Newark, NJ, March 16, 2016 – Is School Funding Fair? A National Report Card (NRC), released by the Education Law Center (ELC) today, finds that in most states public school funding remains unfair and inequitable, depriving millions of U.S. students of the opportunity for school success.

The fifth edition of the NRC uses funding data from the 2013 Census fiscal survey, the most recent data available. The report goes beyond raw per-pupil calculations to evaluate whether states are fairly funding their public schools by distributing funding relative to student poverty. To capture the differences in state public education finance, the NRC uses four interrelated "fairness measures" – Funding Level, Funding Distribution, Effort, and Coverage – that allow for state comparisons while controlling for regional differences.

The NRC released today shows little improvement over the past five years in those states that consistently fail to direct additional funding to districts with high levels of need, as measured by student poverty. The report also finds striking differences in levels of funding for K-12 education across the states, even when adjusted for regional variations in cost. Alaska and New York, the states with the highest funding levels, spend more than two and half times what is spent by Utah and Idaho, the states with the lowest funding levels.

The NRC's other key findings include:

  • Funding levels show wide disparities among states, ranging from a high of $17,331 per pupil in Alaska, to a low of $5,746 in Idaho.
  • Many of the states with the lowest funding levels, such as California, Idaho, Nevada, North Carolina, and Texas, invest a very low percentage of state economic capacity in funding public education.
  • Fourteen states, including Pennsylvania, North Dakota, and Illinois, are regressive, providing less funding to school districts with higher concentrations of low-income students.
  • Certain regions of the country exhibit a double disadvantage – many states with low funding overall add no additional funds for concentrated student poverty. These include Alabama, Mississippi, and Florida in the Southeast, and Colorado, Arizona, and New Mexico in the Southwest.
  • Only a handful of states – Delaware, Massachusetts, Minnesota, New Jersey, and Ohio – have generally high funding levels while also providing significantly more funding to districts where student poverty is highest.
  • Low rankings on school funding fairness correlate to poor state performance on key indicators of essential education resources, including less access to early childhood education, non-competitive wages for teachers, and higher teacher-to-pupil ratios.

ELC also released today a companion report: Is School Funding Fair? America's Most Fiscally Disadvantaged School Districts. This report identifies the nation's public school districts with higher than average student need and lower than average funding when compared to other districts in their regional labor market. These relative funding levels are crucial because districts in the same labor market must compete for teachers and support staff, the largest share of any district's budget. Districts are fiscally disadvantaged if they lack funding to offer competitive wages and comparable working conditions relative to other nearby districts and other professions.

The major district-level findings are:

  • Almost 1.5 million children are educated in the 47 most fiscally disadvantaged school districts across 16 states.
  • The fiscal disadvantages in Reading and Allentown, Pennsylvania, are the nation's most extreme, with nearly 2.5 times area poverty rates and less than 80 percent of the average state and local revenue per pupil.
  • Chicago and Philadelphia continue to top the list of the nation's most fiscally disadvantaged large urban districts.
  • Many of the districts on the most disadvantaged list are in states with regressive funding, including Illinois, Pennsylvania, and Texas. Fiscally disadvantaged districts making the list are also in states with flat funding, such as California, and those with slightly progressive funding, such as Colorado, Massachusetts, and North Carolina.

The two reports released by ELC today underscore the continuing lack of fair, cost-driven methods for financing public education in the states. Most states use outmoded school funding formulas that fail to provide additional funding to address student poverty and other needs. These inadequate formulas also create funding disparities between low wealth, high poverty and high wealth, low poverty districts, even in states with high funding levels, such as Connecticut and New York.

"School finance reform is clearly long overdue," said Bruce Baker, the Rutgers University Graduate School of Education Professor who developed the report's methodology. "States must develop, and fund, school finance formulas that identify the costs of providing essential education resources to students, accounting for diverse student needs and taking into account local fiscal capacity."

According to David G. Sciarra, ELC's Executive Director: "States with deeply regressive funding, like Illinois, Nevada, and Pennsylvania, urgently need to overhaul their finance systems to give students a meaningful opportunity to succeed in school. Even states with higher funding levels, such as Connecticut and Wyoming, need to do more to ensure fair funding for each and every student. It's time to put fair school funding at the top of the nation's education reform agenda."

"Is School Funding Fair? A National Report Card" is coauthored by Dr. Bruce Baker of the Rutgers Graduate School of Education; David Sciarra, Executive Director of the Education Law Center (ELC); Danielle Farrie, ELC Research Director and Theresa Luhm, Esq., ELC Managing Director.

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