Executive Summary – 3rd Edition (2014)

"Is School Funding Fair? A National Report Card" analyzes the condition of state school finance systems with a focus on the fair distribution of resources to the neediest students. The Report Card makes a number of assumptions about how school funding systems should be designed:

This 3rd Edition of the Report Card provides five years of school funding data, from 2007 through 2011, during the critical period before the start of the Great Recession and through the beginning of a slow recovery. Schools across the country were affected by a significant decline in state and local revenues that primarily fund education. To prevent major layoffs and cuts in essential programs and services, the federal government created a stimulus package to support public schools through the American Recovery and Reinvestment Act (ARRA). But when ARRA funding was depleted many states were left with enormous budget shortfalls. The National Report Card examines how states managed these difficult economic circumstances and their impact on the fairness of state school finance systems.

The Fairness Measures

The report evaluates states on the basis of four separate, but interrelated, fairness measures. These measures are designed to provide meaningful comparisons among states by taking into account factors that influence education costs, such as geography, regional labor markets, and population density, when appropriate. The measures are:

Summary of Findings

The table below presents results for the four fairness indicators as of 2011, with arrows signifying changes from the baseline year of 2007. It is important to consider each of the four measures together to capture the complexity of each state’s finance system, which is embedded in a specific economic and political context. The report’s findings demonstrate that poor economic conditions have a direct impact on school funding:

New Indicators

The 3rd Edition of the National Report Card includes three new indicators that exemplify how state policies on education funding determine the resources available for schools and staff and the families they serve.:

This edition of the National Report Card demonstrates the susceptibility of states’ school funding systems to larger economic conditions. The fiscal cliff faced by many states after the depletion of federal stimulus funds often resulted in stagnant or declining resources devoted to education, as well as a retreat from the equitable distribution of funds. The data provide a clear warning to elected officials, education stakeholders and concerned citizens that they must be diligent to ensure that states (even those with the best track record on fair school funding) do not retreat from funding equity.