A New School Finance Report Ranks State Funding Systems

Last Updated: October 27, 2010

This article appeared in the October 2010 Rural Policy Matters.

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A new national report card on school finance has been developed by the Education Law Center (ELC). The report, "Is School Funding Fair? A National Report Card," uses four measures to gauge how well the poorest districts in states are treated under state funding mechanisms. The report's authors include Bruce Baker of Rutgers University Graduate School of Education; David G. Sciarra, a school finance attorney and executive director of the ELC; and Danielle Farrie, ELC Research Director.

The “fairness” measures used in the report are funding level, which is the average state and local revenue per pupil; funding distribution, which shows whether a state provides more or less funding to schools based on their poverty concentration; effort, which gauges spending relative to fiscal capacity; and coverage, a measure encompassing the proportion of students attending public schools as well as the income ration of private and public school families.

Author Baker points out that states have significant control over two of the measures, effort and funding distribution. States determine how much financial effort to put into their schools and make determinations through their funding formulas about how schools will receive funds.

In the report, a state’s funding system is labeled “progressive” if it systemically directs more funds toward school districts with higher percentages of students living in poverty, and “regressive” if more funding is going to districts with less poverty. Notably, the report uses U.S. Census measures of poverty rather than free or reduced price meal eligibility. Many policymakers believe the Census measures are more accurate indications of how many students are living with serious hardships.

The "coverage" indicator in the report highlights the effect on states when high numbers of students — and more specifically, students from higher income families — leave the public schools for private ones.

Report authors hope the report will spark conversation and action on how well states are getting resources to the students who most need them.

Read more:
Read the full report here:

Local coverage of the report, including a quote from RT Board Member Kathy Gephardt of Colorado:

Read more from the October 2010 Rural Policy Matters.