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018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018
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FUNDING GAPS
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2018 2018 2018 AN ANALYSIS OF SCHOOL FUNDING EQUITY
2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018
2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018
2018 2018 2018 ACROSS THE U.S. AND WITHIN EACH STATE
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2018
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P-122018 2018 2018
RESOURCE 2018 2018 2018 2018 2018 2018 2018 2018 2018
EQUITY 2018
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2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 THE
2018 2018 TRUST
EDUCATION 2018 | 2018 2018
FUNDING GAPS2018 20182018
| FEBRUARY 2018
1 2018
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2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018 2018
 Whether you look at the national
numbers or the state-by-state
numbers, the pattern is disturbing:
In 27 states, districts with the
highest poverty rates do not receive
more funding to account for that
increased need.

And in 14 states, the districts with

the most students of color get less
funding than districts with the lowest
percentage of students of color.

2 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

FUNDING GAPS 2018
TOO MANY STUDENTS DO NOT GET THEIR FAIR SHARE OF EDUCATION FUNDING 1
BY IVY MORGAN AND ARY AMERIKANER

Throughout history, public education has been called • How do the revenues of districts serving the most
the great equalizer — the single most influential factor students in poverty (the highest poverty districts)
that allows all students, regardless of zip code, to one compare with those serving the fewest students in
day excel in the workforce and contribute to the nation’s poverty (the lowest poverty districts) in each state
economic well-being as well as their own and that of the and across the country?
communities in which they live.
• How much funding does the state provide to
While that may be true, the educational opportunities districts, and how does it distribute those dollars?
provided to the nearly 51 million children who attend
public schools are anything but equal. Students of different • How do the revenues of districts serving the most
races, ethnicities, and socioeconomic backgrounds tend students of color compare with those of districts
to end up at very different schools, ones with disparate serving the fewest students of color?
resources, including those most crucial to student success
— for example, high quality teachers, effective early We focus specifically on state and local revenues and
education programs, and meaningful forms of college and exclude federal sources because federal dollars are intended
career counseling. — and targeted — to provide supplemental services to
such specific groups of students as those in poverty, English
Access to these and other resources are intrinsically linked learners, and students with disabilities.2 In this analysis, we
to historical inequities in school funding that have been are interested in learning how states allocate the resources
pervasive in American public schools. Coupled with they oversee.
state and local policies, funding allocations determine
how much teachers are paid, the extent and frequency of Funding Gaps 2018 is part of a rich body of work on
professional development, the length of the school day, funding inequities conducted by many terrific researchers
the number of students in a classroom, the availability of and advocates at both the local and national level.3 This
student supports and extracurricular activities, and myriad brief provides an up-to-date, straightforward analysis of
other factors that can have an impact on student learning. funding equity — between districts — that is comparable
across states and allows advocates and policymakers to
In 2015, the last time The Education Trust examined this understand how their state fares in a national context
issue, we set out to determine how state and local funding against a few key criteria. This report gives an overview of
for different districts compared by percentage of students funding equity by race and poverty concentration across
in poverty and by percentage of students of color. What we states, while our interactive, online data tool offers more
found was that many states were not sending additional detailed information for each state. We hope this work
resources to their highest poverty districts or to districts will help advocates keep the focus on equity.
serving the most students of color, and across the country,
these districts were in fact receiving less money than
the districts serving the fewest students living in poverty
and students of color. In this report, we take another
look at how state and local school funding decisions can
either advance or hinder equity. In doing so, we ask the
following questions:

Ivy Morgan is Senior Analyst, Resource Equity and Ary Amerikaner

the Director of Resource Equity at The Education Trust.

THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 3

Inequities Persist for Students Living
in Poverty and Students of Color
Nationally, funding inequities continue to be large. The When we look at funding gaps within each state, we find a
highest poverty districts in our country receive about $1,000 great deal of variation. While some states provide substantially
less per student than the lowest poverty districts. The more funding to their highest poverty districts, others provide
differences are almost twice as large — roughly $1,800 per substantially less. The funding gaps between high and low
student — between districts serving the most students of poverty districts look even worse when we consider that
color and those serving the fewest. students in poverty are likely to need additional supports in
order to succeed academically. In other words, simply offering
Importantly, these numbers reflect differences between the equal funding isn’t enough. Moreover, some states that fund
quartiles of districts with the most and fewest children in their highest poverty districts equally, or even progressively
poverty (or students of color).4 At the extremes (e.g., the (meaning, they allocate more funding to the highest poverty
5 percent of districts with the most and fewest students in districts), are still providing substantially fewer dollars to
poverty or students of color), of course, the differences can districts that serve the most students of color than to those
be much larger. that serve the fewest.

CHANGES SINCE 2015

This report builds upon the foundation laid by Funding Gaps 2015. In this 2018 update, we provide a
snapshot of many of the same data points that we included in our 2015 report.

Overall, the funding inequities we documented in the 2015 report appear slightly smaller, but persist.
Compared to 2015, the national funding gap between high and low poverty districts decreased slightly
— by 3 percentage points — from 10 percent to 7 percent. The national funding gap between districts
with the highest and lowest percentages of students of color went from 15 percent to 13 percent,
representing a 2 percentage point drop.

As we saw in the 2015 report, there is a lot of variation in the funding gaps within states, but overall,
we see a small uptick in the number of states providing more funding to their districts with higher
percentages of students from low-income backgrounds and students of color. Similarly, we see
a slightly smaller number of states providing less funding to districts with higher percentages of
students from low-income backgrounds and students of color.

In some states, there were significant shifts between the gaps reported in our 2015 analyses and
these updated analyses. These shifts may be the result of changes in funding practices, changes
in student enrollment patterns (for example, changes in the numbers of low-income students or
students of color may have an impact on which districts are included in the highest or lowest
quartiles), or data anomalies or reporting errors. Determining the causes of these shifts is beyond
the scope of this report.

4 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

ABOUT THIS ANALYSIS

In this analysis, we examine the relationship between funding and the demographics of the students that districts
served as of 2015, which is the latest school year for which data are available. Specifically, we examine how the
revenues of districts that serve higher percentages of students living in poverty or students of color compare with
those of their counterparts. Our analysis compares the average revenues of groups of districts (the quartiles with
the highest poverty and lowest poverty districts, for example). Within each group, some districts may be receiving
substantially more or less funding than these averages. Furthermore, just because a high-poverty district gets more
money per student, it does not mean that every school in that district is more generously funded. Previous research
shows that even when funding for districts is progressive at the state level, dollars may be distributed regressively
for schools within districts.5 Our analysis does not seek to explain why we see the results that we see. Rather, we
hope that this analysis will support the work of state advocates who know their local context far better than we do.

IN BRIEF: WHAT WE DID

This section briefly describes our data sources and key analytic decisions.
For more detailed documentation, please see the technical appendix to this report.
We used the following data to analyze the state of funding equity across the U.S.
and within each state:

• State and local revenues per student: These data were obtained from the 2013, 2014, and 2015 U.S.
Census Bureau’s Public Elementary-Secondary Education Finance Data files, the most recent data
available.6 To limit the impact of year-to-year fluctuations in revenues, which can arise from such
one-time investments as renovations or capital projects, we used three-year averages of state and
local funds. We also adjusted these dollar figures for both inflation and for regional variation in labor
market costs.7 To calculate revenues per student for each district, we divided each district’s three-
year average state and local revenues by the total number of students enrolled in the district in 2015.

• Percentage of children in poverty: Poverty data are based on the 2015 U.S. Census Bureau’s Small
Area Income and Poverty Estimates.8 For each district, the percentage of children in poverty is the
estimated number of school-aged children in poverty divided by the estimated number of school-aged
children in the district.

• Percentage of students of color: Enrollment data by student ethnicity were obtained from the 2014–
15 National Center for Education Statistics’ Common Core of Data.9 In this analysis, the percentage of
students of color is the number of students who are Black, Latino, or American Indian in each district
divided by the total number of students enrolled in the district.10

To calculate gaps between the highest and lowest poverty districts, we:
• Sorted all districts by the percentage of students below the poverty line (or the percentage
of students of color);

• Divided districts into four groups (quartiles) so that each group had approximately the same
number of students;

• Calculated the average state and local revenue per student across all the districts in
each quartile; and

• Compared the state and local revenues per student in the highest and lowest poverty quartiles.

A NOTE ABOUT POVERTY DATA

Our analysis of gaps between the highest and lowest poverty districts uses the percentage of students living
below the poverty line as an indicator of income. We rely on the poverty rate, rather than the percentage of
students qualifying for free or reduced-price lunch to remain consistent with prior analyses and because the free
or reduced-price lunch eligibility is becoming a less-precise measure of poverty status, in part, as districts take
advantage of the community eligibility provision.11 It is important to note, however, that the percentage of students
in poverty and the percentage qualifying for free or reduced-price lunch are highly correlated. In other words,
districts with high poverty rates also tend to have high percentages of students eligible for free or reduced-price
lunch, and vice versa. THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 5
How do the Revenues of High-Poverty Districts
Compare With Those of Low-Poverty Districts?
Across the country, the highest poverty districts receive about lowest poverty districts. In six states, the highest poverty districts
$1,000, or 7 percent, less per pupil in state and local funding than received at least 15 percent more funding per student than the
the lowest poverty districts. lowest poverty districts. Those states are (in alphabetical order)
Georgia, Minnesota, New Jersey, Ohio, South Dakota, and Utah.
These gaps add up, and there is evidence that closing them can
have a lasting impact on student achievement.12 For example, in At the other end of the spectrum, there are four states where the
a district with 5,000 students, that gap means nearly $5 million in highest poverty districts received substantially less in state and
missing resources. These funds could be used to pay for supports local funding than their lowest poverty counterparts. The largest
and services that we know improve academic outcomes for gap, by far, continues to be in Illinois, where the highest poverty
students, such as substantially smaller class sizes in the elementary districts received 22 percent less in state and local funding than
grades, additional school counselors in the upper grades, or high- the lowest poverty districts.14 Other states with regressive gaps
quality and integrated professional development for teachers.13 include (in alphabetical order) Alabama, Missouri, and New York.
The highest poverty districts in these states received 5 percent to 9
The within-state funding gap analysis shows a great deal of percent less than the lowest poverty districts.
variation among states in the progressiveness — or regressiveness
— of funding (Figure 1). In 20 states, the highest poverty districts In the remaining 23 states, high- and low-poverty districts received
received at least 5 percent more in state and local funds than the similar amounts of state and local funding.

FIGURE 1: Gaps in State and Local Revenues per Student Between Districts
Serving the Most and the Fewest Students in Poverty

Progressive Moderately Progressive Neutral Moderately Regressive Regressive

25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
CO

RI
OH

OR
OK
NJ

NC

LA

CA

VA

NM

NE

ND

CT
VT

NH

NY
UT

PA
WA

KY

WI

KS

WV

WY
GA

IN

IA
ID

IL
TN

TX
DE
MN

MD

MA

MT

MS

ME

MI

MO
FL
SD

SC
AR

AZ

AL

READING THIS FIGURE: In Utah, the highest poverty districts receive 21 percent more in state and local funds per student than the lowest poverty districts. In
states shaded in dark green, the highest poverty districts receive at least 15 percent more state and local funds than the lowest poverty districts; light green shading
indicates that the highest poverty districts receive between 5 and 15 percent more. In states shaded in dark red, the highest poverty districts receive at least 15
percent less state and local funds than the lowest poverty districts; light red shading indicates that the highest poverty districts receive between 5 and 15 percent
less. Gray shading indicates similar levels of funding for the highest and lowest poverty districts. States are ordered and classified as providing more or less funding
to their highest poverty districts based on unrounded percentages.15

6 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

 WHAT HAPPENS WHEN THE NEEDS OF STUDENTS FROM
LOW-INCOME BACKGROUNDS ARE TAKEN INTO ACCOUNT?

So far, we’ve been looking at whether the funding that high and low-poverty districts receive is
equal. But to close achievement gaps, we need funding that is equitable — funding that accounts
for the fact that it simply costs more to educate students from low-income backgrounds, many of
whom start school academically behind their more affluent peers.

To account for these additional needs, we repeated our analysis with the assumption: that it costs a
district 40 percent more to educate a student in poverty than not in poverty. This figure is based on
the federal Title I formula, and, in all likelihood, is an underestimate. Research shows that it could
cost twice as much, or more, to educate a student from a low-income background to the same
standards as a student from a more affluent background.16

Nationally, when we account for the additional needs of students from low-income backgrounds,17
we see that the highest poverty districts receive about $2,000, or 16 percent, less per student than
low-poverty districts (compared to roughly $1,000 before making this adjustment). And while 20 states
appeared to provide substantially more funding to the highest poverty districts before accounting for
the additional needs of students from low-income backgrounds, after the adjustment, only seven still
do (Figure 2). Moreover, the number of states with regressive funding gaps (i.e., states that provide at
least 5 percent less funding to the highest poverty districts) increases from four to 20.

FIGURE 2: Gaps in State and Local Revenues per Student Between Districts Serving
the Most and the Fewest Students in Poverty

PANEL 1: Not adjusted for the additional PANEL 2: Adjusted for the additional needs
needs of low-income students of low-income students

WA WA
MT VT ME ME WA WA
ND MT ND VT
OR MT VT ME ME
OR MN MN ND MT VT
NH ND
ID NY NH OR
ID
SD WI MA NY OR MN MN
SD WI CT MA NH
WY MI CT ID NY NH
WY MI RI ID
SD WI MA NY
RI SD WI CT MA
IA IA PA PA WY MI CT
NE NJ WY MI RI
NV NE OH NJ RI
NV DE OH IA IA PA PA
UT IL IN INMD DE NE NJ
UT WV IL WV NV NE NJ
CA CO VA MD NV OH DE OH
CA CO
MO VA UT IL IN DE
KS KS KY MO UT WV IL INMD
KY CA CO VA WV MD
CA CO
MO VA
NC KS
TN NC KS KY MO KY
TN
AZ OK OK Progressive NC NC
NM AZ NM AR SC
AR SC Progressive TN TN
Moderately Progressive Moderately Progressive AZ OK
GA NM OK
MS
AL AL GA
Neutral
AZ NM AR SC
AR SC
MS Neutral GA
TX Moderately Regressive AL AL GA
LA TX LA Moderately Regressive MS MS
Regressive Regressive TX LA
AK TX LA
AK FL No Data
AK FL No Data
AK AK AK FL FL
AK AK

HI HI
HI HI

READING THIS FIGURE: Panel 1 shows the gap in state and local revenues per student without adjusting for the additional
needs of students in poverty; panel 2 shows the gaps when we do adjust for additional student need. In states shaded in dark
green, the highest poverty districts receive at least 15 percent more in state and local funds than the lowest poverty districts,
light green shading indicates that the highest poverty districts receive between 5 and 15 percent more. In states shaded in dark
red, the highest poverty districts receive at least 15 percent less state and local funds than the lowest poverty districts; light
red shading indicates that the highest poverty districts receive between 5 and 15 percent less. Gray shading indicates similar
levels of funding for the highest and lowest poverty districts. Light blue shading indicates that the state was excluded from the
within-state analysis. In 20 states, the highest poverty districts receive more state and local funds per student than the lowest
poverty districts (panel 1). When adjusting for the additional needs of students in poverty (panel 2), the highest poverty districts
receive more in state and local funds per student in seven states.

THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 7

 Unlike local dollars, which are derived mainly from property
taxes and can vary widely from district to district, state dollars
are the funds that state legislatures can and should use to
counteract these disparities.

The Role of State Dollars How Much Funding Comes from the State?

So far, we’ve been looking at the distribution of state and local Figure 3 shows the percentage of P–12 revenues that districts
funds combined. Now, let’s look exclusively at state dollars. derive from the state (as opposed to local) sources. Although
Unlike local dollars, which are derived mainly from property taxes states vary quite a bit in the share of school funding they provide,
and can vary widely from district to district, state dollars are the all contribute at least a third of funds. About half of the states
funds that state legislatures can and should use to counteract these provide a bigger share of school funds than localities do, with
disparities. In this section, we will examine the share of funding Arkansas providing the largest.
that comes from the state and how progressively states distribute
these dollars.

FIGURE 3: Percentage of District Revenues Derived from State (as Opposed to Local) Sources

100%
90%
80%

70%

60%
50%

40%

30%

20%
10%

0%
RI
OR

OH
CO
NM

NC

KS

ND

NJ

NH
NE
WA

KY

CA

UT

OK
WY

WI

LA

NY

CT

PA
WV

GA
ID

IN

IA

IL
DE

TN

TX
MN

MI

MS

MT

MD
MO

ME
MA
SC

FL

SD
AR

AL

AZ
VA

READING THIS FIGURE: In Arkansas, 86 percent of districts’ non-federal revenues come from state (as opposed to local) sources. Alaska, Hawaii, and Nevada were
excluded from this analysis because they do not appear in any of the other state-by-state analyses. In addition, Vermont was excluded because the state tabulates
revenue sources differently from other states.18 States are ordered based on unrounded percentages.

8 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

 States could allocate dollars based on district need, taking into
account each district’s fiscal capacity and the characteristics
of the students it serves. These decisions can have a profound
effect on the resources districts receive and the educational
opportunities they provide.

How Progressively Is State Money Distributed?

States make decisions about how to allocate the funds they the differences in the amount of state funds that states provide to
contribute. They could, for example, choose to distribute dollars their highest and lowest poverty districts.
based on student enrollment — that is, provide all districts with
an equal amount for every student they serve. Or, they could While the overwhelming majority of states do provide more
allocate dollars based on district need, taking into account each state dollars to their highest poverty districts than their lowest
district’s fiscal capacity and the characteristics of the students it poverty districts, the relative size of those additional allocations
serves. These decisions can have a profound effect on the resources varies greatly. Nine states, for example, provide more than twice
districts receive and the educational opportunities they provide. as much (i.e., more than a 100 percent difference) in state funds
to their highest poverty districts compared with their lowest
So are states allocating more state dollars to their highest poverty districts. At the other end of the spectrum, two states
poverty districts? And if so, how much more? Figure 4 shows provide roughly the same amount to districts, regardless of
poverty.

FIGURE 4: Difference in State Revenues per Student Between Districts

Serving the Most and the Fewest Students in Poverty

500%

450%
400%
350%

300%
READING THIS FIGURE: In New Jersey, the highest poverty districts receive 439 percent more in state dollars per student than the lowest poverty districts. As in
Figure
250%3, Vermont was excluded because the state tabulates revenue sources differently from other states, and Alaska, Hawaii, and Nevada were excluded because
they do not appear in any of the other state-by-state analyses. States are ordered based on unrounded percentages.20
200%
150%
100%

50%
0%
RI

OH

OR

CO
NJ

NH

KS

NC

NE

NM

ND
CT

PA

CA

OK
WY

WI

KY

WA

UT

NY

LA
WV
GA
IL

IA

IN

ID
DE
TX

TN
MA

MD

ME

MN

MO

MS

MT
SD

FL
SC
AZ

AL

AR
VA

MI

READING THIS FIGURE: In New Jersey, the highest poverty districts receive 439 percent more in state dollars per student than the lowest poverty districts. As in
Figure 3, Vermont was excluded because the state tabulates revenue sources differently from other states, and Alaska, Hawaii, and Nevada were excluded because
they do not appear in any of the other state-by-state analyses. States are ordered based on unrounded percentages.19

THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 9

 IN ILLINOIS, FUNDING INEQUITIES PERSIST, BUT A NEW
FUNDING FORMULA COULD CHANGE THAT

In this analysis, Illinois ranks at or near the bottom of the list in terms of gaps in funding between
districts with the highest and lowest percentages of students from low-income families and students
of color. While the state contributes slightly more to high poverty districts than low poverty districts
and provides the highest poverty districts with about half of their total funding, state efforts are not
enough to make up for the tremendous disparities in local funding between the highest and lowest
poverty districts. These are patterns we also observed in our 2015 report.

To improve the equity in Illinois’ education funding policy, Advance Illinois, a statewide education
advocacy organization, led a coalition to change the state’s funding formula. Those efforts were
strongly informed by the Funding Gaps 2015 report.

“Funding Gaps 2015 showed how inequitable Illinois’ funding system had
become. The data helped galvanize support for a more equitable approach
to providing state dollars,” said Ben Boer, deputy director, Advance Illinois.

Due to the work of Advance Illinois and others, the state adopted a new school funding formula in
August 2017 that prescribes a more equitable distribution of state dollars to the neediest districts. The
formula takes into account the cost of providing a high-quality education to all students as well as
local property wealth. Other goals underlying the new funding formula include closing existing funding
gaps, improving stability of state funding allocations, ensuring that no district loses state funding, and
encouraging districts to reduce reliance on local property taxes for school funding.20

“What is groundbreaking is that the new formula calculates the cost of a

quality education for each school district and focuses dollars on those
districts farthest from that amount,” said Boer.

These changes went into effect in the 2017–18 school year — well after the education funding data
that are reflected in this year’s analysis were collected. It will be a number of years before these
reforms are evident in the school district financial data used in these analyses.

What About Students of Color?

Inequities in funding don’t only occur based on poverty. Previous funding than districts that serve the fewest students of color. In 14
studies have shown that districts serving the most students of other states, the reverse is true; those serving the most students of
color also tend to receive less state and local funding than districts color receive at least 5 percent less funding than districts serving
serving the fewest.21 Our latest findings confirm this pattern. the fewest students of color.
In fact, when we looked at state and local funding for districts
serving the largest concentrations of Black, Latino, and American These patterns are troubling for many reasons, but particularly
Indian students, we found inequities to be more prevalent and because research shows that many students of color start school
more substantial than those based on poverty. academically behind their peers.23 If the goal of our education
system is to ensure that all students leave high school ready for
Nationally, districts serving the most students of color receive what’s next — be it college or a meaningful career — we need
about $1,800, or 13 percent, less per student than districts serving to provide students who need the most (and the schools that
the fewest students of color.22 Funding differences within states educate them) with more support — not less.
show a great deal of variation (Figure 5). In 14 states, districts that
serve the most students of color receive at least 5 percent more

10 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

FIGURE 5: Gaps in State and Local Revenues per Student Between Districts
Serving the Most and the Fewest Students of Color

Progressive Moderately Progressive Neutral Moderately Regressive Regressive

35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
-30%

RI
OH

OR

CO
NJ

NM

NC

KS
ND

NE
LA

CA
KY

PA

WA
OK
WI

UT

CT

WY

NY
GA
IN

ID

IA

IL
DE

TN

TX
MN
MA

MI

MO

MS

MD

MT
SC

SD

FL
AR

AZ

AL
VA
READING THIS FIGURE: In Ohio, districts serving the most students of color receive 28 percent more in state and local funds per student than districts serving
the fewest students of color. In states shaded in dark green, the districts serving the most students of color receive at least 15 percent more state and local funds
than the lowest poverty districts; light green shading indicates that districts serving the most students of color receive between 5 and 15 percent more. In states
shaded in dark red, districts serving the most students of color receive at least 15 percent less state and local funds than districts serving the fewest students of
color; light red shading indicates that the districts serving the most students of color receive between 5 and 15 percent less. Gray shading indicates similar levels
of funding for the districts serving the most and fewest students of color. States are ordered and classified as providing more or less funding to their districts with
the most students of color based on unrounded percentages.24

Conclusion
Whether you look at the national numbers or the state-by-state and remedy the funding inequities described in this report. We
numbers, the pattern is disturbing: in more than half of states, also hope that the work doesn’t stop there. The ways in which
districts with the highest poverty rates do not receive more dollars are spent matter too, and making sure that students
funding to account for that increased need. And in 14 states, the have equitable access to other resources — such as high-quality
districts with the most students of color get at least 5 percent less rigorous curricula, effective teaching, and safe and supportive
funding than districts with the lowest percentage of students of learning environments — is just as important for fulfilling our
color. These funding inequities are not new — they have been commitment to achieve educational equity for students from low-
documented and debated for decades. But there has been real income families and students of color.
progress in some states, and we hope this work serves as a tool
to help advocates and state leaders continue to identify, assess,

THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 11

NOTES

1. This report draws heavily on a previous report: Natasha costs using the American Community Survey-based 2013–2015
Ushomirsky and David Williams, “Funding Gaps 2015” Comparable Wage Index obtained from Dr. Lori Taylor at Texas
(Washington, D.C.: The Education Trust, 2015), https://edtrust.org/ A&M University. Bureau of Labor Statistics, “Consumer Price
resource/funding-gaps-2015/. Index-All Urban Consumers, U.S. City Average,” http://data.bls.
gov/pdq/querytool. jsp?survey=cu, (Downloaded August 2017)
2. In addition, federal funds make up a relatively small share of
and Lori Taylor, School of Government and Public Service at Texas
public education funding. In 2013–2014, federal funds represented
A&M University, “ACS-based CWI 2013–2015,” http://bush.tamu.
8.7 percent of revenues for public elementary and secondary
edu/research/faculty/TaylorCWI/ (Received November 2017).
schools across the nation. See, National Center for Education
Statistics, Digest of Education Statistics (2016), “Table 235.10: 8. U.S. Census Bureau, “Small Area Income and Poverty Estimates
Revenues for public elementary and secondary schools, by source by School District, 2014–2015,” http://www.census.gov/did/www/
of funds: Selected years, 1919–20 through 2013–14,” https://nces. saipe/data/schools/data/index.html (Downloaded August 2017).
ed.gov/programs/digest/d16/tables/dt16_235.10.asp
9. National Center for Education Statistics, “Common Core of Data,
3. This body of work includes, but is not limited to: Bruce D. Local Education Agency (School District) Universe Survey Data,
Baker, Danielle Farrie, Monete Johnson, Theresa Luhm, and 2014–15,” http://nces.ed.gov/ccd/pubagency.asp (Downloaded
David G. Sciarra, “Is School Funding Fair? A National Report August 2017).
Card,” (Newark, N.J.: Rutgers Graduate School of Education
10. This represents the group of students who have been historically
and Education Law Center, seventh edition, 2018), http://www.
underserved in our educational system. The count of students of
schoolfundingfairness.org/; Matthew M. Chingos and Kristin
color for Hawaii includes Asian American and Pacific Islander
Blagg, “Do Poor Kids get their Fair Share of School Funding?”
students, in addition to Black, Latino, and American Indian.
(Washington, D.C.: Urban Institute, 2017) https://www.urban.
Hawaii is not included in the within-state funding gap analysis
org/sites/default/files/publication/90586/school_funding_brief.
since it has only one district, but it is included in the national
pdf; and Raegen Miller and Diana Epstein, “There Still Be Dragons:
analysis.
Racial Disparity in School Funding Is No Myth,” (Washington,
D.C.: Center for American Progress, July 2011), https://www. 11. The Community Eligibility Provision allows high-poverty schools
americanprogress.org/issues/education/report/2011/07/05/9943/ and school districts to offer free meals to all enrolled students
there-still-be-dragons/. Examples of organizations working to without collecting household applications to determine eligibility
increase funding equity in their states include Advance Illinois, for free meals. While expansion of this important provision
Education Law Center, and Mexican American Legal Defense and increases low-income students’ access to meals and reduces
Education Fund. administrative burden for school districts, it may also mean that
some children who are not from low-income families may be
4. Each quartile is comprised of districts that serve roughly a quarter
included in the counts of students eligible for free or reduced-
of all students nationwide (for the national analyses) or statewide
price lunch. See, Tom Snyder and Lauren Musu-Gillette, “Free or
(for the within-state analyses).
Reduced Price Lunch: A Proxy for Poverty?,” National Center for
5. Marguerite Roza and Larry Miller, “Title I to Help High-Poverty Education Statistics (NCES) Blog, April 16, 2015, https://nces.ed.gov/
Schools: How Title I Funds Fit Into District Allocation Patterns” blogs/nces/post/free-or-reduced-price-lunch-a-proxy-for-poverty.
(Seattle: Center on Reinventing Public Education, August 2005),
12. C. Kirabo Jackson, Rucker C. Johnson, and Claudia Persico,
https://www.crpe.org/publications/strengthening-title-i-help-high-
“The effects of school spending on educational and economic
poverty-schools-how-title-i-funds-fit-district-0; and Daria Hall and
outcomes: Evidence from school finance reforms,” The Quarterly
Natasha Ushomirsky, “Close the Hidden Funding Gaps in Our
Journal of Economics, 131, no. 1 (2016): 157–218, https://doi.
Schools” (Washington, D.C.: The Education Trust, April 2010),
org/10.1093/qje/qjv036
https://edtrust.org/resource/close-the-hidden-funding-gaps-in-our-
schools/. 13. See, for example, Grover J. Whitehurst and Matthew M. Chingos,
“Class Size: What Research Says and What it means for State
6. U.S. Census Bureau, “Public Elementary and Secondary Education
Policy,” (Washington, D.C.: Brown Center on Education Policy
Finance Data, 2013–2015,” https://www.census.gov/programs-
at Brookings, 2011). Retrieved from https://www.brookings.edu/
surveys/school-finances.html (Downloaded August 2017). Because
wp-content/uploads/2016/06/0511_class_size_whitehurst_chingos.
the Census Bureau data on which this analysis relies do not include
pdf; Michael Hurwitz and Jessica Howell, “Measuring the Impact
independently operated charter schools or districts that only
of High School Counselors on College Enrollment” (Washington,
operate charter schools, our analyses exclude these districts.
D.C.: The College Board, 2013). Retrieved from http://media.
7. We adjusted for inflation using the Bureau of Labor Statistics’ collegeboard.com/digitalServices/pdf/advocacy/policycenter/
Consumer Price Index and for regional variation in labor market research-brief-measuring-impact-high-school-counselors-
college-enrollment.pdf; and Joseph A. Taylor, et al., “The Effect
of an Analysis-of-Practice, Videocase-Base, Teacher Professional
Development Program on Elementary Students’ Science
Achievement,” Journal of Research on Educational Effectiveness 10, no.
2 (2017): 241–271. Retrieved from http://www.tandfonline.com/
doi/abs/10.1080/19345747.2016.1147628.

12 THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018

14. Illinois recently enacted a new school funding formula that in Funding Gaps 2006 (Washington, D.C.: The Education Trust,
intends to provide a more equitable distribution of state dollars 2006), http://edtrust.org/resource/the-funding-gap-2.
to the neediest districts, by taking into account student need and
22. The count of students of color for Hawaii includes Asian American
local government wealth. See the call-out box on page 10. http://
and Pacific Islander students, in addition to Black, Latino, and
www.advanceillinois.org/2017/08/press-release-advance-illinois-
American Indian. Hawaii is not included in the within-state
applauds-new-equitable-school-funding-formula-culmination-
funding gap analysis since it has only one district, but it is
years-long-collaborative-effort.
included in the national analysis.
15. Hawaii is excluded from the within-state gap analysis because it
23. Roland G. Fryer and Steven D. Levitt, “The Black-White Test
is one district. Nevada is excluded because its student population
Score Gap Through Third Grade,” NBER Working Paper 11049,
is heavily concentrated in one district and could not be sorted
(Cambridge, Mass.: National Bureau of Economic Research,
into quartiles. Alaska is excluded because there are substantial
January 2005), http://www.nber.org/papers/w11049; and
regional differences in the cost of education that are not accounted
Sean F. Reardon and Claudia Galindo, “Patterns of Hispanic
for in the ACS-CWI. Because so many New York students are
Students’ Math and English Literacy Test Scores in the Early
concentrated in New York City, we sorted that state into two halves,
Elementary Grades: A Report to the National Task Force on Early
as opposed to four quartiles.
Childhood Education for Hispanics,” October 2006, https://
16. William D. Dumcombe and John Yinger, “How Much More Does lesacreduprintemps19.files.wordpress.com/2012/05/patterns-
a Disadvantaged Student Cost?” (Syracuse, N.Y.: Center for Policy ofhispanic-students-math-and-english-literacy-test-scores-in-
Research at Syracuse University, July 2004), http://surface.syr.edu/ theearly-elementary-grades.pdf.
cgi/viewcontent.cgi?article=1102&context=cpr.
24. Hawaii is excluded from the within-state gap analysis because it
17. To account for these additional needs, we repeated our analysis is one district. Nevada is excluded because its student population
by assuming that it costs a district 40 percent more to educate a is heavily concentrated in one district and could not be sorted
student in poverty than not in poverty (therefore counting each into quartiles. Alaska is excluded because there are substantial
student in poverty as 1.4 students). This figure is based on the regional differences in the cost of education that are not accounted
federal Title I formula. for in the ACS-CWI. Because so many New York students are
concentrated in New York City, we sorted that state into two halves,
18. Lawrence O. Picus, Allan Odden, William Glenn, Michael Griffith,
as opposed to four quartiles. In addition, Maine, New Hampshire,
and Michael Wolkoff, “An Evaluation of Vermont’s Education
Vermont, and West Virginia are also excluded because students of
Finance System,” working draft, January 2012, http://www.leg.state.
color make up less than 10 percent of enrollment in these states.
vt.us/jfo/Education%20RFP%20Page/Picus%20and%20Assoc%20
VT%20Finance%20Study%20with%20Case%20Studies%201-2-
12a.pdf.
19. Hawaii is excluded from the within-state gap analysis because it
is one district. Nevada is excluded because its student population
is heavily concentrated in one district and could not be sorted
into quartiles. Alaska is excluded because there are substantial
regional differences in the cost of education that are not accounted
for in the ACS-CWI. Because so many New York students are
concentrated in New York City, we sorted that state into two halves,
as opposed to four quartiles.
20. To learn more about the new funding formula, see this fact sheet
(http://fundingilfuture.org/wp-content/uploads/2017/09/SB1947_
Factsheet_090818.pdf) and summary of frequently asked questions
(http://fundingilfuture.org/wp-content/uploads/2017/09/SB1947_
FAQ_092617.pdf).
21. Miller and Epstein, “There Still Be Dragons: Racial Disparity in
School Funding Is No Myth”; and Ross Wiener and Eli Pristoop,
“How States Shortchange the Districts That Need the Most Help”

THE EDUCATION TRUST | FUNDING GAPS | FEBRUARY 2018 13

ABOUT THE EDUCATION TRUST

The Education Trust is a nonprofit organization

that promotes closing opportunity gaps by
expanding excellence and equity in education
for students of color and those from low-income
families from pre-kindergarten through college.
Through research and advocacy, the organization
builds and engages diverse communities that care
about education equity, increases political and
public will to act on equity issues, and increases
college access and completion for historically
underserved students.

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