School Funding Adequacy*
About
The average gap in dollars between actual and required spending per pupil among public school districts. Required spending is an estimate of dollars needed to achieve U.S. average test scores in each district. The 2024 Annual Data Release used data from 2021 for this measure.
School funding plays an important role in educational outcomes and their distribution geographically and for racialized populations. A 2012 meta-analysis concluded that school funding does have an impact on educational outcomes, and schools and districts with more funding are better able to provide higher-quality, broader, and deeper educational opportunities to students.1 Increased school spending can improve student outcomes in a variety of ways, such as reductions in class size, and increases in the number of adults per school, amount of instructional time, and teacher’s salaries (resulting in more highly qualified teachers).2
Residential segregation has long been entwined with school segregation and school funding. Discriminatory policies and practices such as redlining, legal actions to terminate tribal culture and land rights, and disinvestment in rural economies, among others, have resulted in entrenched residential segregation.3 Because school funds are tied, in part, to local property taxes, neighborhoods that are more affluent have more deeply resourced schools.4 Further, a relationship has been found between increased segregation of Black students from white students and revenue shifts which disfavor the typical Black student, even after controlling for differences in poverty.5 In these ways, segregation systematically strips academic opportunity from students of color.
A decade of slow progress in improving educational fairness was reversed by the Great Recession. In 40 states, the amount that was spent directly on K-12 education relative to the states’ total economic capacity was lower in 2018 than it was in 2004. Similarly, in 32 states, funding was less progressive in 2018 than it was in 2008; (progressivity is where more funds are allocated to higher-poverty districts than lower-poverty districts). In 2018, on average, spending in the highest-poverty districts (80th-100th percentile) was 20 percent below the estimated adequacy level (i.e., the amount estimated to be necessary for students to achieve average test scores). In contrast, in the lowest poverty districts (0-20th percentile) states spent on average 45 percent more than is estimated to be adequate.6
There is reason to believe these inequities will continue to grow during, and will endure long after, the COVID-19 pandemic. Following the Great Recession, states spent less of their total economic capacity on education, dropping from 4.1% to 3.5% on average. Even after states’ economies recovered, the reduction in education spending did not rebound. These reductions at the state-level differentially harm higher-poverty districts because these districts have less local revenue and rely more on state revenue to fund their schools.6 If COVID-19 has similar economic impacts as the Great Recession, there could be negative school funding repercussions that are felt most deeply by school districts that already are deeply disadvantaged.
Children enter the classroom with a variety of backgrounds and needs. If children are going to be provided with equitable educational opportunities, more resources will be required for those children with educational disadvantages.1 An increase in per-pupil spending has a greater impact on children from low-income families than children from high-income families. A 10% increase in per pupil spending for children from low-income families, for all 12 years of public schooling, was found to be associated with 0.46 additional years of completed schooling, 9.6% higher earnings, and a 6.1% reduction in annual incidence of adult poverty.2 Additionally, spending increases have also been associated with higher rates of high school graduation, college enrollment and completion, improved standardized test performance, and increased adult earnings.5
Data and methods
Data Source
School Finance Indicators Database
The primary products of the system are the State Indicators Database, a collection of 125 state-by-state school finance measures, most of which are available for all years between 1993 and 2020, and the District Cost Database, a dataset of spending adequacy in over 12,000 K-12 public school districts. Both of these datasets are updated annually and freely available to the public.
In addition to an annual report presenting findings from key indicators from the state database and individual profiles summarizing each state’s finance system, we also publish regular research briefs and data visualizations examining different measures in the system. It is our hope and intention that our data, and analyses based on these data, will help to improve school finance debates and policymaking in the U.S.
Key Measure Methods
School Funding Adequacy is a dollar amount
School Funding Adequacy is the average gap in dollars between actual and required spending per pupil among school districts. Required spending is an estimate of dollars needed to achieve United States average test scores in each school district. This measure looks at funding through an equity lens, not every district’s needs for funding are the same, and this measure of school funding takes that into account.
Some data are suppressed
There are some counties which do not have school funding data.
School Funding Adequacy is created using statistical modeling
The estimated dollars needed to support students in achieving U.S. average test scores is produced with a model which is informed by the most recently available data and using methods which are improved over time. Learn more about the methods used in the School Funding Indicators Database.
Caution should be used when comparing these estimates across years
Caution should be used when comparing across years as data availability and modeling improve over time.
Measure limitations
While the amount of funding that is available can impact the effectiveness of education, not all funds are spent equally well and can impact various student groups differentially. This measure is not intended to imply that adequate spending levels, if put into place in a given state or district, would quickly and certainly raise scores to the national average. In addition to varied efficiency in use of funds, improvement is gradual and requires sustained investment.
The outcome that these data focus on are standardized test scores, and school funding can have positive impacts on education that are not captured in this outcome. There are also questions about the bias of standardized test scores against students of color. Finally, these data are limited to public school funding, they do not cover private school or homeschooled students.
Can This Measure Be Used to Track Progress
This measure can be used to track progress with some caveats. While the amount of funding that is available can impact the effectiveness of education, not all funds are spent equally well and can impact various student groups differentially. The outcome that these data focus on are standardized test scores, and school funding can have positive impacts on education that are not captured in this outcome. There are also questions about the bias of standardized test scores against students of color. Finally, these data are limited to K-12 public school funding, they do not cover private school or homeschooled students.
Finding More Data
Disaggregation means breaking data down into smaller, meaningful subgroups. Disaggregated data are often broken down by characteristics of people or where they live. Disaggregated data can reveal inequalities that are otherwise hidden. These data can be disaggregated by:
- Income
- Subcounty Area
The School Funding Indicators Database features a variety of data that we do not highlight within this measure. At the state level, several measures are included that cover: revenue/spending by district poverty, adequacy relative to common outcome goals, staffing ratios by district poverty, early childhood education coverage and income-based gaps, teacher/non-teacher wage competitiveness, among other topics. At the district level, there are data covering the gap between each district and U.S. average test scores, total student enrollment, and demographic information.
References
1 Baker BD, Farrie D, Sciarra DG. Mind the gap: 20 years of progress and retrenchment in school funding and achievement gaps. Educational Testing Service. Educational Testing Service Research Report Series No. RR-16-15; 2016.
2 Jackson CK, Johnson RC, Persico C. The effects of school spending on educational and economic outcomes: Evidence from school finance reforms. Quarterly Journal of Economics. 2016;131(1):157-218.
3 Givens M, Gennuso K, Johnson S, Brown L. 2020 County Health Rankings key findings report. Madison, WI: University of Wisconsin Population Health Institute; 2020.
4 Bhargava A. The interdependence of housing and school segregation. Harvard Joint Center for Housing Studies. Cambridge, MA: Harvard Joint Center for Housing Studies; 2017.
5 Sosina VE, Weathers ES. Pathways to inequality: Between-district segregation and racial disparities in school district expenditures. AERA Open. 2019;5(3):1-15.
6 Baker BD, Di Carlo M, Schneider L, Weber M. The adequacy and fairness of state school finance systems. Washington, D.C.: Albert Shanker Institute; 2021.