School Funding's Tragic Flaw

Public education costs a lot of money -- over $500 billion per year. Over the last century, there have been huge changes in where that money comes from and how it's spent. In 1930, only 17 percent of school funding came from state sources, and virtually none came from the federal government. Today, the state / local / federal split is roughly 50/40/10 (individual states vary). People still say all the time that "most" school funding comes from local property taxes, but that hasn't actually been true since the mid-1970s.

On the whole, this change has been of tremendous benefit to disadvantaged students. As states have assumed the primary role in funding education, they've tended to distribute money in ways that are, on the whole, more equitable. The same is true for federal funding, most of which is spent on behalf of poor students and students with disabilities. (This works because taxpayers have a weird psychological relationship with their tax dollars. Rationally, people should view every dollar they pay in taxes and receive in services as equal, regardless of the basis of taxation or the source of the services. But they don't. People feel very strongly that locally-generated property taxes should be spent locally, while they feel less ownership over state taxes and even less over federal dollars. As a result, they'll tear their hair out if you propose transferring 10 percent of their local property tax dollars to a low-income district across the state, but they're far more sanguine if you propose a state school funding formula with precisely the same net result in terms of the taxes they pay and the dollars their local school district receives. It doesn't make sense, but that's okay, because this irrational jurisdiction-dependent selflessness is what allows for the redistributionist school funding policies that poor students depend on to get a decent education.)

However, there's still a lot of work to do. The transition to more equitable, rational set of school funding policies is far from complete. There is still a basic flaw running through policies at the federal, state, and local levels: money follows money. Students and jurisdictions that have more money still get more. Those that have less still get less. It's not as bad as it used to be, but it's still a major problem. To explore this in more depth, I've co-written a paper with Marguerite Roza, a professor at the University of Washington and senior scholar at the Center for Reinventing Public Education. You can read it here. It shows how these flawed policies cascade through multiple levels of government to produce vastly different funding results for two essentially similar high-poverty elementary schools, one in Virginia and the other in North Carolina.

Let me also say, by way of further self-promotion, that if you have some interest in school funding equity, but can't imagine wading through mind-numbingly boring scholarly treatises or tables of fine-print numbers, then this is the paper for you. I am willing to state with confidence that this is one of the least boring school funding equity papers out there, and it provides a good general overview of how these policies work and fit together. I'm not promising Entertaiment Weekly here, but if you'd been meaning to learn more about this but don't want to spend more than an hour doing so, this is your lucky day.