Toward a Unified Conception of Equity, Equal Opportunity, and Adequacy

Below is an excerpt from my 2018 book Educational Inequality and School Finance . In many ways, I think this one passage is among the most important in the entire book. Below, I’ve bolded a few sections I think are especially important. This passage builds on a chapter Preston Green and I wrote for the original Handbook of Education Finance and Policy (2008) in which we tried to develop a unified framework for understanding equal educational opportunity and educational adequacy. I’ve written in recent posts how it is absolutely necessary that conversations around reforming state school finance systems be guided by clear and consistent principles, which can be coherently linked to both legal frameworks and empirical analyses and models.

To put it bluntly, many of the methods being used and recommendations provided to state legislatures by “consultants” proclaiming their approaches to be built on evidence – to advance equity and adequacy – simply do not, nor can they ever meet the demands of this conceptual framework (and thus, certainly don’t stand up to judicial/constitutional scrutiny where equal educational opportunity and educational adequacy are demanded).

I’ll write more about these connections in future posts.

From Chapter 2

Because of the vast inequities that exist across our public school systems, legal scholars, advocates, and analysts have sought to develop conceptual frameworks and empirical measures to illustrate sources, causes, and consequences of such disparities in order to influence policy makers and guide courts in evaluating student and family rights.[i] In the post-Brown era it became increasingly apparent that dismantling of segregation would be a long and incomplete process. Further, even where greater integration was achieved, significant disparities persisted in the quality of schooling and available resources both across schools within states and across states. While racial integration remained a major national policy concern, resolving persistent, deep resource disparities across schools and communities gained momentum in the late 1960s and early 1970s.

In 1979 Robert Berne and Leanna Stiefel synthesized conceptual frameworks from public policy and finance and evidence drawn from early court cases challenging inequities in state school finance systems to propose a framework and series of measures for evaluating equity in state school finance systems.[ii] Their important work laid the foundation for subsequent conceptual and empirical developments regarding equity measurement applied to preK–12 settings. They used two framing questions: Equity of what? Equity for who? On the “what” side, they suggested that equity could be framed in terms of financial inputs to schooling, real resource inputs (such as teachers and their qualifications), and outcomes.

Their framework, however, predated both judicial application of outcome standards to evaluate school finance systems and the proliferation of state outcome standards, assessments, and accountability systems first in the 1990s and then in the 2000s under No Child Left Behind. The “who” side typically involved “students” and “taxpayers”: a state school finance system should be based on fair treatment of taxpayers and yield fair treatment of students. Drawing on literature from tax policy, Berne and Stiefel adopted a definition of fairness that provided for both “equal treatment of equals” (horizontal equity) and “unequal treatment of unequals” (vertical equity).[iii] That is, if two taxpayers are equally situated, their tax treatment should be similar; likewise, if two students have similar needs, their access to educational programs and services or financial inputs should be similar. But if two taxpayers are differently situated (homeowner versus industrial or commercial property owner), then differential taxation might be permissible; and, if two students have substantively different educational needs requiring different programs and services, then different financial inputs might be needed to achieve equity.

In recent decades, research has shown the shortcomings of horizontal and vertical equity delineations. First, horizontal equity itself does not preclude vertical equity; equal treatment of equals does not preclude the need for differentiated treatment for some (nonequals). Second, vertical equity requires value judgments that lead to categorical determinations of who is unequal and how unequal their treatment must be in order to be “equitable.” Differences in individual students and population needs don’t always fall into neat boxes; rather, they run along continua.

Nonetheless, laws—federal and state statutes and regulations—often try to put things into neat boxes, and conceptions of equity often intersect with legal claims that one group is not receiving equitable treatment when compared with another, thus requiring courts to consider how to remedy those inequities. Significant federal laws enacted in the 1970s operate under this model, applying categorical declarations as to who is eligible for different treatment and frequently requiring judicial intervention to determine how much differentiation is required for legal compliance.[iv] But most children do not fall into the categories set forth under federal (or state) laws, even though there exist vast differences in needs across those children.

An alternative, unifying approach is to suggest that the treatment is not the inputs the child receives but the outcomes that are expected of all children under state standards and accountability systems. In this sense, all children under the umbrella of these state policies are similarly situated and similarly expected to achieve the common outcome standards. Thus, the obligation of the state is to ensure that all children, regardless of their background and where they attend school, have equal opportunity to achieve those common outcome standards.

The provision of equal educational opportunity requires differentiation of programs and services, including additional supports—vertical equity. This input (and process) differentiation is toward a goal of equal treatment (treatment = outcome goals) rather than unequal treatment (treatment = inputs). Further, if differentiation of programs and services is required to provide equal opportunity to achieve common outcomes, there exists a more viable legal equity argument on behalf of the most disadvantaged children not separately classified under federal statutes. Whether children fit neatly into the protected boxes identified in federal statutes does not alone determine whether those children require additional resources. The conception of equal opportunity to achieve common outcome goals has thus largely replaced vertical equity in the vernacular of K–12 equity analysis.[v]

The late 1980s and early 1990s saw a shift in legal strategy regarding state school finance systems away from emphasizing achieving equal revenue across settings (neutral of property wealth) and toward identifying some benchmark for minimum educational adequacy. Some advocates for this approach saw it as politically infeasible for states to raise sufficient state aid to close the spending gap between the poorest and most affluent districts, meaning that achieving spending parity likely required leveling down affluent districts. Thus, a focus on a minimum adequacy bar for the poorest districts would alleviate this concern and potentially garner political support of affluent communities that no longer had anything to lose.[vi] Bill Koski and Rob Reich explain that this approach is problematic in part because minimum adequacy standards are difficult to define; also, when some are provided merely minimally adequate education but others provided education that far exceeds minimum adequacy, the former remain at a disadvantage. Further, the adequacy of the minimum bar is diminished by increasing that gap, because education is, to a large extent, a positional good,whereby individuals compete based on relative position for access to higher education and economic prosperity.[vii]

Others have adopted a more progressive “adequacy” view that focusing on state standards and accountability systems could hold legislators’ feet to the fire to provide sufficient resources for all children to meet those standards, and state constitution education articles could be used to enforce this mandate.[viii] Under this more progressive alternative, equal opportunity and adequacy goals are combined. The state must provide equal opportunity for all children to achieve “adequate” educational outcomes. Funding must be at a sufficient overall level and resources, programs, and services must be provided to ensure that children with varied needs and backgrounds have the supports they need to achieve the mandated outcomes.

It remains important, however, to be able to separate equal opportunity and adequacy objectives both for legal claims and for empirical analysis. The adequacy bar can be elusive.[ix] State courts are not always willing to declare that adopted accountability measures and outcome standards determine the state’s minimum constitutional obligation. The state’s ability to support a specific level of adequacy may be subject to economic fluctuations.[x] Importantly, at those times when revenue falls short of supporting high outcome standards, equal opportunity should still be preserved: equal opportunity can be achieved for a standard lower than, equal to, or higher than the single adequacy standard.[xi]

The practical implications of modern equity, equal opportunity, and adequacy conceptions are that state school finance systems must strive to achieve two simultaneous goals: account for differences in the costs of achieving equal educational opportunity (to achieve desired outcomes) across schools and districts and the children they serve; and account for differences in the ability of local public school districts to cover those costs. The first goal relates primarily to the sorting of students and populations by needs across local schools and districts, warranting substantial differentiation of funding to provide equal educational opportunity, as well as to geographic differences in the costs of labor and other school operations. The second goal stems from the continued reliance on local property taxation to support that system. Because local jurisdictions vary widely in the revenue they can raise when applying common tax rates or effort, states must distribute aid to offset these discrepancies, to achieve dollar parity. 

[i] This section draws on collaborative work with Preston Green of the University of Connecticut.

[ii] Robert Berne and Leanna Stiefel, “The Equity of School Finance Systems Over Time: The Value Judgments Inherent in Evaluation,” Educational Administration Quarterly 15, no. 2 (1979): 14-–34, doi:10.1177/0013161X7901500205; Robert Berne and Leanna Stiefel, The Measurement of Equity in School Finance: Conceptual, Methodological and Empirical Dimensions (Baltimore: Johns Hopkins University Press, 1984); Robert Berne and Leanna Stiefel, “Concepts of School Finance Equity: 1970 to the Present,” in Equity and Adequacy in Education Finance: Issues and Perspectives, ed. Helen Ladd, Rosemary Chalk, and Janet Hansen (Washington, DC: National Research Council, 1999), 7–33.

[iii] Berne and Stiefel, The Measurement of Equity in School Finance.

[iv] Regarding children with disabilities, see Endrew F. v. Douglas County School District Re-1, 137 S. Ct. 29 (U.S. 2016). Regarding children with limited English language proficiency, see Issa v. School District of Lancaster, no. 16-3528 (3d Cir. Jan. 30, 2017).

[v] Bruce D. Baker and Preston Green, “Conceptions of Equity and Adequacy in School Finance,” in Handbook of Research in Education Finance and Policy, ed. Helen Ladd and Edward Fiske (New York: Routledge, 2008), 203–21; Bruce D. Baker and Preston C. Green III, “Conceptions, Measurement, and Application of Educational Adequacy and Equal Educational Opportunity,” in The Handbook of Education Policy Research, ed. Gary Sykes, Barbara Schneider, and David Plank (New York: Routledge, 2009), 438–52.

[vi] William H. Clune, “The Shift from Equity to Adequacy in School Finance,” Educational Policy 8, no. 4 (1994): 376–94.

[vii] William S. Koski and Rob Reich, “When Adequate Isn’t: The Retreat from Equity in Educational Law and Policy and Why It Matters,” Emory Law Journal 56 (2006): 545.

[viii] For example, Kansas’s constitution requires that the legislature “shall make suitable provision for finance of the educational interests of the state.” Those educational interests are articulated in standards adopted by the state board of education, which holds independent constitutional authority for the “general supervision of public schools.” Kansas courts have repeatedly held that the legislature’s obligation is to provide financing that grants all children equal opportunity to achieve those standards. See Gannon v. State, 368 P.3d 1024, 303 Kan. 682 (2016); Gannon v. State, No. 113,267 (Kan. June 28, 2016); Montoy v. State, 279 Kan. 817, 112 P.3d 923 (2005); and USD NO. 229 v. State, 256 Kan. 232, 885 P.2d 1170 (1994).

[ix] Avidan Y. Cover, “Is Adequacy a More Political Question Than Equality? The Effect of Standards-Based Education on Judicial Standards for Education Finance,” Cornell Journal of Law & Public Policy 11 (2001): 403.

[x] Michael A. Rebell, “Safeguarding the Right to a Sound Basic Education in Times of Fiscal Constraint,” Albany Law Review 75 (2011): 1855.

[xi] Baker and Green, “Conceptions of Equity and Adequacy in School Finance”; Baker and Green, “Conceptions, Measurement, and Application.”

What does research say about Charter – District School Spending Differences?

Many of us are frequently bombarded with claims that district schools have a huge revenue and spending advantage over charter schools, and those claims are almost always cited to the same series of junk comparisons produced by the University of Arkansas Department of Education Reform. The authors of those reports would have everyone else believe that no other research has even been produced on the topic. Time and time again, the same authors have engaged in a circle of self-citation and reiteration of bogus findings from the same bogus and painfully amateur analyses – analyses that first and foremost fail to appropriately assign or attribute revenues allocated to the relevant children served, and second and equally problematic, fail to compare schools providing services of similar scope, to similar populations. I will provide a follow up post which explains the correct methods for making such comparisons. But first, what do real studies, performed by competent researchers find?

 Baker (yeah… that’s me, so some self-citation here), Libby, and Wiley (2015), in a peer-reviewed article, find that in Houston, the average charter school spent about $424 less than predicted and NYC charter schools were spending $2,000 more than predicted given their population characteristics.[i] That is, using models to compare otherwise similar schools, spending gaps vary by context, with modest spending gaps disadvantaging charter schools in Houston, but with charters holding a significant spending advantage in New York City.

More recently, Knight and Toenjes (2020), in a study of Texas charter schools, found “after accounting for differences in accounting structures and cost factors, charter schools receive significantly more state and local funding compared to traditional public schools with similar structural characteristics and student demographics.”[ii]

In a study completed on behalf of the Maryland Department of Education, authors from the American Institutes for Research (AIR) found:[iii]

“in all districts except Frederick, the predicted expense is less than the actual charter expense, indicating that average spending would be less for these charter schools if they followed the spending patterns of traditional schools in their district.”

That is, when modeled by regression analysis, given a variety of student and school characteristics, charter schools were spending more than expected (meaning, more than otherwise similar TPS).

Authors from AIR arrived at similar findings using similar methods in a study completed as part of the Getting Down to Facts project in California:[iv]

“The conditional analyses, accounting for student needs and grade configuration, show that average traditional and charter spending within our sample were not substantially different in 2014-15 and 2015-16. In 2016-17, Aspire schools were expected to spend $1,000 or more than traditional schools in both LAUSD and OUSD when controlling for student needs and grade configuration (Exhibit B). When special education spending was excluded, Aspire and Green Dot schools in Los Angeles spent more than otherwise similar traditional schools in Los Angeles.”

So, yes, the squishy bottom line in all of this is that it depends on the context, and also may depend on the charter operator within that context, depending on the types of children they serve as well as their access to supplemental resources. It is certainly NOT the case that charter schools are systematically shorted large amounts of funding compared to their district school counterparts serving otherwise similar populations in regular elementary, middle and secondary schools. The studies above include estimates of funding differentials in at least some of the same locations for which the University of Arkansas studies proclaim vast disparities.

The authors of these studies have been informed more than once, with detailed explanation as to why their methods are wrong and their findings incorrect, and with reference to studies, like those above which actually apply relevant, appropriate and standard methods. Instead of making any attempts to provide more accurate methods, or simply cease reporting, these same authors have made more and more egregious errors (see their latest on special education funding) leading to similarly erroneous – politically convenient – conclusions.

It’s either complete incompetence, or intentional deceit – or perhaps a little of both (see next post on correct methods for evaluating charter/district school – or any between school spending variations).

[i] Baker, B.D., Libby, K., & Wiley, K. (2015). Charter school expansion and within-district equity: Confluence or conflict? Education Finance and Policy, 10(3), 423-465.

[ii] Knight, D.S., & Toenjes, L.A. (2020). Do charter schools receive their fair share of funding? School finance equity for charter and traditional public schools. Education Policy Analysis Archives, 28(51), 1-40. Retrieved August 5, 2020, from

[iii] Levin, J., Baker, B., Atchison, D., Brodziak, I., Boyle, A., Hall, A., & Becker, J. (2016). Study of funding provided to public schools and public charter schools in Maryland. American Institutes for Research.  Retrieved August 10, 2021, from

[iv] Atchison, D., Levin, J., & de los Reyes, I.B. (2018). Study of spending in public charter and traditional schools in California. Making research relevant (p. vii). American Institutes for Research. Retrieved August 10, 2021, from

School Finance 101: Methods for comparing school site spending (and correctly making charter school comparisons)

School finance researchers have been evaluating and comparing district- and school-level expenditures for decades, drawing largely on regression-based approaches which account for differences in needs and costs across settings, districts and schools.[i] With charter schools introduced into the mix over the past several decades, researchers have extended those methods to study differences in spending between district and charter schools serving otherwise similar student populations. The most thorough example, and specific application of this approach is the study conducted on behalf of the Maryland Department of Education in 2016.

Step 1: Matching the Dollars to the Students

The first step in the process is ensuring that the right revenues and expenditures (numerator) are attached to the right students (denominator) when calculating per-pupil resources. This is a fatal flaw – egregious error – repeated time and time again – in the often cited University of Arkansas Department of Education Reform charter funding gap reports. Where charter schools are fiscally dependent on public districts (as in most of the locations addressed by the authors), some revenues sent to and spent by districts are spent on services for children attending charter schools. If we leave those in the district’s funding numerator, but take those pupils out (as they are in charter schools) that overstates district per-pupil funding and understates resources to charter schools. Further, some district revenue sources may be dedicated to other services outside of their own schools—be they community services or students tuitioned elsewhere.

Step 1 is to get a comparable, comprehensive school site spending figure for both district and charter schools, likely excluding special schools or services (those served and the resources spent) from the comparisons. A detailed explanation of the process of achieving a comparable spending figure is explained on page 9, section 2 of the AIR study referenced in this report (

Figure 1 is adapted from a report for the Maryland Department of Education, where the goal was to determine the “commensurate” expenditures of district and charter schools in that state. Maryland charter schools, like those in many states are fiscal dependents of local districts: they are funded by a pass-through system, where local tax revenues and state aid “pass through” the district and to the charter for each resident student enrolled. The district also retains responsibility for the direct provision of some services for charter schools, including transportation and system-wide enrollment management. While the Maryland report focuses on comparing charter and district school spending, its broader goal is establishing data standards and methods for better evaluating equitable allocation of resources across schools within districts, where that context includes a variety of “mission centers,” including charter schools.

As Figure 1 shows, the majority of public/taxpayer financing for the system goes first to the school district. Only a portion of that funding then flows to typical (“regular,” “traditional”) general purpose schools. Districts provide a wide array of services, including providing special schools, where necessary, for children with significant special needs, and alternative placements or schools for children removed from general purpose schools due to disciplinary actions (as is required in New Jersey). Often, students with significant special needs are placed in schools outside the district’s direct control; the district, however, still retains the financial responsibility and pays tuition for the student. Districts also provide an array of community services, make facilities available for community organizations, subsidize transportation and textbooks for private school children (in many states), and provide for transportation and special education supports for children attending charter schools (in many states).

Figure 1

Adapted from: Levin, J., Baker, B.D., Atchison, D., Brodziak, I., Boyle, A., Hall, A., Becker, J. (2017) Study of Funding Provided to Public Schools and Public Charter Schools in Maryland. Maryland Department of Education.

When evaluating resource equity across schools, the goal is to have as complete and comparable a measure as possible of the resources actually available to specific schools, based on the characteristics of students served in those schools. Doing so requires knowing not only which resources are assigned directly to individual schools – per Figure 1– but also identifying which other district services provide support to which schools, or provide support to activities that aren’t connected with individual schools – like providing community services. It would be inappropriate, for example, to take the total revenues received by the district, divided by the district’s own pupils, and compare those to the funding allocated to the charter school, divided by the charter schools’ pupils. This is because some of that revenue received by the district (even after subtracting direct transfers to charters) includes district spending on activities that serve charters, and funds obligated for support of private school students. District revenues allocated to special education schools, which serve student populations that differ substantially from those enrolled in charter schools, will operate at higher per pupil costs than charters.

These complications do not relate exclusively to comparisons between district and charter schools; they relate to any attempts to evaluate the equitable distribution of resources across schools within districts. Once we have isolated the comparable per pupil resources for all schools within a geographic space there will still exist important differences across student populations that must be accounted for when comparing school resources. This is true even when comparing the subset of “general purpose” district-operated schools and charter schools (most of which in New Jersey are “general purpose”).

Additional explanation provided in this report:

Step 2: Modeling Spending Variation with Respect to Cost and Need Factors     

The second step is to use that comparable spending figure (spending per pupil, school site) as the dependent variable in a regression model which accounts for a standard, well-known and frequently used set of factors. This is the approach used in the Maryland and California studies, as well as several peer-reviewed articles evaluating school site spending variation (whether focused on charter schools or not). The standard model is:

Spend = f(% Low Income, %ELL, % SWD LI/HC, % SWD HI/LC, % Grades 6 to 8, % Grades 9 to 12, Geographic Location, Year, Control*)

That is, spending is modeled as a function of the share of children from low-income families (using a measure set to an income threshold sufficient to capture variation across schools), % who are English language learners, % students with disabilities preferably at least in two groups by severity, % in different grade ranges such as to compare schools of similar grade range, and if beyond a single metropolitan area, some geographic indicator to capture labor cost differences.  To determine whether charter schools are funded differently than TPS, one can include a dummy variable on charter status (control).

Table 1 provides an illustration with Maryland data. Table 1 shows that a school with 100% children from low-income families spends about $1,500 more per pupil than a school with 0% children from low-income families. A school with 100% ELL children spends only about $360 more than a school with 0% children who are ELLs. Special education populations, in the aggregate are by far the largest driver of spending differences with a school having 100% children with disabilities expected to spend nearly $22,000 per pupil more than a school with 0% children with disabilities. Notably, however as the share of those children with disabilities who are in the mild/moderate category increases, the overall spending margin decreases. Finally, charter schools are spending approximately $630 more per pupil than district schools—in the same district (fixed effect)—and serving otherwise similar student populations.

Table 1. Model of Maryland School Site Spending 2013-2015, Includes LEA Fixed Effect [schools weighted for enrollment. Estimated with Robust Standard Errors clustered on School]

VARIABLESCommensurate Expense per Pupil
% school enrollment in grades 6 to 8850.170*
% school enrollment in grades 9 to 12558.609*
Percent Special Education21,929.519*
% Students with Disabilities that are Non-Severe Disabilities-1,212.161*
Percent ESL358.567
Percent Low Income1,515.191*
year = 2014183.814*
year = 2015263.468*
Robust standard errors in parentheses
* p<0.05

[i] Baker, B.D. (2009). Within-district resource allocation and the marginal costs of providing equal educational opportunity: Evidence from Texas and Ohio. Education Policy Analysis Archives, 17(3). Retrieved August 10, 2021, from

Chambers, J.G., Levin, J.D., & Shambaugh, L. (2010). Exploring weighted student formulas as a policy for improving equity for distributing resources to schools: A case study of two California school districts. Economics of Education Review, 29(2), 283-300.

Chambers, J., Shambaugh, L., Levin, J., Muraki, M., & Poland, L. (2008). A tale of two districts: A comparative study of student-based funding and school-based decision making in San Francisco and Oakland Unified School Districts. American Institutes for Research.

Atchison, D., Baker, B., Levin, J., & Manship, K. (2017). Exploring the quality of school-level expenditure data: Practices and lessons learned in nine sites. Office of Planning, Evaluation and Policy Development, US Department of Education. Retrieved August 10, 2021, from

Baker, B.D., & Weber, M. (2016). State school finance inequities and the limits of pursuing teacher equity through departmental regulation. Education Policy Analysis Archives/Archivos Analíticos de Políticas Educativas, 24(37), 1-36.

Baker, B.D., Libby, K., & Wiley, K. (2015). Charter school expansion and within-district equity: Confluence or conflict?. Education Finance and Policy, 10(3), 423-465.

Toutkoushian, R.K., & Michael, R.S. (2007). An alternative approach to measuring horizontal and vertical equity in school funding. Journal of Education Finance, 32(4), 395-421.

Kolbe, T., Baker, B.D., Atchison, D., Levin, J., & Harris, P. (2021). The additional cost of operating rural schools: Evidence from Vermont. AERA Open, 7. Retrieved August 10, 2021, from

Berne, R., & Stiefel, L. (1994). Measuring equity at the school level: The finance perspective. Educational Evaluation and Policy Analysis, 16(4), 405-421.

Stiefel, L., Rubenstein, R., & Berne, R. (1998). Intra-district equity in four large cities: Data, methods and results. Journal of Education Finance, 23(4), 447-467.

Stiefel, L., Rubenstein, R., & Berne, R. (1998). Intra-district equity in four large cities: Data, methods and results. Journal of Education Finance, 23(4), 447-467.

Knight, D.S., & Toenjes, L.A. (2020). Do charter schools receive their fair share of funding? School finance equity for charter and traditional public schools. Education Policy Analysis Archives, 28(51), 1-40.

School Finance 101: Child Poverty and State School Finance Formulas

There are days when I’m perplexed at how far we have NOT come in understanding (and conveying in policy circles) why we include measures of poverty and other student needs, along with a variety of “cost” factors in state school finance formulas. The theory and academic literature on this topic are well developed.[1] Some state legislatures have adopted school finance formulas with deeper, others not so deep understanding of these issues, just as some state courts have addressed these issues thoroughly while others have merely acknowledged their existence (others not at all). That is, that it is important, for some reason, to provide additional resources to schools and districts serving more children from low income families. Still, far too few legislatures or courts ask the key questions. Heck, too few of the consultants who advise them on a regular basis, or testify in court on these issues ask the right questions:

  • Why? Toward what end?
  • And how much will that really cost?

Most importantly, how do we get from A to B? And how do we use this information to reform state school finance policies?

The “Why” question is straightforward and embedded throughout every state’s education policy structures – primarily laid out in accountability systems (expressions of desired/preferred outcomes) – systems which dictate that all schools and districts must strive to bring their students to common outcome goals. These days, those common outcome goals are most often described in terms of College and Career Readiness, measured by interim assessments intended to predict whether a child is on track to succeed in college. 

Ideally, state school finance systems would be designed to provide sufficient resources such that all schools and districts could provide the programs and services necessary for all children to have equal opportunity to achieve those goals. And if the school finance system isn’t designed toward this purpose, the system is inherently unfair (most are).

So where does poverty fit into all of that?

Child Poverty is a form of “Risk” Factor

State policymakers often use the terms “at risk” and poverty interchangeably when talking about student need adjustments in their state school finance formulas. But they don’t often ask – “at risk” of what? And how does that relate to providing additional school funding, or how much funding? The tendency is just to say, well, they are “at risk” and we need to provide…oh… and additional 20 to 30% funding to help them out… you know, with a few extra school counselors and maybe some additional teacher aides in classrooms or something like that.

“At risk” is a useful term if we define “at risk of what?” And state policies already, in a sense, provide that, along with an empirical basis for evaluating it: At Risk of not meeting college readiness standards! (or whatever the desired common standards may be) More specifically, statistically less likely to meet these standards, all else equal.

So then, where does school funding come in? Additional resources are intended to mitigate (or equalize) the risk of not meeting those common standards!  In some states, this is actually the constitutional (court articulated) standard for evaluating the state school finance system- that the system must provide equal educational opportunity for all children to achieve constitutionally adequate educational outcomes.

In this context, poverty and poverty measures operate a bit differently than other student need factors in state school finance formulas. Other factors like children’s disability status, or having English as a second language are specific educational program needs of individuals, requiring specific programs and services assigned to those individuals who qualify for and require those programs and services. By contrast, school and district rates and concentrations of low income children, child poverty or other indicators of socioeconomic status capture a broader, community, schoolwide or districtwide need. We don’t (god forbid, I hope we don’t), for example, pull all the kids whose families fall just below the poverty income threshold and send them off to a separate room at 1:15pm every day to meet with the “at risk” counselor, hired with the money generated by the “at risk” weight. Rather, schools with higher poverty concentrations (compared to lower poverty concentrations), require broad based strategies in order to achieve that equal opportunity standard, compared with their more advantaged peers. What do I mean? Perhaps most importantly, high poverty schools need smaller classes (not just more counselors and aides), which means more teachers and classrooms and also likely need to pay a higher wage to recruit and retain teachers of comparable quality/qualifications.

Higher pay x More teachers = More money! (quite a bit more)

How much more? (there’s actually an article on that, using rigorous methods) Enough more so that kids in high poverty schools have equal opportunity to achieve the college and career readiness standards as their peers in lower poverty schools.

What poverty measure should we pick?

Given the framing above, the approach to picking the right measure of poverty as a “risk factor” is pretty straightforward. It’s not about identifying the individual child for some supposed educational need – programs and services – because his/her family falls below a certain income threshold, but rather about the extent to which school or district poverty rates increase “risk” that children don’t achieve the desired outcomes. So the measure you want to use is the measure which, at the district or school level, best predicts risk of not meeting the desired outcome standards? That is, the measure of child poverty, income status or whatever, that most tightly correlates with outcomes. Importantly, the measure which correlates strongly with outcomes across the full range of outcomes and economic status.

It can also be important to explore whether child poverty is associated with outcomes differently in small, remote rural districts and schools than in suburban or urban schools. If child poverty has different relationships to outcomes (different degrees to risk) at different concentrations or in interaction with other factors like population density.

Some cost benefit analysis can play into this. It may be that some measures are more cumbersome or costly to collect and update from year to year, and may perform somewhat better as predictors of outcomes, but not enough given the cost involved.

What then? How do we address the “how much? Question?

                The value of having:

  1. Valid conceptual framework (equal opportunity to achieve common goals), AND
  2. An empirical definition of “risk” and approach to selecting “risk factors”

…is that the next step – estimating the costs of mitigating those risk through state school finance systems flows logically into statistical modeling of the spending differences associated with achieving common outcomes at varied risk (poverty, income, whatever was selected) levels.

This next step – to follow “risk modeling” is “cost modeling,” and cost modeling sets out to very specifically estimate the costs of providing all children with what? Equal educational opportunity to achieve the desired, common outcome goals in question!  Cost modeling can then be used to directly inform the design of state school finance formulas including a) setting the overall level of spending needed in the average district to achieve the desired goals, and b) setting the weights and cost adjustments for a variety of factors (district size, competitive wage variation, student needs) to ensure that all children have equal opportunity to achieve those goals.

Using statistical models to relate risk and cost factors, to actual spending and outcomes – and, letting the data do the talking leads to the most accurate estimates – least political estimates – of the cost of providing equal educational opportunity. The relationships among the data are what they are, and are specific to each state context, measured outcomes and selected risk factors. Yes, there are judgments to be made in that process, by humans. But this process if far less subjective than a) asking local educators and other advisors what resources they believe they need to achieve a given set of outcomes (this is useful, but in other ways), or b) relying on consultants to provide their interpretation of what existing research says about how much (what staffing, programs, interventions) is needed to achieve the desired outcomes. Most of that research – even the best and most useful of it – was likely done in different contexts, toward different outcome measures. While it can be useful for making choices among, say, alternative reading programs, or other interventions, it is not particularly useful for estimating the costs of providing equal opportunity across lower and higher poverty settings.

The dangers of not having a guiding framework

In many states, the conversation has changed over time to adopt the logic and framework laid out here – that there is a connection between how we fund schools and what we expect of them. More broadly, that the state’s constitutional obligation to fund schools may be tied to the state’s obligation to ensure that all children have access to some common outcome goals, not just access to some equal dollar inputs to their schools.

When we – more importantly – when state legislatures (or courts) operate outside of or without any guiding framework, equal educational opportunity is unlikely to ever be achieved. It’s all well and good for state legislatures to let themselves feel progressive by saying – hey, we know kids from low income backgrounds need some more resources – so we’re gonna throw em’ a bone or two, and then to debate how they should count which kids get that bone and which don’t – sometimes picking the count method which requires buying the fewest bones, other times picking the count method which makes sure that those bones get spread most evenly – both being a political calculations. You can’t avoid political calculations. School finance formulas are political calculations.

But, when given a legitimate guiding framework and set of rigorous empirical methods for determining Who? Why? And how much?  We can hope to make school finance formulas better than they might otherwise be, in the absence of this framework and related empirical evidence. We can move the needle toward providing all kids equal educational opportunity to achieve common goals. But we’ve got to change the conversation in many places to get there!


My forthcoming book on Kansas will explain how the conversation changed in that state over time, and, as a result, why that state outpaces most of its neighbors in the region.

And these two recent reports apply the framework I outline here:



[1] Baker, B. D., & Green, P. C. (2014). Conceptions of equity and adequacy in school finance. In Handbook of research in education finance and policy (pp. 247-259). Routledge.

Duncombe, W., & Yinger, J. (1999). Performance standards and educational cost indexes: you can’t have one without the other. Equity and adequacy in education finance: Issues and perspectives, 260, 261.

Charter Schooling in the Post-Espinoza & Fulton Era

Charter schooling is at a critical juncture and the future of charter schooling across US states can take either of two vastly different paths. On the one hand, charter schooling could become increasingly private, more overtly religious, openly discriminatory and decreasingly transparent to voters, taxpayers and the general public.  On the other hand, charter schooling could be made more public and transparent and be shielded from religious intrusion and all that comes with it. We recommend a policy framework which advances the latter and protects against the former.

We wrote in 2019 about transparency problems in charter school financial arrangements with related parties, and proposed regulatory strategies for mitigating these problems.[1] These problems have, over time, led to accumulation of large sums of risky, inefficient, high-cost debt for financing land acquisition and capital investment (school buildings). These are not practices which can be clearly assigned to for-profit and non-profit charter schools managers. Rather, they are practices common to both, and often involve poorly disclosed relationships between charter operators and related parties under either umbrella (FP or NP).

On what would seem to be a separate issue entirely, the US Supreme Court has recently opened the door more widely to overtly religious operators in the charter sector, declaring that when a state permits private actors to access public financing to provide an ostensibly public service, states may not exclude religious organizations from participating. Even more recently the court has also indicated that government has limited authority to regulate the practices of these institutions if those regulations conflict with their religious views. This includes regulations prohibiting discrimination on a variety of bases.  

The murkiness of the public-private distinction under state charter school laws creates a substantial vulnerability of the charter sector to become something it was originally argued to avoid – the public financing of religious education and indoctrination which dominated existing private school voucher programs at the time. Even prior to the Espinoza[2] and Fulton[3] decisions, religious operators had become significantly involved in the charter sector, in some cases adding to the opacity and of related party transactions over land and building deals between religious and secular private organizations.[4]

These two issues – a) the intrusion of religion and all that comes with it (discriminatory practices in the name of free exercise, religious curriculum including teaching of creationism[5]) and b) financial liability and transparency concerns – can be addressed by a unified overhaul of state charter school statutes and regulations.

First, Justice Breyer’s dissent in Espinoza acknowledges the variation in governing status of charter schools across states.[6] We note that there are two layers to this which include entities that authorize the establishment of charter schools and citizen boards that govern those schools. Either or both may involve non-government entities and private citizens and governing bodies. The latter (private governance of schools themselves) being more common than the former (non-gov’t agencies authorizing charters).  We argue first that both of these layers must be governed by state actors, involving elected or appointed boards, who, in this capacity are public officials (not private citizens or institutions).

Maryland provides one example which is sufficiently tight in this regard. Charter schools are authorized by, governed by and financed through their host county school districts. Further, while private management companies may be hired to “operate” the schools, employees of the schools are under county district contracts. That is, teachers and other certified staff in Maryland charter schools are public employees and themselves “state actors,” even when they work under the direction of a private management company. 

This model provides for increased public transparency, and at the same time, minimizes potential for religious intrusion on the charter sector. A truly public governing board (like the district board of education, appointed or elected) would not be able to exclude from management contracts, firms with religious ties or origins on that basis alone. But, given that instruction is provided by public employees and the school governed by public officials, the school would be bound by constitutional requirements regarding discrimination and the provision of religious curriculum (here, the establishment clause prohibits advancement or promotion of religion).

Fiscal transparency may be improved by requiring public access to detailed records on any contractual arrangements made between public officials governing the schools and private management or other private service firms (busing, food, communications/technology, etc.). Private firms seeking public contracts, religious or not, should be required to provide full financial disclosure of detailed expense reports, including annual independent audits. Religious organizations should not be shielded from these religion-neutral regulations when seeking publicly financed contracts.  Finally, this governance and regulatory structure would better enable public oversight of capital investment and acquisition of public debt, ideally shifting the majority of capital financing back to district and state governance and lower cost general obligation bonds.

Charter school advocates who have long favored the flexibility (and limited transparency, albeit unsaid) which charter schools have been granted under current state laws would likely resist this approach, arguing that it undermines the very basis of “chartering.”[7] But we argue that the sector is at a critical juncture, and failing to act may have long term detrimental effects, which more severely undermine the public purpose of charter schooling and democratic society writ large. A more optimal model is attainable, in which contract flexibility is accessible for charter schools, while keeping the schools and their employees truly public. Given the current legal and political environment, a new approach is necessary.








Time to Tax the Churches!

On June 30th 2020, the U.S. Supreme Court determined that if a state has a program of providing public financing for private entities to provide educational services, that program cannot exclude from participation any institution simply because that institution is religious (see Espinoza v. Montana Department of Revenue). The decision involved a taxpayer financed tuition tax credit program providing vouchers for children to attend private schools, which under the state’s constitution (Blaine amendment), prohibited use of those vouchers at religious schools. This decision followed an earlier SCOTUS decision that prohibited Missouri from excluding religious institutions from access to a publicly financed program for playground refurbishing. These cases combined reverse a long history of state enforced Blaine Amendments which excluded the use of taxpayer dollars for religious institutions, even where taxpayer dollars were available to other private providers.

Of course, one difficulty with such provisions is having the government play any role in defining what is, or isn’t religion, when determining whether a tax benefit or public financing should be bestowed on an institution. Jedi? Religion! Church of the Flying Spaghetti Monster? Religion!

There are other examples where state governments bestow tax benefits on institutions simply because, exclusively and explicitly because of their status as “religious,” and regardless of other religion neutral criteria. These too have, to date, been upheld by established case law. But we argue that Espinoza which upended the established case law on Blaine Amendments also upends established case law on any state program which provides a tax benefit on the basis of religious status alone.

You ask – what could they possibly be talking about, and how could this be a big deal? Among other things, most if not all states provide for religious institution exemptions  from local property taxes. Churches, their often elaborate physical facilities, the land on which they sit is often exempt from property taxation by municipalities, school districts, etc., under state laws. Indeed, other types of institutions are also exempted in many cases, but churches and religious institutions are given their own separate status under these exemptions.

In New Jersey, schools and colleges, historical societies, libraries and other publicly held lands/buildings along with some service oriented non-profit organizations may quality for similar tax exemption, in accordance with religion neutral qualifications. Portions of land/buildings leased for to for-profit entities and/or for purposes not otherwise tax exempt may be subject to taxation. New Jersey law (NJ Rev Stat § 54:4-3.6 (2013) ) explicitly states: “all buildings actually used in the work of associations and corporations organized exclusively for religious purposes, including religious worship, or charitable purposes.”[1] Kansas law similarly provides explicit exemption for religious properties:

79-201. Property exempt from taxation; religious, educational, literary, scientific, benevolent, alumni association, veterans’ organization or charitable purposes; parsonages; community service organizations providing humanitarian services; electric generating property using renewable technology; landfill gas and production property.[2]

That is, religious institutions, regardless of whether they qualify on other religion-neutral grounds are granted exemption. Religious worship, per say, is presumed to be a non-profit community/public service, simply because it is “Religious,” even if that activity would not otherwise qualify.  

We are certainly not the first to raise this issue. But to reiterate, as much as these exemptions have been argued by some as absolutely untouchable as a form of religious freedom, or grudgingly untouchable by others as upheld in existing case law,[3] Espinoza changes all of this, and provides clear path toward taxing the churches.

If a state cannot exclude from access to taxpayer resources institutions simply because they are religious, a state also cannot exclude from taxation, institutions simply because they are religious. Indeed, to the extent that properties on which private schools operate are exempt, then this exemption would also apply to properties on which private religious schools operate. But the exemption would not extend to the church itself, or for example, rectories, religious retreats or other lands and buildings used solely for “religious” activities, including worship. The state cannot define religious activity in-and-of-itself to qualify as public service because the state should not be in the business of defining “religion,” and bestowing differential benefits on that basis alone.

Religion neutral exemptions for service oriented non-profits may include religion neutral regulations, such as non-discrimination requirements that may lead to the exclusion of some (if not many) religious institutions, including schools, from tax exemption. Such was the case in the revocation of non-profit status by the IRS of Bob Jones University. The Bob Jones case speaks to the broader point that religion in-and-of-itself cannot be classified by government as necessarily benevolent, thereby qualifying under a “benevolent neutrality” doctrine[4] (per non-profit qualifications). However, a recent SCOTUS decision raises questions about whether these regulations can be enforced. All the more reason to tax the churches.

Who pays the price for these unlawfully bestowed tax benefits? Other local property owners, who must pay higher taxes to offset the reduced overall tax base, and all other taxpayers in the state where state general funds are used to offset differences in local fiscal capacity. These taxpayers should, simultaneously, across multiple jurisdictions begin to file suit to recover these damages, and mitigate any future damages.





Filling our Nation’s Funding Gaps

Mark Weber, Matt Di Carlo and I have a new report, with data and visualizations available over at For that project, we take advantage of two major data sources to estimate a “cost model” for public school districts in the United States – specifically with the goal of estimating the per pupil costs (spending, controlling for differences in efficiency) to achieve a common outcome goal. We set that common outcome goal at the very modest level of existing national average outcomes on state assessments of reading and math achievement, grades 3 to 8. Yes, these are limited outcomes. Yes, this is a low bar. But, our main point here is to evaluate the disparities that exist across states and districts in the funding available, relative to the predicted costs, of achieving this modest target. Education cost analyses of this type have helped us better understand two things:

  1. It costs more to achieve higher outcomes than lower ones; and
  2. It costs more to achieve any given level of outcomes in some settings, with some children, than others!

State school finance systems state accountability systems for schools have historically been disjoint. On the one hand, we use state assessment data and other outcome measures to declare schools or districts good or bad – exceptional or failing. But rarely do we design and implement school funding systems that are actually built upon estimates of a) the costs of achieving the desired outcome levels, on average, or b) how those costs vary from one setting and child to the next. That is, we don’t design state school finance systems to deliver the funding that would provide each school or district with equal opportunity to hit the targets we set in state accountability policies. Thus, we necessarily create an unfair playing field. This is true in every state, though some more than others. We’ve rarely even considered how these disparities play out across states. That is, whether children in Mississippi should have equal opportunity to achieve outcomes similar to children in Massachusetts, and what that might cost.

Here’s what those funding gaps look like with respect to costs to achieve national average outcomes, for 2019, based on a model fit to data on spending, outcomes and various other school and district characteristics from 2009 to 2018.

Here’s what the outcome gaps look like in 2018:

In other words, the outcome gaps line up largely with the funding gaps. Where states, schools and districts spend enough to achieve average outcomes, they generally do achieve those outcomes. It’s not a perfect relationship, but it is a clear one. Further, deviations from this relationship occur for a few different reasons – some of which we suspect are a result of data which simply aren’t fully comparable – fully equated from one state to the next.

Still, these data give us a pretty good picture where in the country and within specific states we need substantially more investment in schooling to achieve even modest outcomes. To put these gaps into context, in 2021, the total sum of money needed to fill the red in the first map is about $130 Billion! While that seems huge, and is, it’s also about the same amount of money included in the new federal stimulus package for schools. But, a) that stimulus package is spread over a few years, to be obligated by fall 2024 (perhaps spend and spread out over even longer) and b) not permanent. It will go away, when what we really need is a sustained increased investment.

It is important to understand though, that states – especially those which currently put up very little effort of their own, should have to share some of the cost of closing these gaps. The needed increase in federal aid to close these gaps would be significantly reduced by requiring all states to put up their fair share and allocate aid to local districts appropriately according to need. This figure, from our visualizations on the site shows that states which put up more effort to fund their schools tend to have more adequate spending. Shocking, I know!

It’s also important to understand that if we want to shoot higher, it’s going to cost more. A lot more. Here’s what the funding gaps look like if we shoot for current Massachusetts average outcomes:

Let’s take a relatively average state, for example, like Missouri. An average state, but one with extremes. I had the pleasure of speaking to school administrators in Missouri about a week ago. On average, school spending per pupil across Missouri school districts really doesn’t vary much by poverty. The funding is not progressive. And on average, it’s relatively average.

St. Louis and Kansas city have somewhat elevated funding, but high poverty districts overall, not so much. If we compare these current expenditures to costs of achieving national average outcomes, we have …

That is, to provide equal opportunity to achieve national average outcomes, which aren’t too different from Missouri average outcomes would take doubling or more the per pupil spending of low spending high poverty districts, but low poverty districts could actually spend less, quite a bit less to achieve national average outcomes (which are much lower than their current achievement). For example, from our new visualizations… Clayton, an affluent suburb of St. Louis spends well above what it needs to achieve merely national average outcomes, and far exceeds those outcomes.

By contrast, right down the road… Normandy schools have significant gaps in spending and outcomes.

A few additional points which aren’t included in our new reports and site are a) how much more it would cost to achieve higher outcomes and b) the influence of racial isolation and segregation on costs. First, here’s how much the cost targets go up in Missouri if we shoot for Massachusetts average outcomes:

Shooting for Mass average outcomes, only Missouri’s lowest poverty districts currently spend enough to achieve the target and the per pupil costs for the state’s major cities climb to over $35,000 per pupil.

Prior research has shown that if we include racial composition directly in these models we may get different cost projections and thus funding gaps. Specifically, black population concentration resulting from structural, systemic racism, housing and school segregation can lead to even higher costs of mitigating outcome disparities.

If we re-estimate our models to each standard, with and without racial composition (in this case, % black enrollment) we get these results. For Normandy, for example, the non-race model (which we use in our new report) estimates a cost of national average outcomes in 2018 of $18,774. But, when racial composition is considered, Normandy which is a nearly 100% black school districts, has costs per pupil of nearly $26,000 to achieve national average outcomes.

These issues require further exploration and integration into what Preston Green and I have recently laid out as a reparations framework for school finance. Racial composition, as in our past work, continues to significantly affect the cost of achieving common outcome goals. Because of this, it remains a significantly unfair playing field to rate and rank districts on outcome metrics, when we have failed to fully address these different costs. It’s also simply unfair to the children subjected to these conditions and a constitutional violation under many state constitutions to deprive these children of equal opportunity to achieve common, adequate outcome levels.

Our new project is intended to help users, policymakers and advocates better understand these need and cost differences. Our focus is on the relative position of districts and states in the mix. And again, we are estimating against a low bar. It should not be construed that this bar – the outcome basis for our estimates – constitutes constitutional educational adequacy in any state’s particular context. States have their own standards. State courts have in many cases determined whether those outcome standards determine the constitutional standard and by extension the legislature’s obligation to finance districts to meet those standards. But many states, courts and legislatures have ducked these questions altogether over time. And we’ve never really had a robust national discussion on what it might take to raise the bar nationally, and where we have the furthest to go.

Here, we offer a starting point and one that hopefully helps change the conversation, and guide future federal aid programs as we move to the post-covid era!

A few thoughts on School Funding and Pandemic Relief

I keep getting asked the same questions regarding my thoughts on the current stimulus proposals for schools. So here’s a quick attempt at summarizing my thoughts.

The pandemic has had at least three different types of effects on school funding, which in turn, require specific, separate policy responses.

First, the pandemic has highlighted the need for a short term infusion of resources to make existing schools safer and healthier for existing staff and students, increasing expenses for things such as cleaning supplies, PPE and technology expansion for increased remote access. While these things can add up, they are still probably the smallest among these financial issues facing schools and states in this moment. Still, they must be addressed, both for short term purposes and so that we learn better how to handle similar situations in the future.

The second issue is the fact that the pandemic has created significant shortfalls in state budgets which have yet to be resolved by an appropriately structured federal stimulus package. When state budgets take a hit like this, and income and sales tax revenues dip, there’s usually a large sharp dip for 1 to 3 years, followed by a long slow recovery. We learned a lot from the last great recession. This one is, and will be different in some ways. State budgets and by extension general aid to local school districts will need significant general support for ongoing expenses for the next few years, just to stop the bleeding. But that can’t just go away immediately like it did last time, leaving huge budget holes in year 3 before states had fully recovered. Ongoing district costs, like making sure schools can provide enough nurses, counselors and small enough class sizes require ongoing support. Continued federal aid increases will be needed beyond year 2 or 3 and the federal government must put additional pressure on states to do their part.

We address this issue in these sources:

Baker, B.D., Weber, M., Atchison, D. (2020) Weathering the storm: School funding in the COVID-19 era. Phi Delta Kappan


Here’s a picture of what a sustained relief package for operating funding shortfalls might look like:

The third issue is that the pandemic has highlighted the extent of inequity in school buildings in terms of safety, health and overall capacity. These have long been issues. Buying more PPE, or having more nurses won’t solve the long accumulated deferred problems of overcrowded, poorly ventilated school buildings that in many cases are over 50 years old. The same facilities also often suffer the greatest deficits in tech infrastructure, while serving communities that have been disproportionately affected by the pandemic.

It’s also important to understand that one factor which limits district ability to reduced class sizes simply by hiring more teachers is lack of useful, quality space. Not enough classrooms! You can’t focus on class size reduction by focusing on personnel alone. Buildings matter.

Schools and districts need renovation, replacement, HVAC upgrades. This may be an especially good use of a large infusion of federal funding, because even after that funding is gone – what was bought with that funding will last for some time. Not only that, but if the federal gov’t invested a large sum in school facilities renewal and environmental improvement (HVAC, lighting, tech.) the ongoing costs of operating those facilities, which falls on districts and states, would actually be reduced. It’s a win-win.

Older post on school facilities and why they matter:
And a picture:

The current Biden framework includes some of these elements, but lacks sufficient detail. The plan needs to better sort out the short term (COVID preparedness), medium term (filling state budget holes) and longer term (maintaining adequate ongoing funding and investing in infrastructure) issues. Focusing on hiring teachers to reduce class size sounds good, politically, but there have to be classrooms in which to house these smaller classes.

Further, current conditions faced by districts across the country vary. Some may require more staff. Some may require better paid staff. This problem is broadly solved by an infusion of general aid, not funds targeted specifically toward expenditures that may or may not be top priorities, may be infeasible and may lead to problematic cuts a few years down the line.

Any final regulations on the plan need to make sure that states do their part. That states don’t generally decimate school budgets over the next several years and that states specifically protect the interests of the most vulnerable children and families, both in terms of the formulas by which new federal aid is allocated and the states’ own obligations.

This report provides some ideas of where that money is needed most, now and in the future:

Getting School Finance Indicators Right

Our data and reports can be found at:

A few years back, Mark Weber and I decided (for a variety of reasons) that we needed to regain control over our school finance indicators work. We needed to find competent collaborators who would support our desire to continuously improve the quality and integrity of the indicators and our communication of them. We also needed to find an appropriate outlet. The William T. Grant Foundation had provided us with significant support to develop an open source data system and a set of indicators to improve the conversation around school funding equity and adequacy.

We found exactly what we were looking for through Matt Di Carlo at Shanker Institute, with whom I have collaborated on a few prior projects, most notably:

I started this work back in the mid to late 2000s around the time I transitioned from Kansas to New Jersey. I’ve written previously about my concern over other “indicators” reports that are out there and the need to improve and add clarity and consistency to the conversation.

Here in April of 2019, I explain the mindset behind the development of our new (in the past few years) school finance indicators data system (SFID):

Matt Di Carlo helped bring this all together into a clear, concise set of indicators to be presented as the body of our new reports.

Below is the summary of our newest update:

The publication of this annual report and accompanying database is motivated by two considerations. The first is that there is now an emerging empirical consensus about the centrality of equitable and adequate funding for high-quality K-12 education. Yes, how money is spent is also important, but there are few options for improving U.S. public schools that do not require investment of resources, and districts cannot spend wisely money they do not have. The research is clear: Money matters. Period.

The second consideration is that school finance is extremely complicated. The inner workings of states’ funding systems, shaped over decades in state legislatures and courts, are so intricate and complex that few truly understand how they work. And finance research is among the most arcane and impenetrable fields for policymakers, parents and the general public. Every year, countless reports of varying quality are published by a variety of different individuals and organizations, sometimes reaching inconsistent conclusions.

The primary purpose of the School Finance Indicators Database (SFID) is to cut through this clutter. It is a public collection of finance and resource allocation measures that are based on sophisticated and widely accepted methods but are also designed to be easy for non-researchers to interpret and use themselves.

The State Indicators Database (SID), which is the SFID’s primary product, includes approximately 125 variables, but we focus in this report on three key school finance measures: fiscal effortadequacy, and progressivity. We feel that these three indicators as a whole provide a succinct and informative overview of the adequacy and fairness of each state’s school finance system.

This third edition of our database and annual report, however, is being published in the middle of a terrible global crisis: the coronavirus pandemic. Due to the lag in the release of national school finance data, our measures (2017-18 school year) predate the economic crisis caused by this pandemic. Yet this is precisely the right time to examine and evaluate states’ school finance systems, as they will play a big role in determining the severity, duration and distribution of the school budget shortfalls. Accordingly, we pay special attention in this report to discussing how states’ systems tend to mediate the impact of economic downturns, and we offer general guidance as to what we can expect as the impact of the current crisis continues to unfold over the next few years. 

Fiscal effort

Fiscal effort (or simply effort) measures how much of states’ total economic capacity is spent directly on K-12 education. It is fundamentally less a measure of how much states spend than the degree to which they leverage their potential to spend. Our effort indicators allow us to determine whether states lag behind in spending because they don’t have the capacity to raise revenue (e.g., they have smaller economies from which to draw tax revenue), or because they refuse to devote sufficient resources to their public schools. 

  • States vary in their effort levels, which, along with state capacity, drive large interstate differences in school resources. 
    • Individual states’ effort levels range from about 2.4 percent of gross state product (GSP) in Hawaii and Arizona to 4.4-4.5 percent in Wyoming and New Jersey. That is, New Jersey and Wyoming devote almost twice as much of their “economic pies” to public schools as do Hawaii and Arizona. (Figure 3)
    • Higher-effort states generally produce more revenue, though states with larger economies can produce the same amount of revenue as states with smaller economies that put forth the same effort levels. Effort and capacity together explain roughly 70-80 percent of interstate differences in adjusted state and local revenue. (Figure 4)
  • The Great Recession, in combination with policymakers’ choices in its aftermath, caused what appears to be a permanent decline in fiscal effort.
    • Average U.S. effort increased from roughly 3.8 percent in 2004 to a high of 4.1 percent in 2009. This was followed by a rapid four-year decline between 2009 and 2013, during which time the average decreased from 4.1 to 3.5 percent. It has remained relatively flat since 2013. States’ economies recovered, but most failed to revisit their funding systems to make up lost ground. (Figure 5)
    • Between 2007 and 2018, there was at least a nominal net decrease in effort in all but nine states (and even small changes in effort represent large changes in resources). In several states—such as Florida, Hawaii, Indiana and Michigan—this decrease was close to or greater than one percentage point. 
    • As a result, in 40 states, effort was lower in 2018 than it was in 2004, 14 years earlier. 
  • Most states are in a worse position to handle the current economic crisis than they were prior to the Great Recession.
    • High-effort, low-capacity states are particularly vulnerable. These states, such as Arkansas, Mississippi and South Carolina, are already spending a relatively large share of their “economic pies” on education and are more limited in their ability to increase resources.
    • Most states’ effort levels will likely increase in the short term, and decline afterward. The initial increase is an illusion of sorts, as it tends to take some time for education budget cuts to “catch up” with the immediate economic contraction caused by recessions. Without significant federal and state level policy responses, decreases in effort may once again recur for several years and not subsequently recover, representing another long-term de facto cut in school funding.


Effort measures how hard states and districts work to raise funds for their public schools, while adequacy addresses whether the amount raised is enough. Our primary measure of adequacy compares each state’s current education spending, by district poverty level, to estimates of spending levels that would be required to achieve national average test scores. In other words, we define adequacy in terms of a common benchmark (national average scores) that is educationally meaningful, using estimates from models that take into account factors such as student characteristics, labor market costs and district characteristics.

  • In the vast majority of states, spending in high-poverty districts falls far short of estimated adequate levels.
    • On average, spending in the highest-poverty districts (80-100th percentile poverty) is approximately 20 percent below our estimated adequate levels. (Figure 7)
    • There are only nine states in which spending on the highest-poverty districts exceeds estimated adequate levels: Wyoming; New York; New Hampshire; Nebraska; Alaska; Connecticut; D.C.; North Dakota; and Delaware. (Figure 8)
    • Conversely, spending in the highest-poverty districts is at least 20 percent below the adequate level in 28 states, and at least 40 percent lower in eight of these states: Arizona; New Mexico; Texas; Mississippi; California; Nevada; Oklahoma; and Alabama.
    • The situation is not much better in the second highest poverty district quintile (60-80th percentile district poverty), where spending is above adequate levels in only 19 states.
  • In contrast, spending in lower-poverty districts is above estimated adequacy targets in most states. When it comes to their lowest-poverty (0-20th percentile) districts, 41 states spend above estimated adequacy targets, by an average of 45 percent. In the second-lowest district poverty quintile (20-40th percentile), spending is above adequate levels in 30 states, by an average of 11 percent.
  • There is a positive relationship between adequacy and fiscal effort. That is, states that spend a larger slice of their “economic pies” on education tend to exhibit more adequate spending levels. Adequate spending in no small part represents a policy choice. (Figure 10)
  • Higher-poverty districts (and states) are particularly vulnerable during the current economic downturn, and most are already spending below adequate levels.
    • The negative impact of budget cuts on spending adequacy will be more severe and persistent in higher-poverty districts, as lower-income districts are generally hit harder by state revenue cuts, and are less well-equipped to recover from them.
    • Federal aid should be targeted at high-effort states with inadequate funding. States such as Mississippi and New Mexico try to raise their own revenue but are constrained in their ability to do so. Low-effort states with inadequate funding, in contrast, have more flexibility to generate resources in house.


Put simply, progressive funding systems are those in which higher-poverty districts, all else being equal, receive more revenue than lower-poverty districts. Regressive funding systems, in contrast, allocate more funding to wealthier districts than they do to poorer districts. Progressivity (sometimes called “fairness”) is important because it is generally well established that students from marginalized backgrounds tend to require more resources than their more affluent peers to achieve the same level of education outcomes. Our primary progressivity measure compares revenue between high- (30 percent Census child poverty) and zero-poverty districts while controlling for factors—such as labor market costs, population density and district size—that affect the value of the education dollar. 

  • State and local education revenue in most states is either non-progressive or regressive. That is, high-poverty districts, all else being equal, tend to receive revenue that is similar to or less than that allocated to the lowest-poverty districts in the same state.
    • There are only 10 states in which high-poverty districts receive at least 10 percent more revenue than zero-poverty districts. In only four of these states (Alaska, Utah, Nebraska, and Minnesota) do high-poverty districts receive at least 25 percent more. (Figure 12)
    • In 25 states, high-poverty districts actually receive less revenue than zero-poverty districts. Funding is particularly regressive in Nevada, New Hampshire, Illinois, Delaware and Maine.
  • At the national level, education funding has been non-progressive for the past two decades. On average, labor market-centered state and local revenue in the highest-poverty districts has been within 2-3 percentage points of that in the lowest-poverty districts since 1998. (Figure 13)
  • The Great Recession reversed a decade of slow progress in improving the fairness of education funding.
    • Between 1998 and 2008, 35 states saw at least a nominal net increase in progressivity.
    • During and after the recession, however, most states saw a net decrease in revenue fairness—in 32 states, funding was less progressive in 2018 than in 2008. Even as states’ economies recovered, the damage to funding equity persisted.
  • Due to the pandemic-fueled economic downturn, increasing inequity of education funding is likely in the short term, but policymakers can limit and reverse the damage.
    • School funding in many states will likely become more regressive during the next two to four years. This shift could be even more pronounced and persistent than it was during and after the Great Recession, as revenue from property taxes, which are regressive, declined due to the collapse of the housing market in 2007-08, but hopefully will remain more stable during this current downturn.
    • The magnitude of these shifts, and how long they last, is largely in the hands of policymakers. The current distribution of state revenue, how it is cut, and its interplay with local revenue will shape these trends. For example, states can cut aid in a manner that minimizes harm to higher-poverty districts, and reform their systems going forward to ensure a more progressive distribution of K-12 revenue.

Overall, then, resources in most states tend to be allocated regressively or non-progressively, and funding for higher-poverty districts in the vast majority of states falls far short of estimated adequacy levels (in many cases reflecting a lack of effort). These results are particularly troubling in our current economic situation, which threatens to make a bad situation worse. 

Yet our findings also highlight the heterogeneity of states’ school finance systems. There are, in fact, several states in which education funds are both adequate and distributed equitably, and there are relatively few that perform poorly on all three of our core measures. Such diversity is a result of the fact that school finance is primarily in the hands of states, and the structure and performance of systems thus varies widely among those states. 

The impact of the current economic crisis on K-12 funding will likewise differ among states that were at a variety of different “starting positions” when the pandemic began. And it bears emphasizing that state policymakers have the ability to mediate the severity of the damage, how long it lasts, and whether the burden is borne disproportionately by districts serving higher-needs students. 

Finally, while the purpose of this report (and the SFID in general) is to describe and evaluate states’ school finance systems, we do not provide overall state ratings or grades. Due to the complex interdependency of our three core measures, as well as the importance of state contextual factors, the potential for single summative measures to mislead and oversimplify outweighs their benefits. We do, however, include recommendations as to how policymakers, journalists, parents, and the public can use our data and results to summarize and assess the performance of state school finance systems.

We have once again made our State Indicators Database, which includes many measures not presented in this report, freely available to the public. Also accompanying this report are one-page profiles of the school finance systems of all 50 states and the District of Columbia, which may be particularly useful to those interested in one state or a small group of states. It is our hope that these data and analyses will improve school finance debates and policymaking in the U.S., both during this current economic crisis and beyond.

Fixing Connecticut School Finance: The Time is Now

 with Rob Cotto Jr. & Preston Green III

Also available at:

The COVID pandemic has laid bare the extent of inequalities across Connecticut’s cities, towns and school districts and the children and families they serve. Connecticut has long been one of our nation’s most racially and economically segregated states, while also one of the wealthiest. In the past decade those inequities have worsened along both economic and racial lines. In 2021, Connecticut continues to face the interrelated challenges of segregation and school funding equity and adequacy.  Connecticut must do better.

In two recent articles we showed that Connecticut school funding continues to systematically disadvantage students in schools and districts serving predominantly Latinx communities. This finding is not new, with districts like Bridgeport, Waterbury and New Britain recognized in numerous national reports as being among the most financially disadvantaged school districts in the nation. For a period, Connecticut appeared to do somewhat better on behalf of predominantly Black school districts, but this was largely a function of additional aid directed specifically at magnet school programs in Hartford and New Haven, and not by the design of the general aid formula. In a forthcoming article, we find that Black-white disparities in state and local revenues and in property taxation are among the largest in the nation and have worsened in recent years.[1]

Inequities in property taxation, fueled by a long history of exclusionary zoning and racial discrimination are major contributors to the state’s school finance problem, and cannot be ignored. Municipal fiscal dependence is also a problem. Having a system in which local public schools rely on city and town budgets, where those budgets are based on prior taxing and spending behavior rather than current needs exacerbates the unevenness of school funding, hitting especially hard, schools in cities like Bridgeport.  Above all, however, the state’s general aid program for schools – The Education Cost Sharing Formula (ECS) – falls short of addressing these inequities, and has never been calibrated appropriately to meet the needs of all of the state’s children.

Yes, longer term structural changes to the property tax system, housing and school segregation must be on the table. But more immediate steps are in order, to reform the state’s Education Cost Sharing Formula. The primary objective of a state school finance system is to ensure that regardless of where a child in the state lives or attends school, that child should have equal opportunity to succeed in school and life. Whether that system relies exclusively on local public-school districts, or includes alternatives such as charter schools among the delivery mechanism to achieve these goals, choice is not a substitute for equitable and adequate funding. Equitable and adequate funding is a prerequisite condition, and necessary for closing the state’s racial and economic achievement gaps.

State school finance systems must accomplish two goals simultaneously:

  1. Accounting for the differences in needs and costs across districts, cities and towns associated with providing equal educational opportunity;
  2. Accounting for the differences in local capacity to generate revenues toward the provision of equal educational opportunity.

Just like the name of the current formula – Education Cost Sharing Formula – suggests, the goal is to identify the “costs” of educating children from one school and district to the next, and then determine how to “share” those costs between local communities and the state. ECS is the primary mechanism by which the state shares the cost of educating children in Connecticut’s public schools. But ECS has never been based on any actual analysis of those costs or how those costs vary from one location to the next and one child to the next.

To clarify, “cost” per se, is what is outlined under the first point above – the “costs” of achieving specific outcome goals.  Any legitimate conception of “costs” necessarily involves consideration of outcomes. The state must decide what those goals are and how they should be measured. And the state should engage in an analysis of the costs of providing all of the state’s children with equal opportunity to achieve those outcomes. This is what we mean by “calibration.” Connecticut needs this information sooner rather than later to take steps toward reforming or replacing ECS.

A recent national analysis estimated the costs of achieving the modest goal of national average outcomes on reading and math assessments, a benchmark that Connecticut children generally exceed. Even against that low bar (per pupil cost of achieving national average outcomes) a handful of Connecticut districts fall behind. Specifically, Bridgeport, Waterbury and New Britain have spending gaps exceeding $5,000 per pupil. Similar analyses have been conducted in recent years to advise state legislatures in Vermont, New Hampshire and Kansas. Two things we know well from these analyses:

  1. It costs more to achieve higher and broader outcome goals
  2. It costs more to achieve these goals in some locations and for some children than others

There are significant additional costs of achieving common outcome goals in locations with concentrated child poverty, large shares of emerging bilingual students with added needs, etc. Connecticut’s Education “Cost” Sharing formula falls well short of addressing these “costs.”

It will undoubtedly require a substantial boost in total state aid to bring all districts to spending levels sufficient to achieve a robust set of outcomes. Achieving more will cost more, plain and simple. Again, Connecticut is a wealthy state that can afford, through higher taxes on its most affluent residents, to address these issues without fearing a mass exodus.

To summarize, we propose a three-step process toward reforming the state school finance system to mitigate the state’s persistent racial and economic disparities in school funding and student outcomes:

Step 1: Conduct rigorous analyses to answer the question – what is needed to achieve equal opportunity for all of the state’s children to achieve a sufficiently robust set of outcomes?

Step 2: Recalibrate ECS with a formula specifically designed to hit these cost targets through a combination of a) equitable local effort and b) sufficient state aid;

Step 3: Fund it! (Raise sufficient tax revenues to support the system)

Keep it up! Revisit. Evaluate. Recalibrate.

No state school finance system remains adequate in perpetuity without checks and balances. Goals change as do other demands on local public schools. State school finance systems require constant evaluation and recalibration. The time is now to start these steps. Connecticut schoolchildren have waited far too long, especially those in the state’s low income black and Latinx communities.

[1] Green, P.C., Baker, B.D., Oluwole, J. School Finance, Race and Reparations. Washington and Lee Journal of Civil Rights and Social Justice

%d bloggers like this: