On School Funding Fairness

Posted on October 12, 2010

I’ve been toying around for a while on this blog with different ways to compare state school finance systems. This new website presents a summary of much of that playing:


After much discussion and debate, we landed on the following four indicators.

The Fairness Measures
All 50 states are evaluated on the basis of four separate, but interrelated, fairness measures:

  • Funding Level: Using figures adjusted to account for a variety of interstate differences, this measure allows for a comparison of the average state and local revenue per pupil across states. States are ranked from the highest to lowest per pupil funding.
  • Funding Distribution: This measure shows whether a state provides more or less funding to schools based on their poverty concentration. States are evaluated as “regressive”, “progressive”, or “flat” and are given letter grades that correspond to their relative position compared to other states.
  • Effort: This measures differences in state spending relative to the state’s fiscal capacity. States are ranked according to the ratio of state spending on education to per-capita gross domestic product.
  • Coverage: This measures the proportion of school-age children attending the state’s public schools and also addresses the income disparity between families using private, rather than public, schools. States are ranked according to both the proportion of children in public schools and the income ratio of private and public school families.

It is important to understand that two of these indicators are much more in control of the states than others – Effort and Funding distribution, or Fairness. States control the amount financial effort they put into their schools, as a percent of their capacity. States have less control over their overall funding level produced by that effort. I encourage you to look carefully at differences between states like Louisiana and Tennessee, compared to Mississippi. The first two simply don’t put up the effort. Hence my constant lambasting of Tennessee on this blog, especially in the context of RttT.

Coverage and funding level are not as controlled by states, but that’s not to say they are not significantly controlled by states. Funding levels vary about 50/50 on the basis of state wealth and on the basis of state effort. Effort seems to matter as much as wealth in predicting state spending levels, and that makes sense. Hence we grade on effort.

Coverage is included for a few reasons, and is included along with the ratio of family income of those in and not in the public education system. First, coverage is included because for many states this indicator shows just how many kids we are leaving out of our equity analysis by comparing revenues across only the public system. In a handful of states, the excluded share is around 20% and in some of those states that 20% are from much higher income households – likely increasing the “regressiveness” of the system as a whole (public/private schooling). Second, we include coverage because long term, systemic deprivation of the public system can, in fact, lead to significant flight from the public system. That should not be ignored and should not be treated, as one reader of a previous post argued (comments section), as a smart state policy decision toward further reducing long run costs- by encouraging more affluent families to independently finance their child’s education. Call it a value-laden decision, but we do not accept the argument that depriving the public education system to the point where more kids opt out, so we don’t have to use tax dollars to pay for them, is smart policy.

I also encourage readers not to try to make too much of the between state comparisons of overall spending level. I discuss many angles on these comparisons in a recent post: https://schoolfinance101.wordpress.com/2010/10/04/state-ranking-madness-who-spends-mostleast/ The bottom line is that it’s really hard to make reasonable comparisons of the cost differences of operating schools in Vermont versus Nevada. However, the within region comparisons may be more useful.

I especially encourage comparisons among the “profiles” or those sloped lines among states sharing regions. The New York/New Jersey profile comparisons are particularly interesting. New York affluent suburban districts have far more resources than New Jersey affluent suburban districts, but for poor urban districts, the differences flip.

Be sure also to check out the updated tables with the 2007-08 NCES data.

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