Making the Grade 2023: Pandemic Economic Uncertainty Spurred Public School Disinvestment


NEWARK, N.J. – The Covid-19 pandemic had an impact on public education that is rarely discussed, according to Education Law Center’s Making the Grade 2023 report released today: Expecting an enormous economic hit from global shutdowns, many state and local policymakers cut aid to schools, regardless of the condition of their school finance systems.

ELC’s Making the Grade 2023: How Fair is School Funding in Your State? documents school funding in the states during the 2020-21 school year, the first full school year of the pandemic. In 2020-21, school finance across the U.S. continued to be marked by vast disparities in funding among states, an insufficient commitment to providing high-poverty districts with the additional resources they need, and a lack of effort in funding schools even among states with the fiscal capacity to do more.

In the spring of 2020, state and local policymakers were contemplating the following year’s fiscal budget just as the pandemic hit. With the country largely shut down and economic prospects uncertain, many states pulled back on education funding. Some states significantly reduced the total amount of state and local revenue allocated to districts (e.g., Colorado and Hawaii) while others failed to implement planned funding increases (e.g., Illinois and New Jersey). In 2021, 14 states reduced total state and local funding for PK-12 education, the largest disinvestment since the 2008 Recession-era cuts.

Making the Grade 2023 is being published as states are beginning to tackle their FY25 budgets, and the report sounds the alarm for policymakers to prioritize education funding. Federal Covid relief funding played a crucial role in helping school districts address pandemic-related costs, but the pandemic once again exposed the preexisting inequity and inadequacy of school funding in many states.

“The pandemic not only illuminated inexcusable conditions in public schools, including subpar air quality, insufficient staffing, crowded classrooms, and outdated technology,” said ELC Executive Director and report co-author Robert Kim, “but also set in motion a retrenchment in state and local funding that must be counteracted immediately, especially as federal pandemic-era funding ends.”

Using the most recently available data from the 2020-21 school year, Making the Grade 2023 evaluates each state’s education funding system on three critical measures of fairness:

  • Funding Level measures the combined per-pupil state and local revenue provided to school districts, adjusted for regional cost differences. The report finds that funding varies dramatically across states, from $10,536 per pupil in Idaho, to $27,265 per pupil in New York.
  • Funding Distribution measures the allocation of funds to school districts relative to the concentration of students from low-income families. In the most “progressive” states (Utah, Delaware, and Minnesota), per-pupil funding in high-poverty districts exceeds funding in low-poverty districts by 30% or more. In the most “regressive” states (Oregon and Nevada) high-poverty districts receive 30% less per pupil than low-poverty districts.
  • Funding Effort measures investment in K-12 public education as a percentage of a state’s economic productivity (GDP). The effort a state makes, combined with the state’s overall fiscal capacity, determines how well schools are funded. The highest-ranked states (Vermont and New Jersey) make more than twice the effort to fund their schools than the lowest-ranked states (Arizona and North Carolina).

Making the Grade 2023 also documents the impact of the pandemic on public school funding by examining changes in the fairness measures between 2020 and 2021:

  • Nationally, PK-12 education had the smallest annual increase in combined state and local funding and the largest number of states (14) cutting state and local revenue since the Great Recession.
  • While most states made modest improvements in funding distribution, a handful of states became significantly less progressive (Utah, Wyoming, Alaska) or even more regressive (Oregon, Nevada). These changes were driven by a decline in average per-pupil funding levels in the highest poverty districts.
  • With the economy far exceeding the initial dire expectations, the combination of slower than typical growth in PK-12 revenue and faster than typical growth in GDP resulted in a near universal decline in funding effort across states.

ELC’s report documents how vulnerable public schools are when states face broader economic challenges. Even though the economic outlook for states has vastly improved from what was predicted in the early days of the pandemic, that does not always translate into timely reinvestment in the nation’s public schools.

“History tells us that school funding improvement can lag well behind financial recovery,” said ELC Research Director and report co-author Dr. Danielle Farrie. “Advocates and policymakers must make use of the current focus on student wellbeing to increase funding and ensure the necessary resources are available for students, no matter where they are located.”

Making the Grade 2022 is coauthored by Dr. Danielle Farrie, ELC Research Director, and Robert Kim, ELC Executive Director. View the full report and explore findings with interactive tools online.

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