Making the Grade 2024: Education Funding Disparities Persist as Some States Prioritize Tax Cuts and Privatization

FOR IMMEDIATE RELEASE 

NEWARK, N.J. – Education Law Center’s much anticipated annual report, Making the Grade: How Fair is School Funding in Your State?, was released today, concluding that, despite the overwhelming challenges facing public schools from the Covid-19 pandemic, many states not only failed to prioritize education funding but also enacted measures that jeopardize their ability to improve school funding in the future.  

“We find that public school needs are going unmet due to short-sighted economic and education policies that depress state revenue and divert scarce resources away from public schools, especially in states where the need for investment is the greatest,” said report co-author Dr. Danielle Farrie, ELC Research Director. 

What grades did your state receive? Find out here.

This year’s Making the Grade report, which focuses on school funding in states during the 2021-22 school year, revealed that far too many states began to implement fiscal and educational policies with the potential to undermine funding equity and adequacy. Instead of shoring up revenues in preparation for the looming fiscal cliff from federal Covid relief funds, many already low-funded states made the decision not to tap into billions of dollars in potential education revenue and instead enacted tax cuts for the wealthy and corporations. Other poorly funded states established costly universal voucher programs – with no income or other eligibility requirements – that are competing with public schools for limited resources. Some states did both.  

“We emerged from the devastating pandemic with a new appreciation of the critical role that public schools play in our communities, serving not just the academic but also the social and mental and physical health needs of our nation’s students,” said ELC Executive Director and report co-author Robert Kim. “In light of this pivotal role, the enactment of policies that either depressed revenue or diverted resources from public schools clearly failed to address the needs of children.” 

Overall, Making the Grade 2024 demonstrates that school finance across the U.S. continued to be marked by vast disparities in per-pupil funding among states, funding levels that did not keep pace with rising inflation, and a failure by many states to capitalize on strong economic growth. On a positive note, more than half of states had at least modestly progressive funding systems that provided more funding to higher poverty school districts. 

Making the Grade 2024 evaluates each state’s education funding system during the 2021-22 school year 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 average funding levels in the five highest funded states are more than twice as high as the five lowest funded states. 

• Funding Distribution measures the allocation of funds to school districts relative to the concentration of students from low-income families. Twenty-eight of the 48 states evaluated had at least a modestly progressive distribution of state and local funding.  

• 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. Schools in many of the highest effort states benefit from a double advantage – high effort on top of high fiscal capacity. Schools in many of the lowest effort states suffer from a double disadvantage – low effort on top of low capacity. 

Three states perform well on all three indicators when evaluated against other states: New York, Ohio, and Wyoming. These states generate well above average per-pupil funding; that funding is progressively distributed; and they are making an average or above fiscal effort. Three other states stand out as consistently low performing: Florida, Nevada, and Texas. These states have funding levels that are well below average; funding is inequitable (flat or regressive); and the states are making a below average effort to fund schools.  

Making the Grade 2024 also documents funding fairness over a ten-year period, revealing some areas of progress and other areas of stubborn inequity. Between 2012 and 2022: 

• Average funding disparities between the highest and lowest funded states were persistently between $13,000 and $14,000 per pupil, dramatically affecting the types of resources available to students in different parts of the country.  

• The number of progressively funded states more than doubled from 13 to 28, indicating a growing acknowledgement that students in high-poverty districts require more funding to reach their full potential. 

• Nationally, the effort index in 2022 was the lowest it has been in the prior ten years. Even with a strong economic recovery after the initial pandemic downturn, state and local revenue for education lagged, especially as revenue failed to keep pace with inflation in recent years.  

“We are heartened by the steady increase in progressively funded states, especially as research evidence on the short-and long-term benefits of school finance reforms for low-income students continues to mount,” said Dr. Farrie. “But it is abundantly clear that many states have a lot of work to do to address existing disparities. Instead of prioritizing policies that create advantages for the already advantaged, we need state policymakers to prioritize public education policies that benefit the most disadvantaged.” 

Making the Grade 2024 is co-authored by Dr. Danielle Farrie, ELC Research Director, and Robert Kim, ELC Executive Director. View the full report and explore findings with interactive tools online, including new downloadable state profiles.  

Join ELC on Monday, December 16, 4-5 p.m. ET, for the webinar “What Do We Do Now? Money Matters More Than Ever So States Can Make the Grade” for a discussion of the report and other school finance issues in the context of the second Trump administration. Register here. If you missed the first webinar in the ELC series “What Do We Do Now” on public money for private education, watch the recording here. 

Press Contact:
Sharon Krengel
Director of Policy, Strategic Partnerships and Communications
skrengel@edlawcenter.org
973-624-1815, x240