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CAP Study Cites Hurdles to Funding Equity

When it comes to making state school funding equitable for needy students, former Pennsylvania Gov. Ed Rendell, a Democrat, has a sad story to tell. But first, some background.

Back in June, I wrote about a study from the Newark, N.J.-based Education Law Center that examined to what extent states used their school funding formulas to provide more resources to the poorest areas that (many would argue) need the most aid to offset low property tax revenues. Essentially, the "National Report Card" on equitable funding found that most states don't do a good job targeting students in need.

One of the authors of that study, Bruce Baker, has now released a report through the liberal-leaning Center for American Progress on what amounts to the same topic. The latest report for CAP, "The Stealth Inequities of School Funding," written by Baker and Sean Corcoran, has a narrower but deeper focus. It looks at six states (Illinois, Missouri, New York, North Carolina, Pennsylvania, and Texas) and why their high-poverty districts don't get equitable access to state, as well as local, resources.

Just to use Rendell's state as an example, Pennsylvania's general aid to schools drops from over $10,000 per student for the districts with the lowest share of poor students down to below $6,000 to districts with the highest poverty rates, according to CAP's report.

Here are some conclusions from the authors that they say help to explain that kind of funding curve:

  • One major driver for funding inequality is that many states provide aid outside of their traditional, general school aid formulas. The authors of the CAP study criticize other types of formulas that may erase progressive funding of poorer districts in general aid formulas. These two non-general funding amounts stay largely constant across both poor and wealthy districts in Illinois and North Carolina, for example.
  • The authors also single out state aid that supports the reduction of local property taxes (in effect, a supplanting of state for local dollars) as a policy that disrupts efforts at equity in Missouri, New York and Texas. In general, the authors say that "property taxes are the most important contributor to inequities in local revenues across districts."
  • North Carolina gets particularly critical treatment, saying that its general education funding formula is largely a "flat, common" model for all districts "regardless of variations in local capacity to support the basic programs." Baker and Corcoran highlight other "flat" grants for special education and English-language learners, regardless of districts' resources. Even the state's effort to account for local wealth differences only makes a $600-per-pupil difference at most for poor districts with the least taxable property wealth.

Here's where it's important to point out that this debate still takes place in the context of how much money in general to spend on schools, wealth-equalized or not. Just this week, I highlighted a report from State Budget Solutions asserting that education spending in the U.S. would benefit from more local control (and not more state-directed solutions like the one Rendell advocates), and that the amount of spending has not boosted student achievement.

Now, on to Rendell's story: During his eight years as the Keystone State's governor, Rendell told the audience at CAP's Washington office during the introduction of Baker and Corcoran's report that he focused extensively on ensuring more state resources for schools. Rendell noted that on his watch, the state's share of public school funding rose from 33 percent to over 40 percent, but did not reach his goal of 50 percent.

He also said that in a few years before the financial crisis, the state made major gains to equitably fund poorer districts, based on an adequacy study commissioned by state lawmakers. But the effort was all but choked off by the recession that began in late 2007.

"We ran out of time," Rendell told his audience.

He also recalled the student body president at a relatively poor, high-minority high school asking him on a visit why other students in a wealthier neighborhood could receive Palm Pilots their schools, while his classmates struggled to get books for their classes. "When I heard him say that, I felt ashamed," Rendell said.

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