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February 1, 2005
Vol. 62
No. 5

Special Report / The Funding Gap

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Closing the achievement gap is a familiar theme these days. But lurking behind the achievement gap is another contentious issue: funding. Excellence in education doesn't come without a price tag.
The Education Trust's most recent analysis of school funding, The Funding Gap 2004, provides state-by-state estimates of low-income and minority funding gaps. It comes as no surprise that the majority of states provide fewer dollars per student to their highest-poverty school districts than to their lowest-poverty districts and that most states have funding gaps between the schools that have the most minority students and those that have the fewest.

The Study

Using annual financial data gathered by the U.S. Census Bureau and the U.S. Department of Education from each of the nation's 14,000 public school districts, the Education Trust zeroed in on school funding disparities by state between high-poverty and low-poverty districts and between high-minority and low-minority districts. The report considered the total amount of state and local revenues that each school district received for the 2001–2002 school year. Federal revenues were not included. The report provides data on 49 states.

The Lowdown on Shortfalls

When revenues were adjusted only for regional cost differences and the additional cost of educating students with disabilities, New York showed the greatest disparity between revenues available per student in the highest- and lowest-poverty districts—$2,040. Illinois was a close second, followed by Virginia and Pennsylvania. Slightly more than half the states provide fewer resources to their highest-poverty districts. Even more—31—show a gap for high-minority districts, with Wyoming, New Hampshire, and Montana showing the largest disparities.
Looking through the lens of a 40 percent adjustment for poverty—because high-poverty districts generally require additional funds to meet the same standards—the disparities grow. Thirty-six states provide fewer cost-adjusted dollars to their highest-poverty districts than to their lowest-poverty districts, with the national funding gap at $1,348 per student. Illinois and New York have the largest gaps for poor children, at $2,615 and $2,465 respectively.
But not all states show such dismal gaps. Massachusetts, Minnesota, and New Jersey provide substantially more resources to their high-poverty districts than to their low-poverty districts, with Alaska, Delaware, and Utah in the plus column as well.
Using this same 40 percent adjustment for poverty to describe the funding gap between districts with the highest and lowest percentages of minority students, the data show that many states with large shortfalls for their high-poverty children—such as New York and Illinois—have similar shortfalls for minority students. But some disturbing disparities surface. The gap in California between revenues available per student in the highest-and lowest-minority districts is almost twice the state's shortfall for low-income students. Colorado, Kansas, Nebraska, Texas, and Wisconsin also provide fewer resources to their high-minority districts than to their high-poverty districts.
The report also looks at funding between 1997 and 2002 to see whether states are gaining or losing ground in terms of responding to their most needy populations of students. Although 27 states narrowed the funding gaps between their highest- and lowest-poverty districts, 22 states saw the gaps grow. Some states have made progress, New Jersey in particular, due in great part to its Abbott v. Burke school funding law.

What It Will Take

  • Reduce reliance on local property taxes to fund education.
  • Target extra funds to help low-income children.
  • Fix funding gaps for individual schools within districts.
  • Improve state education funding in terms of increased spending on public education.
Closing the achievement gap starts with closing the funding gap. Only by providing the necessary resources can states help ensure quality education for all students.

Amy Azzam has contributed to Educational Leadership.

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