There are some common precepts about school funding that are familiar and fairly simple: Local, state, and federal governments each contribute a percentage—often based on providing a certain amount of money per student and meeting basic educational requirements—while asking schools to show student progress.

But that’s where the simplicity ends.

Shifting national politics, high-profile and influential court cases, and differences in state attitudes toward education all affect school funding, as do the nuances of a region’s property (and property taxes) and the whims of local school board members. Then, throw in the expectations of teachers and parents and the needs of students who are underserved, disabled, underperforming (or even succeeding), and the issue becomes much more complicated.

“Each state does things quite differently, and there are a lot of factors in school funding that make it unique for every district and every school,” says Kristin Blagg, a researcher in the Center on Education Data and Policy with the Urban Institute in Washington, D.C., and co-author of Making Sense of State School Funding Policy, a recent report on the topic that attempts to make sense of the process.

“It is complicated, especially at the state level,” says Meg Benner, co-author of “A Quality Approach to School Funding” and a senior consultant at the Center for American Progress (CAP) in Washington, D.C.

For example, in Wyoming, schools face slumping revenue from coal leases that funded the agency responsible for building and maintaining schools, says Brian Cox, principal at Johnson Junior High School in Cheyenne, WY, and state coordinator of the Wyoming Association of Secondary School Principals. “With the decrease in fossil fuels funding our schools, the state took a $9 million dollar cut last year and will see the same $9 million this year and again next,” Cox says.

Meanwhile, California has steadily increased school funding and now pays nearly 60 percent of it because of a court case that made the state fill in gaps for widely varying property tax rates (since some districts have 50 percent of state students who are low-income and a quarter who are English-language learners; those districts get a 20 percent supplement for high-need students).

In Michigan, critics said tight state budget funding has strangled money flowing through a formula for school spending and has contributed to less than 40 percent of the state’s students being proficient in reading and math. The state has increased funds to needy districts that were suffering, but some groups say it isn’t enough. Others vocally contend that spending doesn’t improve performance.

Other states have a patchwork of funding options and are straining to provide enough support, which has resulted in teacher strikes and poor student performance, critics say.

Focus on the States

Vicki Puckett, principal at Mercer Island High School in Mercer Island, WA, says she supports more local control in her state, but with limitations: “Principals know what is needed so that every student has an equal opportunity to access education. We are where the rubber hits the road,” says Puckett, who was recently named as a leading advocate for schools by NASSP. “We know how funding affects students directly, and through our lens, they can get some perspective on legislation that makes sense.”

As most administrators know, states and districts generally share responsibility equally for about 90 percent of school funding, with the federal government contributing about 10 percent. A series of court cases, detailed in Benner’s report, have established requirements about equitable funding, and states have then customarily provided guidance.

One study showed that over the last 25 years, court orders or legislative action improved spending levels and decreased disparities, which led to improved student performance, particularly among low-income students.

But states and districts pulled back funding during the Great Recession of the late 2000s and early 2010s, and Benner says in many cases the levels haven’t recovered. A report from the Center on Budget and Policy Priorities in late 2017 showed that in 29 states, funding had not returned to the levels before the recession. It also concluded local support has not recovered from that period, when property values dropped and, therefore, real estate tax revenue declined.

States have developed new formulas to be fairer to struggling districts. However, Pennsylvania and other states too often don’t use those formulas, says Joseph Roy, superintendent of Bethlehem Area School District in Bethlehem, PA. “Most of the basic education funding is still distributed as it was—without taking into account district variables,” he says.

How Funding Affects Student Achievement

Michael Addonizio, a professor of education policy studies at Wayne State University in Detroit and specialist in school finance, says while the funding formulas are somewhat fixed, he believes teacher activism is also putting the spotlight on money for classrooms and driving some changes. “I think that is something principals should pay attention to,” Addonizio says. “The teachers are at the end of their rope and have been very vocal, and there is some indication in polling that they are getting public support.”

The CAP study and the recent Brookings Institution report also suggested that an investment in teachers pays off, especially in struggling schools. “Schools might play a minor role in achievement overall, but within schools, teachers play a major role,” Brookings reported. “Focusing on teaching within low-performing schools is where the evidence points.”

Jack Schneider, an assistant professor of leadership in education at University of Massachusetts, Lowell, and author of the book Beyond Test Scores: A Better Way to Measure School Quality, has written in Atlantic magazine that a “large body of research demonstrates that school funding has a significant impact on student achievement.”

Other recent studies, such as “School Finance Reform and the Distribution of Student Achievement” from the National Bureau of Economic Research, suggest that the magnitude of impact may be greater than previously understood. Blagg cites several studies showing that student achievement and school funding are linked, including a report that indicated a 20 percent increase in spending per pupil over time resulted in 25 percent higher earnings for them after high school. Regardless, there is agreement that more funds need to be accompanied by transparency and accountability—structured in new ways with fewer and smarter assessments and reviews of whether schools are providing the proper programs in the most effective ways.

Plus, at any level, support has to be sustained. A Brookings Institution report on the role of money in improving education indicated that “short-term money does not matter.”

Strides Toward a Better Future

At least two important developments have occurred in the last decade at the federal level—the passage of the Every Student Succeeds Act (ESSA), and the Trump administration’s move to tighten the education budget.

While federal funding for schools is a small percentage of the total, it has been under threat, particularly Title II monies for staff development, along with full funding for ESSA.

NASSP recommends fully funding ESSA and the Individuals with Disabilities Education Act, along with more support for secondary schools and literacy efforts at all levels. NASSP also recommends that policymakers “refrain from initiating state and federal initiatives that divert funding from public secondary schools to private sources.”

Dealing With Privatization

About a year ago, Education Secretary Betsy DeVos announced support for a department budget that would cut money for some after-school programs and professional development to put $1 billion into private school vouchers, which enables parents to use funds set aside for public education for the private schooling of their children.

Some 27 states have a form of school choice, while 14 and the District of Columbia have traditional school vouchers, all with varying rules about eligibility, according to the National Conference of State Legislatures.

Charter schools have gotten attention and support, but Addonizio says the enthusiasm for them perhaps has died down. “There is some evidence that support for charter schools is peaking and leveling off and maybe declining. Generally speaking, they have had disappointing results. In some states, principals and other leaders might be keeping an eye on what is happening there.”

In Pennsylvania, Roy is concerned that $1.5 billion annually is diverted from public schools to charter schools, which are privately run and publicly funded. “Additionally, through what are called scholarship donation programs, dollars are diverted from the state to private and parochial schools—this is basically a voucher program disguised as donations to scholarship programs—but the donor then has a very significantly reduced state tax bill,” Roy says.

How to Figure Funding

There are generally two ways that states determine school funding, as defined in the Urban Institute study:

  1. Foundation Grants: This is the most popular model for school funding. Under this approach, the state decides the minimum amount that should be spent per student, calculates each district’s ability to pay, and fills in the gap.
  2. Guaranteed Tax Base: Some state formulas equalize both access to a minimum level of funding and the revenue generated in each at a given tax rate. “This approach, sometimes called power equalization, allows each district to tax and spend as if it had the same local property tax base, thereby eliminating the inequities that foundation funding can produce,” the report says.

Some states have “essentially centralized their school finance system,” Blagg says. “The state assigns a standard property tax rate for all districts,” she says. “In return, it guarantees roughly the same per student amount across districts.”

Benner says that in some cases the formulas for states or districts distributing money are “weighted,” assigning more weight (and therefore more dollars) to students from low-income backgrounds or to students with special needs when calculating the amount of funding.

That, she says, is often accompanied by more freedom for districts or school administrators to make decisions about how to spend the money. It could be spent tackling a broad significant problem in a school, such as poor performance by ESL students, or it might provide additional support to a school-based initiative that is showing good results but might not be additionally funded under state formulas.

“Weighted student funding models provide principals with discretion over the use of schools’ budgets,” the CAP study says. “Principals can build their school budget, staff, and program options to best serve their students.” Benner says that some states are trying weighted formulas, including California and Rhode Island, and it appears to have improved graduation rates. In California, an additional $1,000 was added in spending per pupil and the graduation rates increased by 5 percent.

One other change that may be of interest to principals is a requirement under ESSA—which will happen over the next few years—that along with academic data, schools post information about spending per pupil. That would provide administrators and parents clear, comparative data about how much funding their school is receiving, Blagg says.

Funding at the School Level

To raise money, schools can hold fundraisers. They can also partner with local businesses or other organizations to provide resources or manpower. Sometimes schools can lobby for additional funding, Addonizio says, but often there is not much flexibility in district allocations to schools because so much is determined by restricted staffing and regular expenses.

Steve Baker, principal at Bluffton High School in Bluffton, IN, agrees but says that in certain districts, principals have more leverage. “It depends on the school, but I believe that in many, like mine, the principal has a say over certain budget items,” he says. Classroom supplies and professional development are two major ones, Baker says, noting that he believes those choices principals make can be significant and should be done carefully. School funding at all levels is important, he says. “It is critical it become a bigger priority.”

Jim Paterson is a writer based in Lewes, DE.

Sidebar: What Principals Can Do

While there may not be many ways for principals to control most of their funding directly, they certainly can have a say and encourage parents and staff to get involved.

“It’s very important for principals to be involved in the political realm when funding comes about,” says Brian Cox, principal at Johnson Junior High School in Cheyenne, WY, and state coordinator of the Wyoming Association of Secondary School Principals. “Legislators want to hear from the boots on the ground. It is our responsibility to show the data, brag on our students, teachers, and their gains. We cannot find ourselves upset with public opinions of education when we don’t make sure that our message is conveyed.”

NASSP has had an impact on school funding, and the efforts of principals have paid off, says Steve Baker, principal at Bluffton High School in Bluffton, IN, who has been involved in efforts at the federal level. “I remember when I became a principal 20 years ago, advocacy was never on my radar. I felt it was done by lobbyists or people specifically designated for that purpose,” says Baker, who was named one of NASSP’s Principal Advocate Champions over the winter for his work on school funding and other topics. “Within the last five to 10 years, I have seen the importance of advocacy and the growing need for building leaders to get involved.”

NASSP and principals have been effective in improving state and federal policy and educating members about the most pressing issues, often related to school funding, Baker says. He recommends that principals become informed about the issues and then develop relationships with public officials, perhaps by inviting them to the school to speak or see how the school day unfolds. “Developing relationships with legislators gives you the opportunity to communicate with them on a regular basis over funding and other educational issues. I believe that building trust is essential in this arena,” he says.

Joseph Roy, superintendent of Bethlehem Area School District in Bethlehem, PA, says he believes administrators at all levels can have a big impact by involving parents to advocate for school-friendly policy, calling it a “critical opportunity we need to develop.” “They can grow to understand the issue, and legislators will listen to a group of well-informed taxpayers,” he says.