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In 6 states, school districts with the neediest students get less money than the wealthiest

New federal data shows a 3.4 percent funding gap between rich and poor school districts

Photo of Jill Barshay

Proof Points

Red states indicate that the wealthiest districts receive more funds per student than the poorest districts.

Advocates for the poor often make the argument that the neediest children need more resources at school to overcome the disadvantages of poverty. For example, a child from a poor home whose mother works an overnight shift might need more one-on-one attention at school to learn to read. That costs money. Historically, the decentralized U.S. school system was largely funded through local property taxes, providing a giant financial advantage to rich students who live in wealthy neighborhoods with high property values. That has changed. Over the past 50 years, both state and federal funds have attempted to level the playing field.

However, the latest data from the federal government, covering the 2014-15 school year, still shows an advantage to the wealthy across the nation’s public elementary, middle and high schools. And there are signs that the funding gap between rich and poor might have grown larger in the aftermath of the great recession.

Here are the numbers across the nation:  The 25 percent of school districts with the highest amounts of student poverty received 3.4 percent fewer funds per child than the 25 percent wealthiest districts during the 2014-15 school year. That’s a national funding gap of $449 per student. (See Table 7 on pages 19 of this report on school district revenues and expenditures.) Within six states, colored in red on the right, wealthier districts were much better funded than poorer.

“It’s a temporary step backward,” said Marguerite Roza, director of the Edunomics Lab at Georgetown University, explaining that states ran out of money after the 2008 recession, allowing rich communities to spend more and curbing extra funds to poor districts. But with the economic recovery, many states are moving back toward funding schools more equitably, Roza said.

“We’ve generally seen an enormous effort by states to raise the base for the poorest students,” Roza said. “Thirty to 40 years ago, in the poorest districts, you’d have 30 to 40 kids in a class and no extracurriculars. You don’t see that anymore.”

Related: How much would it cost to get all students up to average?

The National Center for Education Statistics last calculated these numbers for the 2011-12 school year and it didn’t use exactly the same measurements as this most recent 2014-15 study, released in June 2018, so it’s hard to make direct comparisons. Back then, school spending per student was only 1.7 percent lower among the poorest districts than the wealthiest school districts, or $193 per student. When the 2011-12 report was released in 2015, during the Obama administration, the Education Department emphasized how much worse the funding gaps were when you only considered state and local funds and excluded federal money, which was intended as a supplement for the neediest students, not to offset deficiencies in local and state funding. At that time, the state and local funding gap between the poorest and richest quarter of school districts was 15.6 percent or $1,500 per student. The current Education Department study did not disclose what the funding gaps would have been without federal aid in 2014-15.

In a majority of states, students in the poorest school districts tended to receive more money than rich districts when you account for all three sources of funds (local, state and federal). But in six states, the wealthiest 25 percent of school districts received more money than the poorest. Illinois topped the list with an 18 percent funding gap between its highest poverty and lowest poverty districts. That’s $2,490 per student more in the state’s wealthiest school districts. Illinois has long had a notable funding gap in part because Chicago’s wealthiest suburbs are organized into “micro”school districts, each with their own budgets. The state recently revamped its funding formula and began distributing more funds to poor districts earlier this year. The other five other states with funding gaps were Maine, Maryland, New Hampshire, Nevada and Virginia.

The funding gap between the poorest and richest 25% of school districts in each state during the 2014-15 school year. Red states are where students in rich districts receive more funds than students in poor districts.

(Click on any state to see student spending data. A positive percentage indicates that the high-poverty districts have more revenues per pupil than the wealthiest districts. A negative percentage indicates that the high-poverty districts have lower revenues per pupil than the wealthiest districts. Interactive map created by Jill Barshay of The Hechinger Report. Source data: NCES, Revenues and Expenditures for Public Elementary and Secondary School Districts: School Year 2014–15, Table 7)

But within many states, it was just the opposite; poor districts received more than the wealthy, buoyed by federal and state aid targeted to poor and disabled students, as well as English-language learners. In eight states, high poverty districts received 20 percent or more funds than wealthy districts. Those states were Alaska, Massachusetts, Michigan, Minnesota, Montana, New Jersey, Ohio and South Dakota.

Related: The gap between rich and poor schools grew 44 percent over a decade

It might seem like a contradiction, at first, that a majority of states fund districts equitably within their borders (only six don’t) while the national figures show just the opposite, that we’re short-changing poor students by at least 3.4 percent. But the reason this can happen is that poverty isn’t spread out evenly throughout the country. Poverty is concentrated in the Deep South, where school funding is generally lower. Probably none of Massachusetts’s school districts would fall into the bottom 25 percent poorest districts in the nation. Meanwhile, many of Mississippi’s middle districts would be re-categorized to be in the poorest 25 percent nationally. Mississippi spends much less than Massachusetts, and that’s contributing to the 3.4 spending gap figure. At the same time, within the state of Massachusetts, poor districts are funded better than the rich districts. The same is true within Mississippi. Both are among the 43 states that give a funding advantage to its poorest districts. (Hawaii is excluded from this analysis because it operates a single, statewide school district.)

However, funding gaps aren’t the only way the judge how well a state is serving its poorest students.

Consider Utah. The poorest districts receive 15 percent more than the wealthiest. But even in the highest poverty districts, less than $10,000 was allocated for each student. That’s $3,000 less than the national average. By contrast, the highest poverty districts in New Hampshire received over $15,000 per student, well above the national average, but $1,700 less per head than the wealthiest districts in the state.

“A big question is whether you prefer a high base in spending or equitable spending,” said Roza. “New Hampshire is inequitable, but look how high the base is. If you’re poor, would you prefer that everyone gets the same amount of money, say $13,000? Or would you tolerate more inequity if the base is high, no one gets below $16,000?”

That’s a tough public policy question and reasonable people can disagree. Funding varies wildly across states and school districts. Among the 100 most populous school districts in America, the Alpine School District (the largest school district in Utah that includes the city of Orem)  managed to educate a child on only $5,724 a year. New York City, the biggest school district in the nation, spent $21,980 per student. Cost of living plays a role, as do differing poverty rates, but they hardly account for the entire difference.

How much it really costs to educate a child remains an elusive question. But pointing out the massive inequities between and within states is an important first step toward addressing them. Beginning next year, a new federal law will require states to disclose spending per student at each school and we’ll learn even more about educational inequities in our communities.

This story about school funding was written by Jill Barshay and produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.

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Jill Barshay

Jill Barshay is a contributing editor who writes the weekly “Proof Points” column about education research and data. She taught algebra to ninth graders for… See Archive

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