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At Ronald D. O’Neal Elementary School, in Elgin, Illinois, none of the third graders could read and write at grade level according to state tests in 2019. Nearly 90 percent of the school population is considered low-income and nearly three-quarters are labeled English learners, meaning that the state language arts test assesses their reading and writing ability in a language they’re still trying to learn.

Just nine miles away sits Centennial Elementary School, where 73 percent of third graders met grade-level standards on that same test. A fifth of Centennial’s student body is considered low-income, and 17 percent get extra supports as they learn English.

The state has celebrated Centennial for “exemplary academic performance.” It designates O’Neal as a school in need of targeted assistance. But despite its low performance and its students’ needs, O’Neal received $9,094 per student in 2019 in state and local funding compared to Centennial’s $10,559. If O’Neal had received Centennial’s per-pupil funding, it would have meant an extra $789,905 in its budget: Money that could have covered more — or more experienced — teachers, social workers or home-school liaisons, or paid for new programs to address students’ academic and nonacademic needs.

While wealthier school districts routinely spend significantly more money to run their public schools, the disparity between Centennial and O’Neal can’t be attributed to the relative wealth in their communities. Both schools are part of a single district, U-46, Illinois’ second largest.

Kids who need more support to overcome barriers to academic achievement are routinely shortchanged. U-46 was one of 53 districts across the United States that spent a statistically significant amount less state and local money on high-poverty schools than on lower-poverty schools, according to a new Hechinger Report analysis of how districts disburse funding. In another 263 districts, the level of spending on each school had little to no connection to the number of students in poverty, despite the higher needs often present in low-income schools. It’s the first time this kind of data has been compiled and analyzed nationally, and some of the spending gaps are extreme.

Until this year, funding disparities between schools in the same district were hard to identify. Most districts didn’t budget in a way that allowed comparisons of school-level spending. They reported only districtwide averages, making disparities across districts the primary fodder for conversations about educational inequities. Now, a federal financial reporting requirement has taken effect, demanding that states report per-student spending by school — just as they report student performance by school — and forcing transparency about disparate spending inside district lines.

“We are inequitable. And we are working on that.”

Tony Sanders, superintendent of Illinois School District U-46

Hechinger’s analysis of state and local spending by school included nearly 700 districts (those with 15 or more schools) from 40 states that made the data available. The data was from the 2018-19 academic year, with the exception of Nevada, which has released only the data from 2017-18. Additionally, five states — Maine, New Mexico, Nevada, Ohio and Oregon — reported combined federal, state and local spending. The analysis focused on state and local spending because federal dollars are explicitly intended to supplement district budgets, rather than provide an alternative revenue stream. Districts that use the federal dollars to equalize their spending violate federal policy.

Hechinger’s analysis found multimillion-dollar funding disparities between schools in the same communities. A lot of factors affect school-level spending, but a handful of district practices routinely drive these disparities. Schools with the wealthiest students tend to draw the most experienced teachers, who cost more. And because small schools cost more to operate without economies of scale, districts that happen to have more of these schools in higher-income areas may end up spending more on wealthier kids. Magnet programs that often serve wealthier student populations drive up spending, both because they are generally small schools and because they frequently get extra funding to support specialized programming.

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School officials are often surprised by their own spending trends, once they see them. While it is widely known that 80 percent of education budgets go to personnel costs, school leaders don’t always realize the outsize effect teacher placement has on budgets when more experienced teachers cluster at schools serving wealthier kids or the disparate impact of raises that are a percentage of teacher salaries. And the additional costs of small schools and magnet programs can fly under the radar.

Marguerite Roza, an economist at Georgetown University and the director of its Edunomics Lab, has studied how spending choices play out in district budgets.

“Those are very much district choices, but districts would say, ‘What? We never made an intentional decision to give more money to the wealthier schools,’ “ Roza said.

The enrollment and staffing patterns that district leaders allow can have a major impact on children’s outcomes. Magnet schools tend to skim districts’ highest-performing kids and most-engaged families, pulling them from elsewhere in a district where they might contribute to building stronger schools. Teachers with more than five years of experience tend to be more effective and more likely to stay in the field for the long-term, boosting student performance in schools where they dominate the teaching force. And small schools tend to offer more attention to individual students, giving their populations a better school experience, overall.

Centennial Elementary School in Bartlett was allocated $10,559 per student in state and local funding last year, compared to $9,094 per student at Ronald D. O’Neal Elementary School in Elgin, even though both are in Elgin Area School District U-46. Credit: Brian Hill/Daily Herald

Ary Amerikaner, vice president for P-12 policy, practice and research at The Education Trust, which fights for more equitable spending in schools, has long sought to draw attention to the variation in per-student spending within school districts. “People are less aware of the inequities within districts and less aware that children attending high-poverty schools in relatively high-poverty districts can get hit twice — first by inequities because their district doesn’t have the revenue and then unfair spending within their district,” Amerikaner said.

Related: “Kids who have less, need more”: The fight over school funding

In Elgin, where Ronald D. O’Neal is located, the median home value is nearly $100,000 less than in Bartlett, where Centennial is. The poverty rate is three times higher. Elgin City Councilman Corey Dixon was born in Elgin and graduated from School District U-46. He had no idea an elementary school his constituents attend was getting so much less in per-pupil funding than a school in a wealthier portion of the same district. But he’s not surprised.

“That’s a problem. Who could argue that it’s not?” Elgin Councilman Corey Dixon said of new data showing funding disparities among schools in Elgin Area School District U-46. Credit: Courtesy of Corey Dixon/2017

He has long taken issue with the “broken” way our country finances its schools: primarily with local property taxes that unfairly advantage students from wealthy communities, which are often also majority white because of the U.S.’s long history of segregation and racist policies. Sixty-five percent of Centennial’s students are white. Five percent of O’Neal’s are (the vast majority, 85 percent, are Latino). Dixon has three daughters in the district. He is Black and has always known that students who look like his own children are on the losing end of glaring achievement gaps nationwide. Now he sees they’re the victims of school funding disparities within individual districts, too.

“That’s broken,” Dixon said. “That’s a problem. Who could argue that it’s not?”

Besides basic ideas about fairness, spending inequities are a problem because having more money matters when it’s used well. Although researchers — and elected officials — have debated the value of increased educational funding, new evidence suggests that when schools serving low-income students do spend additional money in key ways, they greatly boost student success.

Rucker Johnson, an economist at the University of California, Berkeley, studied the connection between school spending and long-term student outcomes, including educational attainment, adult wages and the incidence of adult poverty. He and his colleagues found that children from low-income homes, in particular, benefited from state policies in the 1970s and 1980s that increased school funding – and that the effects were cumulative. The longer students attended schools that got more money, the better they did.

53 U.S. districts spend less state and local money on high-poverty schools than on lower-poverty schools.

More recently, Johnson and his team have also been able to draw a line from per-student spending to better standardized test scores and graduation rates, findings they think bolster the argument that more money makes a difference.

“At every stage, higher spending led to significant increases in student outcomes and narrowing of achievement gaps by race and poverty status,” Johnson said his forthcoming paper will show.

Related: A decade of research on the rich-poor divide in education

Still, even in districts that don’t systematically spend less on high-poverty schools, overall, inequities remain. In Indianapolis Public Schools, for example, the Center for Inquiry School 84 has a lower portion of kids getting free or reduced-price lunch than any other school in the district, at just 8 percent. The school is a magnet school in a wealthier part of the city, and although it is technically open to students across Indianapolis, neighborhood kids get preference, meaning that children whose families can afford to buy a home near the school have a greater chance of getting in. A school of basically the same size, the William McKinley School 39, has a student population in which 76 percent of students get free or reduced-price lunch and many more get services as English learners or students with disabilities. McKinley gets a “C” rating from the state for its below-average student performance while the magnet gets an “A” and far surpasses state averages on standardized test scores.

Yet McKinley gets $9,794 per kid in state and local funding, and the magnet school gets $11,303.

In Algonquin, Illinois, Community Unit School District 300 Superintendent Frederick Heid has prioritized school-level spending as a route to educational equity since he took over the position six years ago. Beyond the needs of kids from low-income homes, Heid said the district allocates extra money to schools serving large populations of students with disabilities and students who are still learning English.  The district also provides more funding to schools with preschool programs and to a pilot program for students with four or more “adverse childhood experiences,” including exposure to abuse, neglect and household dysfunction.

“It does result in different funding amounts going to different schools, but we believe that is the best way to get to equity for our students,” Heid said.

Still, even in a district with such explicit spending priorities, inequities between individual schools remain. Golfview Elementary School, for example, serves about 550 students, 86 percent of whom are considered low-income, 69 percent of whom are English learners and about 13 percent of whom get special education services. Algonquin Lakes Elementary School serves about 425 students, with less than half its students in poverty, less than one-fifth English learners and about the same proportion in special education. Yet Algonquin Lakes gets more than $2,000 more per-pupil than Golfview.

Susan Harkin, District 300’s chief operating officer, said this can largely be attributed to Golfview Elementary School’s early career teaching force and Algonquin Lakes’ shrinking special education population. She said the spending across each school should normalize in the next few years as the teachers at Golfview gain seniority and special education funding drops at Algonquin Lakes. In the meantime, however, Algonquin Lakes students, who are wealthier overall, and most of whom don’t face the challenges of learning English, get to enjoy that extra $2,000 per pupil.

“We saw schools of similar size, similar demographics, but one school got 50 percent more per pupil.”

Jean-Claude Brizard, former superintendent of Rochester City Schools in New York

Similar spending inequities have shocked district leaders around the country. Many have had a reckoning over the last year as they prepared and reported their per-school spending data to the state for the first time because of the new federal requirement. The transparency mandate was tucked into the 2015 update of the Elementary and Secondary Education Act but didn’t require states to report that data until June 30 of this year.

Some districts have defended spending less on higher-poverty schools. Certain special education programs can drive up costs, for example. Yonkers Public Schools in New York said it spends more on wealthier schools because its intensive special education programs are concentrated on those campuses, where there happens to be room for them.

“We are inequitable. And we are working on that,” said Tony Sanders, superintendent of Elgin Area School District U-46. Credit: Brian Hill/Daily Herald

In U-46, in Illinois, Tony Sanders, the superintendent, also pointed to costs associated with special education services as a reason that some schools in higher-income communities end up becoming the most expensive.

The elementary school that receives the most state and local money per student in U-46, Wayne Elementary School, represents a perfect storm of factors driving up per-student spending on a student population that doesn’t seem to need it, when considering only poverty rates. Besides its special education programs, it is a small — and under-enrolled — school, serving just 368 students in a building that can fit twice as many. It has a veteran teaching staff commanding higher salaries. And it is in a wealthy, suburban portion of the district where all children take buses to school, something that is free for them, but costly for the school’s budget. Wayne gets $12,980 per student in state and local funding. If the Ronald D. O’Neal Elementary School got that much, it would add nearly $2.1 million to its budget.

Sanders doesn’t see a way for the district to get around Wayne’s expenses, given its location and enrollment. But over the last year, he and his staff have found ways to address spending equity in the face of the data that made clear the district has room for improvement.

“We are inequitable,” Sanders said. “And we are working on that.”

This past year, with extra money from the state thanks to a revised funding formula, U-46 placed more assistant principals in its high-poverty schools. It also reduced class sizes in the early elementary grades in some of those buildings and bought more mobile devices for schools that didn’t yet have enough for every student. And Sanders said administrators are brainstorming ways to spread out access to the district’s best teachers, perhaps virtually, so that students get more opportunities than the ones available to them in their assigned neighborhood schools.

Elgin Area School District U-46 headquarters in Elgin. Credit: Paul Valade/Daily Herald

Nationwide, few districts have made changes to deal with the inequities laid bare by the new data. But Montgomery County Public Schools in Rockville, Maryland, is well on its way — and it’s paying close attention to how spending is tied to student outcomes. For many who advocated for this financial reporting requirement in the first place, making the connection between resources and results is the whole point of teasing out per-student spending by school.

“The end goal is taking this opportunity to leverage our dollars to get the greatest outcome for our students,” said Roza, the economist at Georgetown University.

Montgomery County Public Schools hired an educational consulting firm to do a financial audit in advance of the federal reporting deadline. The firm found that the district spends more on its higher-poverty schools, but also identified troubling inequities: Overall, Montgomery County’s high-poverty schools perform worse, and Black and Latino students from low-income homes perform particularly poorly, whether they are in high-performing schools or not. In exploring what might contribute to these results, the district found, among other things, that it concentrates its novice teachers and principals in higher-needs schools.

“We as Black and Brown folks have always felt it was hard for us to prove our points because we could only speak about our experience and anecdotes, but then suddenly there was the data that was clearly saying what we have been experiencing.”

Diego Uriburu, Black and Brown Coalition for Educational Equity and Excellence of Montgomery County

Diego Uriburu, executive director of Identity, a nonprofit in Montgomery County that serves Latino youth and families and has teamed up with the NAACP of Montgomery County to lead the newly formed Black and Brown Coalition for Educational Equity and Excellence, said the findings were not necessarily surprising, but that it was striking to see the data so clearly.

“We as Black and Brown folks have always felt it was hard for us to prove our points because we could only speak about our experience and anecdotes, but then suddenly there was the data that was clearly saying what we have been experiencing,” he said.

Jack Smith, the superintendent, came to the district with the explicit goal of improving educational equity. He knew Montgomery County had a long history of high performance for most students, but not all of them. The work he has overseen to root out inequities has caused some angst among families for whom the status quo was working well.

“There’s a belief somehow, always, that if someone gets something, I must be losing something,” Smith said.

He has worked to dispel that notion and win more support for the idea that improving performance for all students is in the best interests of the entire community.

Budgetary uncertainty thanks to the coronavirus pandemic will leave Montgomery County Public Schools with fewer resources to do things like create new incentives to get more experienced teachers into high-needs schools. But Smith said there’s no reason to “sit on our hands and do nothing because there’s less money now than there was six months or a year ago.”

“We’re not in a position to do a major incentive program across all 135 elementary schools, but we can start,” he said. “You can start with the idea that this is scalable.”

Uriburu believes this latest push for equity may truly result in long-term changes for the district and its students. District administrators are committed, as is the school board, and even the county government has embarked on an equity mission for the broader community. And, of course, there is the coalition. Uriburu said this is the first time the Black and Latino communities have teamed up to advocate for better schools, and they are very clear about their right to make demands.

“By bringing the Black and Brown communities together, we make up 54 percent of the student body of Montgomery County Public Schools,” Uriburu said. “It’s a different ballgame.”

While federal law has only recently demanded transparency around school funding disparities for every district in the country, equity battles have played out in a handful of districts and communities over the years. Sometimes they have been spearheaded by district officials, as in Montgomery County, and sometimes by community groups. Longtime advocates of this federal transparency mandate hope the new data will spur more widespread advocacy.

But Rochester, New York, offers a lesson in how hard it can be not only to make major changes, but to make them permanent. Jean-Claude Brizard took over as superintendent of the Rochester City Schools in western New York in January 2008. (He is now a senior advisor and deputy director at the Bill & Melinda Gates Foundation, one of the many funders of The Hechinger Report.) Soon after he started, he hired a consulting firm to follow the dollars in his district and identify inequities, which, it turns out, were striking.

“So many of the problems in school districts with respect to resolving equity issues require some outside third-party intervention. This is not one of them. … It does not require laws changing and getting legislators to understand that schools need more money.”

Traci Ellis, chief equity officer at the Illinois Math and Science Academy

“We saw schools of similar size, similar demographics, but one school got 50 percent more per pupil,” Brizard said.

The budgeting system in Rochester until that point was one in which well-connected principals could advocate for more money for their schools. Brizard wanted to change that. He started out by sharing the data internally and with the school board and then held community meetings where he aimed to spur enough demand for change that the district would be able to justify going against the wishes of the small but vocal populations of the schools that had gotten more than their fair share of district spending.

Brizard orchestrated a three-year transition to a student-based funding formula that clearly laid out how much money schools would get for students with different needs. But when Brizard left the district in 2011, just after the new funding formula was fully in place, he said a group of affluent, mostly white, parents succeeded in lobbying the school board to dismantle the new system.

“The board is often elected by a handful of people, and they will respond to that pressure,” Brizard said. His current work focuses on coalition-building across communities, which he says can help overcome pushback. “When you have a community that is galvanized around these equity issues, it brings the stakes beyond a single protagonist.”

Even without widespread community attention, though, there are cases in which funding decisions have been taken out of the hands of school districts.

In Los Angeles Unified School District, a lawsuit brought by the ACLU of Southern California forced the district to revise its methods of allocating spending among schools. California distributes $61 billion through its Local Control Funding Formula, a portion of which is set aside for foster youth, English learners and students who qualify for free or reduced-price lunch. In LAUSD, the formula generates an extra billion dollars per year to serve students from those three groups. The ACLU sued the district, arguing that it wasn’t directing those dollars to the right students, and LAUSD settled, giving $151 million to a group of schools that had been shortchanged and revising its spending patterns moving forward.

Related: California’s new school funding system stumbles into its first year

Victor Leung, deputy litigation director for the ACLU of Southern California, said his team filed similar complaints against the Long Beach and Fresno school districts and threatened a complaint in Pomona but hasn’t had to resort to litigation because the districts have already made changes.

While the equity battles in Montgomery County, Rochester and Los Angeles have all played out differently, they share one common thread: clear data. In Montgomery County and Rochester, district leaders produced their own analyses and shared the data with the public. In California, outside researchers tracked the state dollars to the school level and gave advocacy groups a smoking gun.

There is a chance that clear, public data won’t make a difference, of course, and some supporters of the transparency mandate fear just that.

“Children attending high poverty schools in relatively high-poverty districts can get hit twice — first by inequities because their district doesn’t have the revenue and then unfair spending within their district.”

Ary Amerikaner, vice president for P-12 policy, practice and research at The Education Trust

In Illinois’ West Aurora School District 129, another district that spends a statistically significant amount less on its high-poverty schools, according to the Hechinger analysis, the funding disparities have gone largely unremarked upon. Angie Smith, assistant superintendent for operations, said there are no plans to redistribute funds because district leaders believe the spending differences are justified. She pointed to wealthier suburban schools’ transportation costs, more expensive staffing in smaller schools and the costs of specialized programs as reasons for the district’s spending trend. With no one demanding change, the spending disparities will surely remain.

In School District U-46, the financial data has been tucked into the online state report cards — in a tab labeled District Environment — since last October, but conversations about it have mainly been among school officials.

“Budgets speak to where priorities lie,” said Traci Ellis, a former Elgin Area School District U-46 board member and now chief human resources and equity officer and chief legal officer at the Illinois Math and Science Academy in Aurora. She is at Ronald D. O’Neal Elementary School in Elgin, which is named for her father and is allocated $9,094 per student, compared to $10,559 at Centennial Elementary School in Bartlett. Credit: Paul Valade/Daily Herald

Traci Ellis is a former U-46 school board member, Elgin native and chief equity officer at the Illinois Math and Science Academy, a public magnet school in Chicago’s northwest suburbs. The Ronald D. O’Neal Elementary School is named for her father, a longtime educator in the district. While she no longer lives in Elgin, she has made educational equity her life’s work, and was disappointed to learn of U-46’s spending trend. The district’s slogan is “academic success for all” and a frequent tagline is “all means all.”

“Budgets speak to where priorities lie and if the district is going to have equity as a priority, and it says that it does, then we should be able to see that borne out in how it spends money,” Ellis said.

Disheartening as U-46’s first-year data is, along with the knowledge that similar spending trends exist all over the country, Ellis sees a silver lining: “So many of the problems in school districts with respect to resolving equity issues require some outside third-party intervention,” she said. “This is not one of them. … It does not require laws changing and getting legislators to understand that schools need more money.”

Districts already have the power to reshape their own budgets. They just have to muster the will to do so.

After a flurry of equity-minded initiatives last school year, Sanders had hoped the district’s spending trend would be different in time for the 2020 update to the state report cards. The changes weren’t enough, and according to the latest state data, released Oct. 30, U-46 still spends fewer state and local dollars on its higher poverty schools, overall. Sanders said in a written statement that the district was disappointed its investments last year didn’t change its spending trend. 

“With this second year of data in mind, we will work to be more deliberate about addressing school funding decisions as we develop our Fiscal Year 2022 budget,” he said. Ellis and Dixon, the city councilman, will be among those watching.

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

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Tara García Mathewson

Tara García Mathewson is a staff writer. She launched her journalism career with two award-winning pieces co-produced during a three-month stint at the Kitsap Sun in Bremerton, WA. After graduating with...

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