How Congress Could Finally Change The Nonsensical Way We Fund Schools

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On the day President Lyndon B. Johnson signed the Elementary and Secondary Education Act (ESEA) into law to help fund low-income schools, he reflected on how education had helped him achieve the American dream: “As a son of a tenant farmer, I know that education is the only valid passport from poverty.”

Anyone who has been paying attention knows that we’ve not yet achieved President Johnson’s lofty vision: school funding continues to be wildly unequal and extremely unjust. For example, after taking into account regional cost differences, the average per-pupil expenditure in Wyoming is $19,534, while in neighboring Utah it is a mere $6,905. Within-state funding is also highly unfair, and in some states, students in high-poverty schools get as much as $5,000 less per pupil than students attending affluent schools.

The law that Johnson signed doesn’t do nearly enough to help all kids get the money that they need to succeed. First passed in 1965, ESEA was designed to rectify a distortion inherent in our education system: because it is primarily funded through local property taxes, it is difficult for low-income communities to levy the resources they need to adequately fund schools. To address this problem, Congress passed a law providing federal support for the education of poor students.

Now rumors are swirling that ESEA is finally going to get an overhaul (it has been up for reauthorization since 2007). Senator Alexander, the incoming chairman of the Senate committee with jurisdiction over ESEA, says that reauthorization is his top priority for the new Congress. Although he has been vocal about wanting to scale back the federal role in education in a rewrite, he hasn’t yet commented on one of the most flawed provisions of the law: how funding is allocated to states.

In their current form, federal funding streams actually worsen existing inequity. Part of the issue is the main federal funding stream, known as Title I, which is calculated according to four messy and convoluted formulas. What the formulas spit out is often nonsensical: North Dakota gets $2,832 in Title I funding per student in poverty, while bordering state Minnesota gets less than half at $1,323.

What’s more, states with identical poverty rates can receive hugely disparate amounts: in New York, where 22 percent of children are poor, the state gets $1,719 per low-income pupil while Oklahoma, with an almost identical child poverty rate, receives only $1,107. Because state allocations are calculated in part based on average per-pupil expenditures, some of the richest states get the most money per low-income student. Hence, lower income states like Nevada and Tennessee are doubly screwed.

The problem of funding inequality is exacerbated in places where poverty is concentrated, where a whole host of secondary outcomes wreak havoc on educational achievement. But instead of addressing the needs of schools with a high concentration of poverty, Title I funding goes to 94 percent of districts across the nation, significantly diluting its potential to meaningfully impact very poor areas.

Not only is this devastating for poor families, for whom a decent education is their best hope of ending the cycle of poverty, but it also has terrible consequences for the nation as a whole. Our lack of serious attention to funding inequity has been cited as one of the reasons we score poorly on international assessments and as a contributor to our nation’s lagging social mobility.

As Congress moves forward with ESEA reauthorization, policymakers should be doing everything in their power to ensure that the law’s original focus on equity is maintained. The law hasn’t been reauthorized in 14 years, so if Congress doesn’t make changes to unfair funding formulas now, an entire generation of students could lose out on the opportunity for a good education. The four confusing formulas in ESEA should be combined into one simplified calculation that would focus funding where it is needed most: in districts with the highest concentrations of low-income students. Read more about Center for American Progress’ work on Title I funding equity here.


Lisette Partelow is a Senior Policy Analyst at the Center for American Progress, focusing on education.