DOCUMENT RESUME ED 473 409 EA 032 092 Biddle, Bruce J.; Berliner, David C. AUTHOR What Research Says about Unequal Funding for Schools in TITLE America. In Pursuit of Better Schools: What Research Says. Arizona State Univ., Tempe. Education Policy Studies Lab. INSTITUTION Rockefeller Foundation, New York, NY. SPONS AGENCY EPSL-0602-102-EPRP REPORT NO 2002-00-00 PUB DATE 42p.; Part of the Education Policy Reports Project (EPRP). NOTE AVAILABLE FROM Education Policy Studies Laboratory, College of Education, Educational Leadership & Policy Studies, Box 872411, Arizona State University, Tempe, AZ 85287-2411. Tel: 480-965-1886; Fax: 480-965-0303; e-mail: [email protected]; Web site:. http://edpolicyreports.org. For full text: http://www.asu.edu/educ/eps1/EPRP/EPSL-0206-102-EPRP.doc. Reports Evaluative (142) PUB TYPE EDRS Price MF01/PCO2 Plus Postage. EDRS PRICE *Educational Equity (Finance); *Educational Finance; DESCRIPTORS Elementary Secondary Education; *Politics of Education; *Property Taxes; Public Schools; *School Funds; *Tax Allocation ABSTRACT Public school funding in America comes from federal, state, and local sources. Because nearly half of those funds are generated by local property taxes, the American system generates large funding differences between wealthy and impoverished communities. This paper reports on the characteristics of these financial inequities. It notes that sharp differences in public school funding appear both between the states and within many, but not all, states. Although most Americans are not aware of it, other advanced, industrial nations do not fund public schools with local property taxes; instead, they provide equal-per-student funding from general tax revenues for all schools throughout the state. Most Americans say they support equal funding for public schools, but affluent and powerful citizens often oppose efforts to correct funding inequities. This opposition may reflect ignorance about funding differences, unthinking acceptance of traditional methods for funding education, and selfish desires to keep personal taxes low. Legal and political efforts to reform inequities have been weak at the federal level, but considerable activity has recently taken place in state courts and legislatures. The paper concludes with a discussion of policy implications and recommendations for combating political and cultural resistance to reform. (Contains 74 references and 4 figures.) (RT) Reproductions supplied by EDRS are the best that can be made from the original document. What Research Says About Unequal Funding for Schools in America Bruce J. Biddle and David C. Berliner Winter 2002 U.S. DEPARTMENT OF EDUCATION PERMISSION TO REPRODUCE AND Office of Educational Research and Improvement DISSEMINATE THIS MATERIAL HAS EDUCATIONAL RESOURCES INFORMATION BEEN GRANTED BY CENTER (ERIC) This document has been reproduced as D. Berliner received from the person or organization originating it. Minor changes have been made to improve TO THE EDUCATIONAL RESOURCES reproduction quality INFORMATION CENTER (ERIC) Points of view or opinions stated in this document do not necessarily represent official OERI position or policy. 1 2 BEST COPY AVAILABLE 'ARIZONA STATE UNIVERSITY What Research Says About Unequal Funding for Schools in America By Bruce J. Biddle University of Missouri-Columbia David C. Berliner Arizona State University Education Policy Reports Project (EPRP) Education Policy Studies Laboratory College of Education Division of Educational Leadership and Policy Studies Box 872411 Arizona State University Tempe, AZ 85287-2411 Winter, 2002 EDUCATION POLICY STUDIES LABORATORY EPSI4 I Education Policy Reports Project EPSL-0602-102-EPRP This research report is part of a series entitled IN PURSUIT OF BETTER SCHOOLS: WHAT RESEARCH SAYS that is supervised by Bruce J. Biddle and David C. Berliner and supported by The Rockefeller Foundation. The series provides timely and trustworthy summaries of research on major issues facing education today, with special emphasis on how Each report in the series reviews and America's poor and minority students are affected by educational policies. evaluates research and scholarship on a specific topic and concludes with recommendations based on research knowledge available at the time of writing. Printed copies of reports from the series may be ordered from The Rockefeller Foundation (please consult for instructions). Further information about the series and downloadable versions of this report may be found at the following website: http://edpolicyreports.org.The views expressed in each report are the sole responsibility of its authors and may not reflect the views of The Rockefeller Foundation or the site supervisors 1 Unequal Funding for Schools in America Bruce J. Biddle David C. Berliner Interest in the topic of unequal funding for public schools is widespread in America. Although they may not know about the extent and specific effects of funding inequities in our country, most Americans believe that students do better in well-funded schools and that public education should provide a "level playing field" for all children. However, nearly half of funding for public schools is provided through local taxes in our country, and this means that large differences in funding have long persisted between wealthy and impoverished American communities. Efforts to reduce these disparities have surfaced at both the federal and state levels, but these efforts have provoked controversy and have been resisted by powerful and wealthy persons. Much empirical research has also appeared concerned with the effects of unequal school funding, but controversies have arisen about this research and its findings. Some authors have claimed that the research shows that differences in school funding have very little impact. To illustrate, in 1989 Eric Hanushek, an influential reviewer, wrote: Detailed research spanning two decades and observing performance in many different educational settings provides strong and consistent evidence that expenditures are not systematically related to student achievement. (Hanushek, 1989, p. 49) This claim has been embraced by those who oppose demands for more equitable school funding, but it has also been contradicted by other well-known reviewers who have judged that such a claim is nonsense. For example, in 1996 Rob Greenwald, Larry Hedges, and Richard Laine wrote: 4 2 [Our analysis shows] that school resources are systematically related to student achievement and that those relations are large [and] educationally important. (Greenwald et al., 1996, p. 384) Given such disputes, what should we now believe about school funding and its impact? How large are funding inequities in America, why have those inequities appeared, and how do Americans justify them? What kinds of research have appeared on the effects of funding, what should we now conclude from that research, and what is implied by those conclusions? And given what we know today, what should and can be done about inequities in funding for education in our country? Differences in School Funding Funding in America Public school funding in America comes from federal, state, and local sources, but because nearly half of those funds are generated by local property taxes,' the American system generates large funding differences between wealthy and impoverished communities. Some of these differences are associated In 1998, for instance, the state with the highest average level of public with the state in which one lives. school funding (adjusted for differences in cost of living) was New Jersey, with an annual funding rate of $8,801 per student, whereas the state with the worst record was Utah with a yearly rate of $3,804 per student (see Figure 1).2 This means that in 1998 the typical student then attending a public school in New Jersey was provided more than twice the level of educational resources that were then allocated to his or her counterpart in Utah. Large funding differences also appear among school districts within many states. A state-by-state display of these differences for 1998 appears in Figure 2 where the length of a vertical bar portrays the disparity between well-funded and poorly funded districts for each state.3 To illustrate, the longest line in the figure belongs to Alaska where public schools within districts ranked at the 95th percentile for funding received an average of $16,546 per student for the year whereas schools ranked at the 5th percentile received only $7,379 on average. Other "winners" in the inequality derby included Vermont (where school districts at the 95th and 5th percentiles received an average of $15,186 and $6,442, respectively), Illinois (where the figures were $11,507 and $5,260), New Jersey (where they were $13,709 and $8,401), 5 New.lersey 8,801 New York 7353 Connecticut 7335 Vesconsin 7448 Delaware 7255 Pennsylvalia 7202 Rhode Island 6330 West Mrginia 6303 Mchigan 6373 Iowa 6323 Nebraska 6,799 Wyoming 6,793 Mnnasota 6767 Vermont 6,746 Maine 6,738 Indiana 6361 Alaska 6391 Maryland 6544 Massachusetts 6518 Oregon 6422 Montana 6A49 spil Kansas Ohio 6301 Virginia 6215 Kentucky New Hampshire 6,195 Georgia 5898 Washington 5395 Illinois 5,991 Louisiana 5,968 North Dakota 5379 Florida 5323 South Carolina 5327 Mssouri 5317 Texas 5315 North Carolina 5,763 \ Rl 11 South Dakota 5367 Colorado 5599 Nevada 5478 Hawaii 5433 Alabama 5,356 NewMexico 5,339 Oklahoma 5,317 Arkansas 5,263 Tennessee 5223 Idaho 5323 California 4333 M se ssippi 4324 Arizona 4323 Utah 3301 0 7030 8000 9030 2030 6030 1030 4030 Expenditures per Student (in Thousands of Dollars) Figure 1. Average Annual Expenditures Per Student Within Each State in 1998, Adjusted for Cost-of- Living BEST COPY AVAILABLE 4 11111111 20000 20000 "C' 15000 t 15000 2 U) U) a 10000 10000 if 5000 5000 u_ "is k 0 0 1 1 1 1 1 cf). ,as 0,6 ,0$ tos cea:,0.444.04i cpe, 00- cp,s4,w 4\so "4.10," ki 9x> ,1,0 1 6" CiP0s, :ghat.? 20000 20000 1 1 1 1 1 1 1 1 1 1 1 E 15000 15000 -0 w 10000 a I II 5000 5000 u- u_ 111- 0 1 1 1 0 1 1 1 1 1 1 1 1 1 1 "4,4.1frelo*:"Vsy, \sto co .04, 2. vSe e:Ve N'ts° State State 20000 1 1 1 1 1 1 1 1 1 1 1 1 Each bar displays the Notes: range among districts within the state between the and 95th 5th t 15000 percentiles for per-student total funding (in dollars). `&3. 10000 The dashed line in the figure(s) c°' district- represents median the level per-student funding for the 5000 u- nation-46,632. I I I I I I I 1 1 0 1 '4'4.610464\sc14°X:4114:44, State Figure 2. Variation Among Districts in Total Revenues Per Student by State by 1998 7 5 New York (with $13,749 and $8,518), and Montana (with $9,839 and $4,774). On the other hand, within the District of Columbia and Hawaii no difference at all appeared between school districts receiving higher and lower levels of funding (because each of these entities has only one school district!), and differences in funding were quite small in such states as Nevada (where better-funded and not-so-well-funded districts received an average of $6,933 and $5,843, respectively, for each student for the year). What Figure 2 suggests is that disparities in funding differ sharply among the states but are greater within some states than among the states as a group. As will be noted shortly, a few states have recently taken modest steps to reduce the size of such disparities, but no states (other than Hawaii) have yet eliminated district-level inequities in funding for education.4 Putting these two types of data together, we learn that a few American students (who just happen to live in wealthy communities or neighborhoods within generous states) are now attending public schools where funding is set at $15,000 or more per student per year, whereas some American students (who are stuck in poor communities or neighborhoods within stingy or impoverished states) must make do with less than $4,000 in per-student funding in their schools for the year. How many students attend well-funded and poorly funded American schools? One way to answer this question might be to list the numbers of school districts that receive each level of funding, but this would give too much weight to small school districts. (The American public education system still features many truly small school districts serving isolated towns, but the vast bulk of students in our country live within larger districts.) Thus, a better way to answer the question is to list the numbers of substantial school districts that report various levels of per-student funding, and Figure 3 provides this information for the 7,206 districts that enrolled 1,000 or more students in 1995.5 As this figure indicates, far more students attend poorly funded than well-funded schools in America. Of the districts appearing in Figure 3, 1,425 (or 20%) received less than $5,000 in 1995 and another 2,167 (or 30%) received between $5,000 and $6,000 per student for that year. Whether such levels of funding are adequate is open to debate, but 451 (or 6%) of the districts clearly believe they are insufficient since these districts provide $10,000 or per student per year for their own children.6 It should be stressed that the data in Figure 3 represent total per-student funds for school districts, 8 6 thus include dollars provided from federal and state, as well as local, sources. Most federal and state funding for schools is associated with "Title 1" programs and other forms of categorical grants that are designed to provide services for students with special needs. Categorical grants more often go to school districts with less access to local funds, and this tends to reduce (but does not eliminate) inequities in total funding. So, which school districts receive higher, and which receive lower, levels of total school funding? A good way to answer this question is to examine the association between funding and student poverty rates within school districts, and this relation is displayed in Figure 4 for substantial school districts.' As can be seen in that figure, districts reporting higher levels of funding are more likely to come from communities where student poverty is minimal whereas those reporting lower levels of funding more often come from communities where student poverty is sizable. (And, to make matters worse, America has by far the highest rate of poverty among children of any advanced, industrialized nation!8) Thus, to rephrase this effect, America's few, well-funded schools are more often found in affluent suburban communities where student poverty is rare, whereas its more numerous, poorly funded schools are far more likely to appear in city centers or rural towns where student poverty is rampant. 9 L 1 greater 0 and $15000 to $14999 $14000 0 O to $13000 $13999 CnO to $12999 $12000 to $11000 $11999 CD Iti 3 to $10999 $10000 =11 O ja) CO f to 40 $9000 $9999 CT c CO cp to $8999 $8000 cp to $7999 $7000 (71 m D CO to $6000 $6999 C- X 0( rn O to $5999 $5000 CD Cr_ to $4999 $4000 CD - 0 I to 0.) $3999 $3000 0 --1 to 5.4 Al $2999 $2000 CD O to $1000 $1999 than Less $1000 (.71 11 C. Districts School of Numbers OT