Education Law Center’s Making the Grade report is an annual overview of school finance in the United States. The current report presents a picture of school funding in the 2022–23 school year, the most recent data available. The report provides a comparative analysis of the degree to which states are fairly funding schools so that all students have the chance for success.
Making the Grade evaluates states on three measures: funding level, funding distribution and funding effort. The funding level measures the combined per-pupil state and local revenue provided to school districts, adjusted for regional cost differences. The funding distribution measures the allocation of funds to school districts relative to the concentration of students from low-income families. Funding effort measure analyzes how much states prioritize education funding by ranking state and local revenue as a proportion of each state’s economic activity.
The report characterizes states as progressive when higher funding levels are given to high-poverty districts, regressive when lower funding levels are given to high-poverty districts, and flat when there is no funding mechanism relative to poverty levels.
Key takeaways
- Average per-pupil funding levels continue to vary greatly among states. There is a funding gap of more than $17,000 between the highest (New York) and lowest (Idaho) funded states, even after accounting for regional cost differences.
- Seventeen states had at least a modestly progressive distribution of state and local funding relative to student poverty. In 2022, that number was 28. This change represents the first reversal of progress after a five-year trend towards increasing progressivity among states.
- States are making markedly different efforts to fund their public schools, where effort is defined as state and local revenue as a percentage of the state’s gross domestic product (GDP). The highest effort state (Vermont) makes more than double the effort to fund schools as the lowest effort state (North Carolina).
- Though federal dollars are a small proportion of overall education revenue, those dollars do contribute to a more equitable distribution of funds relative to poverty in nearly every state. “Threats against states and individual school districts whose policies are at odds with the administration’s priorities are already being realized. For example, over $30 million in special education grants were terminated in September of this year, affecting 14 states,” the report states.
California
Funding level grade: B
California ranked 13th of all states in per-pupil funding levels, up from 28th the prior year. The report notes California raised its ranking from the previous report from a C to a B as it increased per-pupil funding by 18.5 percent from the 2021–22.
Funding distribution grade: A
California is second in the country when it comes to progressive school funding distribution and is tied with Alaska for making the largest gains of all states compared to the prior year. “Changes may result from deliberate school funding policy reforms, as in California, where implementation of the Local Control Funding Formula resulted in funding increases that were targeted to the state’s most disadvantaged school districts,” the report states. “Trend data for California clearly reflect steady improvements as this policy change was phased in over a number of years.”
Funding effort grade: C
The state ranks 20th in the country for funding effort, with a GDP per capita of $82,877 and per-pupil funding of $19,894. This indicates an improvement from the prior year when the state was ranked 34th. California also had the second largest increase in inflation-adjusted total state and local education revenue, rising by 17 percent.
The report highlights that “California’s investment in a new, more equitable school funding formula is paying off: The state dramatically improved on all three measures of funding fairness and now has the second most progressive distribution of funding in the country. Importantly, research convincingly demonstrates that those investments have paid off in terms of student achievement and other measures of success.”
The report also warns about the uncertainty at the federal level in data collection, endangering the future of accurate analysis of education in the U.S.
“Next year, will we have access to the data that is used to generate reports like this one? Reliable state-level school funding comparisons will be nearly impossible without the federal effort to collect and report compatible revenue data across all school districts and states,” the report states. “The Survey of School System Finances, the primary data used in this report, is collected by the U.S. Census Bureau in collaboration with [National Center for Education Statistics]. The Census Bureau has thus far escaped mass firings but still lost 1,500 workers, including many high-level employees, through a resignation incentive program. Current and former workers worry about the agency’s ability to continue to produce reliable statistics.”
