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Can more money make up for the effects of poverty in schools?

School finance experts increasingly say yes. But states will have to distribute their money much differently between schools and districts than they do today, with a more complex approach to fiscal equity than simple funding levels.

Civil rights activists historically have pushed for states to spend the same amount of tax dollars in wealthier and poorer school districts, a legally and politically fraught goal that鈥檚 led to the leveling of spending in states such as Florida and Wyoming.

But a growing number of school finance experts now conclude that states should, instead, spend based on need. In other words, schools with heavier concentrations of poverty, and therefore greater academic needs, should get more money than schools where the majority of students鈥� parents are wealthy.

鈥淧eople are starting to understand that equal funding for unequal needs isn鈥檛 fair,鈥� said Ary Amerikaner, a deputy assistant secretary in the U.S. Department of Education under President Barack Obama. She now serves as the director of P-12 resource equity at the Education Trust, which advocates on behalf of low-income children and students of color. 鈥淚t鈥檚 not fair or evidence-based and it鈥檚 not going to get us the returns on investments that we hope to see every time we spend a dollar on education.鈥�

Political Hurdles

A series of lawsuits in states such as Delaware and Michigan have been filed by civil rights activists in recent months arguing that they don鈥檛 receive enough money to get students from poor families up to academic par.

And several states鈥� legislatures, including those in Colorado and Mississippi, are now considering replacing their decades-old funding formulas with ones that provide schools that have large populations of poor students with more money than those with wealthier students.

鈥淪tates are increasingly asking, 鈥榃hat are we getting for what we鈥檙e spending, and how is funding tied into our accountability and assessment system?鈥� said Michael Griffith, a school finance expert with the Education Commission of the States.

Political hurdles abound, however. Schools in the past decade have become more and more racially and economically segregated, according to a University of California, Los Angeles, study of federal data, and wealthier parents, those with the most political capital, have pushed for states鈥� resources to be targeted at schools that their children attend.

While schools receive grants, federal Title I dollars meant for disadvantaged students, and some extra money from states for educating poor students and those with special needs, school finance experts conclude it鈥檚 usually not enough to overcome factors associated with schools in less-affluent areas. Those include high student mobility, teacher turnover, language gaps, and the lack of at-home resources such as books and internet service.

While the Quality Counts 2018 report highlights Wyoming for its ability to score high in both spending and equity, just one state鈥擜laska鈥攕pent more in 2015 in its poverty-stricken districts than it did on its wealthier districts.

And even some of the nation鈥檚 higher-spending states received the nation鈥檚 lowest grades for failing to spread that wealth to districts with poorer students. Vermont, for instance, ranks second for spending and 48th for equity in the 2018 report.

In addition, fiscally conservative politicians in numerous states have balked at skyrocketing education costs amid stagnant academic outcomes and have argued that money doesn鈥檛 matter when it comes to academic achievement.

鈥淚t鈥檚 going to take a cultural change. It鈥檚 not a money issue,鈥� said David Trabert, the president of the Kansas Policy Institute, a conservative think tank that鈥檚 helped state legislators design a new funding formula. 鈥淜ansas has had a laser focus on money for decades, and outcomes have not improved, especially for low-income kids.鈥�

After a series of court decisions, Kansas this year added another $500 million over the next five years to its school spending, though many administrators argue that鈥檚 still not enough to get more than a quarter of its students up to academic standards. The state鈥檚 supreme court will soon decide whether that amount meets constitutional requirements.

The Every Student Succeeds Act鈥檚 new requirement for states to report to the public how much gets spent at individual schools will further animate this debate in the coming years.

At issue are how much money matters in improving academic outcomes, whether state or local governments should bear the brunt of school costs, and what receiving an 鈥渁dequate education,鈥� as mandated in some state constitutions, means.

The most recent nationwide study of school spending trends by the Center on Budget and Policy Priorities, a think tank that focuses on reducing fiscal inequality, shows districts have become increasingly more reliant on local tax revenue than on state tax revenue, a reversal of a decades-long trend driven by a series of statewide income and business tax cuts and rising health-care costs. This heavy reliance on local revenue can lead to more disparities between wealthy and poor districts since most local revenue is dependent on local property values, said Michael Leachman, the director of state fiscal research for the organization.

Most state funding formulas aim for proportional funding among all districts throughout a state, based on student enrollment. For property-poor districts, states kick in extra money to make sure the funding is even.

But a meta-analysis of school finance studies conducted for Maryland鈥檚 education department in 2015 concluded that as concentrations of poverty increase in schools and districts, 鈥渟o, too, do the types and numbers of services required to enable all students to be successful.鈥�

That leaves policymakers with some complicated spending choices.

鈥淭he money does matter,鈥� said Carlee Escue Simon, the executive director of the National Education Finance Academy and a school finance expert at the University of Cincinnati. 鈥淏ut the money needs to go to effective resources such as intervention specialists, school psychologists, and social-emotional needs.鈥�

Making the Case

Academic data are already affecting the direction of legal challenges by parent groups over school funding.

In Delaware, for example, a group of parents sued the state last month, arguing the money the state provides its students is inadequate to give them an equitable education. The group is looking for the state to institute a 鈥渘eeds-based funding formula鈥� that invests in smaller class sizes; expanded school time; highly qualified, specially trained teachers; and a focus on early literacy.

Such cases aren鈥檛 always successful, however.

A lawsuit in Connecticut, one of the nation鈥檚 richest states, was struck down last year after the state鈥檚 supreme court concluded that while the state鈥檚 funding formula leaves poor students with unqualified teachers and inadequate classroom resources, it was not the court鈥檚 role to determine how the state spends between districts and schools.

Similarly, Texas鈥� supreme court said in 2016 it was not its role to dictate how the state legislature distributes its money.

鈥淥ur Byzantine school funding 鈥榮ystem鈥� is undeniably imperfect, with immense room for improvement. But it satisfies minimum constitutional requirements,鈥� Justice Don Willett wrote in the court鈥檚 decision.

States now are considering replacing their funding formulas with ones that take local and state money and redistribute it based on the amount of 鈥渁t risk鈥� students a school might have.

In California, the state replaced its funding formula in 2013 with one that gives schools with more impoverished students, English-learners, and other historically disadvantaged students more money, and gives districts more say over how to spend that money. State legislators are now considering a bill that would provide more money to schools that serve the lowest-performing subgroup of students. Currently, that would mean schools educating black students would get more money.

The bill has come under legal scrutiny since the state鈥檚 law requires states to spend equitably between student groups, no matter their race.

In Maryland, the state legislature in 2001 replaced its funding formula to give greater weight to historically disadvantaged students. But a commission said last year that the state鈥檚 rapid racial and economic segregation of schools in recent years has accelerated costs in some schools and that its current spending habits are not enough.

Although school funding experts laud politicians for considering giving extra weight based on poverty levels at schools, they鈥檝e raised concerns that states are now setting the bare minimum amount schools get much lower and counting on extra funding to make up for it.

鈥淭he additional weights should be additional supports, but the funding is what makes it work,鈥� said Escue Simon of the University of Cincinnati. 鈥淚f the base allocation is not high enough, some districts that have populations that have fewer needs are going to feel they鈥檙e not being treated very fairly because they don鈥檛 have as much funding as they need.鈥�