WASHINGTON (February 27, 2018) — Districts serving large populations of students of color and students from low-income families receive far less funding than those serving White and more affluent students. And despite widespread attention to inequitable funding formulas — and courts that have declared them unlawful for shortchanging school districts serving large percentages of low-income students — too many states continue this unfair practice, according to a new state-by-state report and online data tool released today by The Education Trust.

The report, Funding Gaps 2018, finds that U.S. school districts serving the largest populations of Black, Latino, or American Indian students receive roughly $1,800, or 13 percent, less per student in state and local funding than those serving the fewest students of color. These gaps add up. For a school district with 5,000 students, a gap of $1,800 per student means a shortage of a staggering $9 million per year.

The analysis also revealed significant gaps between high- and low-poverty districts. Across the country, we spend approximately 7 percent — or $1,000 — less per pupil on students educated in our nation’s highest poverty districts than those educated in the wealthiest.

“Our nation has a sad history of underserving students of color and students from low-income families, and the way in which we fund our schools is no different,” said Ary Amerikaner, director of P-12 resource equity and co-author of the report. “While money most certainly isn’t a silver bullet solution, it matters a great deal. It could mean greater access to important resources such as strong teachers, school counselors, after-school support, or rigorous coursework. This is why equity is such a critical piece of the school funding conversation — money matters most when spent on students who need the most.”

Ed Trust analyzed the most up-to-date national data sources available to examine the state of funding equity across the U.S. and within each state. The report looks at revenues from state and local sources only, excluding federal funds since those dollars are intended — and targeted — to provide supplemental services to traditionally underserved groups. The study focuses on how states allocate the resources that originate from their coffers.

There is, of course, great variation among states’ funding patterns. Nebraska stands out for its unfairness, spending nearly 25 percent less per pupil in districts serving the most students of color. And while in 14 states, districts that serve the most students of color receive substantially more money, in 14 other states, they receive substantially less.

Similar to findings in Funding Gaps 2015, Illinois has the largest funding gap between high- and low-poverty districts. The highest poverty districts in the state get more than 20 percent less per student than the lowest poverty districts. Following Illinois with the largest funding gaps are Missouri (9 percent less), New York (7 percent less), and Alabama (5 percent less).

Yet, there are many states that defy these patterns and show inequities are not inevitable. In Utah, for example, the highest poverty districts receive about 21 percent more state and local dollars per student than their lowest poverty counterparts. Other states where low-income districts get substantially more dollars include Ohio, Minnesota, New Jersey, South Dakota, and Georgia.

These figures, however, only indicate whether the funding that high- and low-poverty districts receive is equal, not equitable. When the authors adjust for the added costs of educating low-income students (e.g., high-quality early learning, wrap-around services, and other student supports) and ask whether funding is equitable, the trends look far worse. Nationally, the funding gap between the highest and lowest poverty districts grows to $2,000 per student, or 16 percent. Moreover, the number of states that provide high-poverty districts with substantially less funding grows from four to 20.

“These funding inequities are not new; they have been documented for decades,” said Amerikaner. “The good news, and the reason we believe this analysis is so important now, is that more and more advocates, parents, educators, and district and state leaders are pushing for change. We hope this work serves as a tool for progress.”

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