How Is State and Local Revenue Distributed?

School funding systems should ensure districts serving the most vulnerable students, such as students from low-income backgrounds, receive significantly more state and local funding. Given the longstanding underfunding of districts serving predominantly Black and Latino students, these districts should receive no less than predominantly white districts. Every student should have access to the resources they need to learn, regardless of the ongoing legacy of racism and segregation. Yet many funding systems fall short, and districts serving students with the greatest needs — no matter how defined — often do not receive fair state and local funding.

How Local Dollars Drive School Funding Gaps

Local funding for schools mainly comes from property taxes, and because these dollars stay within the communities that raise them, communities with low property values struggle to raise as much revenue as wealthier ones. In turn, school districts in these communities often struggle to attract and retain more experienced teachers, maintain facilities, and invest in evidence-based strategies that help improve student outcomes. Most state funding formulas have policies to counteract local funding inequities; however, these policies vary in effectiveness, with some not doing enough to limit disparities between wealthy and low-income districts. EdTrust believes that state leaders can and should do more to take local property wealth into account and reduce local revenue inequities between districts.