This is a glossary of terms that are used in the funding gaps report and data tool. For a more comprehensive glossary of school funding-related terms, see the P-12 School Funding Glossary.

Budget: A plan of revenues and expenditures adopted by a legislative body for a given fiscal year.⁴

English language learners or English learners: Students whose home language is not English, who are enrolled as multilingual learners in school, and who may qualify for additional funding in a state funding formula.¹

Expenditure: The dollars spent (as opposed to planned or allocated) at a school or district. These should consistently be compared to total funding (revenue) and the annual plan for spending (budget).^1,4

Fiscal year (FY): The annual period for an operating budget. The most common school district fiscal year runs from July 1 to June 30 and is named for the closing calendar year. For example, July 1, 2025, to June 30, 2026, is referred to as Fiscal Year 2026, often abbreviated FY26.⁴

Funding formula: A customized combination of enrollment and staffing ratios and/or weighted student funding to calculate funding allocations to districts or schools. Funding formulas should make funding fairer and more equitable based on student needs.²

Local fiscal capacity: The potential ability of local governments to fund education from their own taxable sources, relative to their cost of providing services.

Local education agency (LEA): A public board of education or other public authority within a state that maintains administrative control of public elementary or secondary schools in a city, county, township, school district, or other political subdivision of a state.^1,4

Local revenue: Funding that is generated largely by property tax and is a major funding source for many school districts across the country.

Neutral funding: The highest-need districts receive slightly more (e.g., 0-10% more) state and local funding than the lowest-need districts.

Per-pupil revenue: The total amount of revenues from all sources allocated to K–12 education, divided by the number of students as determined, most often, by average daily attendance or average daily membership. The formula for per-pupil revenue is based on the amount budgeted by a state rather than on what is spent by districts and states to provide services.¹

Progressive funding: The highest-need districts receive substantially more (e.g., at least 10% more) state and local funding than the lowest-need districts.

Property tax: A tariff assessed against the value of real estate levied by the governing authority and paid by the owner of the property. Property taxes are subject to assessed value calculations, millage rates, and tax policies of personal- or privately-owned properties.²

Regressive funding: The highest-need districts receive less state and local funding than the lowest-need districts.

Revenue: The amount of money coming into the district from state and federal allocations and local tax dollars. Typically, revenue increases and decreases with enrollment.⁴

State education agency (SEA): The agency primarily responsible for the supervision of a state’s public elementary and secondary schools.^1,4

State revenue: Funding that is generated by a combination of income and sales tax and is a major source of funding for school districts across the country, coupled with local revenue.

Students of color: Students who are Black, Latino, or Native.

Students in poverty: Students, aged 5-17, living below the poverty line, according to the U.S. Census Bureau’s Small Area Income and Poverty Estimates.

Tax effort: The level of taxation needed to generate the same amount of tax revenue as another governmental entity. Because some governmental entities have wealthier tax bases, they can tax a smaller percentage and still generate the same level of resources as an area with a smaller tax base.³

References

1. (2004). A Glossary of School Finance Terms. https://edsource.org/wp-content/publications/SchFinGlossary04.pdf
2. Education Commission of the States. (2021). Glossary of K-12 Education Funding. https://www.ecs.org/glossary-of-k-12-education-funding/
3. Education Commission of the States. (n.d.). State Information Request: School Finance Equalization. https://www.ecs.org/wp-content/uploads/State-Information-Request_-School-Finance-Equalization.pdf
4. Central Michigan University. (n.d.). School Finance 101 Glossary. https://www.thecenterforcharters.org/wp-content/uploads/2023/03/School-Finance-101-Glossary.pdf

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