Note to Readers: This is the third of three articles on how state funding of K-12 schools is failing students and schools who need the most. The first article looked at a unique measure of funding adequacy and a clear pattern of underfunding for students of color and those who need the most from public schools. Along with the article, we published a data visualization of funding across school districts and student groups. The second article examined how Minnesota allocates K-12 education funding, and how it could tweak funding formulas to make them more equitable. This final article explores what other states are doing to make their K-12 funding more equitable.
Inequitable school funding is not a problem unique to Minnesota. And in some respects, the state does better than many others. But several states have recently changed their funding systems to directly address structural inequities in K-12 education funding. These changes have attempted to account for the costs of educating public school students, and direct more funding to students who need more.
One downside of Minnesota’s current system is its complexities. The state’s guide to legislators about K-12 funding is currently 151 pages long.
The most common ways to do this are either student-centered models, where funding is based on student characteristics, or adult-centered models, based on staffing ratios. In either type of model, states face political constraints that usually lead to “hold harmless” provisions where funding isn’t reduced to any school district. Rather, states typically introduce significant new funding that is explicitly targeted to reduce existing inequities.
In Illinois, a compromise at the state legislature in 2018 included $350 million per year in new targeted funding for schools. In Maryland, new funding from state and local sources will total over $3 billion per year by 2030 under the so-called Blueprint passed in 2021. And in 2022, Vermont updated its school funding formula to direct more resources based on student needs. A recent court ruling in Pennsylvania is likely to lead to significant changes to state education funding that will improve equity, too.
Student-centered models can be easier for the public to understand, but setting the weights correctly to meet student needs is complex.
States like Vermont and Maryland use a student-centered model of funding. Funding begins with a baseline amount per student, like the general formula aid in Minnesota. Then, specific weights are applied to the formula amount to account for student needs, such as qualifying for English Learner services or free and reduced price meals. Some states provide a weight for students who qualify for special education services, while others have a separate system for determining state aid for special education.
The benefits of a weighted student formula is that it directs funding explicitly based on student characteristics. In addition, these funding systems are typically easy for the general public to understand.
One downside of Minnesota’s current system is its complexities. The state’s guide to legislators about K-12 funding is currently 151 pages long. The complexity makes it a challenge for legislators to understand how the system works, not to mention parents or community members wanting to advocate on behalf of public school students and educators.
One challenge for student-centered models is selecting the correct weights for student needs. There is a growing research consensus that weights for low-income students should be 2-3 times as much as the baseline funding, and 2-2.5 times the baseline amount for English Learners.
Weights should also increase as the proportion of students in a school district in these categories increases, similar to the concentration factors in Minnesota’s formulas for compensatory revenue and English Learner revenue. And these weights should be additive, meaning a student who is both low-income and an English Learner would receive additional funding for each category of need.
Hawaii, Vermont and Maryland all recently updated the weights in their funding formula. But, the weights vary considerably by state. Hawaii has struggled to appropriate enough funding to schools to increase its weight for low-income students above 0.10. In Vermont, a group of researchers proposed weighting student poverty at 3.14 as part of a 2018 study requested by the legislature. This number was subsequently reduced to 1.05 by a legislative task force. Before the 2022 update, Vermont set its weight for low-income students at 0.25.
Maryland recently overhauled its state education funding, which will slowly increase student weights over the next decade. Under the current plan, by 2033, English Learners will be weighted at 1.85 times the base amount, and low-income students will be weighted at 1.73 times the base. The current base amount is $7,390 per student.
Adult-centered funding models can appeal to a desire to have uniform staffing across schools, but determining the correct ratios, and adjusting for local wages can make the systems complex.
Adult-centered models are being used in Washington state and Illinois as part of plans to direct school funding more equitably. At the heart of the model in both states are a series of staffing-ratios for an “ideal” school. The ratios vary based on things like the grade level of the students served.
Illinois introduced its adult-centered funding model in 2021, with the state promising to increase aid to school districts by $330 million per year over five years. The additional funds are distributed to districts based on how much funding the district currently has relative to a state-determined level of adequacy.
In Illinois, once the staffing ratios have been determined, the cost of that staffing is estimated, accounting for local wages. Funding is “adequate” if a district has enough state and local funding to afford that level of staffing. Districts are grouped based on adequacy, with those with the least adequate funding receiving the largest share of additional state funding.
Illinois claims that the staffing ratios are “evidence-based,” but experts have criticized Illinois’s model as actually lacking evidence of its effectiveness. In addition, the new funding is not adjusted for inflation. So while school district costs have been increasing, the amount of additional state funding has stayed the same in nominal terms.
Tackling long-standing challenges for Minnesota school districts, like fully funding the special education and English Learner cross subsidies, would make Minnesota a national leader in terms of state funding for these services.
The method of determining the staffing ratios and the cost of the staffing is complex. This makes funding based on staffing ratios difficult for the average resident to understand exactly how state aid is being determined. Neither Illinois nor Washington are districts required to provide the ideal staffing ratios because local districts ultimately control staffing decisions.
Illinois also lacks any limits on the amount of local property taxes that can be levied to fund schools, unlike in Minnesota. Many areas of the state are able to levy well above adequate funding, maintaining significant disparities between districts, even as new state aid brings more districts closer to “adequate” funding levels. Washington state, like Minnesota, limits the amount a school district can levy.
What can Minnesota learn from other states?
Perhaps the biggest takeaway for Minnesota is that other states are talking about, researching and implementing legislation that attempts to improve the equity in their K-12 education funding systems. States are explicitly identifying which students require more from public schools, and targeting additional funding towards those students. Tackling long-standing challenges for Minnesota school districts, like fully funding the special education and English Learner cross subsidies, would make Minnesota a national leader in terms of state funding for these services. And those policies are likely to improve the equity of the state’s funding system, although indirectly. But the conversation about what equitable school funding could look like in Minnesota hasn’t started. Yet.