States Cut Education Funding, Widening Achievement Gaps and Inequality

WASHINGTON—According to a recent analysis, 42 states have decreased the portion of their economies allocated to K-12 public schools compared to two decades ago. This reduction in educational funding effort has resulted in nearly $600 billion less in state and local K-12 revenue from 2016 to 2023. These findings are detailed in the annual “Adequacy and Fairness of State School Finance Systems” report published by the Albert Shanker Institute, University of Miami, and Rutgers University.

The report highlights that student achievement in math and English remains stagnant, with declining investment in public education identified as a major contributing factor. Notably, Black students are three times as likely as white students to reside in “chronically underfunded” districts.

Bruce Baker, a University of Miami professor and one of the report's authors, describes this situation as a “permanent disinvestment” in public schools. He states, “Over much of the past two decades, states’ economies have grown but their school funding has lagged behind. It’s no accident that student achievement has stagnated during this period.”

The authors, including Matthew Di Carlo from the Albert Shanker Institute and Mark Weber from Rutgers University, employ a distinctive approach to assess the K-12 finance systems across all 50 states and the District of Columbia, considering fiscal effort, statewide adequacy, and equal opportunity.

Randi Weingarten, President of the American Federation of Teachers and the Albert Shanker Institute board of directors, asserts, “Money matters and it matters a lot. Why would the opponents of public education be on this campaign to divert taxpayer funds meant for public schools to vouchers and other privatization efforts? While we know that poverty and screens and social media also have a real effect on academic achievement, the lack of consistent financial support is a real problem—particularly for already disadvantaged districts. If we don’t want to see our country fall even further behind, states must redouble their effort and commit to investing in the schools that 90 percent of kids attend.”

The report evaluates statewide funding adequacy by ranking states based on the number of students attending schools in districts with funding below estimated adequate levels. It identifies the 20 percent of districts where funding falls most significantly short of these levels as “chronically below adequate.” Most students in these underfunded districts are concentrated in just 10 states—Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Nevada, North Carolina, South Carolina, and Texas—despite these states serving only about one-third of the nation's student population.

Another key measure in the report is equal opportunity, assessing whether affluent districts receive more adequate funding compared to higher-poverty districts serving vulnerable students. The findings indicate that funding disparities exist in all states, with the size of these “opportunity gaps” varying significantly.

States like Connecticut, New York, and Massachusetts exhibit the largest gaps, where affluent districts benefit from substantial local property tax revenue, exacerbating the divide in funding adequacy. The authors suggest states should reduce these gaps by channeling more state aid to higher-poverty districts with limited local revenue-raising capacity.

The report also reveals that opportunity gaps are influenced by race and ethnicity. African American students are twice as likely to be in districts with inadequate funding and three times more likely to be in “chronically underfunded” districts compared to white students. The disparities between Hispanic and white students, while smaller, remain significant.

Baker notes, “states with large opportunity gaps are essentially inequality factories, with affluent districts funded to achieve higher student outcomes than lower-income districts, year after year. In other words, states’ funding systems are designed to reproduce achievement gaps.”

The authors provide several recommendations for enhancing state funding systems, emphasizing the need for more rigorous methods to set district funding targets and increasing state aid to help districts meet these targets, with local contributions also considered. They propose federal assistance for states with high poverty and small economies that struggle to meet educational needs despite high effort levels.

“The Adequacy and Fairness of State School Finance Systems” is an annual report by researchers from the Albert Shanker Institute, University of Miami School of Education and Human Development, and Rutgers University Graduate School of Education. The report is also accompanied by 51 one-page profiles that summarize the performance of the K-12 finance systems of each state and the District of Columbia.

The Albert Shanker Institute, endowed by the American Federation of Teachers and named in honor of its late president, is a nonprofit, nonpartisan organization dedicated to three themes – excellence in public education, unions as advocates for quality, and freedom of association in the public life of democracies

The AFT represents 1.8 million pre-K through 12th-grade teachers; paraprofessionals and other school-related personnel; higher education faculty and professional staff; federal, state and local government employees; nurses and healthcare workers; and early childhood educators.