Public Education Finance Research Paper Starter

Public Education Finance

(Research Starters)

Public education institutions are funded primarily by the state and local governments, with some money coming from the federal level. The systems set in place to ensure adequate funding are complicated and as a result, many schools do not receive the funding they should. Low income students particularly do not receive the funding that is earmarked for their use. State vary in how they fund wealthy as well as impoverished education institutions, and some measures are being taken to ensure greater equity. Higher education funding differs greatly from primary and secondary school funding and higher education tuition costs have been on the rise. Some controversy also surrounds the funding of charter schools.

Keywords Charter School; Equitable Funding; Low Income; Per-Pupil Spending; Public Education; Revenues; Tax & Expenditure Limitation; Title I; Wealth Neutrality

Politics, Government,


Public schools in the United States receive the bulk of their funding from taxpayer dollars. Specifically, local and state governments supported by taxpayers provide funding for schools within their community districts. As is typically the case, wealthy communities are able to provide ample funding for neighborhood schools enabling these institutions to recruit and retain quality teachers, to maintain facilities and equipment and to buy the latest computers and library resources. Not surprisingly, students at these schools tend to receive a better education and are more likely to graduate and attend college. Cash-strapped communities typically struggle to provide adequate funding for their schools, which causes an assortment of problems such as dilapidated facilities, lack of quality teachers, and outdated computer equipment and library resources. Along these lines, students at such schools are more likely to drop out and less likely to attend college (Wood & Theobald, 2003, p. 719).

Systems Used for Funding Schools

The funding of public schools has been and continues to be a complicated matter. Increasing per- pupil spending has historically been seen to be the solution for improving student performance. Yet, as U.S. student performance continues to lag behind that of other nations and stagnate, many have wondered if this solution is effective. In many ways, school funding and operations have changed little in the past fifty years. Though advances in information technology have affected almost every aspect of society from commerce and the economy to communications and transportation, education systems (including what students learn) has changed little (Hess, 2007, p. 78).

Whether public education financing is sufficient, and whether it is applied equally to all school districts and all students, has been a cause of many lawsuits and much public debate in the U.S. Determining how much money states spend on public education, how much goes to each student, and what programs are funded at the cost of others remains decidedly elusive. Complicated formulas and equations are used to determine the funding of programs. To further obscure the matter, political, economical, and social factors heavily influence funding though ideally the numbers and statistical analyses should alone determine appropriate financing. However, it is not uncommon for one area or program to receive financing because it has been deemed as "in-need" by a politically motivated administrator even though the numbers do not support such a claim. Overfunding one area at the expense of another area, particularly when that area truly lacks sufficient financing, hurts the overall school and its students (Hoffman & Hayden, 2007, p. 366).


It seems as though everywhere a business leader, board member, or politician has a formula for improving the performance of the nation's schools. The relationship between the business sector and the public education sector is tumultuous. The education system is wary of big business financing education reform programs, often mistrusting their intentions. Yet schools readily accept donations from businesses in the form of monetary donations, training, computers, and equipment (Hess, 2007, p. 80).

Education leaders' primary concern about businesses providing equipment to public schools has to do with separation between private and public funding. If schools have an established curriculum to teach, its content could be too heavily influenced by a business. Alfie Kohn, author and expert on school finance, says,

There may be some sort of shadowy business conspiracy at work to turn schools into factories, but this seems unlikely if only because no such conspiracy is necessary to produce the desired results…. To an extraordinary degree, business's wish becomes education's command (as cited in Hess, 2007, p. 81).

Rather than serving the public good, Kohn and others believe that businesses' investment in education serves their own purpose. In this way, businesses want an educated workforce that will support their enterprises, but they are often less concerned with pedagogy or providing a quality education to all students.

Supporting of the greater good, community, corporate citizenship, or securing the future are some reasons given by business executives for supporting educational endeavors. Businesses give $2.5 billion each year to public education, which is still quite small when compared to total spending. Moreover, some businesses support educational endeavors through mentoring programs or other service related programs other than monetary support (Hess, 2007, p.82).

Competition for Education Funding

In 1983, a report was published by the National Commission on Excellence in Education that called attention to the gaps and shortcomings in the U.S. public education system. The report, titled A Nation at Risk, caused schools across the nation to increase their per-pupil spending, to raise their level of accountability, to increase their district equity while reducing disparity, and to improve student achievement for all (Murray, 2007, p. 325). Though the states' commitment to public education spending increased at that time, it has remained relatively stable since then. Though education counts for about one quarter of the average state's spending budget, it has had to compete against other costly projects such as Medicare and other social services used primarily by senior citizens. According to Murray (2007), as the baby-boomer generation continues to age and depend more and more on such social services, it will compete heavily for financing earmarked for education. As the elderly population will not directly benefit from education programs, they are less likely to vote for education spending (Murray, 2007 p. 329).

Though most education spending comes from state and local governments, the federal government's role in this spending has increased in recent years with the passage of the No Child Left Behind Act of 2001 (NCLB). The Act has forced states to spend more money on teacher preparation programs, student assessments, and training programs. If schools fail to perform according to NCLB's standards, they risk losing their federal funding. In this way, many have argued that NCLB forces schools to spend money on overhead, assessment, and other costs rather than student learning (Murray, 2007, p. 331).

Various waivers for aspects of the NCLB standards have been offered by the federal government at different times. For instance in 2011, President Barak Obama announced that states could have waivers on two major requirements of NCLB (the gains students are expected to make annually in math and reading, the the requirement that by 2014 almost all students must score as proficient in both subjects). However, in order to be eligible for this waiver, states would have to accept several other requirements, including a teacher evaluation system based on test scores, which would impose additional costs on the school districts and which some districts perceive as interfering with their rights to make decisions regarding education in their district. However, according to the U.S. Department of Education, as of December, 2013, 42 states, the District of Columbia, and Puerto Rico have been granted waivers on some NCLB requirements, with an additional three states having proposals for NCLB waivers under review.

Further Insights

Examples of Spending by State

According to the National Center for Education Statistics, in 2010, states spent an average of $10,636 per pupil for public elementary and secondary schools; in inflation-adjusted dollars, average per-pupil spending has increased gradually over the years, from $7,967 in 1995, $8,849 in 2000, $9,768 in 2005, and $10,611 in 2009. However, per-pupil spending varies widely between states: in 2010, the District of Columbia spent the most ($20,910), followed by New York state ($18,167), and Idaho spent the least ($7,100).

Each state's government makes efforts to appropriate funds equally to all of their school districts using "per pupil" revenues. Such systems attempt to make sure that each student is allocated a certain number of funds regardless of their local school district. However, because of politics and other factors, equitable funding is not always realized. In forty-three states, lawsuits have been filed alleging that funds have been misappropriated (Wood & Theobald, 2003, p. 719). Typically, more conservative-leaning states give the local governments more control and decision-making power. Such entities are less concerned with across the board equity in terms of providing funding for all students regardless of their neighborhood's revenue generating capacity. More liberal-leaning states give the local authorities less control and are more concerned with equity and with allocating per pupil funding in a way that is more democratic (p. 721).

School Funding for the Wealthy, Poor

Because each state manages its own financing for public schools, one can examine different states in order to get a glimpse of how such affairs are handled. For better or worse, the wealth of a student's immediate neighborhood is typically a good predictor of the quality of his or her public school education. Wealthy neighborhoods tend to adequately fund their schools, while poorer communities often must put their money into other programs, leaving schools under funded. To obtain greater equality across the nation and across each...

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