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Report: Low-income Students in Wealthier States Benefit From Increased Education Spending

Cameron Elementary School located in Virginia and Ponderosa Elementary in North Carolina are similar in many ways. They are about the same size, and both enroll a high percentage of low-income students of color. The bulk of students at both schools qualify for free-or-reduced price lunch. Both struggle to meet performance goals set by the No Child Left Behind Act.

There is one notable difference.

Cameron receives more than twice as much government funding as Ponderosa to educate its children.

Under Title I, a federal funding program which provides money to school districts with high concentrations of poor students, schools in wealthy states receive more funds than schools of the same size in poor states, according to new a report released by Education Sector, an independent think tank based in Washington.

“At every level of government — federal, state, and local — policymakers give more resources to students who have more resources, and less to those who have less,” states the report. “These funding disparities accumulate as they cascade through multiple layers of government, with the end result being massive disparities between otherwise similar schools.”

Last year, Cameron, located in Virginia’s wealthy Fairfax County, received $14,040 per low-income student from all three level of government. Ponderosa received $6,773 per low-income student.

This difference in funding creates problematic disparities.

At Cameron, class sizes in kindergarten and the first and second grades are kept at 15 students or less. Veteran teachers earn an average salary of $62,533, well above the national average of $47,602. Math and reading specialists provide full-time support to both teachers and students, a stark contrast from Ponderosa, the report states.

At Ponderosa class sizes are in the mid-20s, not 15 or below. The teachers often are inexperienced and leave only a few years after being hired, the report states. The school could use more math and reading specialists to help meet NCLB performance goals. Test scores lag behind state norms, with barely half of third-graders proficient in math.

According to the report, Title I allocations are dependent upon how much states and districts spend. States and districts with more money spend more money, so they get more federal dollars. States and districts that are poorer and have less money to spend on education end up getting penalized by not receiving as much federal funding.

Kevin Carey, senior policy analyst for the Education Sector and co-author of the report, asserts that the state, local and federal government split the cost of public education in roughly three ways: State governments pay 50 percent, local governments pay 40 percent and the federal government pay 10 percent.

“There is a basic flaw running through policies at the federal, state and local levels: Money follows money. Students and jurisdictions that have more money still get more. Those that have less still get less,” Carey writes. “These flawed policies cascade through multiple levels of government to produce vastly different funding results for two essentially similar high-poverty elementary schools, one in Virginia and the other in North Carolina.

Carey and co-author Dr. Marguerite Roza, associate professor at the University of Washington’s College of Education and a senior scholar at the Center on Reinventing Public Education, assert that the problem with this approach is the interstate differences in per-student spending are primarily a function of differences in wealth, not cost. For example, public schools in Connecticut spent an average of $12,263 per student in 2005, 87 percent more than the $6,548 spent in Mississippi. Yet a U.S. Department of Education study found that Connecticut’s costs are only 32 percent higher. Most of the difference in spending between the two states stems from the fact that Connecticut simply has more money to spend.

On a state level the inequities in allocations are no better, the report emphasizes. Many states have adopted policies — some prompted by lawsuits — to equalize funding between richer and poorer school districts. However, laws allowing local districts to augment state funding with local property tax levies often mean those districts with higher property wealth wind up with more money. Moreover when state funds are distributed according to staffing reimbursement formulas, wealthier districts that spend more typically benefit.

In Virginia, only 40 percent of school funding comes from the state, significantly below the national average of 47 percent. Virginia has established a “minimum foundation” education program and level of staffing for each district. The state contributes funds to the foundation, and districts are required to raise local funds to match. The state helps poor districts by distributing state funds in inverse proportion to local wealth. But the minimum amount is not enough to compete for the best teachers and provide all the resources students need. As a result, most local districts in Virginia supplement the minimum by raising additional money from local property taxes, the report states.

This benefits wealthy districts like Fairfax County Public Schools. Home of seven Fortune 500 companies, the county has money to spare, and spends it generously on education. In 2006, Fairfax was required by the state to raise $631 million in local funds to meet the minimum foundation requirements. It then voluntarily raised an additional $729 million in local funds on its own.

North Carolina’s Cumberland County, home of Ponderosa Elementary School, is a different story. While Fairfax is home to wealthy defense contractors, Cumberland educates the sons and daughters of soldiers stationed at Fort Bragg. Typical North Carolina school districts are not overly dependent on property tax revenue to fund education. The state’s funding system was designed to provide enough funds to support the basics. The state provides approximately 65 percent of K–12 education funding, via a formula that reimburses districts for the actual costs of hiring a prescribed number of teachers and other staff. That number is, in turn, a function of daily student enrollment counts.

Local school districts make decisions that determine how funding is distributed among individual schools, especially around budgeting for teachers. When teachers are allowed to choose where they work, they tend to go to lower-poverty schools where working conditions may be better. High-poverty schools typically have less experienced teachers and higher turnover rates, so the average teacher salary is usually much lower in those schools, resulting in significant per-student funding disparities between schools within districts, the report claims.

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