Close the hidden funding gaps in America’s public schools

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New Ed Trust report outlines funding gaps between schools located in the same school district and calls on Congress to ensure that districts provide low-income students with their fair share of state and local resources

Publication date: 
April 1 2010

WASHINGTON (April 1, 2010)—A new report from The Education Trust documents how budgeting practices in school districts across the country are shortchanging low-income students and undermining the power of federal investments in high-poverty schools.

Close the Hidden Funding Gaps in Our Schools” shines a light on these widespread and unjust accounting practices and offers Congress a straightforward legislative path: Fix the so-called comparability provisions of Title I of the Elementary and Secondary Education Act (ESEA).

Title I requires federal funds to be added to an equal base of state and local funds in order to buy the extra supports that low-income kids need to achieve at high levels. But when districts don’t provide schools receiving federal Title I funds with an equitable share of state and local resources, federal Title I money ends up filling local funding gaps at these schools, rather than buying the extras that it is intended to purchase and that low income kids need.

“Shortchanging students living in poverty is plain wrong and too easy in far too many school districts,” said Kati Haycock, president of The Education Trust. “Congress can and should stop it. And stop it now.”

The authors of the report examined per-student expenditures in New York City and uncovered big differences between spending in some of the city’s high-poverty and low-poverty schools.

For example, in 2007-08:

  • Half of the city’s nearly 500 Title I schools received less state and local funding than non-Title I schools.
  • At P.S. 251 in Brooklyn, 86 percent of the school’s 668 students are from low-income families. The school received $14,762 in state and local funds per pupil, which is almost $2,000 lower than the average in the district’s lower poverty schools. This gap added up to about $1.3 million in lost revenue for P.S. 251.

But New York City is far from alone. Research conducted over the past decade has uncovered district-level budgeting practices nationwide that frequently favor schools serving the fewest poor students. 

“New York City is just one example of an all too common practice. High-poverty schools across the country are often shortchanged when it comes to funding,” said Natasha Ushomirsky, K-12 policy analyst at The Education Trust and coauthor of the report.

Why do these gaps exist? Most districts allocate teaching positions to schools instead of dollars to spend on salaries. So a school with a first-year teacher with a bachelor’s degree is considered to have the same resource as a school with a 10-year veteran who earned a master’s degree, even though the district pays a higher salary to the more experienced teacher with a more advanced degree. Research shows that high-poverty schools tend to employ less experienced teachers with fewer credentials.

Here are examples of gaps in average teacher salaries between high-poverty and low-poverty elementary schools:

  • $2,637 per teacher in Cincinnati
  • $2,668 per teacher in Austin, Tex.
  • $3,160 per teacher in Fresno, Calif.

Closing teacher salary gaps would be a big step forward, but it would not fully close the spending gap. School districts often allocate other resources inequitably as well. And all of these inequities add up to big financial disadvantages for the schools serving the students facing the steepest challenges. These district-created inequities undermine the intent of federal Title I spending.

“Imagine the professional development, enhanced curriculum, or even school building improvements a low-income school could afford if inequitable local spending practices were halted,” said Daria Hall, director of K-12 policy at The Education Trust and coauthor of the report.

When Congress reauthorizes ESEA later this year, the comparability loophole must be closed. Congress can, and should, require districts to do the following:

  • Spend at least the same amount per student in Title I schools as they do in non-Title I schools.
  • Count all school-level expenditures in dollars, including teacher salaries, to demonstrate equitable funding across a school district.
  • Publicly report per-student expenditures by funding source (local, state, and federal) and by school building.

“I commend the work of The Education Trust in creating this report. Once again we see glaring inequities in funding that disadvantage students with the greatest need,” said Representative Chaka Fattah (D-Pa.). When Congress reconvenes, I will be introducing legislation to address the very challenges raised here by The Education Trust and look forward to working with education advocates, my colleagues in Congress, and the president to see that comparability is addressed in the reauthorization of the Elementary and Secondary Education Act.”

“If we measured funding logically—rather than allowing things like headcounts of teachers to pass for a demonstration of equitable spending—resources would dramatically increase in thousands of low-income schools across the country,” said Amy Wilkins, vice president of The Education Trust. “With one long-overdue change, Congress can end unfair budgeting practices that treat poor children like second-class citizens and help federal funds have their intended impact.”

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