$23 billion racial funding gap

Report finds $23 billion racial funding gap for schools

Laura Meckler

Overwhelmingly white school districts received $23 billion more than predominantly nonwhite school districts in state and local funding in 2016, despite serving roughly the same number of children, a new report finds.

The funding gap is largely the result of the reliance on property taxes as a primary source of funding for schools. Communities in overwhelmingly white areas tend to be wealthier, and school districts' ability to raise money depends on the value of local property and the ability of residents to pay higher taxes.

And while state budgets gave heavily nonwhite districts slightly more money per student than they gave overwhelmingly white districts, in many states it was not enough to erase the local gaps.

"States have largely failed to keep up with the growing wealth disparities across their communities," concludes the report released Tuesday by EdBuild, a New Jersey-based research and advocacy group that focuses on school funding.

The gap reflects a long-standing view that local schools should be both controlled and funded locally.

The funding disparities that result have been challenged in many states, frequently in court. Many states have worked to make formulas more equitable, with varying success.

"While we have made some progress on the issue of economic inequality in our schools, we still have a terribly inequitable system," the report said.

EdBuild examined the nation's 13,000 traditional public school districts and found about 7,600 where more than 75 percent of students were white, and about 1,200 where more than 75 percent of students were not white. The nonwhite districts, which included many large cities, were much larger than the white districts, which included many small rural areas. But the two groups each had about the same number of students - 12.8 million children in nonwhite districts and 12.5 million in white districts.

Nonwhite districts took in about $54 billion in 2016 in local tax dollars - or about $4,500 per student. White districts, home to higher incomes and less poverty, collected more than $77 billion, or just over $7,000 per student.

On average, states added another $6,900 per student to white districts and almost $7,200 per student in nonwhite districts. But the overall gap in state and local funding was $23 billion. White districts, on average, had more than $2,000 more in funding per student than nonwhite districts.

The analysis does not include federal dollars, much of which is targeted to the poorest communities.

The problem is worse in states where districts are small, cordoning off wealthy communities and limiting the likelihood that wealthier taxpayers will subsidize poorer students, said Rebecca Sibilia, EdBuild's CEO. In states such as Maryland and Virginia, she said, many school districts comprise entire counties, making funding more equitable.

In Maryland, 880,000 students are served by 24 districts; in New Jersey, 1.3 million students are divided between 540 districts. Nonwhite districts in Maryland received $501 more per student than white districts, and in Virginia, they got $255 more per student.

Overall, the report found 21 states where white districts got more funding and 14 states where nonwhite districts got more. The other states did not have enough racial diversity to meaningfully analyze, the report said.

The gap was most dramatic in Arizona, where white districts were given $7,613 more per student than nonwhite districts. A dozen other states had gaps between $2,000 and $4,000 per student, with 10 of the states providing more funding to students in majority-white districts.

A representative for the Arizona Education Department had no immediate comment.

Michael Petrilli, president of the Thomas B. Fordham Institute, a conservative think tank, says states should do more to equalize funding. But he added that there is some benefit to local control.

"When districts have to go to the community to get a bond passed, they have to make the case they are spending their money well and it's worth investing in," he said. "That has been an important form of accountability."

But overall, he said, the system needs to become more equitable. "All of this is tough sledding in terms of the politics of it," he said. "It's an area where the courts have played an important role."

Aaron Smith, an expert on school finance at the libertarian Reason Foundation, also supports more equity. He said conservatives should realize that if school funding were more even, it would bolster school choice programs, which many conservatives support. More-equitable funding would make it clear how much money a school should get to educate each student, Smith said.

"Every state has some sort of mechanism in place to try and equalize and neutralize the effects that local property wealth has," he said. "The problem is that these equalization mechanisms vary substantially in terms of how effective they are."