Understanding School District Funding

boy and girl learning in a classroom

Elementary and secondary public education in the US is funded through a combination of federal, state, and local dollars. In most states, money is allocated to school districts through complex state funding formulas. State education funding formulas have been a source of contention, puzzlement, and, in some cases, lawsuits.

Most funding formulas try to account for differences across school districts—including differences in student demographics and local property wealth—to ensure adequate and equitable funding. But other factors, such as provisions that maintain funding at previous levels (“hold harmless”) and that allow local districts to raise more than their minimum contribution, can give some districts an advantage over others.

To understand the complex nature of funding formulas, we created interactive tools to explain popular funding models and examined funding formula models in Massachusetts, Nebraska, Texas, and Virginia.