Funding in Public Education: What the United States gets wrong with public education funding and creating a more equitable system

My paper takes a dive into funding in the United States showing how a lack of funding affects stakeholders. There are also comprehensive solutions presented to solve the lack of funding by involving the federal government.

Published by


June 23, 2023

Inquiry-driven, this project may reflect personal views, aiming to enrich problem-related discourse.

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Executive Summary

Public school students receive an education that lacks fiscal support. To combat this, the US needs to rethink its structure of funding and how to support disadvantaged school districts. Without a well-funded education, closing learning gaps becomes harder as many students lose out on opportunities that enrich their learning. The focus of this paper is on the issue of public education funding in the United States, examining the flaws in the current system and making the case for expanding funding to address educational inequalities. This will be an analysis of the current state of public education funding and its effects on students and will provide policy solutions to create an equitable and functional system of funding by mobilizing the federal government's involvement in public education and creating an equitable and accountable system.

Pointed Summary

  • Most funding for public education comes from state and local governments.
  • The Department of Education follows the consensus that “the federal role in education is limited.”
  • Per-pupil spending differs from city to state allowing for a disproportionate level of public education to be received.
  • During recessions, the first budget cuts begin with cutting education spending.
  • Lack of funding widens the learning gap, especially in lower-poverty school districts.
  • Increased spending on education could help boost economic recovery.
  • We need an overhaul of the school finance system, with reforms ensuring a larger role for the federal government.
  • We need a reform of the education system that creates equitable and accountable policies.
  • Solving the issue requires a mixed use of accountability policies and multi-tiered formula funding sources.


Recent data support the argument that the current system is inadequate and inequitable. According to a report by the National Center for Education Statistics, the average per-pupil expenditure in public schools was $12,756 in 2018-19. However, this varies widely between states, with some states spending as little as $7,628 per student while others spend more than $20,000 per student. This disparity in funding results in unequal educational opportunities for students across the country.

Furthermore, research shows that disadvantaged students are disproportionately affected by the funding gap. According to a report by EdBuild, school districts serving predominantly low-income students receive on average $1,000 less per student in state and local funding than districts serving predominantly wealthy students. This perpetuates educational inequalities and widens the opportunity gap between students from different socioeconomic backgrounds.

 Figure 1. Table showing the distribution of funding that comes from all levels of government

Education in the United States education system mostly runs on the backs of states and local governments. The Education Law Center notes that:

“States, under their respective constitutions, have the legal obligation to support and maintain systems of free public schools for all resident children. This means that the state is the unit of government in the U.S. legally responsible for operating our nation’s public school systems, which includes providing the funding to support and maintain those systems.”

The American education system serves as a fragmented puzzle of states that can fund high-quality education, and states that are forced to move funds to more important places letting the learning gap in school districts grow. Without a system that equitably supports students, we fail to prepare them for the real world. Recent data and research demonstrate the importance of expanding public education funding and addressing the inequities in the current system. According to a report by the Center on Budget and Policy Priorities, "Over the past decade, state funding for public K-12 schools has decreased in 29 states, with the average state providing 16% less funding per student in the fiscal year 2015 than in 2008." This reduction in funding has resulted in teacher layoffs, larger class sizes, and reduced educational resources for students, particularly those in disadvantaged communities. The consequences of inadequate funding are especially pronounced for students from low-income backgrounds.

The data in Figure 1 presents the information that with our current system, education funding in the US is mainly given by the state. With state income varying drastically, it is difficult to provide school districts and students with an equitable education. The Learning Policy Institute notes that "Schools serving high concentrations of low-income students and students of color have less experienced and less qualified teachers, larger class sizes, fewer advanced courses, less access to high-quality curriculum, and less access to the technology and instructional resources needed for learning." This perpetuates educational inequalities and undermines the potential for equity in education, providing the best possible, high-quality education to every student regardless of their social situation.

Figure 2. Bar graph displaying inequities in funding in public education.

In Figure 2, school districts in poverty areas receive fewer funds which don't meet the necessary amount of money necessary to provide students with a quality education. This furthers the inevitability of public education in the US by showing that affluent districts can provide for students' needs while lower-income districts are unable to meet the benchmarks for testing and meet state standards because of a lack of funding.

Current Stances

Currently, there are two dominant sides in the debate for education funding. One side is for public education funding on a federal level, and making education funding more equitable concerning needs. On the other hand, there are those who believe that education funding should remain as the system it has been, where funding is coming from the state and local governments and needs are decided by state-to-state decision-making. 

Starting with the side for federal involvement and increased funding and equity in education, many of those who favor more federal involvement say that it would help eliminate inconsistencies in the system. Reforming a system that allows for inequity could completely reshape the educational landscape by providing students with a high-quality education.

On the other hand, there are those who argue that education funding and education equity should fall on the shoulders of state and local governments. States have the duty of providing quality education to students, as it is embedded into state constitutions.

Tried Policy

Tried policy varies from state to federal level. On a federal level, the policy has mainly focused on programs to help bridge learning gaps, with little success, while on a state level, state education departments have scrambled to make ends meet with a lack of monetary resources.

In relation to states, California voters approved Prop 13 in 1978, in a report done by the California Board of Equalization, noted the purpose of Prop 13.

“Proposition 13 rolled back most local real property, or real estate, assessments to 1975 market value levels, limited the property tax rate to 1 percent plus the rate necessary to fund local voter-approved bonded indebtedness, and limited future property tax increases.”

The approval of this proposition created strains on the California education system since a limitation on tax income reduces the amount of money flowing into school districts. Because of this fiscal shortage, for 40 years the state has drastically lacked progress in bridging learning gaps and creating educational opportunities for students.

California has been a trailblazer in providing equitable funding for school districts. One of the most successful programs the state has introduced is the Local Control Funding Formula (LCFF). The purpose of the LCFF is described by the California Department of Education, “For school districts and charter schools, the LCFF establishes uniform grade span grants in place of the myriad of previously existing K–12 funding streams, including revenue limits, general purpose block grants, and most state categorical programs.”

Policy Problem


The stakeholders who are most affected by a lack of funding in public education are the students. Students are the ones who lose out on quality education, and the ability to be prepared for life, they lack the opportunities to continue growing as adults. With a lack of funding, students won't get the equal amount of resources necessary to have a quality education. The inequities caused by the disparity in funding put low-poverty, high-risk students in a [position where their educational advancement is withheld due to fiscal limitations.

While students lose out on quality education, teachers are likely to be at risk with job security, and career advancements, and they have more struggle meeting state standards. The Public Policy Institute of California writes in its report on Understanding the Effects of School Funding, “Districts tend to use the additional funding to purchase school resources—smaller class sizes, more experienced teachers, more support staff, better material.” Teachers benefit from a well-funded system, without that funding, teachers lose valuable resources that propel students forward. Teachers will face cuts to budgets and will face pay cuts, this will put teachers in a stressful and uncomfortable predicament having to make ends meet economically and having to meet state standards having less than half of their original budget. The annual PDK poll for 54 years has randomly surveyed community members, including teachers, on various aspects of public education in the US. The results are displayed in Figure 3.

Figure 3. Data from the 54th annual PDK poll shows parents' trust and confidence in teachers in schools in their community.

From the results displayed in Figure 3, confidence in teachers overall is favorable. This shows that the teachers themselves are not the issue and that it is a lack of funding and adequate training that creates disparities in funding for public schools.

Risks of Indifference & Nonpartisan Reasoning

Communities as a whole agree that students deserve funding for their education. In an opinion report by The Hechinger Report, 

“It’s time to stop pretending that dramatic disparities in education funding aren’t a direct result of our existing system of leaving states, counties, cities, and towns to fund public education locally.”

 The goal should not only be to give states federal funds for educational purposes, it's about reconstructing the whole system of financing education and giving stakeholders more control over the distribution at state and local levels.

When it comes to funding formulas, in California, there are differences in how to approach the financing of education. California state Senator John Laird, head of the Senate Education Subcommittee stated that “The Senate proposal gets more money sooner to all districts serving students who are low income, foster youth, or English language learners — not just those in districts with the highest concentrations of these students.” The proposal discussed by Senator Laird is a new initiative by California Governor Gavin Newson in which the state would continue to add more money into the LCFF program, 1.2 billion in an annual cycle. While the statehouse agrees, the houses of the statehouse are at odds on how the money should be distributed.


Policy Options

When discussing the possibility of using legislation as a means to shorten the gap between large chunks of missing funding, there are options at all levels of government. A policy option is to increase accountability for how public education funds are spent. This could involve requiring school districts to report on the allocation of funds and how they are being used to improve educational outcomes for students. The Every Student Succeeds Act (ESSA) includes provisions to increase transparency and accountability for school funding, requiring states to report on how funds are allocated to schools and how they are being used to support student achievement. This could be a possible path to informing lawmakers, state governments, and departments of education on what focus districts are taking in terms of funding allocation and use that data to better assess what the common goals of the state are in terms of bettering education and decreasing the learning gap. 

California's Local Control Funding Formula (LCFF) legislation is the best method as a policy option, one that could help address the funding inequities in public education in the United States and create a more equitable system. According to a report by the Learning Policy Institute

The LCFF "has spurred significant changes in California's education system, providing more resources to low-income and other high-need students, creating greater flexibility for districts and schools to use resources to support student success, and engaging families and communities in decision-making processes." 

This flexibility allows districts and schools to invest in initiatives that best serve their student's needs, including hiring more teachers, reducing class sizes, and providing additional support for English language learners. A report by the Aspen Institute highlights the success of the LCFF, and that it "represents a significant step forward in addressing equity in education funding." The report notes that the formula has resulted in increased funding for high-need students and has helped reduce funding disparities between low- and high-poverty districts.

Furthermore, a report by EdSource found that the LCFF has resulted in significant increases in funding for low-income students and English learners, with some districts seeing funding increases of up to 60%. The formula has helped reduce funding disparities between districts, with the gap between the high and low-funded districts shrinking from $2,392 per student in 2012-13 to $1,966 per student in 2018-19. 

In addition to providing more funding for high-need students and reducing funding disparities, LCFF emphasizes the importance of community engagement and input. Districts are required to develop Local Control and Accountability Plans (LCAPs) that outline how they will use the funds to meet their students' needs and engage with parents, students, and community members in the development of the plans. This correlates with the need to ensure that every stakeholder has the opportunity to influence how funds are allocated.

The use of such methods as LCFF provides a nonpartisan manner of addressing learning and funding gaps in public education. The majority of people agreed that schools in their community were not meeting expectations.

Figure 4. Polling data from the 54th annual PDK poll of parents' views on schools in their community.

Conclusions and Recommendations

To address these issues, lawmakers should propose policy solutions that increase not just federal funding, but federal involvement and mobilization in education. For public schools, reforming the way school funding is allocated, and increasing accountability for how funds are spent. One of the most effective methods of doing so is by adopting California's LCFF and LCAP policies at a federal level, ensuring that the federal government, under the Department of Education, can hold states accountable for the equitable distribution of federal, state, and local funds. By expanding public education funding, the United States can ensure that all students have access to high-quality education and the opportunity to succeed regardless of their background. Historically, education initiatives by the Federal government have had little to no effect, even its largest programs. The federal government should improve what it does now, improving its initiatives and funding distribution, before telling states and school districts how to school. The federal government should look to the policies set forth by California, using their model of LCFF funding to create more equitable solutions for funding unprivileged states. Finally, when we look to create an equitable and quality nationwide education system, it is the students who will be directly influenced by these changes. We must create a system where students can achieve everything they could ever be capable of, making school a place of flowing creativity and flourishing members of society who contribute to innovation, not stagnation and polarization.


The Institute for Youth in Policy wishes to acknowledge Gwen Singer, Sarah Zhang, Paul Kramer, Carlos Bindert and other contributors for developing and maintaining the Effective Discourse Department and associated Fellowship programming.

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  2. National Center for Education Statistics. 2015. “The NCES Fast Facts Tool-National Center for Education Statistics.” National Center for Education Statistics. June 2015.
  3.  C. Kirabo Jackson, Rucker C. Johnson, Claudia Persico, The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms, The Quarterly Journal of Economics, Volume 131, Issue 1, February 2016, Pages 157–218,
  4. Farrie, Danielle, Ph.D., and David G. Sciarra Esq. “Making the Grade 2020 | Education Law Center,” 2020. Accessed April 5, 2023.
  5. Williams, Conor P., Shantel Meek, Conor P. Williams, and Shantel Meek. “OPINION: U.S. Public Schools Should Be Federally Funded.” The Hechinger Report, November 6, 2020.
  6. Julien Lafortune, and Joseph Herrera. “Understanding the Effects of School Funding.” Public Policy Institute of California, January 24, 2023. Accessed April 5, 2023.
  7. Michael Leachman, Kathleen Masterson, and Eric Figueroa. “A Punishing Decade for School Funding.” Center on Budget and Policy Priorities, November 29, 2017. 
  8. Furger, R. C., Hernández, L. E., & Darling-Hammond, L. (2019). The California Way: The Golden State’s quest to build an equitable and excellent education system. Palo Alto, CA: Learning Policy Institute.
  9. Dakarai Aarons, Brigid Ahern, Jen Alexander, et al. “Creating Conditions for Student Success - Aspen Institute.” Aspen Institute, January 6, 2021. 
  10. Fensterwald, John. “California's K-12 Funding Formula Likely to Change, but Disagreement over How.” EdSource. EdSource, June 4, 2021. 
  11. Oakes, J., Cookson, P., George, J., Levin, S., Carver-Thomas, D., Frelow, F., & Berry, B. (2021). Adequate and equitable education in high-poverty schools: Barriers and opportunities in North Carolina. Learning Policy Institute
  12. “California Property Tax - California State Board of Equalization.” California Board of Equalization, December 2018. 
  13. “Local Control Funding Formula Guide.” EdSource. EdSource, February 2016. 
  14. (Figures 3 & 4) Teresa Preston, and Albert Chen, eds. “The 54th Annual PDK Poll Local Public School Ratings Rise, Even as the Teaching Profession Loses Ground.” PDK Poll. Phi Delta Kappan, June 2022. 
  15. (Figures 1 & 2) Allegretto, Sylvia, Emma Garcia, and Elaine Weiss. “Public Education Funding in the U.S. Needs an Overhaul: How a Larger Federal Role Would Boost Equity and Shield Children from Disinvestment during Downturns.” EPI. Economic Policy Institute, July 12, 2022. 

Eduardo Corona

Eduardo Corona

Eduardo is a student advocate in education within the Southern California Region. His focus revolves around policy in education and his aspirations are to become a public servant by holding public office one day.

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