Poster #39 - Equity in State School Finance: Examining the Role of Poverty and Spending Measures

• In Event: Saturday Poster Luncheon

Abstract

Background/Significance

Spending on public elementary and secondary education varies widely across the United States, especially between states. Yet states differ not only in terms of how much they spend on K–12 education overall but also in how equitably they spend on students from different demographic groups, particularly students from socioeconomically disadvantaged backgrounds.

Researchers commonly measure state funding equity using spending “progressivity,” meaning the extent to which states spend more on students from poor backgrounds than non-poor backgrounds. While several quantitative approaches exist to estimate spending progressivity, such as those using ratios of weighted averages or regression analyses, many common methods used in prior studies do not adequately consider the trade-offs associated with different poverty measures and how comprehensively they characterize the underlying student population of interest. In this study, we address three key research questions:

(1) How does K-12 spending progressivity vary across states?
(2) How sensitive is spending progressivity to different poverty measures?
(3) What state and district-level factors drive differences in spending progressivity?

This study contributes to school finance literature by systematically examining how different poverty measures affect progressivity estimates—an important methodological consideration often overlooked in existing research. By providing a comprehensive analysis of these measurement issues, we offer a more nuanced understanding of education funding equity.

Data and Methodology

In this study, our primary data source is fiscal data from the School District Finance Survey (F-33) released as part of the NCES Common Core of Data. We also utilize various commonly used poverty measures in education, including eligibility for free and reduced-price lunch, direct certification, and the U.S. Census Bureau’s model-based Small Area Income and Poverty Estimates (SAIPE). Additionally, we employ geographic data on school district boundaries provided by NCES Education Demographic and Geographic Estimates and the Stanford Education Data Archive (SEDA) to address potential alignment issues between schools and their respective government units. Estimates are adjusted for cost-of-living differences using the NCES Comparable Wage Index for Teachers (CWIFT). Our analytic sample spans the 2016–17 to 2021–22 school years.

Results

Preliminary results indicate that state school spending progressivity varies significantly across states, although progressivity estimates tend to be fairly consistent within states when considering different poverty measures and years. Due to the differences in underlying income thresholds for free and reduced-price lunch and direct certification, FRPL often yields slightly higher progressivity estimates than direct certification. However, these progressivity estimates can be sensitive to the inclusion of certain schools (such as charter schools) in the calculation. Our findings have significant implications for both policy and research methodology. For policymakers, this work provides evidence-based insights for designing more equitable school funding formulas. For researchers, we offer methodological guidance on measuring educational equity that accounts for the complex interplay between poverty metrics and spending progressivity calculations.

Author

• Kenton Shimozaki, Vanderbilt University
  Presenting Author