Since 2020, about two-thirds of states have pumped additional funding into education budgets, but few have been successful in making changes to the underlying formula for allocating those funds. Increasing overall funding does not always translate to increases for individual districts. Most states use funding formula based on per student basis or hybrid models that add weighting or are targeted based on student groups.
There are three primary ways states fund education or use a hybrid approach across these models, including:
- Student Focused: funding is based on a per student basis with added weights for higher need students. This is relative to student attendance, which is also calculated differently across states (e.g., averaged daily attendance, single or multiple count days). 35 states use student-based formulas.
- Resource-based Allocation: A minimum base amount of resources is administered to all districts, and typically based on a ratio of students to staffing. Nine states use this method to distribute funds.
- Guaranteed Tax Base/Tax-levy Equalization: Vermont and Wisconsin determine funding based on the taxes paid on the base amount of property within the district. The state adjusts funding to provide more money to lower resource settings.
While most states have made more minor adjustments (e.g., Georgia and Vermont), a few states have overhauled funding formulas altogether. Big changes are afoot in Alabama, as well.
Recent changes to state formulas for education funding have been focused on targeting funds, like weighting for English Learners or using enrollment instead of attendance, in an effort to advance more equitable funding across districts and incentivize outcomes for all students.
Colorado (2024)
- For the first time in 30 years, Colorado is positioned to adopt a new funding model for its K-12 schools. Changes to Colorado’s funding formula will allocate more money to districts serving students with the most need, and then prioritize higher funding for small and rural districts.
Mississippi (2024)
- During this legislative session, Mississippi lawmakers were successful in replacing the previous formula with the new weighted-student funding formula, the Mississippi Student Funding Formula. The new formula is based on student enrollment rather than average daily attendance (ADA).
Ohio (2023)
- Ohio has legal challenges against its previous funding formula. The Fair School Funding Plan dramatically changed the funding formula to include directing funds to where students attend versus where they reside and a cost-per pupil allocation.
Nevada (2022)
- Nevada has consistently ranked in the bottom nationally for per-pupil funding and several thousand dollars below the national average. After almost 55 years, Nevada is in the process of implementing a new Pupil-Centered Funding Plan that prioritizes equity through weighting of at-risk student groups, in addition to the per-pupil base rate.
Tennessee (2022)
- Tennessee successfully passed the Tennessee Investment in Student Achievement (TISA), which overhauls the state’s funding formula, which had only been slightly modified since its last update in 1992, with base amount and additional weighting to direct funding towards the highest-need and incentivize outcomes.
Maryland (2021)
- Maryland lawmakers passed the Blueprint for Education in 2020 and, after a governor’s veto, it became law in 2021. Based on recommendations from the Kirwan Commission, the law promises an increase of about $3.8 billion over the next decade, focusing on improving teachers’ salaries, expanding access to pre-kindergarten for all 4-year-olds and low-income 3-year-olds, enhancing curricular standards, and elevating career and technical education programs.
Texas (2019)
- Coming in before the pandemic, HB3 introduced a new formula for school funding that increased per-student base funding and provided additional resources for low-income students. It also included provisions for full-day pre-kindergarten for eligible students, incentives for college, career, and military readiness, and measures to reduce recapture payments under the “Robin Hood” system.
