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FUNDING GAPS 2015: New Research Shows Widening Funding Gap Between Richest and Poorest School Districts

School districts that serve the highest percentages of low-income students and students of color receive significantly less in local and state funding than districts that serve predominantly white and affluent students, according to a new report from the Education Trust (Ed Trust) and a separate analysis by the U.S. Department of Education (ED). And that funding gap is widening.

In Funding Gaps 2015, Ed Trust finds that the highest poverty school districts nationwide receive about $1,200, or 10 percent, less per student in local and state funds than the lowest poverty districts. Meanwhile, districts serving predominantly students of color receive approximately $2,000, or 15 percent, less per student than districts serving mostly white students. In the report, Ed Trust focuses specifically on local and state funding data from Fiscal Years (FYs) 2010–12, the most recent years available. The analysis excludes federal funding because federal dollars typically provide supplemental and targeted support to specific student groups. The analysis does not compare funding between individual districts, but rather examines funding levels for quartiles of school districts with the highest and lowest poverty levels and the quartiles with the highest and lowest concentrations of students of color.

The researchers also examined funding levels between quartiles of districts within each state and found considerable variation in the levels of funding the poorest and wealthiest districts receive. As shown in the graph below, the highest poverty districts in six states receive between 6 percent and 20 percent less in state and local funding than the lowest poverty districts in their respective states, according to Ed Trust. Seventeen states, meanwhile, provide the highest poverty districts with between 5 percent and 22 percent more in local and state funds. The remaining twenty-four states provide roughly equal levels of funding between high- and low-poverty districts. The report excluded three states whose school district structures did not conform to the model established for the report’s within-state gap analysis.

Gaps In State And Local Revenue

“Our data show that the students needing the most supports are given the least,” said Natasha Ushomirsky, K–12 senior data and policy analyst and coauthor of the report. “As conversations on how to improve achievement for our nation’s youth, particularly those who start school academically behind, are hotly debated in statehouses across the nation, closing long-standing funding gaps must be addressed. While money isn’t the only thing that matters for student success, it most certainly matters. Districts with more resources can, for example, use those funds to attract stronger teachers and principals and to offer students more academic support.”

But simply providing the same level of funding between districts is not sufficient to close the gaps in achievement that exist between poor and affluent students. “[T]o close achievement gaps,” the report states, “schools need funding that is equitable—funding that accounts for the fact that it simply costs more to educate low-income students, many of whom start school academically behind their more affluent peers.” To account for those additional needs, Ed Trust repeats the national analysis assuming it would cost districts 40 percent more to educate a low-income child than an affluent one.[1]

The analysis accounts for the additional needs of low-income students, and in doing so, the researchers determined that the highest poverty districts nationwide receive about $2,200, or 18 percent, less per student than the lowest poverty districts. Furthermore, under the revised calculation, the number of states providing significantly less funding to their poorest districts jumped from six to twenty-two.

Data released by the National Center for Education Statistics (NCES) shows a similar funding gap. According to the data for FY 2012, the highest poverty districts receive 15.6 percent less in state and local funding than the lowest poverty districts, an increase from 10.8 percent in 2002. Additionally, NCES identified twenty-three states where school districts with the highest poverty levels receive less state and local funding than the lowest poverty districts, with some states providing as much as 33 percent less in state and local revenue to the highest poverty districts. It also identified twenty states that spend fewer state and local dollars in districts with the highest concentrations of students of color, with some districts receiving 30 percent less compared to districts that serve predominantly white students.

“In too many places today, right now, around the country, we still have school systems that are fundamentally separate and unequal,” U.S. Secretary of Education Arne Duncan said during a press conference call about the data. “Not only should the funding, at minimum, be equal, but children who come from disadvantaged communities, who come to school needing extra resources, need additional help. They need additional support.”

Funding Gaps 2015 is available at and ED’s data on school district expenditures is available at

[1] Ed Trust bases the 40 percent on the formula for Title I funding but acknowledges that some research estimates “it costs about twice as much, or more, to educate a low-income student to the same standards as a higher income student.”

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