Thursday, October 8, 2026

SCHOOL FUNDING IN AMERICA: WHERE THE MONEY GOES, WHERE IT DOESN'T, AND WHO GETS LEFT HOLDING THE EMPTY BAG

 

SCHOOL FUNDING IN AMERICA: WHERE THE MONEY GOES, WHERE IT DOESN'T, AND WHO GETS LEFT HOLDING THE EMPTY BAG


A wild (but dead serious) look at the state of K-12 finance—synthesizing multi-year policy evaluations, Bruce D. Baker's latest School Finance 101 dispatches, and California's 2026-27 budget reality check

Here's the uncomfortable truth about school funding in America in October 2026: we've gotten remarkably good at designing equity-minded formulas—and remarkably bad at making sure the money actually lands where it's supposed to. States like California, Maryland, and Tennessee have rolled out ambitious student-weighted funding overhauls. Researchers at the Learning Policy Institute, EdTrust, the Urban Institute, and the National Education Policy Center have spent years evaluating them. And the verdict? The architecture is smarter. The plumbing still leaks. Meanwhile, a well-funded privatization movement keeps drilling new holes in the pipes and calling it "choice."

Bruce D. Baker—the University of Miami professor widely considered the nation's leading school finance expert, AERA Fellow, creator of the School Finance Indicators Database, and the person most likely to ruin your Thanksgiving dinner by explaining property tax recapture—has been blogging at SchoolFinance101.com with the intensity of a man watching a building burn while bystanders argue about the color of the fire truck. His recent posts, combined with the sobering 2026-27 California budget analysis from Ed100, paint a picture that's equal parts wonky progress report and five-alarm wake-up call.

Let's break it all down.

The Big Reforms: Shiny New Formulas, Same Old Problems

Multi-year evaluations of the major state funding overhauls—California's Local Control Funding Formula (LCFF), Tennessee's TISA, and Maryland's Blueprint for Maryland's Future—tell a consistent story. The good news: weighted, student-centered formulas do generate more revenue for high-poverty districts than the old staffing-ratio models ever did. Low-income learners, English learners, and foster youth are finally being counted in ways that produce real dollars.

The bad news: those real dollars have a nasty habit of evaporating before they reach an actual classroom.

The Supplanting Shell Game

Here's where it gets infuriating. Targeted equity funds—the money specifically designed to help vulnerable kids—keep getting swallowed by the rising tide of general operational costs. Health insurance premiums go up. Special education mandates expand. The boiler breaks. And suddenly the supplemental dollars earmarked for a literacy specialist or a counselor are paying the gas bill instead.

Researchers call this "supplanting." School administrators call it "Tuesday."

As Baker has argued for years, when base funding fails to keep pace with inflation, districts don't have the luxury of protecting equity dollars in a separate lockbox. They cannibalize. The formula says the money is "for" high-need students. The budget reality says the money is for keeping the lights on.

Attendance-Based Funding: Punishing Poverty for Existing

California's continued reliance on Average Daily Attendance (ADA) rather than enrollment is a masterclass in how to punish the districts that need help most. Here's the logic: if your students don't show up, your district doesn't get paid. Sounds reasonable until you remember that chronic absenteeism is massively concentrated in high-poverty communities—the very communities the equity formula claims to prioritize.

So the formula gives with one hand (weighted supplements for low-income students) and takes away with the other (attendance-based penalties for the same population). It's like offering someone a life jacket and then charging them a docking fee for being in the water.

Property Tax: The Inequality Engine That Won't Quit

And then there's the elephant in every school board meeting: local property tax wealth. Baker's Philadelphia analysis makes this grotesquely clear. In 2009, the School District of Philadelphia spent about 59% of what it would cost to get its students to national average outcomes. Fifteen years, two governors, one landmark court ruling declaring the system unconstitutional, and mountains of "fair funding" rhetoric later? Philadelphia now spends about 55% of adequate.

Meanwhile, Lower Merion—just across City Avenue, close enough to see the school buildings—spent 226% of adequate in 2024. Down from 333% in 2009, sure, but still more than four times Philadelphia's position on the same yardstick.

Let that sink in. A child born on one side of a street gets roughly half the resources needed for an average education. A child born across that street gets more than double. And the state calls this a system.

Structural Comparison: How the Formulas Actually Stack Up

Here's a clean look at the three dominant funding architectures and what they deliver—and where they break:

Formula TypeHow It AllocatesKey Equity AdvantagePrimary Structural Risk
Student-Weighted (e.g., LCFF, TISA)Base per-pupil rate + percentage add-ons for high-need demographicsDirects higher revenue directly to vulnerable student populationsLocal flexibility blurs tracking; equity dollars get supplanted
Resource/Staffing-BasedGuaranteed personnel ratios by school size and grade levelEnsures baseline staffing and program availability everywhereCan't respond to localized poverty concentration or unique needs
Categorical Block GrantsRing-fenced funding for specific state mandates or programsHigh fiscal compliance and auditabilityRestricts local discretion; increases administrative overhead

The student-weighted approach is the clear intellectual winner—but only if states build the guardrails to prevent the money from being absorbed into the general operating budget like water into a sponge. Without those guardrails, a "progressive" formula becomes window dressing over the same old inequities.

Baker's Blog: The Dispatches from the Front Lines

Bruce Baker's recent School Finance 101 posts read like a prosecutor's closing argument against the entire privatization-industrial complex. Here's what's been landing this fall:

"Efficiently Mediocre" — September 30, 2026

Baker dismantles the perennial scatterplot that pundits love: spending on one axis, test scores on the other, a cloud of dots, and the headline "We spend more than ever and get nothing for it."

His argument is precise and devastating: that chart confuses spending with cost. Spending is what districts actually shell out. Cost is the minimum amount required to achieve a given outcome level, given the students served and the conditions on the ground—labor markets, poverty rates, disability prevalence, language needs, scale. A district can be extremely efficient at producing mediocre outcomes simply because it was never given enough money to produce good ones. Declaring that "money doesn't matter" based on a spending-vs-scores scatterplot is like concluding that gasoline doesn't matter for driving because some cars with full tanks are parked in a garage.

"Experimenting With Our Children" — October 2, 2026

This one cuts deep. Baker asks the question that voucher advocates never answer: Who answers to the 18-year-old the voucher failed?

When Kansas cut school budgets, at least the children were still in schools—with teachers, curricula, and test results a court could examine. Arizona and Florida's universal voucher programs hand public money to parents, place virtually no limits on how it's spent, and ask almost nothing about whether the child learned anything. If that experiment fails for a particular kid—and the emerging evidence suggests it fails for many—there is no recourse. No accountability. No defendant to sue. No standard anyone can be said to have missed.

The Shawnee County judges in Gannon v. State of Kansas put it best back in 2013: "If the position advanced here is the State's full position, it is experimenting with our children which have no recourse from a failure of the experiment." Baker argues that vouchers make that Kansas nightmare look quaint by comparison.

"Not the Mere Creature of Anyone" — October 6, 2026

Baker traces a century of Supreme Court jurisprudence on parental rights in education—from Meyer v. Nebraska (1923) to Troxel v. Granville (2000)—and identifies a gaping hole: for a hundred years, courts have asked "How much control do parents get?" and almost never asked "What is the child owed?"

In the post-Espinoza, post-Carson landscape, public money now flows freely to private and religious schools. But the accountability infrastructure—the thing that might protect a child from a school that doesn't teach them to read—was never built. The parental right to exit public schooling is well-established. The child's right to an education once they've exited? Legally speaking, it barely exists.

"A Philadelphia Story of Underfunding" — October 7, 2026

Yesterday's post. The numbers above speak for themselves. Philadelphia at 55% of adequate. Lower Merion at 226%. Same labor market. Same state. Same constitution that a court has already ruled the state is violating. Baker has been writing about Philadelphia for over a decade, and the needle has moved backwards.

California's 2026-27 Budget: Good News, Bad News, and the Ticking Clock

Ed100's comprehensive breakdown of the governor's proposed 2026-27 education budget captures the California paradox perfectly:

The good news:

  • More money for community schools, teacher residencies, and learning recovery programs
  • $40 million for universal K-3 reading difficulty screening
  • $100 million to expand college and career pathways for high schoolers
  • Stock market up, inflation in check, student population roughly steady

The bad news:

  • Special education and healthcare costs are growing faster than revenue
  • The state's independent Legislative Analyst's Office calls the multi-year fiscal outlook "alarming"
  • The California Teachers Association accuses the proposal of a $5.6 billion "shell game"—deferring commitments owed to schools
  • A $23 billion reserve sounds impressive until you see the projected $22 billion deficit in 2027-28
  • Proposition 98 still funds schools based on attendance, not enrollment
  • Federal support has decreased significantly, leaving the state to backfill
  • Revenue volatility—driven by capital gains taxes from a handful of high-income earners—means California's education budget rides the stock market like a roller coaster

The LCFF continues to direct more funds to high-need districts—that structural improvement is real. But when the base isn't keeping pace with mandated cost increases, the "more" that high-need districts receive still isn't enough. The formula is progressive. The total pot isn't adequate.

What the Research Community Actually Recommends

These aren't radical ideas. They're the consensus findings of researchers across the Learning Policy Institute, EdTrust, the Urban Institute, the National Education Policy Center, and state legislative research bureaus. The fact that they keep appearing in report after report—and keep not being implemented—tells you everything about the political economy of school funding.

1. Fix How We Count Students and Poverty

  • Abolish ADA penalties. Move to Average Daily Enrollment (ADE) or multi-year rolling enrollment averages. Stop punishing high-poverty districts for the absenteeism that poverty causes.
  • Modernize poverty identification. Replace static Free and Reduced-Price Lunch (FRPL) counts with Direct Certification (using SNAP, TANF, and Medicaid data) combined with the Census Bureau's SAIPE estimates. FRPL counts undercount poverty. Direct Certification doesn't.

2. Protect Equity Dollars from Supplanting

  • Build classroom-level guardrails. Mandate transparent tracking systems ensuring that targeted weights for low-income, EL, and special education students fund student-facing interventions—not central office overhead.
  • Separate base-rate inflation from equity add-ons. Automatically index base per-pupil amounts to regional COLAs and benefit increases. When the base keeps pace with costs, districts don't have to raid the equity budget.

3. Confront Property Tax Wealth Disparities

  • Cap wealthy district "basic aid" advantages. Re-evaluate structures that let property-rich communities raise revenues far above state adequacy targets—creating Lower Merion / Philadelphia chasms.
  • Expand progressive state matching and dynamic recapture. Match local revenue-raising efforts in low-wealth districts dollar for dollar. Recapture excess local revenues from ultra-wealthy tax bases and redistribute through state equity pools.

4. Stabilize Transitions and Protect Against Downturns

  • Replace abrupt hold-harmless cliffs with multi-year glide paths. Districts experiencing demographic shifts or declining enrollment need time to adjust—not a fiscal guillotine.
  • Establish dedicated state education reserves. Ring-fenced stabilization funds that cushion formula distributions against recessions and revenue shortfalls.

Who Does What: The Governance Action Map



The reform pathway isn't mysterious. State legislatures rewrite the formulas. State departments of education build transparent data systems so the public can see where weighted dollars go. Local school boards implement site-level budgeting that guarantees money follows the students who generated it. None of this requires inventing new technology or new theory. It requires political will—and the willingness to tell wealthy districts that equity means something.

The Voucher and Privatization Elephant

Here's where the policy evaluation story collides with the political reality story, and where Baker's recent writing becomes essential reading.

School funding is complex under the best of circumstances. But these aren't the best of circumstances. The pressure campaign for universal vouchers, education savings accounts, and charter school expansion—fueled by billionaire donors and ideological think tanks—isn't just an alternative theory of education delivery. It's a defunding mechanism that makes every equity formula reform harder to sustain.

Every dollar that leaves a public school district via a voucher is a dollar that doesn't leave the district's fixed costs. The building still needs heat. The bus still runs the route. The special education mandate doesn't shrink. But the per-pupil revenue does. For districts already operating at 55% of adequate (hello, Philadelphia), the math is catastrophic.

And as Baker asks with devastating simplicity: when the voucher fails—when the private school closes, or doesn't teach the child to read, or discriminates, or simply pockets the money—who is accountable? The answer, in Arizona and Florida's current frameworks, is: nobody. There is no standard. There is no assessment requirement. There is no recourse. The child turns 18, and nobody owes them an explanation.

The century of Supreme Court jurisprudence Baker traces has enshrined the parent's right to choose. It has never enshrined the child's right to learn. That asymmetry is the legal foundation of every voucher program in the country, and it should terrify anyone who believes public education is a public obligation.

The Bottom Line: Smart Formulas Can't Fix Cowardly Budgets

Let's be clear about what the evidence shows:

  1. Money matters. Baker has spent 25 years proving this, testified in court after court, and had his work cited by the U.S. Supreme Court. The scatterplot-waving "money doesn't matter" crowd is confusing spending with cost, and Baker's latest takedown of that argument should be required reading for every legislator.

  2. Formula design matters—but it's not enough. California's LCFF, Tennessee's TISA, and Maryland's Blueprint are all structurally superior to what came before. But a progressive formula layered on top of an inadequate base is a progressive distribution of not enough.

  3. Accountability matters—and it's disappearing. Public schools, for all their problems, operate within a framework of democratic accountability, legal obligation, and measurable standards. Voucher programs operate within a framework of... a receipt.

  4. Wealth inequality is the root pathology. Until states confront the property tax wealth disparities that allow Lower Merion to outspend Philadelphia by a factor of four—in the same state, under a court order—no formula fix will close the gap.

The researchers have spoken. The data is in. The consensus is clear. The reforms we need aren't exotic. They're sitting in policy briefs on legislators' desks, gathering dust while billionaire-funded PACs push voucher bills through statehouses and call it freedom.

The children don't get a do-over. As those Kansas judges warned thirteen years ago: school opportunities do not repeat themselves, and when the opportunity for a formal education passes, then for most, it is most likely gone.

We know what to do. The question, as always, is whether we have the political courage to do it—or whether we'll keep experimenting with our children and hoping nobody notices who the experiment failed.




Sources & Further Reading:

Here's a comprehensive, organized list of every source and link referenced in the article, grouped by category for easy navigation 👇

📰 Ed100 — California Education Policy

📝 School Finance 101 — Bruce D. Baker's Blog & Profile

🏛️ Nonpartisan Education Policy Research Institutes (Evaluation Sources)

These organizations produced the multi-year evaluations and consensus recommendations synthesized in the article. No single individual author — these represent collective research community findings.

📊 Key Data & Research Resources Referenced

📚 Bruce D. Baker — Books (Harvard Education Press)

⚖️ Legal Cases & Court Documents Referenced

🏫 State Funding Programs Evaluated

ProgramStateAbbreviation
Local Control Funding FormulaCaliforniaLCFF
Student-Based Funding for AchievementTennesseeTISA
Blueprint for Maryland's FutureMarylandBlueprint

That's 7 direct blog/article links, 4 research institute sources, 3 data/fiscal resources, 3 book references, 7 legal cases, and 3 state program evaluations — all cross-referenced in the article.




Posted by at
Subscribe to: Posts (Atom)