Clean Slate

Millions of students are shortchanged by our school finance systems,
but it doesn’t have to be this way.

70% of American public school students

could have

equal or greater school funding

with no increase to taxes or debt, and no increased strain on state budgets.

The answer lies in rethinking the role of school district borders.

Under current school finance policies, school district borders serve two different purposes. Of course, they define the school system—the set of schools that are governed by a board, overseen by a superintendent, and attended by a group of kids in a particular geographic area. But because our current school finance systems are built on a foundation of local property taxes, these borders also outline the taxing jurisdiction where property tax dollars are raised and spent on education. This double purpose of school district borders is neither automatic nor necessary, and it isn’t serving students well.

Here's why:

Current Funding Systems

In almost every state, each district levies its own school taxes and keeps the proceeds—whatever money can be raised from the properties in the district.

These revenues form the first layer of education funding in most states. When all the dollars are tallied, local funds make up almost half of districts’ funding nationwide.

Those local dollars, though, are an unequal foundation for education funding. Property values are far higher in some districts than in others, allowing school districts in wealthy areas to collect ample funding, while little is raised for students in property-poor districts.

Because ground-level inequality is an automatic consequence of funding schools in this way, states are forced to play catch-up. They generally try to make up the difference by providing extra state dollars to low-wealth districts, but most often, this aid isn't enough to do the job.

This is because high-wealth districts often move the goalposts, raising extra local funds that states simply can’t afford to match.

Moreover, the revenues that states raise to fill in the gaps—most often derived from income, sales, and, energy taxes—are much more volatile than property taxes, making them more susceptible to cuts. This puts the low-wealth districts that rely on state aid in a precarious position.

We need a new solution.

What if, instead of trying to compensate for local funding inequality, we were able to prevent it from arising in the first place?

To that end, we offer a thought experiment—a model that reduces the impact of local economic conditions on education dollars.

We can tackle inequality in education funding by separating the two functions of school district borders.

With no changes to the borders that determine where kids attend school and which school boards govern which areas, we can widen our tax borders, pooling property tax dollars, and sharing them across the students in the broader county or state.

With this one change

69% of all students
would receive equal or greater funding

The students who are the most disadvantaged by the current funding system would see even more widespread gains:

76% of low-income students
would receive equal or greater funding

73% of nonwhite students
would receive equal or greater funding

and the

$23 billion funding gap

between predominantly white and nonwhite school districts

would shrink by over $13 billion

to $9.5 billion.

The fact that we get an impact of this magnitude with no extra dollars at all, just from erasing the artificial dividing lines directing money to some communities over others, tells us that the current policy isn’t working.

The way the system is set up today isn’t doing the best for the most kids. Instead, it advantages a small number of affluent communities, and leaves everyone else—poor and middle-class communities, as well as state governments—just trying to catch up.

We must shift our thinking on local taxes in order to fairly support all students, regardless of where they live.

Look at the overall effect to a state under the county or state pooling system
— OR —
Choose a district to view the local effects of different pooling options:
And how they pool:
This is just one one possible outcome of pooling local revenues, but there are many ways to share local dollars. Use these tools to consider other options.
Students in the United States benefit most from a mix of county- and state-level pooling. If each state selected the most beneficial pooling method,
69% of all students in the United States would get equal or greater funding.
73% of nonwhite students
would get equal or greater funding
76% of low-income students
would get equal or greater funding