Guest Commentary: Ohio can improve the equity of its funding system

Matt Richmond

NOTES: The Thomas B. Fordham Institute occasionally publishes guest commentaries on its blogs. The views expressed by guest authors do not necessarily reflect those of Fordham.

This piece was first published in a slightly different form on EdBuild’s blog.

On their first day of their first year of school, children from poor families already carry a backpack of challenges that will weigh them down throughout their entire educational career. Compared to more affluent classmates, they begin kindergarten less prepared, have access to less out-of-school support, and ultimately graduate high school at far lower rates as a cumulative result.

In Ohio, low-income students are nearly three times as likely to drop out of school, and even while in school their average proficiency rates are 30% below other students. Dealing with constant road blocks that distract from their education and subsequent opportunities in life — they need schools with the extra resources necessary to help them beat the odds.

But is Ohio — and are other states across the U.S. — doing enough to ensure schools have those resources? EdBuild recently released a brief and interactive tool, Resource Inequality: Shortchanging Students, looking at how effective states are at getting dollars to students living in high-poverty school districts versus relatively low-poverty areas.

The results aren’t encouraging. More than half the country still doles out more money to kids living in relative wealth (adjusted for cost of living), a practice which runs contrary to both established research and basic concepts of fairness. To its credit, Ohio does spend about the same amount in its highest- and lowest-poverty school districts on average — but there’s significant room for improvement.

(For a detailed look at how Ohio funds its schools and concrete ways it can improve its formula, see this excellent piece put out by The Fordham Institute and Bellwether Education Partners, A Formula That Works: Five ways to strengthen school funding in Ohio.)

To simply describe how the formula works: first, a calculation is done to determine how much money each district needs to educate its students, based on enrollment and other district and student characteristics. After, it’s decided how much of that amount should be paid by the state rather than local districts (based on a combination of property values in each school district and the income level of residents residing there). There are more details, of course, but this is basically how most state dollars are divvied up.

The key assumption in this system — much like others across the country — is that areas with more money can afford to pay more for their schools than districts with less. In theory, this makes for an equitable system. In practice, if a state does a poor job estimating how much extra money a local district can raise, or if exceptions are carved out that undermine the estimate, then inequities can arise. This is the issue in Ohio.

The figure below demonstrates the disconnect. Despite the state sending more money to districts with greater poverty, local money is so suppressed relative to richer peers that the boost in state aid only barely makes up for the gap. By comparison, in Utah when the state’s dollars are added to local dollars, higher-poverty districts receive significantly more money per pupil than low-poverty districts. You see this same effect in states like Massachusetts, North Carolina, and Wisconsin — all of which are more progressive in how their total education dollars are distributed than Ohio.

Ohio has a tangled and opaque funding formula begging for significant revision, but this issue of equity should be at the top of everyone’s agenda. From a purely utilitarian perspective, providing a threadbare education that results in high drop-out rates and low levels of proficiency is a waste of tax-payer dollars. At that point the state is providing little more than a childcare service. Our nation’s system of public schools must be more than that. Much more.

At its core, public education is nothing short of the engine that drives the American dream, the foundation of our belief in opportunity for all regardless of background or circumstance. Schools that are asked to make that dream a reality for those from disadvantaged backgrounds must themselves be provided the extra resources necessary to meet those obligations.

An engine of opportunity can’t run on fumes.

Matt Richmond is Chief Program Officer at EdBuild.