University of Arkansas Office for Education Policy

More good news for Arkansas students!

In The View from the OEP on February 27, 2018 at 2:46 pm

Funding Gaps

Last week, we highlighted the great opportunity provided to juniors through Arkansas’ universal ACT policy, and today we share good news about school funding! Finding similar patterns as those in our most recent OEP funding analysis, the new report released today from Education Trust compares school funding across the U.S. and within each state, and the results look great for Arkansas students!

The Ed Trust report examines funding from an equity standpoint: how the revenues of districts that serve higher percentages of students living in poverty or students of color compare with those of their counterparts. The analysis compares the average revenues of groups of districts (the quartiles with the highest poverty and lowest poverty districts, for example).

More simply, this Education Trust report (as have past reports from the group) examines the extent to which the states provide equitable school funding to traditionally disadvantaged students. In some states, students in poor districts have continued to receive fewer educational resources than students in wealthy districts. The good news is that Arkansas is NOT one of those states! In fact, school funding in Arkansas has been mostly progressive for the past 15 years or so — for the most part, students in lower-income districts (and in districts serving more students of color) have received higher levels of education funding per pupil.

How do the revenues of High-Poverty Districts compare with those of Low-Poverty Districts?
Across the country, the highest poverty districts receive about $1,000, or 7 percent, less per pupil in state and local funding than the lowest poverty districts.  As can be seen in Figure 1 below, in Arkansas the highest poverty districts receive $895, or 10 percent, MORE per pupil than the lowest poverty districts. Utah leads the nation with the highest poverty districts receiving 21 percent more funding than the lowest poverty districts, but Arkansas ranks 8th in the nation for the progressive education funding related to poverty rates.
Figure 1. Arkansas State and Local Revenues by Poverty Quartile
Poverty Funding

How do the revenues of districts serving the most Students of Color compare with the revenue of those serving the fewest Students of Color? 

Across the country, districts serving the most students of color receive about $1,800, or 13 percent, less per student than districts serving the fewest students of color. As can be seen in Figure 2 below, Arkansas districts serving the most students of color receive $967, or 10 percent MORE per pupil than the districts serving the fewest students of color.  In this analysis, Ohio leads the nation with the districts serving the most students of color receive 28 percent more in state and local funds per student than districts serving the fewest students of color. Arkansas ranks 6th in the nation for the progressive funding in place with regard to students of color.

Figure 2. Arkansas State and Local Revenues by Student of Color Enrollment Quartile
SOC Funding

Where Does the Revenue Come From?

In addition to differences in the amount of revenue provided to districts, the report examines the share of school funding dollars that come from state and local sources. On average, about 50 percent of school funding dollars come from local dollars. The report’s authors note that “state dollars are the funds that legislatures can and should use” to counteract differences in local dollars.  In the report, Arkansas is shown to have 86 percent of districts’ non-federal revenues coming from state sources, but we disagree.  This is an example of the challenges facing researchers who are trying to understand the complexities in each state’s education funding.

Arkansas’ education funding formula calls for the state to equalize funding across districts, so districts first levy at least 25 mills for the uniform rate of tax (URT), then the state makes up the difference between that amount and the state-mandated minimum funding level. As close as we can tell, Ed Trust considered the URT a ‘state contribution’.  When URT is more appropriately considered ‘local contribution’, Arkansas’ non-federal funding presents a more typical pattern, with funds relatively evenly divided between  local and state funds.

Hooray for Arkansas, now take the next step: School level funding reports

While both the Ed Trust report and the more in-depth OEP 2015 funding report for Arkansas’ funding appears more equitable than the funding in many states, it is important to note that all of this research on school funding equity (and nearly all research on funding equity) examines district-level school funding.  Thus, while this research is informative, it provides no information on how funding flows across schools within districts. If we want to truly understand the level of funding equity in our system, we need to be able to dig deeper than funding aggregated up to school district levels.

Indeed, previous research shows that even when funding for districts is progressive at the state level, dollars may be distributed regressively for schools within districts (wealthier schools within the districts get more funding). In Arkansas, as in most states, researchers have very little information on within-district school funding equity because data on school-level finances are not released. Surely, with all of our advances in computing and technology, we can do a better job of gathering and reporting school-level funding.

We aren’t the only ones who think this is a good idea: School-level reporting is required under ESSA, although states may get to delay reporting while they develop their financial systems.  We applaud our state leaders for the forward- thinking funding policies that they have put in place, and propose that school-level financial reporting would provide even better information about how equitably and effectively resources (including teachers) are being allocated to students.

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  1. Greetings.

    Thank you for the great work that you are doing. The information that you provide is extremely insightful! I have a question about this statement from the article:

    “Arkansas’ education funding formula calls for the state to equalize funding across districts, so districts first levy at least 25 mills for the uniform rate of tax (URT), then the state makes up the difference between that amount and the state-mandated minimum funding level. As close as we can tell, Ed Trust considered the URT a ‘state contribution’. When URT is more appropriately considered ‘local contribution’, Arkansas’ non-federal funding presents a more typical pattern, with funds relatively evenly divided between local and state funds.”

    Was this statement intended to communicate that districts in Arkansas pretty much have the same amount of per pupil dollars available (give or take a few…) when all local and state funding sources are considered? (i.e. Pine Bluff has nearly the same amount of per pupil dollars as Springdale when all local and state sources are considered.)

    Thanks for any clarification that you can give. Please forgive me if my understanding is a total misinterpretation.

    Have a blessed evening. Shalom!

    • Hi Dexter!
      Thanks for your comment. The state ensures foundation funding ($6,713 for 2017-18) for each student. The 25 mills in local taxes are expected to cover this cost, but if the amount collected through the mills falls short, the state makes up the difference. If a district has a higher millage rate, the district keeps the local dollars over the 25 mills. So essentially there is a minimum per student revenue, but districts can increase the amount through higher local millage rates. In addition to the foundation funding, however, districts receive categorical funding for students with certain characteristics (Alternative Learning, English Language Learners, students eligible for Federal Free/Reduced Lunch) and for Professional development. These funds are on top of the foundation funding amount and the expenditures of these funds is restricted to certain activities.

      So, essentially there is a state-guaranteed minimum funding per student, but districts can receive more funding through higher local millage rates and/or through categorical funds based on their student population.
      Please let us know if you have additional questions!

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