Prioritizing School Finance Equity during an Economic Downturn: Recommendations for State Policy Makers

Abstract

Abstract State budgets temporarily crashed amid the COVID-19 pandemic and economic shutdown, placing education funding at risk. To demonstrate implications for school finance, we show that (1) school districts are racially segregated along class lines; (2) higher-poverty districts receive a greater share of funds from state, as opposed to local sources, making them especially vulnerable during economic downturns; and (3) many states made across-the-board K–12 budget reductions following the Great Recession, but those cuts disproportionately impacted high-poverty districts. A decade later, state legislators may face similar fiscal challenges. Instead of enacting across-the-board cuts, states can identify specific funding programs that already benefit lower-poverty districts or wealthier students. We demonstrate how this approach would work under different state finance models and offer recommendations for state policy makers.