Do you know which sector of the US economy is worth $1.3 trillion dollars? Here’s a hint: it is the second largest economic sector in the United States, claiming almost 9% of the US GDP.

Yes, it is the education sector, comprising of 100,000 public schools, 30,00 private schools, and 4,000 charter/other k-12 schools—all leading into a total of $1.3 trillion-dollar giant sector of our economy.

But, is that the whole story? If the education sector is worth such a large monetary number, why are especially public school educators feeling the pinch of the budget in their schools? How much of this money is actually being allocated to individual districts and schools? Why are there inconsistencies with the values of these numbers and the district-level experiences?

Whether schools have sufficient funding to successfully fulfill their mission of educating students depends on at least the following factors:

• The Sources of Funding
• Factors that affect the allocation of these funds

Both have their own challenges and we will examine each in turn.

Variability in the Availability of Funding

According to Marguerite Roza, Director of the Edunomics lab at Georgetown University, the amount of dollars that school districts spend is more a function of available dollars than actual cost of educating students. School Districts typically will spend what they get and that depends on sources of funds. If a school districts funding source is more State than local government (property tax), the school district will likely get less funding, and spend less. Therefore, the largest spending school districts are in areas of high-property tax value.

The unit of measure of public school funding is money allocated per pupil. The chart below shows the funding rates from 2006 through 2014 (adjusted for inflation in 2014 dollars. Source: The US Census)

This chart holds true for nearly every state—funding was highest during the early days of the Great Recession due to the impact of the Recovery Act, and slipped down each year after that.

Where the state provides the vast majority of funding for schools, the disparity between school districts is minimal. For example, in Vermont, the State provides 87.3% of the funding for public schools.

On the other, the state of Illinois only provides 32.5% of the funding and schools have to obtain the rest from local sources. In such a case, the school districts in the more affluent neighborhoods with higher property tax rates are significantly more funded than those in poor neighborhoods. For example, Fairfax VA public schools received only $2,764 per pupil from the State, but provided nearly $10,000 per student, while Price William County, while receiving the same funding level from the State of VA, was able to provide only $4,813 per student.

Unless states change their funding model, this disparity between school districts found in rich and poor neighborhoods will continue to persist.

The balancing story so far has come from Federal aids that target these poor communities.

Why This Matters

According to the a 2012 report by the Alert Shanker Institute, author of the report and Rutgers University Professor Bruce Baker stated, “Sustained improvements to the level and distribution of funding across local public school districts can lead to improvements in the level and distribution of student outcomes.” The report continues, “Schooling resources that cost money, including smaller class sizes, additional supports, early childhood programs and more competitive teacher compensation (permitting schools and districts to recruit and retain a higher-quality teacher workforce), are positively associated with student outcomes.”

Clearly, more funding for schools generally means better outcomes for students.

But the challenges that poor school districts face do not stop with just the sources of funds. It is further exacerbated by how those scarce resources are allocated.

States Consider Allocating funds by Attendance

More and more states are moving from funding based on enrollment funding which is based on student attendance.  With this change, state funding is being distributed differently throughout regional school districts, placing a numerical value on the head on each child, approximately $48.30 per student.

Unfortunately, this is a nationwide problem that is causing a drain on the education system.

What is the dollar value of each student? According to KPBS and the Watchdog Institute: $5,230.

Not just an empty seat.

• One sophomore at Lincoln High School in Southeast San Diego is reported as having missed 87 days of school, “or nearly half of the 10th grade,” totaling a loss of -$2,464.71 of funding.
• In one school year (2009-2010), the San Diego Public Schools have reported a loss of “at least $102 million in state funding because of absences.”
• Five years of this chronic absenteeism has cost this school district a total of “$624 million.”

The vast majority of chronically absent kids are those who would benefit the most from attending school—children from poor households.

It is doubly daunting for school districts in poorer districts, who are already lack the funds necessary to create the ideal learning environment, further lose funds due to absenteeism, which is likely at least partially caused by the lack of funds to start with.

This is a vicious cycle within which poor schools are trapped—one problem causing another, which feeds into yet another and so on.

Net gain vs. social gain

Not only does absenteeism cause a loss funding, but also a loss of student learning potential, causing students to have lower testing scores, individually and district-wide. Studies also show that students from low-income families are “more likely to be absent from school and to experience greater losses in achievement for each missed day of school.”

What This Means

According to Sam Matteson, “consistent attendance helps students lay a foundation for the development of more complex skills. Poor student attendance is a reliable predictor of failure to graduate from high school, as well as the odds of early college success.”

The Children’s Aid Society reports

• “75% of chronically absent sixth graders drop out before graduation”
• “80% of juveniles arrested in New York City have a history of poor attendance”

Clearly, improving attendance and reducing chronic absenteeism is one of the most effective initiatives that schools can undertake to improve overall positive outcomes for students.

The question is: how do schools do that?

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