Public School Funding in the US and Its Flaws

Topic: Education System
Words: 924 Pages: 3


Most US students receive primary and secondary education in public schools, and this trend is likely to continue in the foreseeable future. The quality of this education depends to a certain extent on public school funding because funds are necessary to pay salaries to teachers, equip classrooms, buy textbooks, and cover other expenses. This paper will describe the process of public school funding in the US and discuss how its flaws have been causing litigation.

How US Public Schools Are Funded

At the federal level, public school funding is provided through Title I program. This funding supplements state and local financing and is targeted at students from low-income families. Entire school districts can qualify for this federal funding if they serve a large number of families living near the poverty line. Students eligible for this program can get either free lunches or meals at a reduced cost.

At the state level, all states, except for the District of Columbia, allocate a portion of their total revenues to primary and secondary education. This portion varies from state to state: for example, Illinois spends about 25% of its revenues on education, while Vermont and Hawaii invest approximately 90% of their budgets in public schools (Skinner, 2019). States provide funds to local educational agencies (LEAs) through five types of programs, with Foundation Programs being the primary funding formulas in 46 states (Peter G. Peterson Foundation, 2022). These programs set a minimum level of funding per student and ensure that each school district gets enough funds to meet that minimum (Peter G. Peterson Foundation, 2022). The amount of funding per student may be either equal for each student or “weighted,” considering variations in students’ circumstances (Skinner, 2019). For example, states can allocate more funds to students with disabilities, poor English knowledge, or low family income.

At the local level, LEAs combine state funds with locally raised funds and divide them among individual schools. Until recently, no budgets for individual schools were developed: LEAs first assigned equipment, administrators, and teachers to schools and then calculated funding per student (Skinner, 2019). Currently, some districts have begun to create individual school budgets and allocate resources based on them, but the effectiveness of this practice is yet to be determined.

The Main Sources of Income for US Schools

There are three sources of income for public schools: federal, state, and local funding. State funding is allocated from state revenues raised mainly from taxes levied on retail sales, personal and corporate income, alcohol, tobacco, etc. (Skinner, 2019). Local funding is usually provided from revenues received from the property tax (Skinner, 2019). Federal financing only supplements state and local funding sources and cannot replace them.

The Percentage of Funding Coming from Each Source

The three funding sources contribute different shares to the overall school financing. In 2019-2020, state funding accounted for about 47% of education financing, while local funding amounted to 46%, and the federal government invested 7% (Peter G. Peterson Foundation, 2022). According to Skinner (2019), in recent decades, state governments have begun to allocate more funds to education, whereas local governments’ share has decreased, and the federal government’s portion has varied between 6% and 12.7%. Although the federal government’s role seems small relative to the other two sources, it is still important because it specifically targets disadvantaged students.

The Role in Litigation

The public school funding system is not flawless, which is why it has been the subject of litigation. Researchers distinguish three waves of school financing litigation: the first two attempted to achieve equity in funding, while the third one was focused on the adequacy of financing (Martínez, 2021; Obhof, 2019). Equity usually means that every school district within one state should receive equal funding (Obhof, 2019). In contrast, adequacy requires a higher level of education for minority students rather than more financing (Martínez, 2021). In other words, recently, litigation has been focused on ensuring that schools receive adequate overall funding instead of trying to eliminate disparities in financing.

A Specific Case of Litigation

One specific case of litigation reflecting the recent tendency to value adequacy over equity is Delawareans for Educational Opportunity v. Carney. Delawareans for Educational Opportunity filed a suit in the Court of Chancery, claiming that disadvantaged students were far below the state educational standards (ACLU Delaware, 2022). The plaintiffs asked the court to find the current funding system unconstitutional as it did not provide adequate education (ACLU Delaware, 2022). The litigation resulted in the agreement according to which counties in Delaware had to reassess taxable real estate and, subsequently, provide all the necessary resources and support to disadvantaged students.


The public school funding system has evolved over time to meet students’ learning needs more effectively. Currently, public education obtains funds from three sources: federal, state, and local governments, each of which allocates portions of its revenues received from various taxes. State and local funding have almost equal shares in public school financing, while federal funding’s percentage is much smaller but still important. Since it is difficult to determine how school funding affects academic achievement and how much funding is necessary per student, school financing has been subject to litigation. Initially, litigation was centered on eliminating disparities in school funding, but recently, its focus shifted to achieving adequacy in financing. It means that students’ learning outcomes have moved to the forefront, and public school funding is expected to be not equal but sufficient for all students to meet state educational standards. Efforts are still needed to determine what funding formulas will lead to an adequate education.


ACLU Delaware. (2022). Delaware public schools litigation. Web.

Martínez, D. G. (2021). Interrogating social justice paradigms in school finance research and litigation. Interchange, 52, 297–317. Web.

Obhof, L. J. (2019). School finance litigation and the separation of powers. Mitchell Hamline Law Review, 45(2), 536–574.

Peter G. Peterson Foundation. (2022). How is K-12 education funded? Web.

Skinner, R. R. (2019). State and local financing of public schools. Congressional Research Service. Web.

Public School Funding in the United States
Education Change Policy in West Milford, New Jersey