Friday, May 7, 2010

Public Education Finance

Education funding is something that is critically important in the United States because our future rest on the generation we are educating. In most states the funding for education is a combination of state, local and federal funding. What is done with the money once it is collected is what might differ from state to state. In Minnesota we have a per-pupil funding system in which the funding to a school district is based on a dollar amount per student. There has been some criticism of this system because of the inherent inequities in the system.
Following are some tables of where the united states is in comparison to other countries Minnesota rankes 19th in money spent per pupil which is right at the average of the United States.

The current funding formula while very complicated does not account for some of the discrepancies that need to be addressed in school funding. There are two suggestions to change the funding formula available that aim to address some of the problems, although neither would solve the school funding inequalities entirely. One is from research done by Gregory Thorson at the University of Minnesota Morris and another is by the Minnesota Department of Education.
Thorson’s focus on research is on the size of the school districts and argues that smaller school districts are at a disadvantage because there are fixed cost of running a school system that do not decrease with the number of students. The new funding formula he proposes would address these inequalities but not offer solutions for school districts that have many students but because of their student body needs more resources to offer them similar educations as other school districts. Larger school districts have the luxury of running at higher efficiency with most students thus reducing the cost per student. Thorson’s formula would allow an 8% increase in funding per student for the school’s first 500 students and 4% for the second 500 students. After the initial 1000 students they would recommend keeping at the initial per pupil funding. This would clearly have a very high effect in smaller school districts and help manage some of the discrepancies in small and larger funding
The next formula change was recommended by the States of Minnesota’s Department of Education. This report was produced because the funding ration from the bottom 5th percentile and the top 95th percentile increased from 2008. The ratio increased from 2008 ratio of 1.243 to 1.265 in 2009. Although this rate is not higher than the rates from 1997-2001 the increase causes the department to issue opportunities for readjusting school funding to decrease the difference in funding for local school districts. The report states that in an attempt to adjust the lowest 5 percent to be within the previous year’s ratio they are looking at ways to change the funding formula to better compensate districts with lower funding.
Both of these methods try to address a problem with the funding formula but their scope is very narrow and does not get at the root of the problem which might be that wealthier communities are able to spend more money on their school systems and thus have better schools. Students can get a better education based on where they live. There is a large inequality to exist in our state that needs to have a solution for our school systems to be working for everyone.

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