Education Law Center report calls for state reforms and increased federal aid to push states to fix state funding inequities

NEWARK, N.J. (November 1, 2021) – Last week, Education Law Center (ELC) released its annual Making the Grade report, which documents the persistence of unfair school funding across the country. The 2021 report underscores the urgent need for school finance reform to close vast gaps in funding among and within states, especially North Carolina.

This year’s edition of ELC’s annual state-by-state analysis comes as Congress and the Biden administration grapple with a key question: should the federal government play a more active role in advancing school funding equity, especially for students in the nation’s high-poverty, racially isolated districts and schools?

It also comes as North Carolina’s long-running state constitutional right to education litigation (Leandro) reaches a critical juncture. The judge presiding over the case is poised to order the legislature to fund the educational investments in the state’s comprehensive remedial plan.

As this year’s report shows, North Carolina’s per-pupil funding trails the national average by thousands of dollars, even as the state sits on billions in unspent revenue. “The underfunding of schools is not, as some policymakers would like the public to believe, an unfortunate reality of budget constraints,” said ELC Executive Director and report co-author David Sciarra. “Rather, it is the result of inaction and even outright hostility from state governors and legislators to invest in the education of their students.”

Using the most recently available data from the 2018-19 school year, Making the Grade 2021 evaluates states’ education funding systems on three critical measures of fairness:

  • Funding level measures the combined state and local revenues provided to school districts, adjusted for regional cost differences. (North Carolina’s grade: F)
  • Funding distribution measures the allocation of funds to school districts relative to the concentration of students from low-income families. (North Carolina’s grade: C)
  • Funding effort measures investment in the K-12 public education system as a percentage of a state’s economic productivity (GDP). High-effort, high-capacity states, such as New Jersey, New York, and Wyoming, generate above-average funding levels, while low-capacity, low-effort states, such as Arizona, Florida, and North Carolina, have the fiscal wherewithal to improve their below-average funding to levels more in line with the national average. (North Carolina’s grade: F)

Given the resistance of state lawmakers over the past decade to meaningfully expand education funding, Making the Grade 2021 calls on Congress to seriously consider using federal funding as a lever to press states to reform their inequitable finance systems.

“ELC’s annual reports are the benchmark for understanding whether states are funding schools fairly and how they rank against each other,” said Matt Ellinwood, director of the Education & Law Project at the North Carolina Justice Center. “This year’s report yet again demonstrates just how far North Carolina has fallen nationally and how much work is needed to get back on track. Thankfully, funding and enforcing the Leandro plan offers us a path forward.”


Making the Grade 2021 is coauthored by Dr. Danielle Farrie, ELC Research Director, and David Sciarra, ELC Executive Director. View the full report and explore findings with interactive tools.