How States Protect Funding for K-12 Public Schools: A Primer on Funding Protection Policies

Public education funding is a complex matter. It is widely understood that dollars for public schools come from federal, state, and local sources, but the revenue stream from each source is calculated in complex formulas and criteria that can make it hard for anyone to understand the system fully. Calculating aid based on some measure of the number of students that a school district serves is the primary modus operandi by state education departments. Some states determine aid based on average daily attendance, and others use enrollment counts. Each approach has trade-offs. The goal of this article is to explain various school funding protections (also known as "hold harmless" provisions) that states take--which give additional funds to school districts that otherwise would not have received them--in order to provide a better understanding of the various types of funding protections and the trade-offs they present to policymakers and citizens. The first part of the article examines declining enrollment provisions and their trade-offs, while the second part does the same for funding guarantees. A follow-up discussion with suggestions for using either policy more effectively is provided.