How Are Public Schools Funded? Splitting the Bill: A Bellwether Series on Education Finance Equity. #2

Public schools receive funding from three different government sources: local, state, and federal. Local and state governments contribute the majority of funding to support public school systems, while the federal government provides a small fraction (only about 8% on average). Even with recent infusions of federal funding related to the COVID-19 pandemic, the federal share remains the smallest. Three factors determine how much funding districts receive and from which sources: (1) Property value of homes and businesses within school district boundaries; (2) How many students the school district serves and their educational needs (e.g., special education services for students with disabilities or language supports for students learning English); and (3) State policies, including if and by how much the state funding formula adjusts for differences in student population among districts and in the ability of local districts to raise funding through local taxes.