State Aid to Local School Districts

states. Oklahoma and Alabama have reduced funding by more than 20 percent from pre-2008 levels.21

Educational Support and Aging Baby Boomers Another factor that diminishes

states’ abilities to finance public education is an aging population. The average age of the US population is projected to continue growing as it has since 1900, largely due to the baby boom generation reaching retirement age. The proportion of people older than 65 was 4.1 percent in 1900. In 2000, it was 12.4 percent and will likely be greater than 20 percent by 2030.22 Older people who no longer have children in school are generally more resistant to increased taxes for schools. Yet government per capita costs for the elderly are more than double those for children, which is due largely to spending on Social Security and Medicare benefits provided to retirees.23

The increase in average age is a nationwide trend; however, some parts of the country are graying faster than others. According to the 2010 census, fourteen of the twenty-one “oldest” states are in the Northeast and Midwest, where the graying population is more likely to be reluctant to provide financial and political support for schools.24 In contrast, areas with a higher concentration of youth can offset the growing influence of older age groups.

8-2c State aid to local School districts

States use four basic methods to finance public education. Some states have financial strategies that combine methods.25 1. Flat grant model. This is the oldest and most unequal method of financing schools.

State aid to local school districts is based on a fixed amount multiplied by the number of students in attendance. This fails to consider students with special needs (English Language Learners cost more to educate than do native English speakers), special programs (vocational and special education), or the wealth of school districts. The remaining three methods each pursue greater equality of educational opportunity by allocating more funds to school districts in greatest need of assistance. 2. Foundation plan. This most common approach—thirty-six states use a variation of this plan—guarantees a minimum annual expenditure per student to all school districts in the state. However, reformers usually consider the minimum level too low, and wealthy school districts easily exceed it. School districts with a high percentage of children from low-income families suffer with this plan. 3. Power-equalizing plan. Each school district retains the right to establish its own expenditure levels, but the state pays a percentage of local school expenditures

21Michael Leachman and Chris Mai, “Most States Funding Schools Less Than Before the Recession,” The Center on Budget and Policy Priorities (May 20, 2014) at www.cbpp.org/cms/index .cfm?fa=view&id=4011. 22Administration on Aging, Projected Future Growth of the Older Population (Washington, DC: Administration for Community Living, n.d.) at www.aoa.acl.gov/Aging_Statistics /future_growth/future_growth.aspx#age (February 1, 2015). 23Jeffrey S. Passel, “Demography of Immigrant Youth: Past, Present, and Future,” Future of Children (Spring 2011), pp. 19–41; and Jennifer M. Ortman, Victoria A. Velkoff, and Howard Hogan, An Aging Nation: The Older Population in the United States, Current Population Reports, P25-1140 (Washington, DC: US Census Bureau, 2014). 24Linda A. Jacobsen, Mary Kent, Marlene Lee, and Mark Mather, “America’s Aging Population,” Population Bulletin 66, no. 1 (2011); and “Resident Population by Age and State: 2010,” The 2012 Statistical Abstract (Washington, DC: The US Census Bureau, 2011) at www.census.gov /compendia/statab/cats/population.html. 25Amy M. Hightower, Hajime Mitani, and Christopher B. Swanson, State Policies That Pay: A Survey of School Finance Policies and Outcomes (Bethesda, MD: Editorial Projects in Education, Inc., 2010); and Michael Griffith, “Understanding State School Funding,” The Progress of Education Reform (Denver, CO: The Education Commission of the States, June 2012) at www.ecs.org /clearinghouse/01/02/86/10286.pdf.