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April 12, 2018

Where Money Matters Most in K-12

The state legislature has returned to Richmond to approve a new two-year state budget, and they’ll be making important decisions on more than Medicaid expansion. They will also be deciding on state investment in other vital programs and services across the budget, including where the state invests in K-12 education. One proposal they will be considering is whether they will strengthen Virginia’s targeted aid to high poverty school divisions. Recent studies make the case for why that’s a wise investment.

During the legislative session, a bipartisan coalition of delegates advocated strengthening Virginia’s At-Risk Add-On program. Their proposed improvements would have bolstered funding targeted to schools with the highest concentration of students eligible for free lunch and assisted these hard-to-staff schools in their teacher recruitment and retention efforts. Neither chamber fully funded these proposals. The Senate included a modest increase equal to the amount proposed by the governor, whereas the House focused investments on strengthening Virginia’s supplemental lottery allocation.

This special session gives legislators another opportunity to revisit these crucial investments as new studies highlight the benefits of adequately funding low-income school districts.

For example, a study published earlier this month in the American Economic Journal builds off past research showing that sustained increases in funding for school districts with many low-income students results in improved outcomes in states across the country. The review examines the effects of 64 school finance reform events in 26 states from 1990 to 2011. It finds that the sustained increases in spending result in higher test scores for students in low-income school districts and brings their performance closer to students in other districts. In terms of impact, the researchers find that the increased funding has “at least twice the impact” per dollar as an experiment in Tennessee to reduce K-3 class sizes. The gains in test performance lead the researchers to estimate that “A [one dollar] increase in funding to low-income school districts will raise students’ eventual earnings by more than [one dollar] in present value.”

These findings complement another recent study that finds funding reductions in K-12 since the recession have had detrimental effects on student performance and graduation rates. The researchers find that a “10 percent spending reduction during all four high-school years was associated with 2.6 percentage points lower graduation rates.” The study also identifies that the funding reductions impact both non-instructional costs like construction projects and instructional spending through teacher staffing cuts.

These findings are alarming because in Virginia state per pupil funding currently sits 10.7 percent below where it was in 2009 in real dollars, and it was school divisions with the highest concentrations of poverty that bore the brunt of those reductions. Right now, combined state and local spending is 11 percent lower per student in localities with the most poverty than in communities with the least poverty, and that’s why a national report card gives Virginia an “F” grade on the fairness of its funding distribution.


The research shows that money matters when it comes to student outcomes and it matters most when it’s targeted to districts with the most low-income students. Unfortunately, that’s where Virginia lags in its targeted aid. This has been a missed opportunity that can be remedied right now. The state already has a designated fund called the At-Risk Add-On that addresses this problem. Republicans and democrats representing rural and urban communities struggling to overcome heightened poverty have come together in support of strengthening the At-Risk Add-On. This is a bipartisan, evidence-based policy solution that invests in Virginia’s children to make sure Virginia’s economy grows with them.


Chris Duncombe

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