How state education funding formulas work

In Politics by Michael Rae

Many school finance formulas can be traced back to the 1920s, when foundation programs were designed to guarantee school districts a funding floor while accounting for their ability to raise local education dollars. The key feature of this approach is that state and local tax revenue contribute to what is essentially a single pot of dollars that funds school districts. Although lower-wealth districts receive a disproportionate share of state formula aid under foundation programs, all districts are ultimately funded according to state formula calculations.

Foundation formulas take different forms across states (and not every state uses one), but generally operate using