How Ferguson, Mo., now could help reform public education funding

Five years ago, on Aug. 9, 2014, the nation’s eyes were on Ferguson, Mo., after Michael Brown was shot and killed by former police officer Darren Wilson. Subsequent investigations raised important questions about America’s criminal justice system that helped spur steps toward fixing systemic flaws. But as the fifth anniversary of Brown’s death approaches, another issue that affects Ferguson and many other predominantly black communities largely has gone unnoticed: unfair school finance policy and reform. Just as Ferguson put a spotlight on the need for criminal justice reform, the city also illustrates problems with how states allocate education dollars to their school districts. 

Historically, the Ferguson-Florissant School District has underperformed. In fact, in the school-year before Dr. Joseph Davis took over as superintendent in 2015, a paltry 16 students took Advancement Placement exams, which help prepare students for college. Although the district has shown signs of improvement, many of its 10,000 students — 83 percent of whom are black — still fall short of meeting the state’s academic standards. For example, just 27 percent of the district’s third-graders are proficient in English language arts, compared to about 73 percent for the nearby School District of Clayton, a predominantly white school district. 

Only 10 miles separate the two districts’ offices, yet in 2017-18, Clayton’s received an additional 53 percent in state and local operating revenue. Clayton got $19,513 per average daily attendance (ADA) compared to just $12,755 for Ferguson. This disparity is consistent with the overall funding picture among St. Louis County’s 22 traditional school districts: students in communities with greater proportions of black and low-income students tend to be shortchanged relative to their more affluent neighbors. 

The school districts with the highest proportion of black students — Riverview and Jennings — both rank near the bottom in per-pupil revenue and take in less than half of the county’s highest-spending district, Brentwood. Astoundingly, Brentwood generated more than $21,000 per ADA in 2017-18.  

To be sure, these school funding disparities aren’t unique to Missouri and in some ways the state’s funding formula actually is better than many others. State legislators took a positive step toward fairness and transparency in 2005 by adopting a weighted-student funding model that provides extra dollars for low-income, special education and limited English proficiency students. So why do kids in black communities still receive far fewer resources?   

It’s no secret that local dollars often are  the root cause of funding differences. Potential presidential hopefuls Sens. Kamala Harris (D-Calif.) and Bernie Sanders (I-Vt.) have  campaigned on the issue. While Missouri’s school finance system helps equalize some revenue, it falls short of leveling the playing field. As a result, it’s substantially easier for property wealthy districts to raise enrichment dollars beyond what the formula provides. It’s unsurprising then that high-revenue districts such as Brentwood and Clayton have the most property wealth per student in St. Louis County, with lower-revenue districts such as Ferguson, Riverview and Jennings ranking at or near the bottom. In fact, Clayton’s $464,172 per ADA in property wealth is over four times greater than Ferguson’s, putting it at a substantial advantage.  

What’s less known is that state dollars often are diverted to property wealthy districts despite the vast sums of local dollars they raise. Missouri’s system contains “outside the formula” exceptions with no relation to need. Most troubling is a hold-harmless provision that guarantees school districts a funding floor of state dollars based on what they received in 2005-06. As a result, affluent districts often receive more state money than what they’re entitled to under the formula. For example, it is estimated that Clayton received over $1 million in hold harmless funding in 2017-18 alone, even though the funding formula allocated nothing to them. 

Similarly, the mechanism Missouri uses to account for local property wealth is also problematic. Rather than basing calculations on recent property value assessments, which reflect districts’ current ability to raise local dollars, the state uses assessments from 2004. This underestimates the ability of today’s wealthy districts to raise revenue, favoring those with higher growth relative to others. In St. Louis County, the four districts with the lowest growth all have majority black student populations: Riverview Gardens, Jennings, Hazelwood and Ferguson, while affluent districts such as Brentwood and Clayton have seen around 40 percent growth since 2004. 

Clearly, Missouri’s education funding scale is tipped in favor of affluent districts, as is the case in many states. So what can be done to ensure that students in predominantly black communities such as Ferguson are on equal financial footing?  

Quite simply, policymakers need to make school district boundaries irrelevant. This can be done by focusing on two primary reforms. First, states can move to a full-state funding model by either eliminating local operating dollars entirely or by adopting policies that are conceptually identical to this. No system is perfect but states such as Indiana, Vermont and Michigan have taken steps toward limiting funding gaps. But this is only half the battle; legislatures must also fix allocation practices. This involves eliminating arbitrary provisions that favor some communities over others and distributing dollars based on the number of students attending schools, as California does with its Local Control Funding formula. 

It’s true that more money alone is unlikely to improve outcomes for underperforming districts. So why is it important to reform school finance systems? Because it’s not only the right thing to do, but it’s also a foundational component of putting students and families first in America’s education systems. District boundaries that systemically shortchange black communities such as Ferguson have no place in public education and it’s time to make them irrelevant.  

Aaron Garth Smith is director of education reform at Reason Foundation, a nonprofit policy group advancing free markets. He previously was senior director of analytics at YES Prep Public Charter Schools, a charter management organization serving over 12,000 students in Houston. Follow him on Twitter @AaronGarthSmith.