Arkansas’ school funding apparatus has a number of flaws that, if addressed, would make the system simpler, fairer, and better attuned to individual student needs. The state’s main challenges on this front are:
- Several K-12 funding mechanisms that don’t properly acknowledge the needs of special education and disadvantaged students;
- Restrictive grants that tie the hands of local leaders; and
- Funding inequities that are based largely on district property wealth.
Fundamentally, Arkansas policymakers need to build on the main formula that they already have.
- Streamlining their many separate grants into a flexible weighted student formula;
- Adopting formula weights that more accurately account for individual student needs; and
- Equalizing local funding disparities.
Over the last three decades, states across the country have made serious efforts to systematically reform their school funding systems. These reforms have come in response to political and legal pressures aimed at ensuring that all K-12 children in a state have equal access to a quality education, regardless of their race, income status, or neighborhood wealth.
While states have made considerable strides over this period of time, some problems have persisted and new challenges have arisen. Arkansas’ school finance system derives largely from a 15-year lawsuit—Lake View School District No. 25 vs. Huckabee—which began in 1992 and led to the adoption of its current foundation funding formula in 2003 as well as most of its key state education grants.
While some changes have been made since then, this reform improved public school funding equity for Arkansas students residing in school districts of varying property wealth, and the state now ranks favorably compared to many other states on measures of school funding fairness.
But the system is still far from perfect, and Arkansas faces distinct school finance challenges.
The tax revenue losses wrought by the COVID-19 pandemic—coupled with the fact that Arkansas is already one of the poorest and most rural states in America—require a close examination of how the Natural State can allocate funds more fairly, get the most from every education dollar, and better empower local leaders and families. This brief starts with an overview of the state’s school finance system and some summary data analysis and then turns to a deeper analysis of Arkansas’ main school finance problems and recommendations for reform.
The benefits of moving Arkansas’ school funding system in a more streamlined, equitable, and flexible direction should be considered in concrete terms. Data released annually by the Division of Elementary and Secondary Education (DESE) indicate that teacher salary schedules vary substantially across the state and that there’s a correlation whereby school districts with higher poverty rates tend to have lower average teacher salaries. Ensuring that school districts get equitable funding based on student needs and that they have the latitude to use funds as they see best would help mitigate against these teacher salary disparities. More-challenged districts could more easily prioritize paying and retaining quality teachers so that their students get a quality education.
Consider further what it could look like if restrictions on categorical grants were relaxed. Rather than having to adhere to a long list of state grant regulations—which change quite frequently—districts would be able to direct more energy toward doing the most good with the dollars they have. Consider a hypothetical school district that wants to improve how it serves its large Hispanic population. That district could blend professional development and English learner funds to help teachers improve Spanish skills and cultural awareness, without having to worry about getting special permission from the state department. Or imagine if school districts could more easily use Alternative Learning Environments (ALE) funds to support keeping students in adverse circumstances in general classrooms, rather than separating these students into different classrooms (as the current program generally does). This list could go on.
On school finance reform, no state can truly start from scratch at this point—and Arkansas is no exception. The problems and recommendations highlighted in this brief are intended to emphasize the positive aspects of Arkansas’ school finance system and then progress onward. Arkansas should be proud to have a formula that already equalizes some funding fairly well and special funds for disadvantaged students. The state should build on this foundation by streamlining education dollars into a weighted student formula and ensuring that the formula provides greater resources to students with greater needs. From there, school operational decisions should be left in the hands of local leaders—those who are closest to the kids.
Full Policy Brief: A Vision for Better School Funding In Arkansas