Table 1.7. Financing sources for state funding systems, state provided formula funds, state reclaim of funds, and funding systems ruled unconstitutional, by state: 2004

Compiles and disseminates data on state education practice activities

Table 1.7. Financing sources for state funding systems, state provided formula funds, state reclaim of funds, and funding systems ruled unconstitutional, by state: 2004–05


State	Financing sources for state funding system¹		State requires a minimum local effort for districts to receive state aid¹		State reclaims funds from districts able to generate above a specified amount¹		Current state funding system has been ruled unconstitutional for equity concerns (2003–2004)²
United States	†		35	³	5	³	9	³

Alabama	Foundation		Yes		No		Yes
Alaska	Foundation		Yes		No		No
Arizona	Foundation		Yes	⁴	No		Yes	⁵
Arkansas	Foundation		Yes	⁴	No		Yes
California	Foundation	⁶	No		No		No

Colorado	Foundation		Yes	⁴	No		No
Connecticut	Foundation		Yes		No		No
Delaware	Flat grant/local-effort equalization		No		No		No
District of Columbia	Foundation		†	⁷	†	⁷	No
Florida	Foundation		Yes		No		No

Georgia	Flat grant/local-effort equalization		Yes		No		No
Hawaii	Full state funding	⁸	†	⁷	†	⁷	No
Idaho	Foundation		Yes	⁴	No		No
Illinois	Foundation/flat grant		Yes	⁴	No		No
Indiana	Foundation	⁹	Yes	⁴	No		No

Iowa	Flat grant/local-effort equalization		Yes		No		No
Kansas	Flat grant/local-effort equalization		Yes		Yes		No
Kentucky	Flat grant/local-effort equalization		Yes		No		No
Louisiana	Flat grant/local-effort equalization		No		No		No
Maine	Foundation		Yes		No		No

Maryland	Flat grant/local-effort equalization		Yes		No		No
Massachusetts	Foundation		Yes		No		No
Michigan	Foundation		Yes	⁴	No		No
Minnesota	Flat grant/local-effort equalization		No		No		No
Mississippi	Foundation		Yes		No		No

Missouri	Foundation	⁹	Yes		No		No
Montana	Foundation		No		No		No
Nebraska	Foundation		Yes	⁴	No		No
Nevada	Foundation		Yes		No		No
New Hampshire	Foundation		No		No		No

New Jersey	Foundation		Yes		No		Yes
New Mexico	Foundation		Yes		No		Yes	⁵
New York	General aid	¹⁰	No		No		Yes
North Carolina	Foundation		No		No		Yes
North Dakota	Foundation		Yes	⁴	No		No

Ohio	Foundation		Yes		No		Yes
Oklahoma	Foundation		No		No		No
Oregon	Foundation		Yes	⁴	No		No
Pennsylvania	Percentage equalization	¹¹	No		No		No
Rhode Island	General aid	¹²	No		No		No

South Carolina	Foundation		Yes		No		No
South Dakota	Foundation		Yes	⁴	No		No
Tennessee	Foundation		Yes		No		No
Texas	Foundation/local effort equalization		Yes		Yes		No
Utah	Foundation		Yes		Yes		No

Vermont	Full state funding		No		No		No
Virginia	Foundation		Yes		No		No
Washington	Full state funding/local-effort equalization		No		No		No
West Virginia	Foundation		Yes		No		No
Wisconsin	Guaranteed tax base		No		Yes	¹³	No
Wyoming	Foundation		Yes		Yes		Yes	⁵

† Not applicable.
¹ Education Week Research Center annual state policy survey, 2004.
² Education Week, Quality Counts 2004.
³ United States total number of affirmative or "Yes" responses for each column.
⁴ A minimum local effort is not required for districts to receive state aid; instead the state assumes local districts will raise a certain amount and adjusts state aid accordingly.
⁵ Ruling for these states were based on funding for school construction.
⁶ California has several grants and entitlements in its school funding formula, the largest of which is general-purpose aid. General-purpose funding is based on a modified foundation formula, and the foundation level varies for each local education agency.
⁷ Hawaii and the District of Columbia both are single school districts.
⁸ Hawaii basis of state funding formula based on the 2003–2004 school year.
⁹ Indiana's school finance system is based on a foundation program, but the state uses a guaranteed-tax-base formula to determine the local share. Missouri calculates its foundation level by multiplying a guaranteed tax base by a minimum required tax rate.
¹⁰ The combination foundation/percentage equalizing formula that generated operating aid in New York state for many years has not been used as the basis for allocation of that aid since the 2000–2001 school year. For 2004–2005, every district received a 1.75 percent increase from its 2003–2004 funding level.
¹¹ In Pennsylvania, the subsidy from the prior year has been the base for the current year; any additional funding for the current year has been distributed through various formula components called supplements. The base supplement is based on a district-wealth ratio.
¹² Rhode Island uses 10 major methods to distribute education funds. The largest dollar amount, general aid, is a fixed amount based on what a district received in fiscal 1998.
¹³ There is recapture in Wisconsin if a school district has "negative aid" in Wisconsin's third tier of funding. Although funds are not returned to the state, those districts share local funds with districts that have property wealth lower than the state average.
SOURCE: Education Week, Quality Counts 2005, table Resources: Equity. Data Source

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