School district lines have become engines of inequity in many states. Not only can they be used to keep children out of a neighborhood's schools, they can also keep a district's wealthin. But with many districts facing severe budget cuts because of the coronavirus pandemic, a new report proposes a radical solution:

Leave the lines, but spread the wealth.

The report, titled Clean Slate, comes from EdBuild, a nonprofit that advocates for equitable school funding. It's a moonshot pitch to many district and state leaders that recommends distributing local property tax revenue more broadly — at the county or even state level. According to EdBuild, only 13 states currently do this.

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After a nationwide analysis of school funding data, the report found, "the bigger the school district taxing jurisdiction, the more equity was being created," says Rebecca Sibilia, EdBuild's founder and CEO.

Under this reimagining of America's school funding system, EdBuild found, more than 2 out of 3 K-12 students (69%) — and 76% of low-income students — would receive equal or greater school funding than they do now, an average increase of nearly $1,000 per student.

Sibilia admits some communities may see this idea as a threat to their local control of schools, but funding should not be confused with governance, she says.

"I hope this report will take the first step toward really challenging this question of whether or not being able to run your own schools means being able to keep all of the money that you happen to have," Sibilia says.

To understand Sibilia's proposed solution, here's a quick primer on the system as it is: On average, America's schools receive nearly half of their funding from local sources, mostly property taxes. But those local dollars usually don't cross school district lines. So if one community's property wealth far surpasses that of its neighbors across the road, the inequity will show up not just in the size of the homes or the number of businesses, but in classroom spending, too.

According to EdBuild, in counties with more than one school district, the average difference between the highest- and lowest-wealth district is more than $6,000 per student. And these spending inequities within a given county are most common in northern states.

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The report found that school districts in the South — in a triangle tipped by Maryland, Florida and Louisiana — distribute local funding more equitably than their neighbors to the north for one big reason: Districts in the South are larger, and tend to follow county lines.

Georgia, for example, has 159 counties, but the vast majority (139) have just one school district in them, Sibilia says. New York, on the other hand, has just 62 counties, but 57 contain two or more districts. The average difference in local revenue per student, between the highest and lowest-wealth districts in the same Georgia county is $186. In New York, that difference is $22,006 per student.

In addition to New York, Massachusetts, New Jersey, Connecticut and California all rank among the worst states in the nation for cross-border equity.

Sibilia says this idea that broader, county- or state-based school district spending allows for more equitable local funding, has come up again and again in previous EdBuild reports. "Last year we put out a report that highlighted the 969 worst school districts, in terms of both racial and funding gaps. Only 66 of those school district borders, the worst in the country, exist in states that draw school district funding lines along counties."

EdBuild's report comes as districts across the country face severe budget cuts as a result of the coronavirus pandemic. State revenues, driven largely by income and sales taxes, make up the other half of schools' funding, after local sources, and with revenues crashing states have already warned schools to prepare for steep cuts. That's why, Sibilia says, it's more important than ever for state lawmakers to rethink how communities collect and share their local property tax revenue.

"I would find it inexplicable that [state lawmakers] don't do that at the same time that they take the massive cuts that we know are coming," Sibilia says. "If they do the dual injustice of taking the cuts from the state funds and the injustice of not taking action to spread out local wealth at the same time, then we're going to just continue to repeat the same problems that have always existed in school funding."

The chief obstacle to Sibilia's fix is the fact that, while nearly 70% of students would benefit, that leaves almost a third of students who would not. Those students would see declines in local school funding, making this recommendation political kryptonite in many communities. Even in places that may be receptive, change likely would not happen fast enough to help schools through the current, pandemic-driven budget crisis.

"This is an idea that's ... unbelievably difficult and is not something that would help in the fall," says Michael Griffith, who studies school funding at the Learning Policy Institute. Communities who would stand to lose money would need to be convinced that the change is still in their best interest, he says. "If this were easy to do, it would have been done."

Griffith points to Michigan as an example of just how hard change can be. In 1994, the state moved from a traditional, local property tax school funding system to a statewide tax. But to do so, lawmakers took dramatic steps.

"To get everybody on board, they said, 'Most of you will get a property tax cut. We'll make up that property tax cut with sales and cigarette taxes and some other things. And then you're going to share that property tax revenue with others in the state.'"

That sweeping property tax cut, says Griffith, helped people to buy in. But it also made Michigan's schools more dependent on sales tax revenue, which is more volatile than property taxes in an economic downturn.

While school funding experts may not share Sibilia's optimism for how quickly states might be willing to reimagine their school funding systems, they do agree that it's an important conversation to have.

"It would benefit all of us if we had more equitably funded schools," says Michael Leachman at the Center on Budget and Policy Priorities. "I hope that we're moving to a place where we recognize that dealing with these kinds of underlying structural questions really helps all of us."

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