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Last week, President Obama signed the latest iteration of the decades-old Elementary and Secondary Education Act (ESEA) into law, officially replacing the No Child Left Behind Act (NCLB) with the bipartisan compromise known as the Every Student Succeeds Act (ESSA). Like any true compromise, reactions have been mixed on both sides of the aisle, but for all the heated debates the new law has generated, the federal financial role in K-12 education remains extremely limited. But even within this narrow federal role, the formulas that policymakers have devised to allocate the funds still result in considerable variation among states.

On average, states receive  $1,315 per student from the federal government, which translates to just over 10 percent of all spending. These totals vary from state to state, with the District of Columbia receiving the most in per-student funding, at $2,735. Alaska is a close second, receiving $2,692 per student. Despite their above-average allocations, these states have relatively high education costs, meaning federal funding doesn’t represent an outsized share of their budgets. (D.C. spends over $27,000 per student, the highest of any state, while K-12 spending in Alaska comes in just under $19,000 per student. These high spending levels put the federal contribution at 10 and 14 percent, respectively.) At the bottom of the list, Utah receives just $752 dollars per student, out of a total of $7,532, putting the state in line with the national average of 10 percent federal funding despite the extremely small federal contribution.

In percentage terms, states with lower overall poverty levels tend to receive a lower share of their funding from federal sources, thanks to the way the formulas are designed. New Jersey and Connecticut tie for the lowest federal share, receiving just 5 percent of funding from federal sources. On the opposite end of the spectrum, Mississippi receives nearly 18 percent. The largest single source of federal funding comes in the form of Title I of ESEA, and is intended to provide additional funding to support education for disadvantaged students. This seems to indicate that the dollars are indeed well-targeted. In addition, many of these low-poverty states spend higher amounts on K-12 education. For example, Massachusetts comes in eighth in terms of overall spending, yet receives just 7 percent of that revenue from federal sources, a lower rate than all but three other states. On the other hand, Arizona and North Carolina both receive a relatively generous federal contribution, but have held overall spending quite low. Because of this, Arizona ranks fifth in the share of federal funding, with North Carolina coming in sixth.  

The other major federal component comes in the form of special education funding, provided under the Individuals with Disabilities in Education Act (IDEA). Both the IDEA formula, and the Title I program are governed by complex rules, including hold harmless provisions that prevent them from losing money from one year to the next, and small-state minimums that guarantee states with small populations a minimum aggregate amount, which translates to higher per-student allocations. These factors profoundly affect the way federal funding is distributed. For example, South Dakota ranks seventh in federal funding per student, despite a per pupil spending rate of under $10,000 per student. Because of it’s small size, South Dakota receives a disproportionate share of funding from the federal government, putting the state third in the share of funding from federal sources. Other small states, such as Wyoming and Rhode Island, receive similar per pupil allocations from federal sources, but spend much more overall.  

Interestingly, the new legislation will likely have an impact on how some of these dollars are distributed. Changes to Title II of ESEA, which grants funding for teacher education and professional development, included a change to the formula that prioritizes poverty over population. While the $2.3 billion spent on Title II makes up a very small sliver of the overall federal contribution, they’re likely to benefit Southern states at the expense of rust-belt states over time.

In the aggregate these dollars add up: overall, the federal government contributed $61 billion to states in 2012, creating valid reasons to desire that those dollars be spent both effectively and equitably, and to hold states accountable for serving vulnerable populations. With ESSA’s increased state flexibility, this federal bump will remain a valuable tool for bolstering cash-strapped districts and overworked state budgets, but the way these dollars are distributed means that some states get a much larger allocation than others.

Federal Education Spending, 2012

State Education Agency
Federal per pupil revenues
Rank
Overall per pupil spending
Rank
Percent federal revenues
Rank
MISSISSIPPI DEPARTMENT OF EDUCATION1611889974517.9%1
LOUISIANA DEPARTMENT OF EDUCATION20523118332617.3%2
SOUTH DAKOTA DEPARTMENT OF EDUCATION1655799874016.6%3
NEW MEXICO PUBLIC EDUCATION DEPARTMENT15979106783415%4
ARIZONA DEPARTMENT OF EDUCATION12622285424914.8%5
PUBLIC SCHOOLS OF NORTH CAROLINA12372686364814.3%6
ALASKA DEPARTMENT OF EDUCATION2692218988414.2%7
TENNESSEE DEPARTMENT OF EDUCATION12712090394414.1%8
KENTUCKY DEPARTMENT OF EDUCATION141817103433813.7%9
OKLAHOMA STATE DEPARTMENT OF EDUCATION11792987054713.5%10
IDAHO STATE DEPARTMENT OF EDUCATION9794672405113.5%11
MONTANA OFFICE OF PUBLIC INSTRUCTIO152812113552913.5%12
ARKANSAS DEPARTMENT OF EDUCATION143815108703313.2%13
NORTH DAKOTA DEPARTMENT OF PUBLIC I16826128261913.1%14
FLORIDA DEPARTMENT OF EDUCATION11603189114613%15
TEXAS EDUCATION AGENCY12432597554112.7%16
DELAWARE DEPARTMENT OF EDUCATION18284145051312.6%17
HAWAII DEPARTMENT OF EDUCATION17255137211612.6%18
CALIFORNIA DEPARTMENT OF EDUCATION131118104473612.6%19
WV DEPARTMENT OF EDUCATION153111125662012.2%20
ALABAMA DEPARTMENT OF EDUCATION11263495344211.8%21
GEORGIA DEPARTMENT OF EDUCATION112732103453710.9%22
SOUTH CAROLINA DEPARTMENT OF EDUCAT118427109253210.8%23
MICHIGAN DEPARTMENT OF EDUCATION130619120562410.8%24
MISSOURI DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION 112733111363110.1%25
WASHINGTON DC OFFICE OF THE ST SUPERINTENDENT2735127234110%26
OREGON DEPARTMENT OF EDUCATION105339105053510%27
NEVADA DEPARTMENT OF EDUCATION9294992834310%28
UTAH STATE OFFICE OF EDUCATION7525175325010%29
INDIANA DEPARTMENT OF EDUCATION11043611467289.6%30
OHIO DEPARTMENT OF EDUCATION12642113230179.6%31
RHODE ISLAND DEPARTMENT OF EDUCATIO15261315989109.5%32
NEBRASKA DEPARTMENT OF EDUCATION11832812450229.5%33
VIRGINIA DEPARTMENT OF EDUCATION10723811584279.3%34
MAINE DEPARTMENT OF EDUCATION12592313762159.1%35
WA STATE DEPT OF EDUCATION10054211263308.9%36
WISCONSIN DEPT OF PUBLIC INSTRUCTION10933712470218.8%37
WYOMING DEPARTMENT OF EDUCATION1586101813278.7%38
IOWA DEPARTMENT OF EDUCATION10534012082238.7%39
KANSAS STATE DEPARTMENT OF EDUCATIO9924511853258.4%40
COLORADO DEPARTMENT OF EDUCATION8375010073398.3%41
ILLINOIS STATE BOARD OF EDUCATION11613014070148.3%42
PENNSYLVANIA DEPARTMENT OF EDUCATIO12482415200118.2%43
VERMONT DEPARTMENT OF EDUCATION1424161834667.8%44
MINNESOTA DEPARTMENT OF EDUCATION9444812999187.3%45
NEW YORK STATE EDUCATION DEPARTMENT1459142163526.7%46
MASS. DEPARTMENT OF ELEMENTARY AND SECONDARY EDUCATION1110351658586.7%47
NH DEPT OF EDUCATION10004415159126.6%48
MARYLAND STATE DEPARTMENT OF EDUCAT1000431598996.3%49
NEW JERSEY DEPARTMENT OF EDUCATION1039411937835.4%50
CONNECTICUT STATE DEPARTMENT OF EDU971471864955.2%51
U.S. Average13151272310.3%
Data from the Department of Education’s Common Core of Data, 2012.