In all 50 states, state and local tax revenues provide most public school funding, with the federal government supplying only about seven percent of school funds nationwide. Historically, the state portion of school funding has been based on a politically determined amount of available money – without an analysis of educational needs – and the outcome of a political struggle over how to distribute that money among a state’s school districts. Usually, this process has led to an “Inequitable Equilibrium,” in which the distribution of resources represents the balance of political power in the state.

Standards-based Reform

Over the past 17 years, 49 of the 50 states have adopted statewide student learning standards in accordance with standards-based reform. Therefore, a new set of questions has emerged as to how states should fund schools to align funding with the standards that students are required or expected to meet:

What resources and conditions do schools need in order to enable their students to meet the state’s student learning standards?

How much funding is required to build and maintain the necessary resources and conditions?

What kind of state education finance system would best deliver that funding to all schools?

To answer these questions, especially the first two, states and education advocacy organizations have increasingly turned to “costing-out studies” to obtain rationally based, objective information on how to fund public education so that all students have a genuine opportunity to meet the learning standards. Since 1991, when a business group in Massachusetts conducted an education cost study for that state, over 50 studies have been undertaken in over 35 states.

Finance Litigation

An additional impetus for costing-out studies has come from the courts, many of which have declared their state’s school funding system unconstitutional as the result of education finance litigation. In five of these states, courts have also ordered the states to conduct costing-out studies as part of their Remedial Orders: Arizona, Arkansas, New York, Ohio, and Wyoming. (Status of School Funding Litigations in the 50 States)


The 2001 reauthorization of the federal Elementary and Secondary Education Act, known as “No Child Left Behind” (NCLB), has added another reason for education cost studies because its unprecedented goals would require an unknown level of additional funding for schools.  Ohio was the first state to conduct such a study. Since then, other states have conduted NCLB studies of varying scopes.

Public Engagement

To date, most costing-out studies have not afforded the public the opportunity to become involved, although the Maine and Kansas studies included some outreach. However, public engagement played a significant role from the outset in a New York costing-out study.

Useful Resources

A Costing-Out Primer explains what costing-out is, summarizes the methodologies used, and provides additional resources.

“Professional Rigor, Public Engagement and Judicial Review: A Proposal for Enhancing the Validity of Education Adequacy Studies,” by Michael Rebell. Teachers College Record (October 2006)

Discussion of the three costing-out studies in Ohio, in Molly A. Hunter, Trying to Bridge the Gaps: Ohio’s Search for an Education Finance Remedy, 26 Journal of Education Finance 63 (Summer 2000)

Report on Public Engagement in costing out: New York State Council on Costing Out, Adequate Funding for New York’s Schools: Communities Speak Out on What Students Really Need to Succeed (June 2003)

Discussion of NCLB funding needs in “Two Very Different Questions,” by William J. Mathis, Education Week, April 21, 2004.

Prepared by Molly A. Hunter, last updated May 9, 2006.