Exploring the History of School Funding in the United States

23 September 2025

When we think about education, we often imagine classrooms, teachers, textbooks, and maybe even the school bus you used to ride. But behind all of that is something a bit less visible, yet incredibly powerful—money. Yep, school funding. It’s the engine that keeps the education system running. Without it, there are no teachers, no chalkboards, and definitely no shiny new laptops.

So how did we get here? Why do some schools have theater-quality auditoriums while others struggle to keep the heater running? Great questions—and that’s what we’re digging into today. Let’s take a trip back in time and trace how school funding in the U.S. has evolved. Buckle up!

The Early Days: Education Was a Local Thing

Way back in the 1600s and 1700s, schooling wasn't a national priority. Education was incredibly local—like, your-town-your-responsibility local.

In fact, early public schools were mostly supported by:

- Local property taxes
- Fees paid directly by parents
- Occasional donations from community members or churches

There was no central school system, and certainly no state or federal funding. If your town was wealthy, students had access to better schooling. If it wasn’t? Well, kids might have received the basics—if anything.

Think of it like a potluck dinner. If every family brings a dish, you get a feast. But if only a couple families can afford to bring food, you've got a pretty sad table.

The 1800s: Horace Mann and the Rise of Public Education

Now, let’s fast-forward to the 1800s. This is when a guy named Horace Mann—often dubbed the “Father of American Education”—came along and said, “Hey, education should be free and available to everyone.”

Sounds obvious now, right? But back then, it was revolutionary.

Horace Mann pushed for:

- Publicly funded schools
- Professional training for teachers
- Standardized curriculum

His advocacy led to the rise of "common schools"—what we now think of as public schools. And for the first time, states began to take an interest in funding schools.

But here’s the catch: Even though states were getting involved, school funding still leaned heavily on local property taxes. That meant the quality of your education still depended on your zip code.

Post-Civil War Era: Education Spreads, But So Do Inequities

After the Civil War, there was a big push to educate newly freed Black Americans. Sounds like a step forward, right? Well, sort of.

Southern states created public education systems, but they were deeply segregated and unequal. Black schools were underfunded, had fewer resources, and were often housed in buildings that were literally falling apart.

It wasn’t just a Southern problem either. Across the country, school funding favored wealthier, often white communities. And this pattern would keep repeating, decade after decade.

The 20th Century: More Kids, More Money, More Gaps

By the early 1900s, things were changing in a big way. The U.S. was becoming more urban and industrial, and the demand for education skyrocketed. More people were sending kids to school—some through high school, and eventually college.

The Role of State Governments

States began to play a bigger role in school funding, trying to balance out local inequalities. They introduced formulas to allocate money more fairly, often based on student needs.

But—yep, there’s always a “but”—these formulas weren’t always effective. High-poverty school districts often still got less per student than wealthier ones. Why? Because local funding from property taxes continued to make up a huge part of the equation.

Enter the Feds

Up until the mid-1900s, the federal government stayed mostly hands-off when it came to education funding. That changed with the Great Depression and, later, with the Civil Rights Movement.

In 1965, President Lyndon B. Johnson signed the Elementary and Secondary Education Act (ESEA) as part of his “War on Poverty.” This was a game-changer.

ESEA meant:

- Federal money for disadvantaged schools (Title I funding)
- A push for equity in education
- A national conversation on closing the achievement gap

At last—some real muscle behind the effort to level the playing field.

Busing, Integration, and Money: A Complex Triangle

You can’t talk about school funding without addressing segregation. Even after Brown v. Board of Education in 1954 declared segregation unconstitutional, actual integration took time—and often came with a side of controversy.

In the 1970s and 1980s, busing was used as a tool to integrate schools, but funding disparities still loomed large. Schools in majority-Black or low-income neighborhoods often received less money even when they were technically "integrated."

So, busing might’ve changed who sat next to whom, but it didn’t fix everything. You can mix the paint, but if you’re still using two different kinds of brushes, you’re going to get very different results.

The Lawsuits Begin: Fighting for Fair Funding

By the 1970s and beyond, people started to say, “Hold up—this isn’t fair.” And so began a long stream of school funding lawsuits.

States like Texas, California, and New Jersey saw major court battles, with communities suing for more equitable funding. The argument? That every child, no matter where they live, deserves a quality education.

Some courts agreed and required states to revamp their funding formulas. Others said, “Nah, education isn’t a constitutional right in our state.” Yep, really.

So, depending on where you lived, your odds of getting a fair shot at a quality education still varied dramatically.

The 2000s: No Child Left Behind and Federal Oversight

In 2002, the federal government doubled down on making schools accountable with the No Child Left Behind Act (NCLB). It aimed to close achievement gaps and required schools to meet testing benchmarks or risk losing funding.

Sounds great on paper, but here’s the twist:

- Schools already underfunded struggled to meet requirements.
- Losing federal dollars just made things worse.
- The pressure led to teaching-to-the-test and other unintended consequences.

Once again, funding inequality remained the elephant in the room. You can’t expect a school trying to repair leaky ceilings to meet the same standards as a pristinely funded suburban school, right?

Today’s Landscape: A Mixed Bag

So where are we now?

Federal Funding

The federal government contributes roughly 8-10% of total school funding. Most of that goes to high-need students through programs like Title I, special education funding under IDEA, and school lunch programs.

State and Local Funding

Still, the bulk of the money—about 90%—comes from state and local sources, particularly local property taxes.

And guess what? That’s still causing disparities today. Wealthier districts raise more money for their schools, while lower-income districts often struggle to provide even the basics.

The Pandemic Effect

Then came COVID-19. Schools faced massive challenges—remote learning, safe reopening, teacher shortages—and funding became even more critical.

Thankfully, federal relief packages like the American Rescue Plan pumped billions into schools. But the question remains: Will it be enough to create lasting change?

Moving Forward: What Needs to Happen?

Here’s the truth: Fixing school funding in the U.S. isn’t just about throwing more money into the pot. It’s about how that money is distributed.

Here’s what experts say we need:

- Equitable funding formulas: Allocate money based on student needs, not zip codes.
- Adequate funding levels: Ensure every student has the basics—no matter where they live.
- Transparency and accountability: Make sure dollars are spent wisely and actually reach the kids they’re meant for.

It’s kind of like building a bridge. You don’t just need steel and concrete—you need a solid blueprint and skilled engineers to build it right. Same goes for funding schools.

Final Thoughts: Why It All Matters

School funding might seem like one of those "boring behind-the-scenes" topics. But in reality, it shapes the experience of every student, every teacher, and every classroom across the country.

Better funding doesn’t just mean fancier buildings. It means:

- Smaller class sizes
- Access to mental health services
- Up-to-date textbooks and technology
- Safer school environments

So yeah, it matters. A lot.

The history of school funding in the United States reveals a complex and often frustrating journey—one filled with big dreams, deep inequities, and ongoing battles for fairness. But it’s also a story of progress, resilience, and hope.

And as long as people keep asking hard questions—and demanding better—we’re heading in the right direction.