How Do States Fund School Facilities? Splitting the Bill: A Bellwether Series on Education Finance Equity. #12

This report discusses the funding of school facilities and sheds light on systemic inequities. The construction and maintenance of school buildings represent a significant cost for districts, and better-quality facilities are directly associated with improved student outcomes, such as enhanced academic performance, increased attendance, and better health. However, students in low-income and high-poverty areas—often comprised of students of color—tend to attend schools that are in worse condition, including outdated or temporary structures. This situation arises primarily because local school districts cover approximately 77% of construction costs, relying heavily on voter-approved bonds and levies for funding. Wealthier districts can more readily pass these measures and secure lower borrowing costs, while less affluent districts encounter higher tax burdens and greater financial obstacles. The level of state support for school facilities varies significantly. Although 90% of states provide some form of construction funding, the methods differ widely. Some states offer appropriations such as grants or construction reimbursements, while others provide financing options through loans or credit support to assist districts in issuing bonds. Some states allocate revenue from dedicated sources, such as sales taxes or lottery earnings, to fund school construction. However, not every state has dedicated funding mechanisms, and some depend solely on local funding, which can exacerbate disparities between districts. To ensure fair access to safe and modern educational facilities, policymakers and advocates must scrutinize how their state finances school infrastructure. Upholding equity—especially in lower-wealth areas—should remain a fundamental principle of school infrastructure policy.

Authors: Linea Koehler, Bonnie O’Keefe