Big state student funding formula reforms don’t happen every day. Many states go decades between major overhauls or even significant refinements to their K-12 funding systems.  

So, 2024 is a particularly exciting year for state legislatures as more shift toward the weighted student funding formulas that a strong majority of states now use to allocate funding to school districts. Weighted student funding formulas offer higher potential for transparency, equity in response to student and community needs, and flexibility for local decision-making.  

Mississippi, Colorado, and Alabama are among states making moves this year toward promising state funding overhauls. Each is at a different stage of its reform process and offers a unique mix of legislative highlights, early lessons learned, and longer-term implications for student funding equity. 

Mississippi’s Comprehensive Funding System Overhaul

Overview 

Mississippi’s new education finance formula (House Bill 4130) was signed into law by Gov. Tate Reeves in May 2024. The Mississippi School Funding Formula (MSFF) represents the most dramatic change to the state’s school funding formula since 1997. 

Under its old formula, the Mississippi Adequate Education Program, most schools got roughly the same state funding per pupil with little differentiation based on students’ needs. The formula had a hybrid structure, with the bulk of funding based on past spending and a variety of add-on funding streams (some student-based, others resource-based). Mississippi provided just 5% in additional weighting for students who were economically disadvantaged, a low percentage funding boost compared to other states both regionally and nationally. In addition, special education services were funded based on individual districts’ staffing and benefits. Mississippi was also one of only two states, along with Montana, that allocated no targeted funding toward English learners (ELs) in its old formula.  

Legislation Highlights 

As a complete overhaul, the new MSFF is more transparent and responsive to differences in student needs, and creates a comprehensive weighted, student-based formula. The new system is also structured to better target funding to students’ educational needs and to respond to local demographics and community needs. Mississippi plans to add at least $200 million to education funding to enact the MSFF, which includes some of the following weights applied to an initial base cost of $6,695.34: 

• Low-income: 30% 
• ELs: 15% 
• Special Education: 
  • Tier I (language/speech impaired, developmental delay, specific learning disability): 60% 
  • Tier II (autism, emotional disability, hearing impaired, intellectual disability, other health impairment, orthopedic impairment): 110% 
  • Tier III (deaf-blind, multiple disabilities, traumatic brain injury, visually impaired): 130% 
• Career and Technical Education: 10% 
• Concentrated Poverty: 10% 
• Sparsity (additional funding for schools in rural or low-population areas): Up to 7% 

The new MSFF also shifts the student count for the purposes of funding from being attendance-based to enrollment-based — a policy decision that will increase funding equity, since attendance-based funding disproportionately disadvantages low-income districts. 

Looking Ahead 

Although Mississippi’s new MSFF is a significant step toward statewide school funding equity, there are still noteworthy challenges ahead. It remains to be seen how the state will implement the law and bring along district leaders with the power to turn these additional resources into classroom change. Another key test will be whether the state sustains investments in its new formula over time; the legislature was frequently criticized for rarely funding its prior formula according to statute in the decades in which it was in place.

Colorado’s Equity-Focused Revisions

Overview 

Colorado’s new funding formula bill was recently signed by Gov. Jared Polis. Unlike Mississippi, Colorado’s bill isn’t a wholesale rewrite, but it makes substantial changes to improve the equity of its funding allocations and center student needs. The bill was preceded by the efforts of a state funding task force, whose recommendations and modeling influenced most of Colorado’s formula changes.                

Legislation Highlights 

As the formula phases in over the next several years, taking full effect in the 2030-31 school year, Colorado school districts can expect to see: 

• Increases in funding weights for at-risk students (e.g., low-income students, students experiencing homelessness, ELs, and special education students, among others). 
• Additional funding for rural districts. 
• Caps on the impact of a cost-of-living factor, which tends to benefit wealthier communities. 
• Simplified, transparent calculations with additive factors to the base amount, replacing the previous multiplicative approach. 

In a state that has struggled with revenue, the new formula would phase in $500 million more dollars to schools over six years for Colorado’s K-12 students. 

Looking Ahead 

These are all wins for Colorado students; however, the versions of the weights and caps that recently passed don’t go quite as far as the state’s task force recommendations. In addition, the phase-in and hold harmless approach included in the bill will likely soften the immediate effects of the change in funding distribution — complicating any assessment of its effectiveness in the short term.  

Alabama’s Resolution to Study Changes in Fiscal Year 2025

Overview 

Alabama recently passed a resolution to “conduct a study on modernizing the current K-12 school funding model into a student-based funding model.” The results of the study, and any subsequent proposed legislation, will be delivered in February 2025.  

Legislation Highlights 

The resolution highlights a few key issues with the state’s current funding model: 

• Alabama is one of fewer than 10 states using a resource-based formula. Its model has limited funding features to support populations of students such as economically disadvantaged students or students with disabilities. 
• Alabama also has significant funding disparities driven by local revenue, only a small portion of which the state considers in its allocation of funds. 

Looking Ahead 

Though Alabama’s promise of a funding formula overhaul is still in the exploratory stages, this resolution is a hopeful signal of more to come. In response to the recent resolution, a diverse coalition of stakeholders established Every Child Alabama to promote a statewide modernized weighted student funding formula. 

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Fixing state funding systems won’t immediately guarantee equitable student outcomes or solve every other problem in education, but it’s an essential step in the right direction. Funding policy change and implementation can be a long, evolving process, as shown in the wake of Tennessee’s recent funding changes. Although Mississippi, Colorado, and Alabama are in different stages of education finance reform, they are all making a push toward more equitable systems. For as different and challenging as each state’s journey to more equitable funding might be, they offer important lessons about how to better serve all students, including the most vulnerable student populations.  

Disclosure: Advocates in several states featured participated in Bellwether’s school finance equity training series. As part of Bellwether’s commitment to transparency, a list of clients and funders since our founding in 2010 is publicly available on our website. An organization’s name appearing on our list of clients and funders does not imply any endorsement of or by Bellwether.