Education finance is a critical lever for change in every school across the country — one that can level the playing field or exacerbate long-standing inequities. Bellwether’s work on state education finance amplifies a range of promising funding strategies that can promote equity for students and demystify education funding for advocates, state policymakers, and families. Bonnie O’Keefe recently sat down with Dr. Julien Lafortune, a research fellow at the Public Policy Institute of California to talk about an often-overlooked realm of school funding: facilities. This discussion has been edited for clarity and content. 

Bonnie O’Keefe: Tell our readers about your professional background in education. What drew you to the sector and what keeps you engaged in the work?

Julien Lafortune: I came to my current work at the Public Policy Institute of California through a love of economics. I spent time studying K-12 education broadly and my doctorate focused on labor economics, human capital, and public finance, especially education finance. I was drawn to studying levers of economic mobility and how public investments do or don’t play a role in improving long-run outcomes for families. Where’s that locus of change? In my research, I’ve found that so much public investment in economic mobility is rooted in the K-12 system, and much of that investment comes at the state level. Right now, most of my research is on school funding formulas and related funding aspects in California. 

BOK: In your research on school funding, you’ve focused several times on facilities funding. Why are facilities (including school building and upgrades) important to consider separately from other aspects of school funding? 

JL: The simple answer: facilities are fundamental to getting an education. Students need a building, classroom, gym, library, and more — these spaces are core to K-12 learning and yet those necessary facilities vary significantly and aren’t always adequate within or between districts. This disparity motivates my research and evaluation work to examine facilities expenditures and their impact on equitable student learning. 

Facilities funding is treated differently from operational funding in most every state. We treat them as two separate issues — with operations funding, we focus on funding for student needs, teachers, materials, and staffing that policies often try to equalize through state funding formulas and property tax bases. Whereas, with facilities, most states lack that equity focus, and there’s a big correlation with income and wealth and funding when it comes to facilities that is more severe and stark than what we see with operations funding. 

BOK: Tell our readers a little bit about how school facilities funding differs from operational funding, and where those equity issues come from?

JL: Every state is different, but in most, operations funding (e.g., staffing, materials, and everyday operations-related expenses) is a mix of state (47%) and local (45%) funding, with a small amount of federal funding (8%). Whereas facilities funding is typically about 80% local funding with practically no federal dollars and some states providing no funding at all. This often leaves facilities funding up to local districts that raise funds through voter-approved bonds to finance school infrastructure upgrades with property tax increases. So what you’re left with in many states is quite a bit of policy focus on equity and adequacy in operational funding formulas, with little coordinated focus on how districts can equitably finance building maintenance and invest in needed upgrades. That’s fundamentally why we see such vast differences in school buildings neighborhood to neighborhood, district to district. You can see the disparity just driving around — some schools are in great shape with features that improve the student learning experience, while others are barely hanging on with a lot of needs and a sort of “papering” over approach that masks structural deficiencies at the root. Facilities funding warrants more attention from policymakers. 

BOK: What are the implications for students if funding for school facilities is inequitable or inadequate? Conversely, how might more and better facilities funding support students?

JL: There’s not a singular or definitive theory for all the reasons why a better school facility improves student learning, but there are three important indicators that are important to consider — health, engagement, and culture.

• Health: On a micro scale, research links student achievement to things like temperature control and stable indoor air quality/HVAC systems. 
• Engagement: More broadly, buildings that have structural issues beyond HVAC can distract and detract from student learning.
• Culture: What kind of message does it send to students and teachers to learn and work every day in a crumbling or woefully outdated building? Investments in facilities improve culture, a sense of belonging, and a dedication to promoting a learning environment; lack of investment can have a detrimental social-emotional impact on students and on staff retention.

In California, we’ve tried to look at the funding side to get a better sense of the big picture on facilities, examining the level of return on investment that districts get when they spend more money on facilities upgrades and maintenance. For example, we examined Los Angeles Unified School District’s big construction boom from 2000 to 2015. The district spent about $25 billion on a public infrastructure program, which led to big changes in student learning environments, zoning, and improvements in attendance with modest-to-large positive impacts on test scores. These improvements were accumulated over time once students were acclimated to a new school facility, but are important indicators of the value of ongoing facilities investments. 

BOK: What are some examples of state-level policies that can support more equitable facilities funding? Are there examples of states doing this work well to level the playing field?

JL: A common mechanism to support equitable facilities funding is some form of direct funding or a matching grant system. The concern there, though, is a match exacerbates inequities since districts must have money themselves to be able to raise money from the state. State policies should go beyond a one-for-one match and instead provide direct hardship funding, prioritizing districts with greater needs. One way to accomplish this within a match is to scale it by matching at a higher share for districts with lower property wealth or higher student needs. Ohio does this well with its progressive funding mechanism that equitably prioritizes facilities projects. California, however, does not do this well with its first-come, first served matching program. Here, districts with capacity can get their projects in the door first and garner early funding, whereas counterpart districts that can’t get projects in as early might wait years for funding to get a project off the ground, assuming that they can even raise the local match requirement.

BOK: The potential level of investment needed to correct historical disparities in K-12 facilities funding and modernize schools can be daunting. In a report last year, you cited data from the California State Auditor that the state would need to spend $7.4 billion to meet existing and anticipated school facilities needs in the next five years. How might California state policymakers make headway in those investments without compromising other funding priorities?

JL: I think it’s a challenge in a resource-constrained environment to figure out how to fix facilities funding, especially when initial dollar investments are large. That figure cited is probably in many ways an underestimate, too, that doesn’t take into account broader historical needs and deficiencies in some California districts. It gets challenging when funding is scarce, because changes will create winners and losers. It’s certainly easier to provide more money for everyone in a vacuum, but prioritization is critical. State dollars should go to places that not only have students with greater needs but also district populations without as much income or wealth and facilities in disrepair. There’s a lack of systematic data in many states on facility conditions that could enable targeted funding based on building conditions. Absent more money to spend, states can improve equity and efficiency through better targeting of dollars to schools with the greatest facility needs and the least ability to raise local funds. 

BOK: What can California “teach” other states grappling with facilities funding inequities?

JL: California has one of the more progressive equity-enhancing operational funding formulas and a strong commitment to providing extra funding to districts with high-need kids. But when it comes to facilities and replacing aging buildings, our research shows that more state money has gone to higher-income districts versus lower-income districts. The way California distributes money for facilities has exacerbated local inequity based on local wealth versus correcting for it. This is a big missed opportunity.

BOK: In an era of declining public school enrollment, are there opportunities for states and districts to approach school facilities funding in a different or more targeted way?

JL: Yes, this is a necessity, but I don’t know that I have a silver-bullet solution. California is experiencing declining student enrollment with big declines projected in the coming decades due to the declining birth rate and migration. Yet, there will always be places with a need for new schools, or investment in aging facilities, or upgrades if schools consolidate. It may become politically more difficult to ask local voters to fund facilities investments if enrollment is shrinking, even if there’s not necessarily less money in the community. That also suggests a bigger role for states to step up and ensure a higher level of equity in facilities funding. 

BOK: What is one thing you wish more people knew about education funding broadly?

JL: I wish there was a bigger spotlight on the disconnect between the amount of research, advocacy, and policy focus on equity in operational funding for schools versus comparatively little focus and energy on equity in facilities funding. Facilities are an important part of shaping a child’s education and they deserve more attention, research, and high-quality data collection. 

For more on Bellwether’s state education finance work, click here. And check out Splitting the Bill: How Do States Fund School Facilities? to learn more about the ins and outs of facilities funding.