Research suggests increased spending on education can improve student outcomes, especially among low-income students. This means that targeted increases in funding could help narrow the achievement gap between poor and nonpoor students. But given the complexities of our school finance system, can policymakers actually direct funds to the students who need them most? Public schools are funded through a combination of local, state, and federal dollars. In the 1920s, local governments provided more than 80 percent of school funding; today, state and local governments provide an equal share of school funding, with the federal government covering less than 10 percent.

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