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Finance and Funding: Background Information

More than half a century ago Adlai Stevenson said, "The most American thing about America is the free common school system." The public school system in the United States is free only in the sense that all students have a right to attend. Revenue must still be raised to pay for public education in elementary, junior high, and high schools.

The process for raising and allocating revenue for schools has a long history. This article reviews some of the past systems for raising school revenue to provide context and insight into the current way schools are funded.

Early Stages

The colonies were founded in part to escape religious persecution. Early Americans relished the opportunity to teach their religion to their children without supervision by Old World governments, consequently, many of the early schools were established to teach Latin, the Bible, and religious practices.

As American started to become its own nation, the founding fathers recognized the importance of having a well educated public. Benjamin Franklin established several schools, and Thomas Jefferson was instrumental in creating a tracked educational system that would train both well-educated statesmen and manual laborers. The federal and state governments began to reserve parcels of land to be used for schools.

Compulsory, Free Education

As the pace of industry increased around the beginning of the nineteenth century, private business organizations began to fund free schools in New York and Massachusetts in order to train their labor force. Soon schools in all states and territories were free to students, paid for through a combination of taxes and donations from local businesses. Many states made public school attendance compulsory, even to the exclusion of private schools.

The Federal Government Steps In

The Federal government had a very minor role in funding public education until the 1940's and 50's, when it began granting funds to school districts that were overburdened by the war effort. After World War II ended, the Cold War highlighted the need for well trained scientists, so the Department of Education began to collect information on effective teaching practices and distributing funds much more widely.

The Civil Rights movement in the 1960's spurred the Department of Education to make much greater grants to needier, urban school districts that serve lower income black and Hispanic students. Although the exact distribution of funds has changed significantly since the 1960's with the addition of federal programs such as No Child Left Behind and Race to the Top, the overall system of education funding remains in place.

For more information, see FindLaw's sections on School Curriculum Basics and Competency Testing.

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