Generational Change in School Funding Formula

August 4, 2023

Oran P. Smith, Ph.D

Senior Fellow

As Governor Henry McMaster and the House Ways & Means Committee were drafting their plans for the state budget year beginning on July 1, 2022, the question of the complex web of funding streams for public education was asked once again.

Charter schools in particular were stuck in ad hoc line items rather than receiving allocations on a per-pupil basis. Turns out, according to Palmetto Promise research, traditional public school districts were also victims of funding that began to take on a per program rather than per student basis as far back as 1990.

Independent economist and frequent Palmetto Promise partner Dr. Rebecca Gunnlaugsson sharpened her pencil in Charting the Course (2022) and presented multiple options for how this problem could be fixed. This work supplemented the earlier Palmetto Promise study Funding Our Children for Success (2017).

Now, as of 2022-23, South Carolina’s school district funding formula is working back to how it began (1977): based on “pupils” rather than programs. This is a fairer system for all public school districts, including public charter districts. The three statewide charter districts have seen marked growth in enrollment since the funding formula change. Now statewide charters will be paid for each student rather than appealing for one-time grants out of Education Improvement Act (EIA) programmatic funds.