How the Federal Government Shapes and Distorts the Financing of K-12 Schools

March 2007

Christopher Cross and Marguerite Roza examine the categorical program strategy by which the federal government and most states try to target extra funds for particular purposes. They show that funding programs based on good motives can nonetheless make it more, not less, difficult, for teachers and principals to adapt to the needs of their most challenging students. Ironically, the accounting structures attached to federal funding streams have led school districts to change their use of funds in ways that can frustrate the federal goal of increasing spending on disadvantaged children.

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