System takes from poor schools and gives to the rich, study shows

May 27, 2003

School districts transfer millions of dollars each year from schools in poor neighborhoods to those with wealthier students and higher-paid teachers, a new study shows.

The study documents the effects of a system used by nearly all of America's urban school districts, which allocate money to schools as if all teachers made the same salary even though better-paid teachers cluster in affluent neighborhoods.

The result: one Baltimore County school with low teacher salaries, for example, received $500,000 less than reported in the district's own budget documents.

"Do we really want to keep systematically funneling resources away from poor and low-performing schools?" asked study co-author Paul Hill, director of the University of Washington's Center on Reinventing Public Education.

Hill and fellow UW researcher Marguerite Roza examined the effects in four major school districts - Baltimore City, Baltimore County, Cincinnati and Seattle - of the salary-averaging system that makes it appear as though teachers in low-income schools cost as much as the senior teachers in high-income schools.

In each district, researchers found, salary averaging works against efforts to invest more money in poor schools.

By switching to a system that accounts for actual pay, districts could let poorer schools recoup the lost dollars for smaller classes or better technology, researchers said.

Union rules and longstanding practice often permit experienced teachers to choose their schools, and they often choose schools that enroll students from more privileged backgrounds. But in allocating staff costs, districts' budgets show all teachers earning the district-wide average.

In reality, Roza and Hill found that the average teacher in Baltimore's high-poverty schools pulls in nearly $2,000 less than the district average - and $4,000 less than those at the wealthiest schools. Poor schools receive no extra resources to compensate for their lower-cost teachers, and budget documents hide the salary differences.

"Those lost dollars really add up, to the tune of $637 per pupil in one Seattle school," Roza said. "District budget documents should reflect how much money the district is really spending on each school."

The study, funded through the Atlantic Philanthropies and the Annie E. Casey Foundation, is being posted online this week and will be part of a book to be published by the Brookings Institution next year. The research suggests the pattern plagues most urban districts.

In Seattle, teachers in the city's wealthier Northeast zone earned average salaries above $41,000, which those in the less-affluent Southeast averaged $37,670.

Hill and Roza recommended not only using real salaries in budgeting, but adding financial incentives to lure better teachers to struggling schools.
For more information, contact Hill at 206-685-2214 or, or Roza at 206-612-0810 or The Center on Reinventing Public Education, at the Daniel J. Evans School of Public Affairs, University of Washington, studies major issues in education reform and governance. The center can be reached at 206-685-2214. The study - including charts and graphs - is available online at

University of Washington

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