Can Targeted Funding Formulas Improve Student Academic Performance?

This study examines whether a weighted-student funding pilot in Nevada improved school expenditures and student achievement. Researchers analyzed panel data from 103 treated schools and 237 comparison schools, focusing on per-pupil spending and Smarter Balanced (SBAC) test scores in English language arts (ELA) and math from 2016–2019. Using event study and difference-in-differences methods, the study found that schools receiving pilot funds increased expenditures by about $681 per pupil. Student achievement improved modestly, with gains of 0.070 standard deviations in ELA and 0.052 in math. However, non-qualifying students outgained targeted subgroups, raising concerns about equity and implementation.

Full Citation and Link to Article

Marianno, B. D., & Mulvenon, S. W. (2025). Piloting school funding equity: How the new Nevada education funding pilot impacted student outcomes. Education Finance and Policy. Advance online publication. https://doi.org/10.1162/edfp.a.20

Extended Summary

Central Research Question

The central research question of this study is whether Nevada’s weighted-student funding pilot program, known as the New Nevada Funding Plan Pilot Program (NNFP), improved school expenditures and student academic achievement. Specifically, the authors sought to determine how the targeted allocation of an additional $1,200 per pupil for English Learner (EL) and free or reduced-price lunch (FRL) eligible students scoring below the 25th percentile on standardized tests influenced per-pupil spending and outcomes on Smarter Balanced (SBAC) English language arts (ELA) and math exams. The study also examined whether qualifying students—the intended beneficiaries—experienced the most significant achievement gains, or whether effects accrued disproportionately to non-qualifying students.

Previous Literature

For decades, education scholars debated whether increased school funding reliably improved student achievement. Early perspectives, such as Hanushek (2003), argued that additional resources had limited effects. More recent research, however, finds consistent evidence that increased funding enhances educational outcomes. Studies of court-ordered finance reforms (Jackson, Johnson, & Persico, 2015; Lafortune, Rothstein, & Schanzenbach, 2018), tax referenda (Kogan, Lavertu, & Peskowitz, 2017), and policy changes (Lee & Polachek, 2018) demonstrate that higher per-pupil spending leads to measurable gains in achievement. Scholars such as Jackson (2020) have emphasized the critical role of funding levels for student performance.

Less well studied is the impact of how funds are distributed within districts. Weighted-student funding (WSF) models allocate a foundational amount plus additional funds for students with greater needs, such as those from low-income households, ELs, or students with disabilities. Advocates argue that WSF promotes transparency, equity, and school-level accountability (Levin et al., 2019; Roza et al., 2021). Yet rigorous empirical evidence remains limited, particularly at the state level. Studies of WSF in Los Angeles (Lee & Fuller, 2022), Hawaii (Levin et al., 2013), and North Carolina (Henry et al., 2010) suggest potential benefits, though implementation challenges often dilute effects. Nevada’s NNFP pilot offered a unique opportunity to examine a state-level WSF initiative with a clear treatment group and a set of comparable schools that did not participate, thereby enabling stronger causal inference than many earlier studies.

Data

The study drew on multiple sources of data covering the years 2014–2019. For expenditures, the authors used Nevada Department of Education data from the Nevada Report Card, adjusted for inflation (2022 dollars) and regional cost variations. These data included total per-pupil expenditures and disaggregated categories such as instructional, instructional support, operations, and leadership spending. For student achievement, the study used longitudinal, student-level SBAC ELA and math test scores from 2016–2019, the period immediately before and during the first two years of the NNFP. Standardized test scores were normalized within grade and subject relative to the baseline year (2016–2017).

The analytic sample included 103 elementary and middle schools that received NNFP funding during 2017–2019 and 237 comparison schools that did not participate and were not recipients of other categorical programs like Nevada’s Zoom or Victory grants. Roughly 43,000 students attended NNFP schools, while 96,000 were in comparison schools. At baseline, NNFP schools had higher proportions of FRL (76% vs. 51%) and EL students (18% vs. 10%) and lower average achievement levels (by approximately 0.52–0.55 standard deviations). About 41% of students in NNFP schools qualified for the additional $1,200 per-pupil funding, compared to 19% in comparison schools who would have qualified if their schools had been selected.

Methods

The researchers used a quasi-experimental design combining event study and difference-in-differences (DiD) approaches. The event study framework estimated changes in per-pupil expenditures over time, comparing NNFP and non-NNFP schools relative to the pre-treatment baseline year (2016–2017). School fixed effects were included to control for time-invariant differences, while controls such as enrollment and the percentage of FRL students accounted for time-varying school characteristics.

For achievement, the DiD models compared changes in SBAC ELA and math outcomes for students in NNFP schools versus comparison schools. Student- and grade-level fixed effects were incorporated to refine the estimates. Standard errors were clustered at the school level. To examine differential effects on intended beneficiaries, the authors employed a triple-differences model. This interacted indicators for qualifying students (EL or FRL scoring at or below the 25th percentile) with NNFP treatment and time, enabling the authors to estimate whether gains were larger for qualifying versus non-qualifying students.

Finally, the study drew on annual monitoring reports filed by schools to code how NNFP funds were spent. Categories included academic interventions, extended learning, professional development, school climate initiatives, family engagement, prekindergarten, health services, and teacher incentives.

Findings/Size Effects

The NNFP led to notable increases in school expenditures. By the second year, NNFP schools spent approximately $681 more per pupil compared to non-NNFP schools. Disaggregated results showed increases of $730 in instructional spending, $113 in instructional support, and $135 in leadership expenditures. The rise exceeded the average direct NNFP allocation of $324–$363 per pupil, suggesting schools may have leveraged additional resources alongside state funding.

In terms of achievement, NNFP schools showed modest but significant gains. By the second year, students in NNFP schools scored 0.070 standard deviations higher in ELA and 0.052 standard deviations higher in math than comparison students. When controlling for student and grade fixed effects, the ELA effect was slightly smaller at 0.053 SD, while the math effect was no longer statistically significant and turned slightly negative. Benchmarked against the broader literature, the ELA effect of 0.070 SD corresponds to roughly a 0.100 SD gain for every $1,000 per-pupil spending increase, larger than the average marginal effect of 0.032 SD documented by Jackson and Mackevicius (2024).

However, the distribution of gains raised concerns. Triple-difference models revealed that qualifying students did not experience statistically significant improvements relative to their peers. Instead, non-qualifying students in NNFP schools showed the most consistent gains, particularly in ELA, where they outperformed their counterparts in comparison schools by 0.05 SD in 2017–2018 and 0.08 SD in 2018–2019. Qualifying students showed no improvement in either year. In math, differences between qualifying and non-qualifying students were smaller and generally not significant.

Fund use data showed that 64% of NNFP schools invested in academic interventions, while 36% funded extended learning opportunities and professional development. About 20% initiated school climate and culture programs, and fewer than 10% invested in family engagement, health services, or prekindergarten. A majority of schools (60%) spread funding across multiple categories, often three or more, raising concerns that diluted spending reduced effectiveness for targeted subgroups.

Robustness checks supported the main findings. Models limited to students who remained in the same school (stayers), those defined by baseline school assignment (starters), and analyses limited to two-star schools (closer matches to treatment schools) all produced substantively similar results, though math effects were weaker and sometimes negative. Sensitivity tests suggested results were somewhat vulnerable to deviations from parallel pre-treatment trends, particularly in expenditure estimates, but overall supported the interpretation of NNFP as producing modest, if uneven, effects.

Conclusion

The study concludes that Nevada’s NNFP pilot increased school spending and generated modest gains in student achievement, particularly in ELA. However, the intended beneficiaries—low-achieving EL and FRL students—did not experience measurable improvements. Instead, non-qualifying students appeared to benefit more, leading to a widening of achievement disparities within NNFP schools.

These findings highlight both the promise and the pitfalls of weighted-student funding reforms. The observed per-pupil spending increases translated into achievement effects that compare favorably to prior school finance studies. Yet the failure to improve outcomes for targeted subgroups underscores the importance of implementation design. Schools often dispersed funds across multiple initiatives, giving leaders autonomy but potentially diluting resources intended for disadvantaged students. The study suggests that policymakers should combine WSF models with stricter requirements to direct funds toward evidence-based interventions for qualifying students and strengthen monitoring systems to ensure funds reach those with the greatest need.

Overall, the Nevada pilot provides valuable evidence that weighted-student funding can increase spending and yield academic gains, but without careful targeting and accountability mechanisms, it may not achieve its equity goals. The study’s limitations—lack of longer-term outcomes, inability to fully test pre-treatment achievement trends, and reliance on self-reported expenditure data—warrant caution. Still, the analysis contributes to a growing body of research suggesting that while money matters, how it is allocated and used matters just as much.