NCSL Releases New Framework: Principles for Funding Every Student’s Success

WASHINGTON, D.C.-A new report designed to present a comprehensive framework for designing and evaluating state education finance systems was released today by the National Conference of State Legislatures (NCSL). The "Principles of a Sound State Education Finance System" is written to help state policymakers strengthen and evaluate their education funding systems.

The report outlines a comprehensive framework grounded in six interdependent principles-Lodestar (vision), equity, adequacy, efficiency, accountability and stability-that together create the foundation of a fair, durable, and effective state education finance system.

Six Key Principles of a Sound State Education Finance System:

1. Lodestar (Vision): Funding decisions should be guided by a clear statewide vision for student success.
2. Equity: Resources must be distributed based on student needs, district characteristics, and local fiscal capacity.
3. Adequacy: States must ensure sufficient funding to meet realistic, statewide education goals.
4. Efficiency: Resources should be aligned to maximize outcomes, with flexibility for local decision-making.
5. Accountability: Finance systems must promote transparency and link funding decisions to student outcomes.
6. Stability: Reliable, balanced revenue sources are essential to protect schools from economic volatility.

The report emphasizes that no single formula can guarantee success. Instead, a principle-driven approach allows states to balance competing demands, adapt to economic shifts, and ensure long-term sustainability.

The report was developed by NCSL's Education Finance Fellowship in partnership with the Learning Policy Institute. The report's findings were developed on a bipartisan basis by fellowship members, with input from Learning Policy Institute staff and other education finance experts.

The full report is available here: Principles of a Sound State Education Finance System.