2026 Legislative Changes: Where States Made School Finance Updates This Year
This year’s rubric updates show that many Southern states are still operating funding systems that only partially account for student needs. In states that increased base funding in 2026, overall per-pupil funding still remains below the national average. Mississippi, for example, increased its per-student base amount by more than 5% for the 2026-27 school year, but remains $4,292 below the national average per-pupil funding. Similar to Tennessee which saw a 3% increase in their per-student base amount, but still remains well below the national average. Fair funding starts with making sure every student has access to a strong educational foundation. That requires states to invest enough to meet the real cost of providing a high-quality education. While some funding increases this year are a step in the right direction, small boosts to base funding are not enough to address the long-standing gaps that continue to leave many schools stretched thin and under-resourced year after year.
Student-Based Funding and Student Needs
The rubric highlights that there are still states that still rely on hybrid or resource-based funding formulas instead of fully student-based systems that direct additional funding toward students with greater needs. Without stronger student-based funding structures, states may continue struggling to ensure resources consistently reach the students and schools that need them most. Arkansas, Kentucky, Mississippi, and Tennessee are the Southern states leading the way in having primarily student-based formulas.
One of the clearest trends across the South is the uneven support provided to students from low-income backgrounds. While some states have developed stronger weighted funding systems, others continue to provide little or no additional funding tied directly to student poverty. These differences matter because the way states define and fund economically disadvantaged students directly affects whether schools have the resources necessary to support students effectively.
Similar inconsistencies appear in funding for English Learners and Students with Disabilities, where states vary widely in both the amount and structure of additional support provided. At the same time, there were several bright spots in this year’s rubric for how states fund students with disabilities. Five of the ten Southern states included in the rubric, Alabama, Georgia, Kentucky, Louisiana, and Tennessee received green ratings for using tiered funding systems that provide different levels of support based on student need rather than a one-size-fits-all approach. The rubric makes clear that formula design choices, especially around student weights and definitions, have real implications for educational opportunity.
Progressive Tax Policy and School Funding Are Closely Connected
Another major trend emerging from the 2026 legislative sessions is the growing connection between progressive tax policy and education funding. Several Southern states either passed additional tax cuts this year or continued implementing tax reductions approved in previous sessions. North Carolina, Georgia, Arkansas, and South Carolina all continued moving forward with income tax reductions, while other states debated additional cuts or long-term revenue changes.
These conversations are often discussed separately from school funding debates, but they are closely connected. Long-term investment in public education depends on sustainable and predictable revenue systems. When states reduce long-term revenue capacity, it can become more difficult to maintain funding increases, strengthen student supports, or respond to changing student needs over time.
Transparency and Public Access to Funding Information
The rubric also reinforces the importance of funding students transparently and effectively. While some states have improved funding dashboards, formula guides, and public reporting systems, others still provide limited or difficult-to-access information about how education dollars are distributed and whether funding is reaching students as intended. Georgia stands out as the only state in the rubric to receive a green rating for funding data transparency, with public data that clearly shows how district funding is calculated in a way that is both timely and user-friendly.
Transparency is about more than just data and reporting requirements. Families, communities, educators, and policymakers all deserve clear, accessible information about how school funding works, where education dollars are going and whether investments are reaching students as intended. Strong transparency systems can help create more meaningful opportunities for communities to engage in funding decisions that affect their schools.
Voucher Expansion Continues Across the Region
Many Southern states continue expanding voucher and education savings account programs that use public dollars for private school options, with several states now operating near-universal or universal programs with limited accountability requirements. Tennessee, for example, reduced testing requirements tied to one of its voucher programs in 2026, while Kentucky remains a notable exception in the region because its state constitution currently prohibits voucher programs.
As these programs grow across the region, states are continuing to navigate conversations around public school investment, school choice, long-term funding sustainability, and how education dollars are distributed.
Where States Go From Here
The trends emerging from the 2026 legislative sessions reinforce that school funding remains one of the clearest reflections of state priorities. Decisions around revenue, transparency, formula design, and public accountability will continue shaping educational opportunity across the South for years to come.
This work is already happening across the region. Partner organizations throughout the South are continuing to track legislative sessions, analyze funding proposals, and connect state policy decisions back to their impact on students and communities.
As conversations around school funding continue across the South, states have an opportunity to learn from one another and build on what is working. Many of the challenges states are facing are similar, and so are the opportunities to strengthen public education systems and expand opportunities for students across the South.
Questions? Reach out to fundsouthernschools@edtrust.org.
Beyond the Ratings: Key School Funding Trends Shaping the South
Regional
Publish Date: June 24, 2026
By Kylie Allen, EdTrust-Tennessee P-12 Policy Fellow
At the heart of Southerners for Fair School Funding is a research-based State Ratings Rubric developed by EdTrust-Tennessee to evaluate how states invest in public education.
As Southern states wrap up their 2026 legislative sessions, important patterns are emerging about the future of public education funding across the South. While some states increased base funding or made modest updates to their funding formulas, many of the same long-standing challenges remain: ensuring students with the greatest needs receive enough support, maintaining long-term investment in public school, responding to the continued growth of voucher programs, and improving transparency around how education funding is distributed.
At the same time, there were also several notable bright spots in 2026. States like Mississippi and Tennessee increased their base funding amounts by more than 3%, while Virginia expanded funding tied to concentrated poverty. Kentucky, Mississippi, and Tennessee continue to stand out for strong formula transparency through clear public guides, dashboards, and accessible explanations of how their funding systems work. Georgia also continues providing detailed, timely, and user-friendly public funding data, while Alabama stands out for requiring districts to publish accountability reports that connect spending decisions to investments in student groups receiving additional funding.
Together, these trends reinforce why Southerners for Fair School Funding’s vision remains so important. Expanding access to high-quality education opportunities across the South, especially for students of color, students experiencing poverty, English Learners, students with disabilities, and rural students, has the potential to create lasting generational impact for students, communities, and the region as a whole.
Southern progress is national progress.
2026 Legislative Changes: Where States Made School Finance Updates This Year
Funding Adequacy
This year’s rubric updates show that many Southern states are still operating funding systems that only partially account for student needs. In states that increased base funding in 2026, overall per-pupil funding still remains below the national average. Mississippi, for example, increased its per-student base amount by more than 5% for the 2026-27 school year, but remains $4,292 below the national average per-pupil funding. Similar to Tennessee which saw a 3% increase in their per-student base amount, but still remains well below the national average. Fair funding starts with making sure every student has access to a strong educational foundation. That requires states to invest enough to meet the real cost of providing a high-quality education. While some funding increases this year are a step in the right direction, small boosts to base funding are not enough to address the long-standing gaps that continue to leave many schools stretched thin and under-resourced year after year.
Student-Based Funding and Student Needs
The rubric highlights that there are still states that still rely on hybrid or resource-based funding formulas instead of fully student-based systems that direct additional funding toward students with greater needs. Without stronger student-based funding structures, states may continue struggling to ensure resources consistently reach the students and schools that need them most. Arkansas, Kentucky, Mississippi, and Tennessee are the Southern states leading the way in having primarily student-based formulas.
One of the clearest trends across the South is the uneven support provided to students from low-income backgrounds. While some states have developed stronger weighted funding systems, others continue to provide little or no additional funding tied directly to student poverty. These differences matter because the way states define and fund economically disadvantaged students directly affects whether schools have the resources necessary to support students effectively.
Similar inconsistencies appear in funding for English Learners and Students with Disabilities, where states vary widely in both the amount and structure of additional support provided. At the same time, there were several bright spots in this year’s rubric for how states fund students with disabilities. Five of the ten Southern states included in the rubric, Alabama, Georgia, Kentucky, Louisiana, and Tennessee received green ratings for using tiered funding systems that provide different levels of support based on student need rather than a one-size-fits-all approach. The rubric makes clear that formula design choices, especially around student weights and definitions, have real implications for educational opportunity.
Progressive Tax Policy and School Funding Are Closely Connected
Another major trend emerging from the 2026 legislative sessions is the growing connection between progressive tax policy and education funding. Several Southern states either passed additional tax cuts this year or continued implementing tax reductions approved in previous sessions. North Carolina, Georgia, Arkansas, and South Carolina all continued moving forward with income tax reductions, while other states debated additional cuts or long-term revenue changes.
These conversations are often discussed separately from school funding debates, but they are closely connected. Long-term investment in public education depends on sustainable and predictable revenue systems. When states reduce long-term revenue capacity, it can become more difficult to maintain funding increases, strengthen student supports, or respond to changing student needs over time.
Transparency and Public Access to Funding Information
The rubric also reinforces the importance of funding students transparently and effectively. While some states have improved funding dashboards, formula guides, and public reporting systems, others still provide limited or difficult-to-access information about how education dollars are distributed and whether funding is reaching students as intended. Georgia stands out as the only state in the rubric to receive a green rating for funding data transparency, with public data that clearly shows how district funding is calculated in a way that is both timely and user-friendly.
Transparency is about more than just data and reporting requirements. Families, communities, educators, and policymakers all deserve clear, accessible information about how school funding works, where education dollars are going and whether investments are reaching students as intended. Strong transparency systems can help create more meaningful opportunities for communities to engage in funding decisions that affect their schools.
Voucher Expansion Continues Across the Region
Many Southern states continue expanding voucher and education savings account programs that use public dollars for private school options, with several states now operating near-universal or universal programs with limited accountability requirements. Tennessee, for example, reduced testing requirements tied to one of its voucher programs in 2026, while Kentucky remains a notable exception in the region because its state constitution currently prohibits voucher programs.
As these programs grow across the region, states are continuing to navigate conversations around public school investment, school choice, long-term funding sustainability, and how education dollars are distributed.
Where States Go From Here
The trends emerging from the 2026 legislative sessions reinforce that school funding remains one of the clearest reflections of state priorities. Decisions around revenue, transparency, formula design, and public accountability will continue shaping educational opportunity across the South for years to come.
This work is already happening across the region. Partner organizations throughout the South are continuing to track legislative sessions, analyze funding proposals, and connect state policy decisions back to their impact on students and communities.
As conversations around school funding continue across the South, states have an opportunity to learn from one another and build on what is working. Many of the challenges states are facing are similar, and so are the opportunities to strengthen public education systems and expand opportunities for students across the South.
Questions? Reach out to fundsouthernschools@edtrust.org.
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