The variance in payments under Impact Aid is too large. The “needs” for different classes of students may differ, but the funding formula creates huge differences in funding for the same type of student. Equity and fairness suggest that the program should move toward an approach that substantially reduces the variance in payments.
The linkage of Impact Aid funding to shares of federally connected students in an LEA is inherently flawed. LEA boundaries are not defined consistently across states, and this inconsistency creates funding inequities under the Impact Aid funding formula. Several states with large military bases have countywide school districts, so the military share of enrollments is small even near large bases. Other states have several LEAs in the same county or city, so a base of comparable size is associated with a large share of military students in nearby LEAs. These historical and political differences in defining LEAs lead to dramatic funding swings under the LOT formula. The Impact Aid reimbursement for an on-base student in Florida is $625 compared with $1,970 in Texas, and the funding gap is driven primarily by the difference between county-level districts in Florida and small districts in Texas. The taxpayers of Florida may be able to makeup this shortfall in funding, but the funding policy punishes them unfairly for the way the state defines LEA boundaries.
The evidence indicates that the education opportunities for military and civilian children are moderately comparable. Test scores in military-related LEAs are generally at or above those of other LEAs in their respective states. Similarly, expenditures per pupil and pupilteacher ratios vary across districts, but these resources are not