Abstract
School finance debates frequently turn on two crucial questions: (1) How much do state and local governments spend on K-12 education?; and (2) How are education dollars distributed across jurisdictions? This focus makes sense because the answers to these questions determine how well states are able to provide an adequate, equal education for all students. This report, however, focuses on two different questions: (1) Where do school revenues come from?; and (2) How does revenue composition affect education policymaking? Put differently, this report focuses on the degree to which states rely on state versus local revenue, or on different types of taxes (e.g., those on income, sales, or property), and how such features matter for the adequacy and equity of education spending. Two states with identical finance systems and student populations, and which spend the same amount overall on K-12 schools, might have very different adequacy and equity outcomes depending on the composition of their revenue. In short, money matters; but where money comes from matters too.