Which States Are Best at Funding Education?

Funding public education is one of the most important responsibilities of state and local governments in the United States. How much money states invest in K-12 education — and how they distribute that money — affects teacher salaries, class sizes, facilities, student supports and, ultimately, educational outcomes. However, best funding isn’t just about spending the most dollars — it includes equity, effort and how effectively funds support students who need them most.

1. Per-Pupil Spending: Top Funders

One of the simplest ways to compare education funding across states is to look at per-student spending — how much money is spent on each student annually in public schools. By this measure, states in the Northeast and some smaller states dominate.

According to recent data:

New York is the biggest spender, with figures exceeding roughly $33,400 per pupil — far above the national average.

Vermont and New Jersey also rank at the top, investing around $26,900 and $26,500 per student, respectively.

Other high spenders include Connecticut, Massachusetts, Alaska, Pennsylvania and Rhode Island — all allocating over $20,000 per student.

States like Utah, Idaho, Arizona, and Oklahoma are at the opposite end of the spectrum, spending less than $11,000 per student in many cases — often correlated with lower overall funding effort and greater reliance on local property taxes.

High per-pupil spending generally reflects a mix of state commitment and high cost of living. States with urban centers and high labor costs — like New York and Connecticut — naturally spend more to pay competitive teacher salaries and meet service demands.

2. Funding Effort: Commitment Relative to Resources

Looking only at dollars per student doesn’t tell the whole story. Another way to measure a state’s commitment is funding effort — the percentage of a state’s economic output (Gross Domestic Product) that goes into K-12 education.

In this metric:

Vermont, New Jersey, Maine, Wyoming, New York, and Connecticut are among the highest.

Funding effort captures how much of a state’s available wealth is devoted to education, regardless of how wealthy the state is. For example, a state with a modest economy can still prioritize schools by allocating a higher percentage of its budget, even if absolute per-student spending is lower.

3. Funding Equity: Supporting High-Need Students

A third, increasingly important measure is funding equity — how well state systems direct money to districts with higher poverty or greater student needs.

In some states that don’t spend the most overall, funding formulas are structured to allocate substantially more money to high-poverty districts:

Utah stands out for distributing around 60% more per pupil to high-poverty districts than to low-poverty ones.

Other states with strong equity components include California, Wyoming, Minnesota, and New Mexico.

By contrast, states like Connecticut — despite high overall spending — sometimes allocate less to higher-need districts, which can exacerbate disparities in student opportunities.

4. How Funding Translates to Outcomes

While funding is crucial, it isn’t a guarantee of better test scores or higher graduation rates on its own. Studies have shown that targeted use of funds — particularly toward teacher quality, early literacy, and student support services — often matters more than total spending levels.

For example, Mississippi significantly improved reading and math results in recent years through systemic reforms, even without the highest spending levels nationally. This suggests that how money is directed — not just how much is available — can make a major difference.

5. Regional Patterns and Broader Trends

Two clear regional patterns emerge from the data:

Northeastern states generally top spending lists, often due to higher state taxes, strong labor markets and long histories of investment in public education.

Southern and Western states, especially in the Mountain and Plains regions, tend to spend less per pupil, reflecting different tax bases, larger rural populations and sometimes lower state funding effort.

Despite these disparities, all states have increased funding over the past two decades, and many are working to close gaps between funding and actual school needs — though challenges remain.

The states best at funding education vary depending on the metric used. If measured by per-pupil dollars, New York, Vermont, New Jersey, Connecticut and Massachusetts lead the nation. If measured by funding effort, states like Vermont, New Jersey and Maine show the greatest commitment relative to their economic size. And if measured by equity, states such as Utah and California make sure high-need students receive larger shares of funding.

Ultimately, strong education systems require not only adequate funding, but smart, equitable funding that supports teachers, addresses student needs, and drives real improvements in learning.