Categorically Equitable? An Exploration of Financial Inequities in Categorical Funding in California’s Community Colleges

Amidst chronic disparities in per-student resources, how best to construct funding formulas to equitably fund colleges and universities is an enduring policy concern. This brief focuses on a historically overlooked financial mechanism, categorical funding, to examine its role in funding (in)equity. Leveraging illustrative data from four equity-oriented categorical programs in the United States’s largest community college system, this study suggests extant funding formulas yield more per-student resources to institutions who serve the fewest students. The largest gaps in funding are associated with key funding formula mechanisms, including base allocations and funding guarantees. Policymakers should consider the tradeoffs when constructing funding policy, as even funds earmarked for equitable purposes may not be allocated in an equitable manner.