Equity and Adequacy in Education Finance Issues and Perspectives (1999) / Chapter Skim
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1 Concepts of School Finance Equity: 1970 to the Present
1 Concepts of School Finance Equity: 1970 to the Present
Pages 7-33
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From page 7... ...
While a common statement among experts in education is that changing resource allocation can lead to improvements in outputs if schools use their funds productively, the enormous literature on education production functions is not conclusive about which specific resources, under which particular circumstances, will affect outputs and outcomes (Hanushek, 1986; Ferguson and Ladd, 1996; Mosteller et al., 1996. In addition to conceptual issues about the extent to which finance inputs are related to improving performance, fairness in financing also runs headlong into 7
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From page 8... ...
Property taxes in turn are based on property values that are unequally distributed across school districts and across states. Beginning at the turn of the century, the traditional policy response to inequities caused by unequal property tax bases has been to restructure state financing systems to mitigate the disequalizing effects within states while still maintaining the 50-state system.
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From page 9... ...
Local revenues are derived mostly from property taxes and, to a lesser extent, from local sales and income taxes. States usually delegate responsibility for provision of K-12 education to local school districts and then design complex formulas to govern how state funds will be distributed to those districts.
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From page 10... ...
The ability to pay principle enables one to judge how fairly tax burdens change as ability to pay changes.7 Tax burdens are defined as reductions in welfare, usually measured by changes in income, and ability to pay is usually measured by annual or average lifetime income. Thus, while school finance taxpayer equity compares tax rates to spending per child, public finance taxpayer equity compares tax burdens to ability to pay.8 The benefit principle states that, where possible, taxation should relate to the value of the services that the tax provides.
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From page 11... ...
. But aside from these occasional discussions of commercial property or capitalization, the vast majority of school finance work on taxpayer equity has not used public finance ideas.9 The Unit of Analysis States, districts, schools, and students grouped by socioeconomic or other characteristics have all been used as units of analysis in school finance equity analyses.
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From page 12... ...
Many court cases since the 1970s have focused on propertypoor school districts. This latter emphasis has proved problematic in some instances because the correlation between poor districts and poor children is not high.
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From page 13... ...
EQUAL OPPORTUNITY The idea that public policy can be designed to improve or equalize the opportunity for some Americans, coupled with the belief in education as one of the most effective institutions in this regard, makes the concept of equal opportunity the logical place to start a discussion of equity concepts. But while it may be the right starting point and the most widely held value, our review of the history of concepts of school finance equity since 1970 suggests that it is perhaps among the more ambiguous concepts of equity.
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From page 14... ...
will encourage the courts to address, with more specificity, the types of curriculum, program, teacher quality, or technology that constitute "equal educational opportunity" or "an adequate education."~3 The equal opportunity concept is much broader in application to education than in school finance issues per se. School finance equity has stressed one particular formulation of equal opportunity wealth neutrality which we explore more fully in the next section of the chapter.
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From page 15... ...
These works of the 1960s and 1970s that questioned the link between resources and effects in education may have had a very particular influence on the development of school finance equity concepts by convincing those working with school finance equity to stick more closely to inputs and processes, waiting for more definitive, less controversial findings on the link to outputs before using output concepts. More recent work is indeed beginning to challenge the findings of the 1960s.
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From page 16... ...
His major contribution, however, lies with application of the equal opportunity concept to school finance in the law and especially his development of the wealth neutrality concept. WEALTH NEUTRALITY Wealth neutrality as a school finance equity concept specifies that no relationship should exist between the education of children and the property wealth (or other fiscal capacity)
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From page 17... ...
School districts make decisions about spending per pupil based on their local tax price, income levels of residents, and other taste and socioeconomic factors. Feldstein demonstrated that district power equalizing does not correctly offset the effects of DPE's tax price and other wealthrelated factors and, therefore, districts do not respond in ways that break the positive wealth-spending relationship.24 Berne and Stiefel's The Measurement of Equity in School Finance (1984)
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From page 18... ...
Using 1991-92 data, the U.S. General Accounting Office recently completed a study that concluded that fiscal neutrality has not been achieved in most states: "A1though most states pursued strategies to supplement the local funding of poor school districts, wealthier districts in 37 states had more total (state and local combined)
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From page 19... ...
Interestingly, the courts, even in the early 1980s when defendants were using the wealth neutrality concept, often heard testimony about the degree of ex post horizontal equity. States, including California, made arguments that their systems were improving in equity on the basis of measures of horizontal equity.
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From page 20... ...
VERTICAL EQUITY Vertical equity, a children' s concept that has been used both ex ante and ex post, specifies that differently situated children should be treated differently. Analogous to the challenge for users of horizontal equity, users of vertical equity must identify "differently situated" students.
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From page 21... ...
students (weight equals 1.2~. School finance legislation in the states has addressed vertical equity by weighting students according to needs or costs (37 states in 1993-94)
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From page 22... ...
The increased focus on outcomes, the continued appeal of equal opportunity, and the shift in legal strategies as described by Enrich (1995) have increased the use of the concept of adequacy in educational analyses.
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From page 23... ...
, several lawyers looked at applications of adequacy in three states Alabama, Oklahoma, end Kentucky (Morgan et al., 1995; Grossman 1995; Trimble and Forsaith,1995~. Julie Underwood, in the same volume, interprets adequacy as a form of vertical equity, which is an interesting way to link the previous equity work with the current legal concept of adequacy: "adequacy from the perspective of 'vertical equity,' meaning that different students should be treated differently based on their special educational needs" (1995:493~.
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From page 24... ...
Throughout the past 25 years, data availability has been an important factor in determining how school finance equity concepts and even court case remedies are formulated. For example, in the 1970s,
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From page 25... ...
Although it is reasonably safe to maintain that the financing of primary and secondary education in America will remain public, we can be less sure about the constancy of public provision in the traditional form of public schools organized in local school districts. Various changes that are being debated today, such as voucher schemes and charter schools, may lead to significant structural changes.
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From page 26... ...
"How" identifies the equity concept, which can include horizontal equity, vertical equity, and equal opportunity. "How much" focuses on the statistical measure used to quantify the other choices.
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From page 27... ...
This chapter is a review of school finance equity since 1970. Our objective is not to define or redefine equal opportunity, but to analyze what others have written.
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From page 28... ...
This measure simulated the minimum total funding per pupil each state could support for all its school districts, assuming all districts were taxed at the same tax rate, that the state share of funding remained constant, and that total state plus local spending remained constant. The report uses per-capita income as a measure of fiscal
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From page 29... ...
equity are traditional public finance taxpayer equity concepts that are used to judge the relationship between tax burdens and income. We do not discuss them here as taxpayer concepts because they have not been used extensively to date in school finance taxpayer equity analyses.
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From page 30... ...
University of Michigan Journal of Law Reform 28(3)
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From page 31... ...
University of Michigan Journal of Law Reform 28(3)
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From page 32... ...
Mellon Foundation for Study of Resource Allocation in Urban Public Schools. New York: Robert F
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From page 33... ...
Wise, A 1968 Rich Schools, Poor Schools: The Promise of Equal Educational Opportunity.
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