Making Money Matter Financing America's Schools (1999) / Chapter Skim
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3 Equity I—Spending on Schools
3 Equity I—Spending on Schools
Pages 65-100
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From page 65... ...
Using school finance policy to improve educational outcomes is a relatively new objective. Identifying policy options that will foster this objective hinges on having good information about how to use resources to improve the performance of schools and students.
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From page 66... ...
use data for academic years 1989-90 and 1991-92 to examine variations between school districts and across states in the revenues available for educational programs and services and their relationship to family and community characteristics. Looked at from a national perspective, families living in the poorest districts -- those with the highest poverty levels and the lowest median incomes (where income levels have been adjusted for differences across districts in the cost of living)
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From page 67... ...
reveals major disparities in educational opportunities. These inequalities stemmed from differences in place of residence, family occupation and income, race, and gender, and from physical and mental handicaps.
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From page 68... ...
(1970:30) put it: "if money is inadequate to improve education, the residents of poor districts should at least have an equal opportunity to be disappointed by its failure." This chapter explores the pursuit of equity in school finance since midcentury, which until recently emphasized reducing spending disparities tied to the place of residence and increasing spending to meet special educational needs.
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From page 69... ...
The concept of equity motivating school finance reform today is shifting in emphasis from differences in the amount of money spent to the adequacy of the education that this money provides. The next chapter explores this newer approach to equity and the possibilities and challenges it poses for school finance.
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From page 70... ...
or ex post (judged by the actual outcomes that result from behavioral changes of school districts as they respond to the design elements of a school finance system)
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From page 71... ...
First, until recently, they focused mainly on attacking geographically based disparities in school spending that result from dependence on local wealth-based property taxes. Second, school finance litigation has taken place primarily in state courts under state law, a surprising venue given that federal courts and federal law have played the central role in lawsuits concerning other aspects of public education, such as school desegregation and student rights to free expression.
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From page 72... ...
Constitution and the California constitution. Dependence on local property taxes as a primary source of school funding, they argued, resulted in average per-pupil spending differences in the 1969-70 school year ranging from $407 to $2,586 in elementary school districts to $722 to $1,761 in high school districts (Franklin, 1987~.
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From page 73... ...
Constitution's Fourteenth Amendment provision that states not deny to individuals "equal protection of the law," but they developed differing notions 2State education clauses are collected in an appendix to Hubsch (1992)
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From page 74... ...
Wise (1968:4) linked school finance to the work of Coleman and others on equal educational opportunity by asking "whether the absence of equal educational opportunity within a state, as evidenced by unequal per-pupil expenditures, may constitute a denial by the state of the equal protection of its laws." His theoretical standard that the quality of a child's education in the public schools of a state should not depend on where he or she happens to live became a central argument in Serrano-type cases.
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From page 75... ...
To demonstrate how a new school finance scheme could meet their principle of fiscal neutrality and yet tolerate geographically different spending levels, the Coons team developed an ex ante measure of equity, which, they argued, would be achieved by state aid that was district power equalizing.4 Such aid promotes equity in the ex ante sense that districts levying the same tax rate would have the same amount to spend, regardless of their property tax wealth. Wealth neutrality was no panacea for all the school finance ills perceived by critics of the existing system.
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From page 76... ...
marked the beginning of a new period of judicial activism. Moreover, the Kentucky Supreme Court, in ruling the entire state education system inadequate, gave reformers hope that courts might be prepared to address not only spending disparities but also the adequacy of the educational opportunities available to students.
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From page 77... ...
One state's education clause was singled out for attention in what was, after Serrano, the most notable early case won by plaintiffs, although the difference in legal argument had little practical significance. In 1973, the New Jersey Supreme Court found that the state's school funding system which, like California's, resulted in property-poor districts spending half as much per pupil as wealthy districts violated the state constitution.
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minimum of education that is constitutionally required" (Seattle, 1978:95~. In 1979, the West Virginia Supreme Court took the notion of equal and adequate educational opportunities a step further (see Pauley)
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When faced with state equal protection clause challenges, most courts took the view that education was not a fundamental right entitled to strict scrutiny under their state constitution (Underwood, 1995) and upheld existing finance systems and the local control they fostered.
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From page 80... ...
Unlike Serrano, however, the new Texas decision relied not on the state constitution's equal protection requirements but rather on its education clause, which required that the state make "suitable" provision for an "efficient" system of free public schools allowing for a "general diffusion of knowledge." The court deferred to the legislature to devise a constitutionally acceptable system. Solutions acceptable to the court were not easy to come by, however.
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From page 81... ...
General Accounting Office, 1997~. OTHER APPROACHES TO SPENDING EQUITY Court challenges to state school finance systems have greatly influenced the shape of school finance reform since 1970 but by no means fully describe efforts to increase equity by improving funding for underserved groups.
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From page 82... ...
, and on uncertainty about what federal aid might mean for segregated school systems in the South. Before the 1960s, the only sizeable federal assistance to public schools came through "impact aid," a program enacted in 1950 to compensate school districts for revenues lost because of the presence of military bases or other federal activities that take place on tax-exempt properties.
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From page 83... ...
, provides extra educational services to children at risk of educational failure, with funding formulas linked to poverty levels within counties, school districts, and schools. Agreeing to focus on disadvantaged students, however, did not mean that decisions about how to allocate federal funds would be easy.
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From page 84... ...
This and other far-reaching bills to make the federal government a major force in equalizing education spending have been unsuccessful, but Congress has passed more circumscribed measures to encourage states to achieve greater spending equity in their school finance systems. Title I requires that school districts provide services to Title I schools that are "at least comparable" to the services provided to non-Title I schools as a condition of receiving federal aid.
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From page 85... ...
Along with the impact aid incentive, Congress in 1974 also included a provision in the act reauthorizing elementary and secondary education programs that provided federal funds to states for technical assistance in revising their state finance laws. The amount of federal aid that became available was comparatively small ($13.5 million in 1977)
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From page 86... ...
Concentration grants were added in 1978 to target a small proportion of Title I dollars to school districts with higher numbers or proportions of poor students. The 1994 targeted grant formula called for allocating "new" money through a weighted-child formula that gave even greater weight to districts with such students.
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From page 87... ...
Soon after Lau was filed, guidelines were published that ordered affirmative action steps to be taken by school districts to assist non-English-speaking students (Sugarman and Widess, 1974: 169~. State Equity Efforts Although we have given much attention to court-mandated school finance reforms, states have taken many actions in the past 30 or 40 years that were not directly the result of court orders.
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From page 88... ...
Faced with approving a new finance system or closing the public schools, voters approved a new system that centralized finance at the state level; reduced local property taxes and raised state taxes (notably the sales tax) , with overall taxes becoming somewhat lower; and substantially raised per-pupil spending in the districts where it had previously been lowest (Courant and Loeb, 1997~.
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From page 89... ...
Impact of Finance Reforms Efforts to evaluate changes in equity as a result of finance reform tend to focus on ex post measures of wealth neutrality, such as the educational revenues or expenditures of school districts and their association with district wealth. Since reformers often hoped that greater wealth neutrality would also reduce overall spending disparities in American education, researchers, legislators, and lawyers also frequently want to know the degree to which actual spending across districts is equal or unequal and how spending disparities have changed over time.
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From page 90... ...
As a result of court-ordered reform, spending rose by 11 percent in the poorest school districts, rose by 7 percent in the median district, and remained roughly constant in the wealthiest districts. Court-ordered finance reform led states to increase spending for education and leave spending in other areas unchanged, and thus by implication states funded the additional spending 7For comparability purposes, their study omitted districts that were not unified (i.e., districts that included only elementary or secondary grades)
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From page 91... ...
Evans et al. examined the impact of court-mandated reform on low-household-income districts to shed further light on progress toward one key objective of education finance reformers: to sever the link between the ability to pay for education (as measured in terms of wealth or income)
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From page 92... ...
Local funding increased throughout this period, including the last five years; in 1992, local governments contributed 47.0 percent of all of public education resources. The federal government played a small and shrinking role throughout 1972-92.
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, various years. Calculations exclude school districts from Alaska, District of Columbia, Hawaii, Montana, and Vermont.
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From page 94... ...
Adjusting for cost differences between metropolitan and nonmetropolitan school districts in 1992 results in a noticeable decline in inequality as measured in various ways. The amount of inequality due to differences in revenues between states continues to dominate inequality due to revenue differences within states, although the amount of variation accounted for by between-state inequality drops from 66 percent of total inequality to 53 to 60 percent.
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From page 95... ...
Nevertheless, the fact that new court cases continue to be filed, even on traditional equity grounds, and that disparities in interdistrict spending levels have far from disappeared, indicate that there are limits to how far school finance reforms are likely to go in reducing spending disparities, even when courts intervene. Limitations on the Impact of Court-Ordered Reforms The main lesson from the past 30 years is how persistent spending inequalities are in American education.
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From page 96... ...
. Tensions over local control are part of the political context that frequently stymie or limit finance reform efforts, even when finance changes are mandated 13There is emerging evidence in some states that interdistrict school finance spending disparities may have decreased in the bottom half of the distribution but increased in the top half, while leaving the overall coefficient of variation about the same.
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From page 97... ...
By contrast, Kentucky was able to marshal a strong coalition in favor of reform and revamped its educational system thoroughly and comparatively quickly after the 1989 court decision declaring the existing system unconstitutional. For those whose objective for school finance reform goes beyond wealth neutrality to equality of funding for students no matter where they live, there is one final limitation to the impact of court reform that is perhaps the most significant of all.
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From page 98... ...
The nation awoke in the 1950s and 1960s to the problems of unequal educational opportunities and began to address them. Around 1970 it entered a notably vigorous era of debate and reform aimed specifically at breaking the link between the property wealth of school districts and the amount of resources they had available to spend on the education of schoolchildren.
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From page 99... ...
Increasingly, though, it seems that finance reforms of the past, with their emphasis on the fiscal capacity of school districts, insufficiently address pressing equity questions of today, which include how to use the finance system to foster higher levels of learning for all students, regardless of background, and what to do about the desperate social, economic, and educational problems that plague some central-city schools. A fundamental dissatisfaction with discussions about finance equity as they have been carried on over the past three decades has become apparent as the nation has become increasingly concerned about educational achievement levels.
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From page 100... ...
Advocates began to think that school finance litigation might be a promising substitute (Tatel, 1992~. For needy children attending highcost, urban schools, however, school finance litigation would be far more attractive if the definition of equity on which it was based was broader than the conventional approach of wealth discrimination.
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