Abstract
This paper examines the distributional implications of a recent decision by the Supreme Court of Texas requiring the state to devise a fiscally neutral school finance system. The authors modify traditional Lorenz curve analysis to compare the distributions of expenditures per pupil and expenditures per unit of tax effort under the 1988–1989 school finance system to those distributions that they estimate would arise under two forms of district power equalization (DPE). They find that while DPE (either with or without a recapture provision) would generate a more equal distribution of expenditures per unit of tax effort, it would not generate a substantially more equal distribution of expenditures per pupil.
Published Version
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