Equity and Adequacy in School Funding

Abstract

Since 1971, most states have been subject to lawsuits seeking to reform their education funding systems. These cases are litigated on the basis of state (not federal) constitutional language and generally seek either greater equity in funding among school districts or a guaranteed level of adequate funding for education. State supreme courts have found the finance systems unconstitutional in 16 states, and many states are still actively involved in litigation. Even where litigation has not occurred or has not succeeded, the prospect of litigation has prompted revisions of state funding policies. Despite the predominant role equity and adequacy play in litigation, there are no universally accepted definitions for either of these words in education funding. Most commonly, equity is measured in terms of the variation in per-pupil revenues among school districts in a single state. By this measure, some states have greater funding equity than others, and in most states wealthy districts have significantly higher per-pupil expenditures than do poor districts. Equity is likely to be greater when the residents of poor districts pay higher taxes. (In some states, residents in poorer areas pay twice as much of their income in local taxes as do residents of wealthier communities.) Equity is also greater in those states where the state's share of the education budget is higher and where the state consistently targets its contributions to lower-income districts. Much of current litigation and legislative activity in education funding seeks to assure "adequacy," that is, a sufficient level of funding to deliver an adequate education to every student in the state. Most states have not explicitly addressed the questions of how much education is "adequate" or how educational standards can be converted to a finance formula. Several approaches to calculating the cost of an adequate education are described.