School Finance Reform Research Articles

Equity and adequacy in education finance: issues and perspectives

Spending on K-12 education across the United States and across local school districts has long been characterized by great disparities--disparities that reflect differences in property wealth and tax rates. For more than a quarter-century, reformers have attempted to reduce these differences through court challenges and legislative action. As part of a broad study of education finance, the committee commissioned eight papers examining the history and consequences of school finance reform undertaken in the name of and adequacy. This thought-provoking, timely collection of papers explores such topics as: * What do the terms equity and in school finance really mean? * How are these terms relevant to the politics and litigation of school finance reform? * What is the impact of court-ordered school finance reform on spending disparities? * How do school districts use money from finance reform? * What policy options are available to states facing new challenges from court decisions mandating adequacy in school finance? * When measuring adequacy, how do you consider differences in student needs and regional costs?

The Influence of Race in School Finance Reform

There is some evidence, from past social science studies, that school finance reform is seen by citizens--and especially white parents--through a racial lens. This Article picks up that point--which is nothing more than a hint, really--and tries to explore the role of race in school finance reform by surveying the history and success of minority districts in school finance reform litigation. The Article examines how predominantly minority districts have fared in school finance litigation (and subsequent legislative reforms) as compared to predominantly white districts, and concludes that minority districts fare worse than their white counterparts both in court and before the legislature. Based on this and other evidence, this Article contends that there are strong reasons to believe that the racial composition of the school district plays an influential role in determining success or failure in school finance litigation and legislative reform. As the Article explains, this evidence has important academic, historical, and practical implications. Indeed, if the Article is correct in asserting that race plays an influential role in school finance reform, school finance scholars and practitioners should begin paying closer attention than they have to the dynamics of race relations and school desegregation; historians and legal scholars should recognize with added confidence the wisdom of the NAACP's desegregation strategy; and civil rights attorneys, courts, critical race theorists, and conservative critcs of desegregation should hesitate before abandoning the goal of desegregation.

The Influence of Race in School Finance Reform

There is some evidence, from past social science studies, that school finance reform is seen by citizens--and especially white parents--through a racial lens. This Article picks up that point--which is nothing more than a hint, really--and tries to explore the role of race in school finance reform by surveying the history and success of minority districts in school finance reform litigation. The Article examines how predominantly minority districts have fared in school finance litigation (and subsequent legislative reforms) as compared to predominantly white districts, and concludes that minority districts fare worse than their white counterparts both in court and before the legislature. Based on this and other evidence, this Article contends that there are strong reasons to believe that the racial composition of the school district plays an influential role in determining success or failure in school finance litigation and legislative reform. As the Article explains, this evidence has important academic, historical, and practical implications. Indeed, if the Article is correct in asserting that race plays an influential role in school finance reform, school finance scholars and practitioners should begin paying closer attention than they have to the dynamics of race relations and school desegregation; historians and legal scholars should recognize with added confidence the wisdom of the NAACP's desegregation strategy; and civil rights attorneys, courts, critical race theorists, and conservative critcs of desegregation should hesitate before abandoning the goal of desegregation.

The Effect of School Finance Reform on Population Heterogeneity

This paper tests whether state school finance reform alters neighborhood income homogeneity. One implication of the Tiebout model is that within-community homogeneity declines as a result of an exogenous decrease in the ability of jurisdictions to set local tax and expenditure levels. The property tax revolt and the school finance equalization reform of the 1970s and 1980s offer a test of the role of state fiscal reform on aggregate population sorting behavior. The results show that schoolfinance has a significant effect on school district income sorting, especially among low-income communities.

School Finance Reform in the “Live Free or Die” State: Personal, Legal, and Policy Responses to Claremont School District v. Governor

School Finance Reform in the “Live Free or Die” State: Personal, Legal, and Policy Responses to <i>Claremont School District v. Governor</i>

Financing Federal Systems: The Selected Essays of Edward M. Gramlich

Contents: 1. State and Local Governments and their Budget Constraint 2. State and Local Fiscal Behavior and Federal Grant Policy 3. State and Local Budgets the day after it rained: Why is the Surplus so High? 4. Micro Estimates of Public Spending Demand Functions and Tests of the Tiebout and Median-Voter Hypothesis 5. Intergovernmental Grants: review of the Empirical Literature 6. The stimulative effects of Intergovernmental Grants: Or why money sticks where it hits 7. Moving into and out of Poor Urban Areas 8. The Spatial Dimension: Should worker assistance be given to poor people or poor places? 9. Subnational Fiscal Policy 10. Public employee market power and the level of government spending 11. Why voters support Tax limitation amendments: The Michigan Case 12. The deductability of State and Local Taxes 13. The Impact of the Tax Reform Act of 1986 on State and Local Fiscal Behaviour 14. Infrastructure Investment: Review Essay 15. Migration and Income Redistribution Responsibilities 16. Cooperation and Competition in Public Welfare Policies 17. Report on School Finance and Educational Reform in Michigan 18. Reforming US Federal Fiscal Arrangements 19. Federalism and Federal Deficit Reduction 20. New York: Ripple or Tidal Wave? The New York City Fiscal Crisis: What happened and what is to be done? 21. A Fair Go: Fiscal Federalism Arrangements 22. Rethinking the Role of the Public Sector 23. Canadian Fiscal Federalism: An Outsider's View Index

School Finance Induced Migration and Stratification Patterns: The Impact of Private School Vouchers

This paper introduces a general equilibrium model of public school finance that includes: (i) multiple school districts that finance local public schools via property taxes set by majority vote; (ii) multiple neighborhoods within school districts where each neighborhood is characterized by a quality level of housing; (iii) local public schools that are obligated to admit all interested students who reside within the school district; (iv) private schools that function as clubs of parents who share the cost of the private school equally and who can choose to exclude others; (v) an educational production process that depends on both per pupil spending and average peer quality within the school; and (vi) individual peer quality levels that are correlated with the socioeconomic status of households. Since it allows for various degrees of imperfect stratification of residents across communities, the model is well suited for investigating empirically relevant migration forces induced by school finance reform proposals. The abstract model itself, however, is too complex to yield many analytic results. A computational counterpart to the model isnb therefore developed, calibrated to data, and utilized for policy experiments. In particular, the impact of vouchers in the context of different types of prevoucher educational finance systems is investigated, and it is found that migration patterns in general would cause vouchers to benefit public schools in poor communities while hurting public schools in wealthy communities.

School Finance Reform and Private School Enrollment: Evidence from California

Abstract: This paper uses the school finance reforms in California in the 1970s to examine whether the constraints such reforms impose on school districts lead to switching to private schools. Misspecifications of demand in previous work have led to understatement of reform effects. An empirical model of schooling share equations is derived from a discrete choice framework. Large biases are shown to result from failure to account for heterogeneity of demanders and school-district-specific fixed effects. Simulations indicate that the changes in public provision potentially resulting from reform explain a sizeable portion of the growth in the private school share.

Back to the Future: An Update on Michigan School Finance Reform

Back to the Future: An Update on Michigan School Finance Reform

Balancing Conflicting Policy Objectives: The Case of School Finance Reform

Public policy decisions frequently require the establishment of a balance between conflicting objectives. This is especially true for many current state policy efforts, particularly with regard to funding for public education. This policy area, which dominates state-local fiscal relationships, has been subjected to substantial challenges in recent years. While local governments have traditionally exercised significant control over public education policy, that control is increasingly constrained by recent state efforts--often prompted by court action--to alter the distribution of public education resources. As a result, the fiscal relationship between states and local governments is undergoing significant changes, characterized by substantial shifts toward more centralized models of funding public education. The shifts to greater state funding responsibility have generated conflicts associated with diminished local control over local government activities. Underlying the political tensions of shifting responsibilities is a fundamental trade-off between equity and efficiency objectives in the provision of public education. The principal factors driving increased state centralization are court-ordered improvement in interdistrict funding equity and local opposition to the property tax. However, public finance theory suggests that centralization may reduce the level of efficiency normally expected when services are provided closer to the people, where the conformity between citizen preferences and the services provided can be strengthened (Tiebout, 1956; Oates, 1972). Thus, states are striving to balance conflicting equity and efficiency objectives--the benefits associated with enhanced equity of educational opportunity as opposed to the decline in efficiency that may result from erosion of local budget control. A major school finance reform in Kansas in the early 1990s provides an opportunity to broaden our understanding of the dynamics associated with managing such conflicting objectives. In 1992, Kansas adopted a school funding reform that transferred significant public school funding decisions--both taxing and spending--to the state. However, the legislature attempted to balance the mandated equity changes with concessions to the concept of continued local fiscal control. The concessions are important in preserving some local voice in a traditional local function, but, potentially, they could threaten the major objective of the reform--equalized educational opportunity for all students. We begin with an overview of the common equity standards proposed for school finance systems and their compatibility with efficient provision of educational services. Since state courts have often served as the catalyst for finance reform, we briefly review the evolution of court decisions and how court action framed the nature of the Kansas reform. We then describe the Kansas system--both before and after the reform--and show how the legislature balanced competing equity (centralization) and efficiency (local control) goals. Using data from before and after the reform, we evaluate how these changes have affected various equity objectives. Our initial hypothesis was that the most important of the local control concessions--a local option budget provision--would help to provide a continued local role in education, but would lead to significant weakening of the relative equity goals stressed by the court. Our analysis suggests that, in fact, the local option budget has so far generated only moderate reductions in relative equity, and it may provide a fairly successful strategy for states to resolve the state-local conflict, and also to balance the equity and efficiency objectives of education reform. Equity Standards and Court Intervention In 1991, 40 percent of total local (i.e., substate) government spending in the United States was dedicated to elementary and secondary education, by far the largest share of local budgets. …

School Finance Reform: an Empirical Test of the Economics of Public Opinion Formation

Printary and secondary public school finance reforms that began in the 1970s have failed to correct large intrastate spending inequities in the United States. The threat of judicial activity and concern over the stagnating effect of property taxes have caused states to again look at ways in which to bring about reform. This article uses survey data to deternune characteristics significant to individual opinion formation on school finance reform. In addition to traits that proxy for self-interest, measures of fiscal knowledge, political party identification, and opinions on the role of government are all found to be important. Results can be used by policy makers to determine characteristics that are consequential to an individual's decision to support school finance reform.

School Finance Reform: An Empirical Test of the Economics of Public Opinion Formation

Primary and secondary public school finance reforms that began in the 1970's have failed to correct large intrastate spending inequities in the United States. The threat of judicial activity and concern over the stagnating effect of property taxes have caused states to again look at ways in which to bring about reform. This paper uses survey data to determine characteristics significant to individual opinion formation on school finance reform. In addition to traits that proxy for self interest; measures of fiscal knowledge, political party identification, and opinions on the role of government are all found to be important. Results can be used by policymakers to determine characteristics that are consequential to an individual?s decision to support school finance reform. *Wassmer received a grant from Wayne State University?s College of Urban, Labor, and Metropolitan Affairs (CULMA) to conduct this research. CULMA's Center for Urban Studies conducted the survey used here. Pan Zuohong provided research assistance. Allen Goodman, Judy Temple, anonymous referees, and participants at various seminars offered helpful comments; remaining errors are my own.

The Equity Consequence of School Finance Reform in Kentucky

This study examines the equity consequence of school finance policy changes in Kentucky. It incorporates traditional school finance concerns regarding equity targets, objects, principles, and statistics. It utilizes adjustments for district economies of scale and interdistrict price differences. Findings indicate that Kentucky experienced marked improvements in equity as a result of school finance reform, including a narrower dispersion of pupil revenue and greater fiscal neutrality. Equity improvements resulted from policy changes that effectively addressed disequalizing attributes of the pre-reform state aid formula. Manipulating this formula further could produce additional marginal gains in system equity but at substantial cost.

Budget-Constrained Frontier Measures of Fiscal Equality and Efficiency in Schooling

Equality and efficiency are key issues in educational reform. Here the authors analyze the efficiency and equality consequences of various school finance reforms using a cost-indirect output distance function. This function readily models multiple-output production under conditions of budgetary constraint, and provides a natural measure of performance that is closely related to Farrell-type measures of efficiency. The analysis suggests that despite school district inefficiency, finance reforms can affect student achievement. However, any potential gains in output from redistribution are dwarfed by the potential gains from increased efficiency. More strikingly, the analysis demonstrates that budgetary reforms designed to equalize expenditures could actually increase the inequality of student achievement.

Centralization of school finance in Michigan

School finance reform in Michigan involved centralization (at the state level) of spending decisions about schools, a large tax shift (mostly from property to sales), and a small tax cut. The changes came about after two decades of failed attempts to reduce property taxes in the state, and were the immediate result of an unlikely piece of legislation that abolished all funding for public schools. Unlike most centralized systems, foundation grants in Michigan differ by district. Distributionally, the reforms favor residents of small, rural districts (whose spending was increased sharply). Residents of poorer urban areas, including Detroit, lost net income as a result of the reforms, as did residents of some of the richest suburbs in the state. Michigan permits a number of districts to supplement their foundation grants by limited amounts, a strategy that we argue may be a promising way of combining the efficiency benefits of local control with the equity benefits of foundation grant systems.

The Equity Consequence of School Finance Reform in Kentucky

The Equity Consequence of School Finance Reform in Kentucky

School Finance Policy and Students' Opportunities to Learn: Kentucky's Experience

School finance reform is usually done piecemeal, with many changes made to an existing framework over a period of decades. Also, finance reform is generally carried out separately from reform of school programs or governance. A notable exception is Kentucky which, in response to a 1989 state supreme court ruling, created an entirely new elementary and secondary education system with new finance and governance mechanisms and new academic expectations and accountability mechanisms. This article summarizes the major elements of the Kentucky Education Reform Act (KERA) and research on its impact. Revenues increased, funding differences between districts shrank, but basic allocations (percentage spent on instruction, facilities, and so on) changed little. A new Office of Education Accountability, reporting to the legislature, tracks incentives and sanctions for schools that progress or regress against their baseline performance. School site councils (SSCs) are in operation, with authority to hire the principal and to make decisions about curriculum, instruction, and the school budget. Major instructional changes were implemented in the early elementary grades, and model restructured high schools are being studied. Significant supplemental services (both academic and social) have been added. Overall, much progress has been made in putting new structures in place, though changes in practice evolve more slowly. The article identifies barriers to change and concludes that KERA's strategy is promising, but more focus should be placed on school-level uses of education dollars. SSCs have authority, but they should also be offered substantial guidance regarding which practices will most reliably promote learning.

Litigation, School Finance Reform and Aggregate Educational Spending

The United States has traditionally financed elementary and secondary education through property taxation. In the past two decades, litigation in many states has triggered educational reform movements designed to reduce the inequalities in educational expenditures across districts inherent in a property tax financed system. While these movements have been successful in reducing inequalities, there are some who argue that this movement has had adverse affects on the level of educational spending. In this paper, we use a panel data set across all the states from 1970-1990 to examine the role of litigation and educational finance reform in determining the level of education funding in a flexible, dynamic setting. This allows us to analyze the determinants of educational spending and to assess the differential impacts of litigation and reform movements across states. An important finding of our work is that litigation and reform have differential effects across the states, in some cases leading to increases while in other cases decreases in spending.

Systemic Reform, Equity, and School Finance Reform: Essential Policy Linkages

There is an unquestionable connection between systemic reform, equity, and school finance reform that requires the attention of educators and policymakers at all levels of government. Instead of disconnected reform initiatives prevalent in the 1980s, the 1990s is the beginning of a new era of educational reform that strives for coordination, integration, and cohesion around a clear set of outcomes. Within this framework of systemic reform, it is essential that policies leading the efforts be coordinated with school finance reforms that foster equity. This article analyzes the factors that must be considered when forging these linkages. The concepts of equity and adequacy are discussed along with their relationship to school finance litigation. Examples of linkages between systemic reform and school finance reform are examined. A policy linkage model is proposed that illustrates the connections between the policy-making bodies, systemic reform initiatives, and the various components of school finance reform. General recommendations for policymakers to consider when fostering reform initiatives are suggested.

Moving From Technological Possibility to Richer Student Learning: Revitalized Infrastructure and Reconstructed Pedagogy

The science fiction writer Arthur C. Clarke once noted, Any sufficiently advanced technology is indistinguishable from magic. So it is with the technological possibilities showcased at the 1996 Education Summit, which apparently bewitched the governors and business leaders in attendance. Americans have historically trusted the power of technology to solve problems and improve quality of life (Segal, 1996), and the Education Summit seems a compelling demonstration of America's belief in the power of the technological fix. Not only was it sponsored by IBM, but the agenda indicates that approximately one third of the Summit was devoted to demonstrations and discussions of small-scale, advanced educational technology projects and experiments (see National Education Summit, 1996a). Although there is no doubt that advanced technology suggests new possibilities for learning and teacher professional development, to date these possibilities have been explored in relatively small-scale, test bed projects. Few have survived the realities of largescale implementation in typical classrooms, and those that have report significant implementation problems (Ladewskii, Krajcik, & Harvey, 1994; Marx et al., 1994). Three final policy statements were issued at the end of the Summit. One was titled is the Equalizer in Educational Advancement and quoted Governor Tommy G. Thompson, chairman of the National Governors' Association (NGA) and the Education Commission of the States as saying Information technology is critical to improving the quality and diversity of (National Education Summit, 1996b). In addition, BellSouth Corporation CEO John Clendenin noted, We will be inadequate in our response to the competitive education challenge if we do integrate technology into the classroom (National Education Summit, 1996b). Although these documents acknowledge that technology is not a silver bullet, they also place the nation's hope for educational reform and improvement on only two ideas-higher standards and technology--among all other possibilities (e.g, school finance reform, teacher training, school/community relations, family involvement, curriculum development, etc.). This testifies to the appeal of technology for Summit participants. Technology is far less than a silver bullet. Indeed, it invariably creates new problems at the same time it may ameliorate others. Educational technology is often ill matched to the normative expectations and complex social interactions and behavior patterns that define school as we know it (Cuban, 1986; Hativa & Lesgold, 1996; Means, 1994). It is no accident that the most prevalent uses of computer technology--drill and practice instructional programs in elementary schools and word processing in secondary schools (Becker, 1994; Mergendoller, Sacks, & Horan, 1995)-are those that fit most cleanly within the existing educational context and require little or no change in standard operating procedures. The sights of the Education Summit, however, were set far beyond the humble image of computer as tutor or word processor. Instead, it emphasized the educational possibilities latent in real-time video conferencing; Internet access to worldwide multimedia information resources; longdistance collaboration with students, scientists, and teachers; digitized records of student work; simulations of workplace problem-solving experiences; mathematical and graphical modeling of realistic problems; and computer-based school/parent/community communication networks (see National Education Summit, 1996c). Although such pilot projects are enchanting in their potential, full-scale and school implementation face formidable barriers. If policymakers are to take seriously the commitment of Summit participants to take swift action, the following two issues will need careful consideration and a monetary commitment that is more than rhetorical.