ERIC Identifier: ED350717
Publication Date: 1992-12-00
Author: Renchler, Ron
Source: ERIC Clearinghouse on
Educational Management Eugene OR.
Financial Equity in the Schools. ERIC Digest, Number 76.
The publication in 1991 of Jonathan Kozol's "Savage Inequalities" helped
awaken educators and the general public alike to the grim realities of school
funding inequities. Most of the literature on school finance prior to the
appearance of Kozol's book reported on the growing gap between the educational
haves and have-nots in terms of statistical analysis and reviews of court cases.
"Savage Inequalities" took readers inside classrooms for a first-hand look at
different schools in separate school districts often located only a few blocks
apart yet having wide disparities in per-pupil expenditures.
Kozol's descriptions of underfunded schools--overcrowded, dilapidated
classrooms, understaffed faculties, insufficient numbers of textbooks, and
science labs with no equipment--stand in stark contrast to our image of what our
nation's schoolrooms should be like. Although Kozol's accounts of funding
disparities most often involve innercity schools, inequity in funding among
schools exists in rural and suburban areas as well.
HOW WIDE IS THE GAP?
Although the collection of data on
school funding is still an inexact science, there is plenty of evidence that
gross disparities exist in per-pupil spending between wealthy and poor school
districts within states. For example, in 1989-90, the poorest school district in
Texas spent $2,150 per pupil while the wealthiest spent $14,514, or 6.75 times
more, per pupil. New York's wealthiest district spent $19,238 per pupil in
1989-90; its poorest district spent only $3,127 per pupil. In most states, two
to five times more per pupil is spent in the wealthiest districts than in the
poorest districts (Harp 1992).
Some attempts have been made to explain away the disparities by excluding the
top 5 or 10 percent of the wealthiest and poorest schools in funding
comparisons. However, the fact remains that within virtually every state, some
children's education is funded at levels several times greater than those of
other children simply because they reside in different districts.
The statistics on per-pupil expenditures across states raise other serious
questions about the equity of educational opportunity offered in the U.S. During
the 1989-90 school year, a student residing in Arkansas could expect $2,423 to
be spent on his education while a student living in Alaska enjoyed an investment
of $7,411 (Odden and Picus 1992). National averages for per-pupil spending based
on other geographic factors also point to funding inequities. According to one
recent report, an average of $5,200 per pupil was spent on education in large
urban schools compared to $6,073 per pupil in suburban schools. Rural school
districts also spent less per pupil ($5,476) than suburban districts (The
Council of Great City Schools 1992).
WHY DO FUNDING INEQUITIES EXIST?
Although states are
individually responsible for school funding, they have traditionally turned
control of school finances over to local school districts. This has created a
system of de facto economic determinism. Wealthy districts with high property
values fund their schools at high levels with monies generated from what are
often very low property tax rates. Districts with low or declining property
values, on the other hand, must make do with low levels of revenue generated
from extremely high property tax rates.
To counter this built-in inequity, the legislatures in most states have
devised funding plans that guarantee all schools minimum funding on a per-pupil
basis, thus providing each school with revenue for a basic level of education
for all students. However, these "foundation" or "equalizing formula" plans have
not eliminated the gross disparities in funding among schools (Harp 1992,
Verstegen 1990), since districts are still free to add their
property-tax-generated revenues to the foundation amounts. Ideally, restructured
financing plans will tend to "level up" the poorer districts to funding levels
that approximate those in wealthier districts.
Most school funding litigation brought against states during the past two
decades has focused on the area of financial inequity and the attendant lack of
equal educational opportunity engendered by these plans. For a review of funding
strategies and the results of litigation testing them, see Odden and Picus
WHAT HAVE THE COURTS RULED?
Between 1968 and 1990,
twenty-seven court cases contesting school funding plans were filed. In about
half those cases, the courts overturned financing plans on the basis that they
violated either the education clause or the equal protection clause of the
state's constitution. About twenty-five new cases were filed in the early 1990s.
Sixteen cases are still outstanding, and cases are currently being developed in
five additional states (Odden and Picus 1992).
The courts have consistently overturned state funding plans, including those
in Texas, New Jersey, Kentucky, and Montana; however, clear guidelines for
remedying the fiscal inequity have not been given. Consequently, legislatures in
these states have had to devise new plans that may have to face a second or even
third round of court tests to assess their legal status.
IS THERE A LINK BETWEEN PER-PUPIL EXPENDITURES AND STUDENT ACHIEVEMENT?
One central premise in litigation challenging the fairness
of school finance systems is that equalization of funding will lead to
equalization of educational opportunity, which, in turn, will lead to improved
academic performance of students in lower funded districts. Research into the
relationship between school expenditures and student achievement has not yet
provided us with a clear understanding of where we can most effectively invest
our educational dollars. Should educational funds be invested in smaller class
size, staff development, improved instructional materials, or teacher
compensation? Hanushek (1989) reviewed 187 studies and found that school
expenditures per se were not generally related to improved student performance.
As Odden and Picus (1992) point out, such findings do not negate the importance
of financial equity; they indicate that certain types of investment of
educational funds have not been shown to lead to higher levels of student
achievement. "The important message from this research," Odden and Picus say,
"is that if additional education revenues are spent in the same way as current
education revenues, student performance increases are unlikely to emerge. The
message is that the way money is used matters. New revenues need to support new
strategies in order to produce significant student achievement gains."
WHAT DOES THE FUTURE HOLD?
One important area of funding
equity that has received limited attention is financial equity across states.
Even if parity in funding is attained at the state level, equity in funding for
education across states will still not be achieved (Barton and others 1991).
Because the power to provide education is a state's constitutional right, the
federal government has not been involved in establishing and promoting policies
that create equitable educational funding for all children regardless of their
state of residence. State concerns about increased federal control of education
confound this problem. At present, only a few government officials and policy
analysts have called for more action at the federal level (Odden and Kim 1992,
Achieving financial equity among schools at the state level promises to be
one of the central focal points in education during the 1990s. Because most
court challenges to school funding plans have been notoriously slow in being
resolved, immediate change is unlikely. The involvement of state legislatures in
constructing complex funding mechanisms that shift monies from some school
districts to others makes the attainment of financial equity politically risky
(McCarty and Brazer 1990, Yudoff 1992). However, if research and policy studies
continue to improve, and if the courts continue to uphold the principle that all
children deserve equal educational opportunity as expressed through equality in
school funding, the 1990s promises to be a decade of slow but inevitable
movement toward more equitable distribution of educational resources.
Barton, Paul E., and others. THE STATE OF
INEQUALITY. POLICY INFORMATION REPORT. Princeton, New Jersey: Educational
Testing Service, 1991. 35 pages. ED 340 716.
The Council of Great City Schools. NATIONAL URBAN EDUCATION GOALS: BASELINE
INDICATORS, 1990-91. Washington, DC: The Council of Great City Schools, 1992.
Hanushek, Eric. "The Impact of Differential Expenditures on Student
Performance." EDUCATIONAL RESEARCHER 18, 4 (1989): 45-51. EJ 390 070.
Harp, Lonnie. "School-Finance Suits Look Beyond Money to Issues of Quality."
EDUCATION WEEK 11, 39 (June 17, 1992): 1-2.
Kozol, Jonathan. SAVAGE INEQUALITIES: CHILDREN IN AMERICA'S SCHOOLS. New
York: Crown Publisher, 1991. 262 pages.
McCarty, Therese A., and Harvey E. Brazer. "On Equalizing School
Expenditures." ECONOMICS OF EDUCATION REVIEW 9, 3 (1990): 251-64. EJ 416 484.
Odden, Allan R., Ed. RETHINKING SCHOOL FINANCE. San Francisco: Jossey-Bass
Inc., 1992. 379 pages.
Odden, Allan R., and Lori Kim. "Reducing Disparities Across the States: A New
Federal Role in School Finance." 260-97. In RETHINKING SCHOOL FINANCE, edited by
Allan R. Odden. San Francisco: Jossey-Bass Inc., 1992.
Odden, Allan R., and Lawrence O. Picus. SCHOOL FINANCE: A POLICY PERSPECTIVE.
New York: McGraw-Hill, 1992. 363 pages.
Verstegen, Deborah A. "Invidiousness and Inviolability in Public Education
Finance." EDUCATIONAL ADMINISTRATION QUARTERLY 26, 3 (August 1990): 205-34. EJ
Yudoff, Mark G. "School Finance Reform: Don't Worry, Be Happy." NOLPE Notes
27,5 (May 1992):1-6. EJ number not yet assigned.