The Equality of Public School District Funding in the United States: A National Status Report

Public education is the largest area of state and local government spending in the United States, accounting for almost one-fifth of direct state and local government expenditures in 1996 (Statistical Abstract of the United States 1999, table 504). Given the enormous resources involved and--more importantly--the critical private and societal benefits that education produces, the distribution of educational opportunities across communities has generated considerable interest among policy makers, the public, and the courts. This article takes advantage of national data sets to examine the equality of education funding across school districts in 49 states for fiscal years 1992 and 1995. (1) It presents rankings of each state's funding equality and explores factors that may be related to the level of equality within states and to changes across years. The focus of this article is the equality of revenues that are available to school districts within states, one of a number of broad goals of education financing systems. In recent years, policy initiatives and court cases in many states have focused on other goals, such as eliminating the relationship between local property wealth and education spending or achieving an adequate level of funding for all students. Still, ensuring equality of resources across school districts (often referred to as "horizontal equity") remains a fundamental benchmark in evaluating state education funding systems, and it continues to be an important concern of the public and the broad education community. Comparing the national averages of a number of intrastate equity measures, our results show that the equality of the distribution of education revenues improved slightly between 1992 and 1995. Relative equity rankings for most states changed little between 1992 and 1995, however. Our analysis of univariate equity measures suggests that states with fewer school districts relative to students tended to have a more equal distribution of education dollars than did states with more districts, although states with a greater number of districts had somewhat larger improvements across the two years. We also found a weak but significant relationship between intrastate equity and median revenues for education, with lower-revenue states tending to have a more equal distribution of resources. Finally, states with higher proportions of revenues provided by state governments generally showed a more equitable distribution of resources than did states that were more dependent on local revenues. The Role of Equity in School Finance Concerns over the equality of educational opportunity date back well over 40 years. In 1954, the U.S. Supreme Court's decision in Brown v. Board of Education (347 U.S. 483 [1954]) overturned the long-standing system of separate educational institutions for whites and African Americans, ruling that "separate but equal" schools are inherently unequal. The country's awakening to the perils of unequal access to employment and education helped bring about the enactment of three important pieces of federal legislation related to education: the Civil Rights Act of 1964, the Economic Opportunity Act of 1964, and the Elementary and Secondary Education Act of 1965. The latter act created new federal funding (Title 1) for "at-risk" pupils, while the Civil Rights and Economic Opportunity acts more broadly addressed poverty and discrimination in society. The Civil Rights Act, in particular, is important for proponents of educational equity because it required a study of the factors leading to unequal educational opportunity. A team of researchers led by James Coleman conducted the study, which produced a long line of quantitative research examining the factors, including dollars and the resources they buy, that might affect student achievement (see Coleman et al. 1966; Hanushek 1972, 1981, 1989; Murnane 1975; Hedges, Laine, and Greenwald 1994). While the debate about whether (and how) money matters to educational achievement continues among researchers (Hanushek 1989; Hedges, Laine and Greenwald 1994), courts in virtually every state have addressed the constitutionality of funding disparities across districts within states. …