The Nature of the Problem

Linked patterns of disparity provoke serious questions about the way our schools are financed. Inequalities in per-pupil spending appear between schools, between school-districts, and between states. The disparities can be extreme. A 1992 study of the Los Angeles Unified School District (LAUSD) found that schools within the district varied by $1,000 in total direct expenditure per pupil per year (Espinosa and Ochoa 1992). In 1987, Mississippi's lowest-spending district spent $1,324 per pupil while its highest-spending district spent $4,018. In states, six rank among the nation's top ten for percentage of children in poverty; three of the remaining four lowest-spenders are among the nation's top twenty.

Reliance on local property taxes creates inequality in per pupil spending among districts. African American, Latino, Asian/Pacific American and Native American students are disproportionately concentrated in the lowest-spending schools. Their families, on average, own less wealth and have lower per capita and family incomes than white Americans. Populous states with substantial minority concentrations show the greatest differences in per pupil expenditure between school districts. In all states, low-spending districts tend to have high concentrations of poor people, particularly poor people of color (Taylor and Piche 1991). For example, in 1987, 95% of students in Texas' poorest school districts were Mexican American; in Los Angeles, the lowest-spending elementary school was 96% Latino, while the highest-spending elementary school was slightly more than 90% white (Espinosa and Ochoa 1992).

Not surprisingly, the pattern of spending disparity parallels educational experience and school outcomes. African American, Latino and Native American children, on average, achieve lower scores on standardized tests, drop out of school at higher rates, and enroll in smaller numbers in post-high school academic or vocational education programs. They are overrepresented in special-education programs, "low-ability" and remedial basic skills tracks; are more likely to experience early grade-level failure and retention; and are more likely to be over-age on entering high school. They are under-represented in programs for the gifted and talented, in "high ability" and college preparatory tracks and in advance placement courses.

Considerable evidence supports the proposition that spending differences translate into differences in educational quality. The study of Los Angeles schools found:

...structural variables that correlate strongly with schools' student achievement averages and that also correlate strongly with inequity of distribution of educational resources. (Espinosa and Ochoa 1992)

A 1990 national assessment of 8th grade mathematics programs by the National Assessment of Educational Progress (NAEP) revealed a striking connection between students' economic status and what is provided for them in their classrooms. While 84% of teachers in schools with economically middle- or upper-class students received all or most of the materials and resources they asked for, 59% of teachers in schools with the largest percent of poor students received only some or none of the instructional materials and resources that they sought (ETS 1991). And the students whose teachers reported an inadequacy of materials and resources achieved lower mathematics proficiency attainments than those whose teachers reported that their materials and resources were adequate. Higher spending districts had smaller classes; they had higher paid and more experienced teachers and higher instructional expenditures, while students in poor school districts were more likely to lack necessary instructional resources.

Low-spending schools often provide inferior versions of a state's "standard" educational program and curriculum. Further, they are disadvantaged in their ability to provide educational services and programs vital to at-risk students - and it is in low spending schools that poor, minority and limited English proficient students are concentrated. In spite of broad agreement among educators that pre-school child development programs, reading programs in the early grades, reduced class size, teachers with experience and with expertise in meeting special needs, and broad and in-depth curricula are particularly important for securing positive educational outcomes for poor and minority students, Taylor and Piche (1991) report that:

It is not unusual for economically disadvantaged students in these (poor) districts to enter school without preschool experience, to be retained in the early grades without any special help in reading, to attend classes with 30 or more students, to lack counseling and needed social services, to be taught by teachers who are inexperienced and uncertified, and to be exposed to a curriculum in which important courses are not taught and materials are inadequate and outdated.

Equity vs. Equality

Differences in wealth often result in property-poor districts taxing at higher rates than property-wealthy districts while producing far fewer dollars. While this raises legitimate questions of taxpayer equity, we limit ourselves here to student equity. Equity can be measured against Congress' policy of providing every person an equal opportunity to receive an education of high quality regardless of race, color, religion, sex, age, disability, national origin or social class. State governments, too, are bound by their individual constitutions to provide public education that meet criteria for quality and equity.

Per pupil expenditure is the most common measure by which schools, school districts and states are compared. Most efforts to achieve fiscal equity have sought equalize, within states, the per pupil expenditure of school districts to achieve what is referred to as "horizontal" equity. But only by assuming that all children are alike can equal per pupil expenditure alone be held to constitute student equity. Another concept - referred to as "vertical" equity - recognizes that children vary in their characteristics and their needs, and that their treatment is only equitable when their different characteristics are equally considered and their differing needs are equally met. Both states and the federal government have recognized that some students have special characteristics (such as disabilities, limited English language proficiency, special gifts or talents, learning disabilities, or "disadvantages" associated with additional services to meet those special needs.

Federal funding meant to help school districts meet special needs (for example, through Chapter 1, which provides funds to districts with students who live in poverty) assumes that horizontal, or per pupil expenditure equity, already exists and that federal dollars will translate into services and/or resources that some children need in addition to what their more affluent peers receive. Too often, however, per pupil expenditure inequity is so great that categorical funding not only fails in its intended purpose - it does not begin to compensate for the reduced quality of education available to at-risk students.

A further assumption implicit in equating equal per pupil expenditure with equity is that equal spending will be used to buy - or can buy - equal amounts of equally appropriate educational resources. Districts, of course, vary widely in the nature and extent of problems against which they must take action, salary scales, cost of living, etc. - all of which affect the amount of educational resources that a dollar can buy. While even cost-adjusted dollar amounts alone are a poor indicator of the education actually offered to students, federal or state funding formulas must be cost-adjusted as a step toward equity.

Programmic equity measures have been suggested as better indicators of equity than per pupil expenditure, both for federal assistance and for state funding formulas. By shifting the focus from available dollars to the educational resources; that those dollars actually buy, we come closer to seeing what students' actual learning opportunities are. National agreement on educational standards and on means to achieve them could be translated into state program standards, including the structures, services, curricula and implementation resources necessary to assure high-quality education. Such state standards would provide the bases for measuring equity as educational opportunity within states, within school districts and between states.

Program implementation equity measures reach even farther to ensure that effective programs and services of poor, diverse and at-risk students not only are planned and financed but that they are, in fact, provided. Probably the enacted curriculum (that to which students are actually exposed) is most strongly related to student learning. Teacher observations, surveys and questionnaires could assess curriculum enactment indicators. A critical measure would be the extent to which the curriculum is distributed across all student groups. Other measures might include the extent to which structural, material, and teacher and other personnel competencies required to implement the programs are actually in place.

Outcomes equity measures permit comparing the learning opportunities offered by different schools and districts in terms of their results. It permits assessing what matters most - the degree to which all students learn and develop. The national trend is away from norm-referenced tests and toward criterion-referenced tests that reveal a student's knowledge in a given content area. This move is more likely to provide student achievement data of increased reliability for judging schools by measuring students' actual abilities to conduct experiments, formulate a hypothesis and critically examine explanations of the way his/her world works. Yet, however student achievement is measured, achievement data must be disaggregated by advantaged and at-risk groups to prevent between-group disparities to be concealed within school or district averages. Such data is needed for accountability and for decision-making at the local, state and national levels.

Aligning Federal and State Efforts

Although the federal government has increased its involvement with public education over the past quarter century, state governments bear the major responsibility for educational policy and funding. The U.S. Constitution omits any discussion of education, making it an "implied" power of the states whose constitutions require their legislatures to maintain a system of "uniform" schools or to provide a "thorough and efficient" system of education. States, in turn, historically have let the bulk of revenue-raising and decisions about programming to local governments. However, extreme differences in wealth have caused great inequality among school districts, and, over the years, a need to achieve some uniformity has led to a growth of state regulation.

Federal leadership can help states to align their educational systems with national standards. Currently, most states regulate teacher certification, length of school day, curriculum, graduation standards, attendance policies and school construction. State aid for education has increased to approximately half of the total education funding with dollars allocated for two major purposes: lessening the spending disparities between districts and assisting schools to meet special needs through action allotments, categorical aid (for example, for special education, compensatory education, bilingual education), and capital improvements and construction. A clear federal policy emphasizing equity of state and local program support for all students can only strengthen the hand of states facing pressures to devise and implement more equitable school funding policies. Efforts to achieve educational equality have produced court challenges of the school funding systems in many states over the last twenty years. Since the landmark California case, Serrano v. Priest, fourteen states have had their school finance systems declared unconstitutional; currently nineteen states have school finance cases pending before the courts. Strong federal leadership for equity in school financing - based on formula that measure equity in terms directly related to real educational opportunity - can be an important lever assisting states to align educational resources with educational goals.

School Finance Systems

Current systems deny equal educational opportunity - at least as measured by educational resources - to children in property-poor districts in which children of racial minority and limited English proficiency are over-represented. In virtually all states, public schools are financed by systems that combine revenues form three sources: the federal government, local school districts, and stated education funds.

Federal Assistance provides slightly more than six cents of each dollar spent for public elementary and secondary education through grant programs authorized by Congress to help schools meet special needs, with most money going to Chapter 1.

Local Revenues provide slightly less than half of the educational dollars spent for public schools. Local governments tax property; the higher the assessed valuation of property in a district, the greater is its ability to raise funds. Given disparities in wealth, however property-poor districts may not be able to raise even the minimum revenues needed though they tax themselves at rates several times higher than wealthy districts

State Funding currently accounts for approximately half of the dollars spent on public education. Given the impact of the state on local revenue raising and local spending, the importance of state policy for equity in school financing is obvious. State aid is most often based on one or a combination of the following:

• Foundation grants are meant to guarantee a minimum level of per pupil dollars to school districts. The state determines a per-pupil foundation level and the minimum tax effort that school districts are expected ro make. Districts that tax at the required rate yet fail to raise the state-determined per pupil minimum receive "foundation grants" to make up the difference. In most states, however, the overall state funding level is insufficient - and the local wealth differences are too great - for foundation grants to produce equity. In some cases, the increased wealth disparity between districts, coupled with the state's failure to keep up with inflation and increased costs, has increased between-district inequity over time.

• Power equalizing reforms seek to guarantee equal revenue yield for tax effort regardless of assessed property wealth. It is implemented through formulas that establish a minimum revenue yield for a given tax effort. Since usually there is nothing to prevent a wealthy district from taxing itself above the required rate, wealthy districts are still able to provide higher per pupil expenditures than poor districts.

While recognizing state primacy in public education, Congress clearly has established its role of assisting states and local districts to meet the needs of at-risk students and of achieving educational equity for students of poverty and minority backgrounds. Over the years, Congress has authorized programs to assist children who face equity barriers, targeting the poor, those of limited English proficiency, children with disabilities, Native Americans, migrant children, the homeless, those discriminated against because of gender, and others with special needs. The Civil Rights Act of 1964 provided legal remedies, including lawsuits and the withholding of federal funds, to prevent educational discrimination because of race or national origin - protections that have been extended to women and girls and to other students with disabilities. It is clear, however, that the Civil Rights Act has yet to bring about funding equity within school programs. For example, schools still routinely provide unequal finances for physical education and athletics of males and females. Though Congress has been aware of the need for alignment of state efforts with federal assistance, its piecemeal approach to reform and inadequate monitoring of compliance have not provided sufficient stimulus and assistance to accomplish satisfactory state and local reform.

Congressional concern for equity, as expressed in its regulation governing Chapter 1, assumes that "horizontal" equity already exists and seeks through its assistance to achieve "vertical" equity. Recipients of federal funds are expected to "supplement" rather than "supplant" regular state and local funds, which are supposed to be "comparable" to those provided in schools that do not receive Chapter 1 assistance. Taylor and Piche (1991) assert:

The clear aim of the comparability requirement is to assure that services provided with state and local funds to educationally deprived children attending Chapter 1 school are approximately equal to services to children in non-Chapter 1 schools, before the addition of the Chapter 1 funds... (Unfortunately), the fact is that the mandate has been applied only to deal with intradistrict inequity.

But too often, federal categorical funds are used in poor districts to meet needs routinely met through state and local expenditures in more affluent districts. Espinosa and Ochoa (1992) found that within the Los Angeles Unified School District (within which per pupil spending varied by more than $1,000):

Latino, Afro American and Asian American majority schools were disproportionately allocated fewer general funds than White majority schools. Although the larger Latino majority and LEP (limited English proficient) predominant schools received increases in federal and state categorical fund, those were accompanied by loss of general base funds and the net effect was lower funds per pupil.

They further report:

Ethically impacted schools received less base funds while using categorical funding to complement their schools budget. Categorical funding drove a compensatory remedial curriculum meant to supplement, but that in fact substantially replaced, critical thinking and higher-level skills offerings needed for meaningful career preparation.

Both federal and state concepts of equity must go beyond dollars to include measurements of what dollars buy, and must expand the notion of "comparable" services to reach defined "basic vital services," or a core educational program for all students. While there is debate about the exact connection between school spending and student outcomes, there is considerable recognition of the importance of certain practices and services for the success of at-risk students. An identified array of "basic vital services" would permit equity measurement of real educational opportunities. Such an array of services might include:

• Pre-school child development programs;
• Parent outreach programs;
• Social services counselling and coordination;
• Teacher-quality assurance programs (recruitment, development and reward);
• Moderate class-size policies;
• Effective pedagogies and practices;
• Structures and practices to assure equity of access to the best curricula and development opportunities offered.

In addition, state standards should be put in place to ensure the safety and livability of the school premises that our children are by law obligated to attend.

Costing-out effective programs with regard for cost of living, scale of economy, prevailing wage, etc., would translate state program standards into the funding levels needed to implement them under different conditions within states. It could also provide comparability data on which to base federal inter-state equalization measures. Federal support of funding equalization based on programmatic equity could strengthen states' ability to make the hard choices that will ensure that each district has the funds necessary to provide equitable services while retaining the right to spend as it may choose.

More than two decades of experience have shown that educational equity for poor, minority and other at-risk students cannot be achieved by a patchwork of "compensatory" services added on to a fictional "mainstream" education that serves all children equally. Equity requires finally providing what we have for too-long pretended exists - the resources and the will to provide high quality educational opportunity to whatever child enters through a public school's doors. Congress and each state must consider the equity impact of education legislation and use all available resources to restructure schools so that the concept of a "level playing field" becomes a reality for all children. Such a "level playing field" will be characterized by schools that implement comparable educational services that include pre-school programs, reading programs in the early grades, moderate class size, counseling and social services; that ensure the experience and certification of teachers; and that demonstrate high quality in the range and breadth of curricula.

Integrating Educational Equity

State eligibility requirements for federal programs such as Chapter 1 of Title VII could encourage systemic restructuring of state education systems through two important effects: eligibility requirements could require state adoption of standards for state restructuring , and they could help state legislators to "sell" hard equity choices to representatives of conflicting interests. State eligibility requirements for federal assistance programs could require:

• Clear, high standards for what all students should know and be able to do;

• Plans that assure a "level playing field" of vital services comparable between districts as well as between schools that receive or do not receive federal assistance funding;

• Assurance of assessment and testing practices that provide:
  • information on individual progress toward meeting state high standards;
  • information on the impact of federal assistance in enabling students to reach high standards;
  • information on individual schools' progress in enabling students to meet high standards;

• Plans to include a family-education component in all federal educational assistance programs;

• Plans for investing a part of assistance funds for professional and school development;

• Assurance that states will provide for and encourage "whole school" projects to restructure and upgrade all elements of an individual school's programs, with priority given to schools with concentrations of children targeted for assistance (e.g., poor, limited English proficient);

• Plans to meet the health, safety and social services needs of all children;

• Assurance of substantial help to schools that do not make progress.

Achieving Inter- and Intra-District Funding Equity

States receive hundreds of millions of dollars (Impact Aid) to compensate school districts for losses in local revenues or in expenses caused by federal activity within their jurisdiction. States that meet federal criteria for school funding equalization are permitted to treat portions of their Impact Aid funds as local revenues, deducting them from state funding allocations. The Impact Aid state-qualifying criteria proposed by Odden (1993) provides a model for state school funding policies that would go far towards achieving inter- and intra-district funding equity within states. Such policies would:

• Move beyond the concept of dollar inputs as the measure of educational equity to one that includes educational processes, curriculum, instructional delivery and student outcomes as necessary objects of equalization;

• Measure fiscal inputs as:
  • total current revenues form local and state sources; and
  • total current operating expenditures;

• Include educational processes and student outcomes in "horizontal" equity assessment to ensure that all students receive equal exposure to the intended curriculum and equal distribution of scores on achievement tests as well as equal shares of fiscal resources (such as total state and local general revenue per pupil and total expenditures per pupil);

• Analyze "vertical" equity to ensure the equitable treatment of different characteristics of:
  • children (e.g., for mental disability, limited English proficiency, disadvantages of poverty);
  • school districts (e.g., isolation, scale of economy, energy costs, ethnographic change); and
  • programs (e.g., vocational education, laboratory science, advanced placement courses).

Ensuring Adequate Funding For All Schools

Even if school funding were equitable within and between districts, the economic variations between states would inevitably result in great educational differences between states. Congress could help states to achieve educational equity (including inter-state equity) by directly enacting national school finance legislation. Just that approach was proposed in a 1990 bill which proposed to apply th 14th Amendment by offering all children a fair chance for a good education. Known as the "Fair Chance Bill", 3850 illustrates a possible framework for mandating equity of opportunity for all children to obtain a high quality education. Such a mandate would:

• Require the Secretary of Education to review each state educational finance system to determine its fiscal equitability as a condition for eligibility to receive federal funds administered by the U.S. Department of Education;

• Require that the states include educational processes and educational outcomes as objects of equalization;

• Allow non-compliant states a reasonable period to submit plans to comply;

• Distribute federal funds allocated to a state found ineligible because of non-compliance directly to local educational agencies within the state, on a basis determined by the Secretary to carry out the purposed for which the funds were authorized;

• Authorize the appropriation of such funds as may be necessary to carry out a program to assure an equitable opportunity for a high-quality education to children in all the states;

• Require the Secretary to determine an equitable and appropriate formula allocating funds among the states in order to:
  • Move all states up to the funding level determined to be necessary to assure a high-quality education for all children;
  • Give greater funding to those states that provide adequate programs to meet the special needs of economically disadvantaged, physically disabled, and non-English proficient children;
  • Measure the tax-effort for education of each state in terms of its fiscal capacity and reward those states making a greater effort.

While such legislation would provide a tremendous impetus to state finance equity reform and would create an important resource for states with economic difficulties, it does not appear to be on the current agenda of political likelihood. However, the goals of H.R. 3850 do reflect a valid and unsentimental vision of what it will take to make equitable and excellent education a reality in the United States.