Why and With What Results
Albert Cortez, Ph.D.
School finance reform has been pivotal to IDRA’s work to improve educational opportunities for all students. It was initially our primary focus, and the organization has since expanded its reform efforts to include extensive work in the areas of professional development for teachers and administrators, supporting expanded parent involvement, and encouraging improved student engagement and graduation in schools. Promoting and sustaining school finance equity however has remained a constant area of focus in IDRA’s 36-year history.
This article examines the following critical questions about school finance equity and offers lessons learned during the course of our long involvement in this area: Why is funding considered so crucial for providing excellent and equitable education for all children? Does money really make all that much of a difference in the educational opportunities provided to students, and does it convert to improved outcomes? If it does, then how does one best achieve equitable funding and how do states best pay for such reforms? What options are available in states and communities that refuse to modify state funding plans that would ensure all students in all schools have equitable opportunities?
Recognizing the Need for an Educated Citizenry
It seems a no-brainer to understand that providing excellent and equitable education requires some level of investment. It is a given that operating schools requires expenditures for school buildings, for textbooks and instructional materials, for teachers and administrators, and for the staff needed to provide a wide array of support as well as to keep records, provide counseling, and maintain school property.
While there is no disagreement about the need to provide funding to support public education in the United States, there has always been dissension about how much funding to provide, for what purposes, and out of what pockets. Concerns about the need to have an educated citizenry in a political system that allocated much of its power to the electorate led to an early agreement to support public education.
The lack of consensus on the role that the federal government should play in that critical area was reflected in its exclusion from the U.S. Constitution. No doubt an article committing the federal government to support public education in all states would have resulted in a very different educational landscape than the patchwork of state-supported systems that exists today.
The exclusion of an education clause in the U.S. Constitution has resulted in the subsequent creation of state-based and state-controlled systems of public education and, with them, state-specific school funding plans. Research on these systems reveals that no two systems is the same (Augenblick, et al., 2001) with each reflecting the unique evolution of these plans within the contexts of each state’s unique history.
Attendance Requirements and Inequity
In many states, public education was not an option available to all students. As states began to adopt compulsory attendance requirements, they also adopted processes for sorting students, such as designating separate school systems for White children and Black children in the South. In the Southwest, a variant created separate school environments for Latino students.
Texas is one example of that evolutionary process. Describing the early funding plans in the 1970s, legislative researchers note that Texas did not enter the modern era of school funding until 1949 (Texas House Research Organization, 1990; Walker and Kirby, 1986). Spurred by a strong education governor, a commission recommended major revisions to the heretofore locally-controlled enterprise and recommended the establishment of a "minimum foundation program of state and local financial support" (Cárdenas, 1997).
Known as the Gilmer-Aiken Act, this basic funding plan served as the primary vehicle for the support of Texas public schools for a few years until legal challenges to inequalities in public school funding caused the state to review its funding system.
Like many of its counterparts, Texas was plagued by very large differences in educational spending per student. Many of the disparities were attributable to vast differences in the amount and value of taxable property within school systems, which ranged from a few hundred dollars to millions of dollars in taxable revenue per pupil.
The state’s failure to recognize – let alone to equalize – these funding disparities would eventually be challenged in federal court. The historic case of Rodríguez vs. San Antonio ISD resulted in a 5-4 ruling that despite the observation that the Texas system was "chaotic and unjust," it did not violate federal equal protection requirements.
The state’s successful defense was short lived: in 1987 a state court found that the unequal school finance plan did in fact violate the Texas constitution. In the historic Edgewood vs. Kirby case (which came to be known as Edgewood I), the state’s supreme court required Texas to modify its school funding plan in a way that provided every school district equal return for equal tax effort, instituting a process for equalizing school funding throughout the state (Cárdenas, 1997).
Other Considerations for Funding
In response to these issues, states developed funding mechanisms that recognized varying program costs. They used different strategies ranging from simple add-on funding to tying special program costs to funding for regular programs via weighting systems (where programs such as compensatory education were provided an allocation based on percentage of regular program costs) (Augenblick, 2001; Verstegen, 1988). Though an improvement, a major flaw in many of those state adjustments was the failure to collect and use actual add-on cost data to guide funding levels.
In addition to issues related to student counts and special needs, funding plans grew increasingly complex by incorporating adjustments for such issues as school district size, which impacted both operating expenses and efficiency.
Another funding issue that has confronted state leaders is how to deal with costs of constructing and renovating school facilities. Some states play little or no role in supporting local school construction, while others cover substantial portions of building costs. Some states incorporate equalization features that consider local district wealth factors, while others fund facilities outside an equalized system (ECS, 2009).
Impact on Student Achievement
The impact of school funding on student achievement has long accompanied debates about the amount and the type of funding provided to local schools. Research by Eric Hanushek (1997; 1996) has argued that funding variations have no impact on student achievement, while Ronald Ferguson (1991) and Thomas Nechbya (2004) found that the amount of funding notably impacts the quality of schooling available to students in different school districts.
An interesting observation in Texas is that some of the state’s wealthy districts had originally proposed that money did not make much difference but later complained that limited funding did not enable them to provide an adequate level of education for their students, especially their special needs students.
An outgrowth of decades-long debates on equitable funding of public schools is an effort to ensure that schools provide "adequate levels of funding" for all students in a state (Augenblick, et al., 1997). The emergence of adequacy studies led to the filing of a new round of court challenges based on the level of funding adequacy produced by a state funding plan. These were particularly effective in increasing funding in states (mostly in the South) that had previously provided minimal state funding for their public schools (Rebell, 2008).
Recent federal attention fueled by requirements in the No Child Left Behind Act have led to increasing federal funding for the nation’s public schools. What began as supplemental support targeted for students with special needs has grown to increasing federal allocations that help cover costs of facilities, energy, technology and other issues of interest to federal officials.
While making a notably larger investment in public education, the federal percentage of total school allocations still accounts for less than 10 percent of most state public school budgets, though that amount may vary from state to state.
Funding for public education also has been challenged with the emergence of vouchers, which provide direct allocation of monies to private institutions. A radical departure from the goals of public education, these approaches have been vigorously opposed by public school advocates and the majority of the general public. Public school advocates affirm that the way to fix public schools is to focus attention on fixing public schools, rather than diverting resources to private enterprises.
Emerging research indicates that despite big promises, voucher programs have not resulted in dramatic improvements in achievement (Rouk, 2000), and at best, after years of implementation, have proven to be inconclusive (Gill, et al., 2001). At a symposium convened by the Institute for Education Sciences in Washington in 2005, a panel of experts continued to show that the evidence of voucher effectiveness at improving achievement was inconclusive.
As long as states, communities and federal agencies provide funding for public schools, we can expect continuing debates on what to fund, how much to fund and who will be responsible for covering those costs. As long as funding remains a state responsibility, IDRA believes that equity and excellence also is primarily a state responsibility.
On the other hand, while we understand the evolution of state education funding plans, we believe it is perhaps an appropriate time to consider adoption of a new federal constitutional amendment stating that equal educational opportunity is a birthright of every child living in the United States.
In an age when a student educated in one locale may grow up, work and raise a family anywhere in the country, it is not unreasonable to assure that an excellent and equitable education is accessible to all.
IDRA’s president, Dr. María "Cuca" Robledo Montecel, has proposed imagining "a future in which the color of a child’s skin, the language a child speaks and the side of town a child comes from are no longer considered barriers to a great education and a great life" (2009).
In the closing paragraphs of Savage Inequalities, Jonathon Kozol exposes the effect of unequal public school funding systems, noting: "From the top of the hill… the horizon is so wide and open… one wonders what might happen to the spirits of these children if they had a chance to breathe this air and stretch their arms and see so far… Standing there by the [river]… one is struck by the sheer beauty of this country, of its goodness and unrealized goodness, of the limitless potential that it holds to render life rewarding and the spirit clean. Surely there is enough for everyone within this country. It is a tragedy that these good things are not more widely shared" (1992).
When we establish a system of fair funding for schools, it will send the message that indeed every child is capable and is worthy of receiving the best quality education possible. Excellent schools will no longer be just for the families with the greatest financial advantages. With fair funding, everyone benefits by having schools that are excellent and equitable.
Augenblick, J.A. The Status of School Finance Today – Education Finance in the States: Its Past, Present and Future, ECS Issue Paper (Denver, Colorado: Education Commission of the States, 2001).
Augenblick J.A, and J.L. Meyers, M. Burk Anderson. Equity and Adequacy in Education (Princeton, N.J.: Princeton University Press, 1997).
Augenblick, J.A., and J.S. Hansen, J.W. Guthrie. Education Finance in the States: Its Past, Present and Future (Denver, Colorado: Education Commission of the States, 2001).
Cárdenas, J.A. Texas School Finance Reform: An IDRA Perspective (San Antonio, Texas: Intercultural Development Research Association, 1997).
Education Commission of the States. Finance, Facilities: What States are Doing, web site (Denver, Colorado: Education Commission of the States, 2009).
Farr, J.S., and M. Trachtenberg. "The Edgewood Drama: An Epic Quest for Education Equity," Yale Law and Policy Review (1999). Vol. 17, No. 2.
Ferguson, R.F. "Paying for Public Education – New Evidence on How and Why Money Matters," Harvard Journal of Legislation (1991). Vol. 28.
Fernández, R., and R. Rogerson. "Equity in Resources: An Analysis of Education Finance Systems," Journal of Political Economy (University of Chicago Press, 2002).
Gill, B.P., and P.M. Timpane, K.E. Ross, D.J. Brewer. Rhetoric Versus Reality: What We Know and What We Need to Know About Vouchers and Charter Schools (Santa Monica, Calif.: RAND Corporation, 2001).
Hanushek E.A. "Assessing the Effects of School Resources on Student Performance," Education Evaluation and Policy Analysis (Summer 1997). Vol. 19, No. 2, pp. 141-164.
Hanushek, E.A. “School Resources and School Performance,” Does Money Matter: The Effects of School Resources on Student Achievement and Adult Success, Gary Burtless ed. (Washington, D.C.: Brookings Institution, 1996).
Imazecki, J., and A. Reschovsky. "School Finance Reform in Texas – A Never Ending Story," State Aid and the Pursuit of Educational Excellence, John Yinger (Cambridge, Mass.: MIT Press, 2003).
Kozol, J.A. Savage Inequalities – Children in America’s Public Schools (New York: Harpers Perennial, 1992).
Maryland Department of Legislative Services. Review of Selected State Responses to Facilities Survey, presentation to the Task Force to Study Public School Facilities (Anapolis, Md.: December 2003).
McQuire K.C. State and Federal Programs for Special Student Populations (Denver, Colo.: Education Commission of the States, April 1982).
Nechbya, T.J. "Prospects for Achieving Equity and Adequacy in Education," State Aid and the Pursuit of Educational Excellence, John Yinger (Cambridge, Mass.: MIT Press, 2004).
Oden, A., and J.A. Augenblick, V.E. Philip. School Finance Reform in the States, 1976-1977: An Overview of Legislative Actions, Judicial Decisions and Public Policy Research (Denver, Colo.: Education Commission of the States, 1976).
Rebell, M.A. "Educational Opportunity and the Courts," Phi Delta Kappan (February 2008) Vol. 89, No. 06, 432-439.
Robledo Montecel, M. IDRA web site (San Antonio, Texas: Intercultural Development Research Association, 2009).
Rouk, U. "Vouchers: Yea or Nay," Insights on Education Policy, Practice, and Research (Austin, Texas: Southwestern Educational Development Laboratory, September 2000).
Texas Association of School Boards. A Guide to Texas School Finance (Austin, Texas: Texas Association of School Boards, August 2008).
Texas House Research Organization. An Introduction to School Finance (Austin, Texas: Texas House of Representatives, February 1990).
Texas Legislative Budget Board. Foundation School Program Fiscal and Policy Studies (Austin, Texas: Texas Legislative Budget Board, March 2009).
Texas Legislative Budget Board. Financing Public Education in Texas Kindergarten through Grade 12 Legislative Primer, third edition (Austin, Texas: Texas Legislative Budget Board, October 2001).
Verstegen, D.A. School Finance at a Glance (Denver, Colorado: Education Commission of the States, 1988).
Walker, B.D., and W. Kirby. The Basics of Texas Public School Finance (Austin, Texas: Texas Association of School Boards, 1986).
Albert Cortez, Ph.D., is the director of IDRA Policy. Comments and questions may be directed to him via e-mail at
[©2009, IDRA. This article originally appeared in the IDRA Newsletter by the Intercultural Development Research Association. Every effort has been made to maintain the content in its original form. However, accompanying charts and graphs may not be provided here. To receive a copy of the original article by mail or fax, please fill out our information request and feedback form. Permission to reproduce this article is granted provided the article is reprinted in its entirety and proper credit is given to IDRA and the author.]