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School Finance 101: Toward a Unified Conception of Equity, Equal Opportunity, and Adequacy

Below is an excerpt from my 2018 book Educational Inequality and School Finance . In many ways, I think this one passage is among the most important in the entire book. Below, I’ve bolded a few sections I think are especially important. This passage builds on a chapter Preston Green and I wrote for the original Handbook of Education Finance and Policy (2008) in which we tried to develop a unified framework for understanding equal educational opportunity and educational adequacy. I’ve written in recent posts how it is absolutely necessary that conversations around reforming state school finance systems be guided by clear and consistent principles, which can be coherently linked to both legal frameworks and empirical analyses and models.

To put it bluntly, many of the methods being used and recommendations provided to state legislatures by “consultants” proclaiming their approaches to be built on evidence – to advance equity and adequacy – simply do not, nor can they ever meet the demands of this conceptual framework (and thus, certainly don’t stand up to judicial/constitutional scrutiny where equal educational opportunity and educational adequacy are demanded).

I’ll write more about these connections in future posts.

From Chapter 2

Because of the vast inequities that exist across our public school systems, legal scholars, advocates, and analysts have sought to develop conceptual frameworks and empirical measures to illustrate sources, causes, and consequences of such disparities in order to influence policy makers and guide courts in evaluating student and family rights.[i] In the post-Brown era it became increasingly apparent that dismantling of segregation would be a long and incomplete process. Further, even where greater integration was achieved, significant disparities persisted in the quality of schooling and available resources both across schools within states and across states. While racial integration remained a major national policy concern, resolving persistent, deep resource disparities across schools and communities gained momentum in the late 1960s and early 1970s.

In 1979 Robert Berne and Leanna Stiefel synthesized conceptual frameworks from public policy and finance and evidence drawn from early court cases challenging inequities in state school finance systems to propose a framework and series of measures for evaluating equity in state school finance systems.[ii] Their important work laid the foundation for subsequent conceptual and empirical developments regarding equity measurement applied to preK–12 settings. They used two framing questions: Equity of what? Equity for who? On the “what” side, they suggested that equity could be framed in terms of financial inputs to schooling, real resource inputs (such as teachers and their qualifications), and outcomes.

Their framework, however, predated both judicial application of outcome standards to evaluate school finance systems and the proliferation of state outcome standards, assessments, and accountability systems first in the 1990s and then in the 2000s under No Child Left Behind. The “who” side typically involved “students” and “taxpayers”: a state school finance system should be based on fair treatment of taxpayers and yield fair treatment of students. Drawing on literature from tax policy, Berne and Stiefel adopted a definition of fairness that provided for both “equal treatment of equals” (horizontal equity) and “unequal treatment of unequals” (vertical equity).[iii] That is, if two taxpayers are equally situated, their tax treatment should be similar; likewise, if two students have similar needs, their access to educational programs and services or financial inputs should be similar. But if two taxpayers are differently situated (homeowner versus industrial or commercial property owner), then differential taxation might be permissible; and, if two students have substantively different educational needs requiring different programs and services, then different financial inputs might be needed to achieve equity.

In recent decades, research has shown the shortcomings of horizontal and vertical equity delineations. First, horizontal equity itself does not preclude vertical equity; equal treatment of equals does not preclude the need for differentiated treatment for some (nonequals). Second, vertical equity requires value judgments that lead to categorical determinations of who is unequal and how unequal their treatment must be in order to be “equitable.” Differences in individual students and population needs don’t always fall into neat boxes; rather, they run along continua.

Nonetheless, laws—federal and state statutes and regulations—often try to put things into neat boxes, and conceptions of equity often intersect with legal claims that one group is not receiving equitable treatment when compared with another, thus requiring courts to consider how to remedy those inequities. Significant federal laws enacted in the 1970s operate under this model, applying categorical declarations as to who is eligible for different treatment and frequently requiring judicial intervention to determine how much differentiation is required for legal compliance.[iv] But most children do not fall into the categories set forth under federal (or state) laws, even though there exist vast differences in needs across those children.

An alternative, unifying approach is to suggest that the treatment is not the inputs the child receives but the outcomes that are expected of all children under state standards and accountability systems. In this sense, all children under the umbrella of these state policies are similarly situated and similarly expected to achieve the common outcome standards. Thus, the obligation of the state is to ensure that all children, regardless of their background and where they attend school, have equal opportunity to achieve those common outcome standards.

The provision of equal educational opportunity requires differentiation of programs and services, including additional supports—vertical equityThis input (and process) differentiation is toward a goal of equal treatment (treatment = outcome goals) rather than unequal treatment (treatment = inputs). Further, if differentiation of programs and services is required to provide equal opportunity to achieve common outcomes, there exists a more viable legal equity argument on behalf of the most disadvantaged children not separately classified under federal statutes. Whether children fit neatly into the protected boxes identified in federal statutes does not alone determine whether those children require additional resources. The conception of equal opportunity to achieve common outcome goals has thus largely replaced vertical equity in the vernacular of K–12 equity analysis.[v]

The late 1980s and early 1990s saw a shift in legal strategy regarding state school finance systems away from emphasizing achieving equal revenue across settings (neutral of property wealth) and toward identifying some benchmark for minimum educational adequacy. Some advocates for this approach saw it as politically infeasible for states to raise sufficient state aid to close the spending gap between the poorest and most affluent districts, meaning that achieving spending parity likely required leveling down affluent districts. Thus, a focus on a minimum adequacy bar for the poorest districts would alleviate this concern and potentially garner political support of affluent communities that no longer had anything to lose.[vi] Bill Koski and Rob Reich explain that this approach is problematic in part because minimum adequacy standards are difficult to define; also, when some are provided merely minimally adequate education but others provided education that far exceeds minimum adequacy, the former remain at a disadvantage. Further, the adequacy of the minimum bar is diminished by increasing that gap, because education is, to a large extent, a positional good,whereby individuals compete based on relative position for access to higher education and economic prosperity.[vii]

Others have adopted a more progressive “adequacy” view that focusing on state standards and accountability systems could hold legislators’ feet to the fire to provide sufficient resources for all children to meet those standards, and state constitution education articles could be used to enforce this mandate.[viii] Under this more progressive alternative, equal opportunity and adequacy goals are combined. The state must provide equal opportunity for all children to achieve “adequate” educational outcomes. Funding must be at a sufficient overall level and resources, programs, and services must be provided to ensure that children with varied needs and backgrounds have the supports they need to achieve the mandated outcomes.

It remains important, however, to be able to separate equal opportunity and adequacy objectives both for legal claims and for empirical analysis. The adequacy bar can be elusive.[ix] State courts are not always willing to declare that adopted accountability measures and outcome standards determine the state’s minimum constitutional obligation. The state’s ability to support a specific level of adequacy may be subject to economic fluctuations.[x] Importantly, at those times when revenue falls short of supporting high outcome standards, equal opportunity should still be preserved: equal opportunity can be achieved for a standard lower than, equal to, or higher than the single adequacy standard.[xi]

The practical implications of modern equity, equal opportunity, and adequacy conceptions are that state school finance systems must strive to achieve two simultaneous goals: account for differences in the costs of achieving equal educational opportunity (to achieve desired outcomes) across schools and districts and the children they serve; and account for differences in the ability of local public school districts to cover those costs. The first goal relates primarily to the sorting of students and populations by needs across local schools and districts, warranting substantial differentiation of funding to provide equal educational opportunity, as well as to geographic differences in the costs of labor and other school operations. The second goal stems from the continued reliance on local property taxation to support that system. Because local jurisdictions vary widely in the revenue they can raise when applying common tax rates or effort, states must distribute aid to offset these discrepancies, to achieve dollar parity. 

[i] This section draws on collaborative work with Preston Green of the University of Connecticut.

[ii] Robert Berne and Leanna Stiefel, “The Equity of School Finance Systems Over Time: The Value Judgments Inherent in Evaluation,” Educational Administration Quarterly 15, no. 2 (1979): 14-–34, doi:10.1177/0013161X7901500205; Robert Berne and Leanna Stiefel, The Measurement of Equity in School Finance: Conceptual, Methodological and Empirical Dimensions (Baltimore: Johns Hopkins University Press, 1984); Robert Berne and Leanna Stiefel, “Concepts of School Finance Equity: 1970 to the Present,” in Equity and Adequacy in Education Finance: Issues and Perspectives, ed. Helen Ladd, Rosemary Chalk, and Janet Hansen (Washington, DC: National Research Council, 1999), 7–33.

[iii] Berne and Stiefel, The Measurement of Equity in School Finance.

[iv] Regarding children with disabilities, see Endrew F. v. Douglas County School District Re-1, 137 S. Ct. 29 (U.S. 2016). Regarding children with limited English language proficiency, see Issa v. School District of Lancaster, no. 16-3528 (3d Cir. Jan. 30, 2017).

[v] Bruce D. Baker and Preston Green, “Conceptions of Equity and Adequacy in School Finance,” in Handbook of Research in Education Finance and Policy, ed. Helen Ladd and Edward Fiske (New York: Routledge, 2008), 203–21; Bruce D. Baker and Preston C. Green III, “Conceptions, Measurement, and Application of Educational Adequacy and Equal Educational Opportunity,” in The Handbook of Education Policy Research, ed. Gary Sykes, Barbara Schneider, and David Plank (New York: Routledge, 2009), 438–52.

[vi] William H. Clune, “The Shift from Equity to Adequacy in School Finance,” Educational Policy 8, no. 4 (1994): 376–94.

[vii] William S. Koski and Rob Reich, “When Adequate Isn’t: The Retreat from Equity in Educational Law and Policy and Why It Matters,” Emory Law Journal 56 (2006): 545.

[viii] For example, Kansas’s constitution requires that the legislature “shall make suitable provision for finance of the educational interests of the state.” Those educational interests are articulated in standards adopted by the state board of education, which holds independent constitutional authority for the “general supervision of public schools.” Kansas courts have repeatedly held that the legislature’s obligation is to provide financing that grants all children equal opportunity to achieve those standards. See Gannon v. State, 368 P.3d 1024, 303 Kan. 682 (2016); Gannon v. State, No. 113,267 (Kan. June 28, 2016); Montoy v. State, 279 Kan. 817, 112 P.3d 923 (2005); and USD NO. 229 v. State, 256 Kan. 232, 885 P.2d 1170 (1994).

[ix] Avidan Y. Cover, “Is Adequacy a More Political Question Than Equality? The Effect of Standards-Based Education on Judicial Standards for Education Finance,” Cornell Journal of Law & Public Policy 11 (2001): 403.

[x] Michael A. Rebell, “Safeguarding the Right to a Sound Basic Education in Times of Fiscal Constraint,” Albany Law Review 75 (2011): 1855.

[xi] Baker and Green, “Conceptions of Equity and Adequacy in School Finance”; Baker and Green, “Conceptions, Measurement, and Application.”

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Bruce D. Baker

Bruce Baker is Professor and Chair of the Department of Teaching and Learning at the University of Miami. Professor Baker is widely recognized as the nation’s lea...