A Comparison and Analysis of School Finance Practitioners

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8300333

Rinaldi, Robert Thomas

COMPARISON AND ANALYSIS OF THE RESPONSES OF SELECTEDPUBLIC SCHOOL FINANCE PRACTITIONERS AND ACADEMICIANSREGARDING CURRENT CONCEPTS, ISSUES, AND UNDERSTANDINGSOF PERTINENCE TO THE FINANCING OF THE PUBLIC SCHOOLS

The Ohio State University PH.D. 1982

UniversityMicrofilmsInternational 300 N.Zeeb Road, Ann Arbor, MI 48106Copyright 1982

byRinaldi, Robert Thomas

All Rights Reserved


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C O M P A R I S O N A N D ANALYSIS O F T H E R E S P O N S E S O F S E L E C T E DPUBLIC S C H O O L FINANCE PRACTITIONERS A N D ACADEMICIANSR E G A R D I N G C U R R E N T C O N C E P T S , ISSUES, A N D U N D E R S T A N D I N G SO F P E R T I N E N C E T O T H E F INANCING O F T H E PUBLIC S C H O O L S

DISSERTATION

Presented in Partial fulfillment of the Requirementsfor the Degree Doctor of Philosophy in theG raduate School of The Oh io State University

B yRobert T. Rinaldi, A.B., M.A., M .E d.

The Oh io State University1982

Reading CommitteeJames L. Collins, P h .D .Walter G . Hack, Ph.D .W . Frederick Staub, Ph . D .Thomas M . Stephens , Ed.D .

Approved B y

U>. fy/ieJii.'.LAdviserFaculty for EducationalAdministration


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This investigation is dedicated to all of the childrenwho have attended or currently attend the public schools of the UnitedStates, and particularly to those children in attendance who have beenor currently are being denied equal educational opportunity because ofthe inadequacies an d inequities historically associated with the financing of American Education.

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A C K N O W L E D G M E N T S

The writer wishes to express sincere appreciation to thegraduate commit tee: Dr. James L. Collins, Dr. Walter G . Hack, Dr.Thomas M . Stephens, and Dr. W . Frederick Staub, Adviser, for theirhighly valued assistance throughout this investigation.

Special appreciation isexpressed to Billie J. Rinaldi, forher extended personal support and assistance in the preparation ofthe manuscript.

Special recognition is also extended to Dr. Thomas M . Stephens,and to his course in Psychoeducat ional Diagnosis given in 1969 at theUniversity of Pittsburgh.

The writer further wishes to acknowledge the leadership an dassistance of Dr. G odfrey D . Stevens, adviser during his originaldoctoral program matriculation at the University of Pittsburgh.

A final special note of thanks is extended to Dr. W , FrederickStaub an d Dr. Walter G . Hack for. their invaluable time, persistentencouragement, an d tremendous support.


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VITAM arch 8, 1942 Born: N e w York City, N e w York1963 A.B., St. Michael's CollegeWinooski Park, Vermont1964-1968 Elementary and Secondary TeachingExperience1 9 6 6 . . . . . . . . . . M . A . , F a i r f i e l d U n i v e r s i t yFairfield, Connecticut1968 M.Ed., University of N e w HampshireDurham, N e w Hampshire1968-1971 Doctoral Fellow, Special Educat ionan d Rehabilitation, University ofPittsburgh, Pittsburgh, Pennsylvania1969-1970 Assistant Director of Education, YouthD evelopment Center, Newcastle, Pennsylvania1970-1971 Vocational Program Consultant, PittsburghPublic Schools, Pittsburgh, Pennsylvania1971-1973 State Director of Special Educat ionPierre, South D akota1973-1980 Assistant Superintendent, Baltimore CityPublic Schools, Baltimore, M ary land1979-1982 Research Associate, Academic Faculty forExceptional Children, The Oh io StateUniversity, Columbus, Oh io1980-1982 Assistant Director, Tri-State M idwestRegional Resource Center, The Oh io StateUniversity, Columbus, Oh io

PUBLICATIONS"The School Health Team an d School Health Physician." American Journalof Piseases of Chi1dren, Vol. 29, February 1975.

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"Deinstitutionalization an d Beyond. " Bailiwick, M aryland StateCouncil for Exceptional Children, Spring 1976."Urban Schools an d P.L. 94-142, O ne Administrator's Perspectiveon the Law." Perspectives on the Implementation of the Educationof All Handicapped Act of 1975, Richard A. Johnson and Anthony P.Kowalski (eds.): The Council of G reat City Schools, Washington,D .C. 1976 ."The IEP (Individualized Education Plan) as a Child Find Instrument."Implementation of the Individualized Education Program, Anthony P .Kowalski (ed.): The Council of G reat City Schools, Washington, D .C .1976."Early Identification of Handicapped Children through a FrequencySampling Technique." Exceptional Children, Vol. 43, N o. 7, April 1977."A Field Study of a Frequency Sampling Technique in the Early Identification of Handicapped Children: A Second Year Report." Child StudyJournal, State University of N e w York at Buffalo, Vol . 9, N o. 3, 1979."Apprising Parents an d the Community of School Programs for SpecialChildren: Support Services." American School Health Association,Stephen J. Jerrick and Warren Shaller (eds.), Summer 1979."Extended School Year for the Handicapped: Legal Requirements an dEducational Efficacy." Journal of Special Education, (in press), 1982."The Process of Multi-Factored Assessment for Handicapped Students."Theory Into Practice, The Oh io State University, Spring 1982.

U N P U B L I S H E D M A N U S C R I P T S"Political Implications an d Distributional Consequences of SchoolFinance Reform, 1970-80." June 1980."From Regression to Progression - Property Taxation - Past, Present,an d Future." August 1981.

F IELDS O F S T U D YM a jo r Fields:

Teaching, Curriculum, an d Supervision, A.B., M . A .Major Area, Science Educat ionProfessor M ichae l D . Andrew, Adviser

Exceptional Children, Administration an d Supervision, M .E d.Professor Thomas M . Stephens, AdviserProfessor G odfrey D . Stevens, Adviser

Educational Administration, P h , D .Professor W . Frederick Staub, Adviser

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TABLE O F C O N T E N T SPage

DEDICATION iiA C K N O W L E D G E M E N T S iiiVITA ivLIST O F T A B L E S xLIST O F F I G U R E S xiChapterI. I N T R O D U C T I O N T O T H E P R O B L E M 1

Rationale 6Purpose an d Statement of the Problem 10Null Hypothesis 11Definition of Terms 12Design of the Study 14

Population Samples - M ethod of Research 14Da ta Gathering - Instrumentation 15Statistical Procedures - Da ta Treatment 17Limitations an d Delimitations of the Study 18

Significance of Research, 19II. R E V I E W O F T H E LITERATURE 21

The History an d Social Context of PublicSchool Finance an d Public School Finance Reform 23Origins of School Finance Theory, 1900-1950 23Equality an d Adaptability 29

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TABLE O F C O N T E N T S (Cont'd)Chapter Page

Local Control an d Individual Worth 32Legislation an d Litigation, 1950-1982 39

Concepts, Issues, an d Understandings of Pertinenceto the Financing of the Public Schools 59The Politics an d Progress of Public SchoolF inance Reform 59The Legal Basis for Equity in Public SchoolF inance an d its Relationship to EqualEducational Opportunity 70A Proposed Conceptual Framework for PublicSchool F inance Policy Criteria 81

III. R E S E A R C H M E T H O D O L O G Y 90Rationale for Research D es ign 91

D evelopment an d G rouping of SchoolFinance Statements 91Selection and G rouping of SchoolFinance Experts 99U se of the Preselection Panel 102

Statistical Treatment 10 4Statistical Analysis System 104U se of Preselection Panel D ata 106U se of Practitioner/Academician Da ta 107Tables, Figures, an d Appendixes 109

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TABLE O F C O N T E N T S (CONT 'D)Chapter PageIV. P R E S E N T A T IO N O F T H E F I ND I NG S 110

Sampling Results IllPreselection Panel Item Responses IllPractitioner/Academician Item Responses 125Practitioner/Academician Item Subgroup Responses 12 9Variances in Practitioner/Academician Responses 133Summary of Data 14 4

V . S U M M A R Y , C O N C L U S I O N S , IMPLICATIONS 157Summary 158

Purpose an d Statement of the Problem 15 8Limitations an d Delimitations 16 0Procedures an d M ethodology 16 1Sources of Error. 16 5Analysis of Patterns of Responses..: 16 6

Conclusions 175Questions O ne, Two, Three, an d Fou r 17 5Null Hypothesis 17 9

Implications 18 0Dissemination of Information 181Subsequent Research 18 2Professional D evelopment 18 3

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TABLE O F C O N T E N T S (CONT 'D )Page

BIBLIOGRAPHY 18 5A P P E N D I X E S

A. E X P E R T P R E S E L E C T I O N P A N E L S U R V E Y I N S T R U M E N T 201B. MEAN, S T A N D A R D DEV IAT ION , S T A N D A R D E R R O R , A N DV A R I A N C E F O R P R E S E L E C T I O N P A N E L R E S P O N S E S T OSEVENTY-FIVE S U R V E Y ITEMS 209C. F R E Q U E N C Y , C U M U L A T I V E F R E Q U E N C Y , P E R C E N T A G E , A N DC U M U L A T I V E P E R C E N T A G E F O R P R E S E L E C T I O N P A N E LR E S P O N S E S T O SEVENTY-FIVE S U R V E Y ITEMS 212D . PRACTITIONER/ACADEMICIAN S U R V E Y I N S T R U M E N T 222E . MEAN, S T A N D A R D DEV IAT ION , S T A N D A R D E R R O R , A N DV A R I A N C E F O R O N E G R O U P A N D F I V E S U B G R O U P S O FPRACTITIONER R E S P O N S E S T O F I F T Y - F I V E S U R V E Y ITEMS 23 0F. F R E Q U E N C Y , C U M U L A T I V E F R E Q U E N C Y , P E R C E N T A G E , A N DC U M U L A T I V E P E R C E N T A G E F O R PRACTITIONER R E S P O N S E ST O F I F T Y - F I V E S U R V E Y ITEMS 233G . MEAN, S T A N D A R D DEV IAT ION , S T A N D A R D E R R O R , A N DV A R I A N C E F O R O N E G R O U P A N D F I V E S U B G R O U P S O FACADEMICIAN R E S P O N S E S T O F I F T Y - F I V E S U R V E Y ITEMS 245H. F R E Q U E N C Y , C U M U L A T I V E F R E Q U E N C Y , P E R C E N T A G E , A N DC U M U L A T I V E P E R C E N T A G E F O R ACADEMICIAN R E S P O N S E ST O F I F T Y - F I V E S U R V E Y ITEMS 248I. C O M P O S I T E MEAN, S T A N D A R D DEV IAT ION , S T A N D A R D E R R O R , A N DV A R I A N C E F O R O N E G R O U P A N D F I V E S U B G R O U P S O FPRACTITIONER/ACADEMICIAN R E S P O N S E S T O F I F T Y - F I V ES U R V E Y ITEMS 26 0J. C O M P O S I T E F R E Q U E N C Y , C U M U L A T I V E F R E Q U E N C Y , P E R C E N T A G E ,A N D C U M U L A T I V E P E R C E N T A G E F O R PRACTITIONER/ACADEMICIANR E S P O N S E S T O F I F T Y - F I V E S U R V E Y ITEMS 26 3K. ANALYSIS O F V A R I A N C E O F PRACTITIONER/ACADEMICIAN R E S P O N S E ST O O N E G R O U P A N D F I V E S U B G R O U P S O F F I F T Y - F IV E S U R V E Y ITEM S. .. 27 5L. VERTICAL F R E Q U E N C Y B A R G R A P H C O M P A R I S O N S O F PRACTITIONER/CADEMICIAN R E S P O N S E S T O F I F T Y - F I V E S U R V E Y ITEMS 28 8M . G L O S S A R Y O F PUBLIC S C H O O L FINANCE T E R M S 344

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LIST O F TABLESTable Page

1. Number an d Percent of Returns for PreselectionPanel M embers an d Practitioner/Academician Groups 1122. Summary of Seventy-Five Low, M edium, and HighCurrent Topical Relevance Responses of FourteenPreselection Panel M embers 1143. Class Limits, Frequency , an d Item Classificationfor Relevance Level Responses of FourteenPreselection Panel M embers 1154. Bimodal Distribution Patterns of PreselectionPanel Member Survey Item Responses 12 25. Summary of Practitioner/Academician ResponsesIndicating Highest Levels of Agreement/D isagreement with Identified Survey I tems 1306. Significant Differences in Practitioner/Academician Responses to Individual Survey

Items and Subgroups of I tems at .01 an d .05Levels of Confidence 1347. Analysis of Variance of Practitioner/AcademicianResponses to Identified Subgroups of Survey I tems 1368. Bimodal an d Atypical Frequency Distributionsof Identified Survey I tems 1399. Summary Practitioner/Academician Responses to ThreeOptionally Specified School Finance Issues 141

10. Item-by-Item Summary of Relevance an d AgreementLevels, an d Significant Differences among PreselectionPanel M embers, Practitioners, and Academicians 145

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LIST O F F I G U R E S

Figure Page1. A Chronology of Public SchoolF inance Theory ,. 382. A State-by-State Summary of EqualizationApproaches an d School Finance Litigation 483. N ine Cell School F inance IssueConceptual Framework 864. Equity/Efficiency Subgroup of SchoolF inance Statement Survey Items... 945. Equal Educational Opportunity Subgroupsof School Finance Statement Survey I tems 956. Local Control/Property Taxation Subgroupsof School F inance Statement Survey I tems 967. State Aid-to-Education Subgroup of SchoolFinance Statement Survey I tems 978. Alternative Financing Subgroup of SchoolF inance Survey I tems 989. Histogram an d Frequency Polygon of RelevanceLevel Responses of Four teen PreselectionPanel M embers 117

10. Additional School F inance Survey I temsSuggested by Preselection Panel M embers 12 4

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ChapterII N T R O D U C T I O N T O T H E P R O B L E M

Local tax paying ability has historically been the majordeterminant of social policy for public education (James, 1961, 1971).H o w much local communities have been willing to spend on publiceducation has not been determined directly by social preferences, butb y the ability to generate revenue through real property values of alocally administered property tax system. Property taxation beganwith local levies upon land an d cattle in the American Colonies. Withthe Industrial Revolution came the proliferation of property (capital),including intangible property, confounding the application of auniform tax to property irrespective of form. Because of this anarrower view was adopted at the beginning of the twentieth century,establishing property taxation as a selective tax on real estate,business equipment , an d inventory.

The share of the property tax in total tax revenue has declinedfrom 5 0 % to 1 0 % in the past 80 years, with revenues accruing to localgovernments, imposed and collected locally (Halstead, 1978). Thereis a wide variation in rates an d th e definition of property amongpolitical subdivisions an d often in assessments within political subdivisions. Unlike other taxes such as sales and corporate income,

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the property tax is direct and visible personally viewed by thepublic as a matter of local control, an d is particularly subject tocriticism during the inflationary periods. With the property taxproviding the bulk of public school financing, and with significantwealth disparities among political subdivisions, there has beenconsiderable variation in per pupil funding an d overall equity ofschool finance among local school districts. These variations havehistorically been a matter of concern in the study of school finance(Cubberly, 1905, 1916; Frasier, 1922; James, 1958, 1961 ; James, Thomas,& Dyck , 1963; Johns & Morphet, 1952, 1960; Mort, 1926 ; Mort, Reusser,& Polley, 1950; Pittinger, 1925; Strayer, & Haig, 1923; an d Swift,Fletcher, & Harper, 1922).

With the significant increases in public school enrollmentfollowing World War II nd the Korean Conflict, taken together withthe increasingly higher costs of educational personnel costs andservices, wealth disparities among school districts increased andfiscal equity for equal educational opportunity became politicallyfocused (Coons, Clune, & Sugarman, 1970; Hack & Woodard, 1971; James,1971; Jencks, 1972; an d Wise, 1960). School finance litigation wasinitiated in both State and Federal Courts. Although the SupremeCour t ruled against use of the U .S . Constitution as legal remedy forschool finance reform (Rodriguez v. San Antonio School District1973), school finance litigation proceeded on state constitutionalgrounds with considerable success (Robinson v. Cahill, 1973; Serranov. Priest, 1971, 1976). The findings of these cases, particularly the


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3Serrano cases in California, popularized the term "fiscal neutrality,"an d generated the significant efforts made toward school financereform during the decade of the 1970's.

The theoretical concept of fiscal neutrality, established toprovide courts and/or economists with a measurable way to identify therelative relationship of per pupil expenditure to school districtwealth, seems to have been marginally effective in defining and/orreducing disparities in educational expenditures across local politicalsubdivisions (Carroll, 1979; Carroll & Park, 1979). Although manystates have changed from Strayer-Haig foundation formulae to Serrano-based power equalization formulae to improve equity, results have beenmixed. In some states, such as Ohio, the change in formula hasaggravated problems of revenue disparity (O h io Comnittee of Twenty,1979). In the 22 states that enacted reforms in school finance systems,there has been a growth in statewide total spending an d districtrevenues. However, districts serving disproportionate numbers ofpoor children have not significantly benefited. Also, property taxrates in poorer local districts have increased in being overburdenedrelative to districts with higher income populations (Augenblick, 1979;Carroll, 1979; Odden & Augenblick, 1980; and Odden & Vincent, 1976).

School finance reform in the 1970's has solved some problems an dcreated others. General aid has been strengthened with some levelingup of less wealthy districts; equity has increased through a reductionof the linkage between per pupil expenditure level and local districtwealth; an d an expansion of local district fiscal capacity beyond


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4property wealth has begun (Adams, 1980; Berne & Stiefel, 1979; Odden& Augenblick, 1980; an d Odden, Berne, & Stiefel, 1979). M oreover ,states have attempted to enhance traditional foundation programs,develop power equalization formulae, or use a combination of suchstate funding plans to strengthen aid an d improve equity (Callahan& Wilken, 1976 ; an d O dden, 1978). Notwithstanding such gains, certainpolitical limits to school finance reform have been identified. G ivencontinued reliance on the local property tax system, even includingimprovement in state support to improve equity, local tax payingability and the local perceptions of tax paying ability remain thedeterminants of social policy for public education.

The definition of fiscal neutrality, the equity consequences ofthe definition, an d the subsequent relationship to equal educationalopportunity are critical issues of school finance that were extensivelyinvestigated in the decade of the 1970's. Does the equal division ofshares per pupil to school districts assure the equal distribution ofshares within school districts? Does equal distribution of equalshares account for the differential cost of education for pupils withexceptional learner characteristics, or for poor pupils in propertypoor school districts? Is the district power equalization formulasuperior to the traditional Strayer-Haig-Mort foundation formula, orare both subject to the political limits of school finance reform?What is the relationship of fiscal neutrality to equal educationalopportunity? These are some of the pertinent issues to be addressedan d further clarified by school finance practitioners an d policymakersin the decade of the 1980's.


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5Equity in school finance systems, and the equity consequences of

school finance reform are complex concepts with numerous proposedquantifiable standards reconmended in the literature (Berne &Stiefel, 1979; Carroll, Cox, & Lisowski, 1979; Friedman & Wiseman,1978; Johns & M agers, 1978 ; an d Odden & Vincent, 1976). The abundanceof quantifiable data an d empirical work in the field in the 1970'sseems to have confused an d confounded some issues, an d at leastpartially obscured the need for further conceptual development. Ina field of investigation as clearly politically sensitive an d controversial as the financing of public education through the localproperty tax system, the comparison an d analysis of qualitativeresponses of school finance practitioners an d academicians to currentconcepts, understandings, an d issues of pertinence in the field is alogical step toward delineation an d resolution of issues.

It s truly not difficult to elaborately document the failure ofschool bond issues over the last decade, nor to explain the significance of grass roots movements such as Proposition 13 as barometersof local willingness and/or ability to pay for public education. Taxrelief is clearly a higher priority than school finance reform, withlittledoubt that reform will not occur in lieu of property tax relief.State legislators are very aware of this circumstance, an d with thenotion that voters tend to equate the cost of education with the localproperty tax rate (Cohen, Levin, & Beaver , 1973, Feldstein, 1975;Levin, 1977; an d Odden, 1976). The political implications an d distributional consequences of school finance reform in the 1970's provide


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6much data, an d much room for further conceptual development in effecting equalization of funds for equal educational opportunity. Thisprocess involves the identification and application of equal proceduraltreatments in politically sensitive areas. The dependence of publicschool financing on the local system of property taxation greatlyimpacts distributional parities for funding public education acrosslocal subdivisions. Current analysis tends toward the desirabilityof financing education apart from rather than a part of a local propertytax system.

The opinions of practitioners an d academicians in the field ofschool finance may vary markedly regarding concepts, understandings,an d issues. It ay be that the school finance reform movement of the1970's represents a further attempt to resolve the libertarian v.egalitarian dilenma as a dominant value conflict in our society (James,1971). Regardless of this possibility, the efficiency or adequacy ofschool financing should not be subject to unresolved questions an dinadequate conceptual development in the field. Necessary trade-offsamong equity goals are difficult to derive in a public policy contextwithout a professional language that clearly defines terms an d providesagreed upon contexts with which to identify alternative policy issues( Be rne & Stiefel, 1979; Garms, 1980; Hyman, 1978; Odden & Augenblick,1980; and Pincus, 1977).

RationalePolicymaker, educational personnel, an d interest group representa

tive questionnaires, polls, an d surveys regarding school finance issues


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7have become increasingly prevalent in the literature. An opinionsurvey, conducted by the School Finance Project of the AdvisoryCommittee on Intergovernmental Relations (ACIR, 1981), sampled overtw o thousand practitioners an d policymakers regarding general schoolfinance issues. O f ten groups surveyed, on e group of state an d localschool finance administrators was included. O ther groups includedprincipals, teachers, school board members, executives, and legislators.Funding was identified as on e of the three most important problems ofeducation today b y 75 percent of all respondents. A school financeissues questionnaire, developed by the Educational Commission of theStates (ECS, 1980), sampled over 250 state policymakers, educationalpersonnel, an d interest group representatives. Respondents answereda forced choice questionnaire of 36 questions ranking relativeimportance of school finance issues in the coming decade. Basic schoolfinance reform an d changes in the tax structure for education werereported as the tw o top education finance concerns for the 1980's.

Thorough review of the literature, including a computer-assistedsearch of ERIC and E S E R S document files, has revealed the absence ofcurrent data regarding the opinions of school finance practitionersan d academicians on current concepts, understandings, an d issues ofpertinence of financing of the public schools. The opinions of schoolfinance administrators at state departments of education have not beenassessed an d evaluated. The opinions of professors of school financewithin departments an d faculties of educational administration have notbeen assessed an d evaluated. Interestingly, professors of school


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8finance, many of w h o m serve as members of state and/or local schoolfinance commit tees, are generally not included as policymakers orpractitioners in the field. Similarly, the opinions an d recommendations of past an d current major contributors to the literature in thefield have not been assessed an d evaluated.

Among the critical issues regarding public school financinginclude applicable free market economic principles an d topical areasparticular to public education. The incidence of real property taxrevenue in local political subdivisions and the relative adequacy/inadequacy of this revenue source for financing the public schoolsare of primary concern. The collection of available revenue an d theallocation of monies in an d among local school districts within a stateare also significant considerations. James (1961, 1963) noted thatschool finance investigators generally ignored free market economicprinciples, including variable demand for local education attributableto local choice and property tax incidence, and have assumed a universaldemand for education. This assumption leads directly to concerns ofequity of financing an d equal educational opportunity juxtaposed tovariable demand and variable ability to pa y at the local level.

The relative impact of litigation on the efficacy of schoolfinance reform is also a critical issue of current topical interest.The legal context of the contemporary school finance reform movementbegan with landmark decisions in California (Serrano v. Priest, 1971,1974, 1975, 1976) an d N e w Jersey (Robinson v. Cahill, 1973). At theFederal level, an d in a 5-4 decision (Rodriguez v. San Antonio


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9School District 1973) , education was determined not to be a " fundamentalinterest" of the federal government. This decision of the U.S.Supreme Court has not seemed to slow the pace or clarify the directionsof litigation in the various state courts. As of December, 1981,litigation on public school finance had been initiated in 31 states(Education Commission of the States, 1981).

M ost recently in N ew York State (Levittown v. Nyquist, 1981,1982) school finance litigation evolved to include a comprehensiveset of school finance issues. This case, affirmed at the appellatelevel an d reversed by the N ew York State Court of Appeals (highestcourt level), begins with the Serrano simple neutrality issue an dincludes other issues to be considered in equity measurements.Variable costs for special pupil populations, variable purchasingpower of the education dollar, municipal overburden (high needs forlocal noneducat ion expenditures competing for limited resources), an dattendance-based pupil counts (in districts with low attendance-to-membership ratios) are the new equity considerations presented foranalysis by school finance academicians an d practitioners.

The proliferation of judicial review an d legislative action,combined with the plethora of quantitative research in public schoolfinance, provides ample justification for qualitative analysis. Theperceptions an d opinions of school finance practitioners an d academicians are simply not known and/or perhaps closely held. The development of a profile of responses of school finance practitioners an dacademicians to current concepts an d issues of pertinence to the


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10financing of the public schools is a logical next step of considerableresearch value.

Significant similarities an d differences in the opinions of schoolfinance practitioners and academicians regarding school finance concepts an d issues should be assessed an d reported. Such data will beuseful in a field where the major contributors to the literature haveidentified the need for conceptual development, an d which, since itsbeginnings 75 years ago, has continuously wrestled with the equitabledistribution of available fiscal resources.

Purpose an d Statement of the ProblemPurpose. The purpose of this study is to compare and analyze the

responses of school finance practitioners an d academicians, particularly including: (1) state level school finance administrators; an d(2) school finance academicians an d researchers, to current concepts,understandings an d issues of pertinence to the financing of the publicschools. Those school finance issues presented for analysis willinclude the identification an d interaction of school an d publicfinance issues presented in the professional literature as of significance to the process and progress of school finance. The presentationof contemporary school finance issues in appropriate historical context,an d in a forced choice format, is designed to provide specific insightto current conceptual development in the field, an d to provide datafor comparison of practitioner an d academician groups.

Statement of the problem. The present investigation providesevidence helpful in solving the research problems as presented in thefollowing four questions:


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1. To what extent do the responses of school financepractitioners an d academicians agree on currentconcepts, understandings, an d issues of pertinenceto the financing of the public schools?

2. To what extent are there discrepancies amongresponses of school finance practitioners an dacademicians as to school finance concepts, issues,an d understandings presented?

3. Are there statistically significant differencesamong responses of these tw o population samples,regarding their levels of agreement or disagreementwith current concepts, understandings, an d issues ofpertinence to the financing of the public schools?

4. What are the implications of the patterns ofresponses of school finance practitioners an dacademicians, regarding their levels of agreementor disagreement with current concepts, understandings, and issues of pertinence to the financing ofthe public schools?

The problem area being addressed directly by this investigation is thecurrently perceived need for continued conceptual development in theschool finance area.

Null HypothesisFrom the stated purpose an d problem, the following null hypothesis

has been formulated. There are no statistically significant differences


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1 2among the responses of school finance practitioners and academiciansto current concepts, understandings, an d issues of pertinence to thefinancing of the public schools, as presented in a multiple itemforced answer format: HQ: X - J = X g = 0 where ITj = school financepractitioners and " X g = school finance academicians.

Definition of TermsThe terms included in the statement of the problem and in the

stated questions are operationally defined here to clarify their meanings as intended for the purposes of this study. Definitions for allschool finance terms used in this study and in the school financesurvey instrument are in c o m m o n usage in the area. A glossary of theseterms is included as Appendix M of this paper (p. 344).

School finance practitioners: School finance specialists andadministrators at the state level, including department an d bureauchiefs, budget officers, legislative analysts, etc., with organizational responsibilities for budget preparation an d projection, revenueestimation, an d fiscal accounting and disbursement procedures. Keymembership in the practitioner group will include Assistant Superintendents of F inance in State D epartments of Education.

School finance academicians: Professors of EducationalAdministration and/or School F inance at colleges an d universities withpublic school administrator training programs. Key membership in theacademician group also includes researchers an d policy developers atnational level educational policy and/or school finance agencies an dorganizations (i.e., Educational Commission of the States, Advisory


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13Committee on Intergovernmental Relations, Rand Corporation, SchoolF inance Project, etc.).

School finance issues: Issues pertinent to the financing of thepublic schools, including concepts an d definitions of adequacy andequity, an d the qualitative an d quantitative analysis of such conceptsan d definitions. Key issues include (1) the ingredients of state aid-to-education formulae; (2) relationships of equity, efficiency, an dliberty considerations; an d (3) local, state, an d federal governmentalrelationships an d responsibilities.

School finance equity: The principle of equity in school financeincludes the answers to four questions ( Be rne & Stiefel, 1979):(1) W h o are the different groups for w h o m school finance systems shouldbe equitable? (students, parents, taxpayers, teachers, etc.); (2) Whatservices or resources should be equitably distributed? (actual dollars,physical resources, i.e., teachers/books, price adjusted dollars,etc.); (3) What are the different equity principles to be used todetermine fair distribution? (horizontal equity = equal shares perpupil, vertical equity = unequal shares per pupil based on exceptionalpupil characteristics, i.e., handicaps/disadvantaged/poverty, equalopportunity principle = relationship-type measures, i.e., propertywealth per child/average revenues per child); an d (4) H o w should thedegree of equity be measured? (relative adequacy/ inadequacy of variousdispersion measures).

School finance adequacy: The principle of adequacy in schoolfinance includes the determination of expenditures per pupil necessary


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14to provide appropriate instruction, local fiscal capacity an d effort,an d state an d federal aid. Current expanded measures of fiscalcapacity include a combination of property wealth and personal income.A fully funded foundation or equalization state program proportionallysupplements local fiscal capacity uniformly measured. With generalequalized state aid an d special pupil/special district categoricalstate aid, both adequacy an d equity goals can be addressed.

School finance reform: An y recommended methodology for definingan d improving equity an d adequacy of public school financing in localdistricts, including equity measures, distribution formulae, an d statesystems of financing the public schools. The term also refers to thechanges legally required in state educational finance systems as aresult of litigation.

D esign of the StudyPopulation samples - M ethod of research. T w o major groups will

comprise the study sample. The first major group includes state levelschool finance officials (Assistant Superintendent, School F inanceOfficer, School Budget Analyst, etc.). The second major group includesprofessors of school finance at colleges and universities, an d otheracademicians researchers in school finance at regional or nationalresearch and information centers. These will be classified as practitioner an d academician groups. The practitioner group will includefrom 40 - 50 respondents; an d the academician group will include from50 - r 60 respondents. State assistant superintendents for schoolfinance in state departments of education an d professors of school


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15finance at colleges an d universities with professional preparationprograms are the primary target population.The method of inquiry used for this study specifically involvesa conceptual issues survey instrument which provides a basis for thecomparison an d analysis of school finance expert responses. Qualitative research is undertaken to gain a clarity of understanding ofcurrent thought in the field of school finance an d regarding schoolfinance reform. Data collection is designed to facilitate interpretation according to political* legal, economic, and educational dimensionsimpacting the process an d progress of school finance through the decadeof the 1970's. This is exploratory research designed to find out whatschool finance experts think about the issues presented; what differences might exist among their responses to current concepts, issues,an d understandings; an d the significance an d implications of patternsof responses. As such, this research is inquiry oriented an d highlyappropriate for subsequent validation or rejection of hypotheses(Kerlinger, 1973).

Data Gathering - Instrumentation, A nonstandardized school financesurvey instrument has been developed an d will be mailed to the tw o majorpopulation groups of the sample. Practitioner respondents have beenselected primarily from the Education Finance Center of the EducationCommission of the States' mailing list of key state school finance officers. This listing includes state assistant superintendents of schoolfinance an d program an d budget directors, analysts, an d officers in all50 states an d U.S. territories. Academician/researcher respondents an d


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16additional practitioner respondents have been selected from the currentAmerican Education F inance Association mailing list of professionalmembership.

Prior to the final selection of survey instrument items, a firstlisting of school finance statements will be presented for review toa preselection panel of school finance experts. These experts arenationally prominent an d widely published school finance academiciansan d researchers. Their ratings of the current topical relevance ofschool finance statements will provide a perspective of current expertopinion, help focus the content of the survey instrument, an d provideinsight to the consensus of leadership in the school finance area. Theuse of the preselection panel is also intended to simplify data collection an d increase the percentage of respondents to the survey. Expertpanelists will also be asked to suggest other items or areas ofinterest which in their opinion have not been adequately treated.

Instrumentation for the school finance survey begins with a 75item instrument (See Appendix A, p. 201 ). A group of 12 to 18 expertpreselection panel members rate each item (school finance statement)as high (H), medium (M), or lo w (L) in current topical relevance. Thesecond stage of instrumentation includes the highest rated 55 items(school finance statements) in a second instrument (See Appendix D,p. 222). The tw o major population groups of the study (40 - 50 schoolfinance practitioners; 50 - 60 school finance academicians) will rateeach item on a six point scale representing their level of agreementor disagreement with the concept or issue presented.


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17This type of rating scale represents an ordinal measure of the

underlying cont inuum of agreement/disagreement for each group. Suchratings suggest equal intervals (Kerlinger, 1973) an d fix a cont inuumin the mind of the respondent. Therefore-, the assumption was madethat an interval of on e exists between each point on the rating scale.As a result, data yielded from the survey instrument meet the requirement for interval data in parametric statistical analysis.

Statistical procedures - Da ta treatment. The SASStatisticalAnalysis System (SAS Institute, 1978) will be utilized for computer-assisted processing of survey data. This analysis includes the following calculations and data arrays:

(1) Frequency, cumulative frequency, percentage, andcumulative percentage of high, medium an d lo wrelevance responses of expert preselection panelmembers to 75 school finance items;

(2) Frequency, cumulative frequency, percentage, andcumulative percentage of level of agreement/disagreement responses of school finance practitioners and academicians to 55 school finance items;

(3) Mean, standard deviation, standard error an d varianceof preselection panel an d practitioner/academicianrespondents by individual items and subgroups ofitems; and


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18(4) analysis of variance an d significant differences

among practitioners/academicians by individualitems an d subgroups of items. Survey items withbimodal and/or atypical f requency distributionswill also be reported.

All school finance statements will be item analyzed with avariance procedure for the academician and practitioner groups.Significant items will be treated independently and as related to eachother according to the five identified item subgroups. Threats tointernal validity will be controlled through the use of the mean indata analysis. Threats to external validity (multi-x interference)are of limited concern owing to the fact that data treatment revolvesaround the statistically significant responses of groups rather thanindividuals (Campbell & Stanley, 1963). The desired outcome of thepresent investigation will be to determine what school financepractitioners an d academicians agree or disagree with, or are neutralor uncertain about, regarding current concepts, understandings, andissues pertinent to the financing of the public schools; and todetermine significant variances in response b y item and by group ofitems between two specified major groups.

Limitations and Delimitations of the Study. Research for thisstudy has been designed to permit comparison and analysis of responsesof school finance practitioners an d academicians to current concepts,understandings, and issues. Each practitioner/academician respondentwill provide his/her level of agreement /disagreement with 55 survey


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19items. Analysis is limited to levels of relevance an d agreement,significant differences of responses, an d bimodal distributions.

The use of a nonstandard!'zed data gathering instrument hasrequired certain statistical treatments an d analyses. Findings arelimited to those statements appropriately made as a result of acommercially available statistical analysis package and other standardprocedures. Standard sources of error include sampling error,statistical misapplication or error in analyses, and a nonstandardizedinstrument.

Significance of ResearchThe significance of qualitative research in school finance begins

with its infrequency when compared to a plethora of quantitativeresearch on the equity and efficiency of public school financingsystems. There is a need for more attention to the conceptua l groundwork (Berne & Stiefel, 1979). This investigation will further aconceptual framework for equity analyses, as reflected in the responses(opinions) of practitioners and academicians in the field. The issueof equity is on e of egalitarian principle. Long before the schoolfinance reform of the 1970's, it as recognized that "no amount ofempirical quantitative research in school finance would ever settlethe ancient an d often bitter dispute about the egalitarian an d thelibertarian dilemma that has been perhaps the dominant value conflictin our nation from its beginnings" (Hickrod, 1971; James, 1961). Thisinvestigation will provide a current baseline for egalitarian/libertarian response analysis which could serve subsequent research.


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20This research will also provide data on the differences between

the responses of practitioners an d academicians on items an d groups ofitems in the school finance issues survey instrument. The possiblesignificance of this data includes the development of a basis for themeasurement of change in the variance of response among practitionersan d academicians, i.e., baseline data for a longitudinal researchstudy. Significant differences in responses between practitioners an dacademician groups pertaining to current concepts, understandings, an dissues provide insight to current inequities an d inadequacies in stateschool financing systems.

The decade of the 1970's was extremely active for the field ofschool finance; "the 1980's will also be vibrant, but a new set ofissues an d changing politics are likely to arise" (O dden, Augenblick,& M c G u ire , 1980). The responses/opinions of school finance practitioners, analysts, and/or reform activists at state education agencies,national education organizations, an d other advocacy an d professionalorganizations,regarding the progress and status of school finance atthe outset of the 1980's, is an appropriate contribution to an extensive empirical literature. There appears to be considerable room forexploratory an d qualitative research in the school finance area.Research implications an d training implications which currently arenot in evidence will be considered as significant results of thisinvestigation.


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Chapter IIR E V I E W O F T H E LITERATURE

The review of the literature is presented in tw o major sections:(1) The History an d Social Context of Public School F inance an d PublicSchool Finance Reform; an d (2) Concepts, Issues, an d Understandingsof Pertinence to the Financing of the Public Schools. The literatureof school finance is multi-dimensional. The principles of schoolfinance, local control, state support, an d federal intervention(through both legislative an d judicial actions) extend from the earlywork at Columbia University (Cubberly, 1905, 1916; Strayer & Haig,1923); through the literature of equity (Coons, Clune, & Sugarman,1970; Levin, 1973, 1977; Wise, 1968); an d to the equity an d otherconsequences of the school finance reform movement of the 1970's(Berne, & Stiefel, 1978; 1979; Fr iedman & Wiseman, 1978; O dden,Augenblick, & Vincent, 1976 , 1980). The first section of this reviewwill trace the evolution of thought into policy an d evaluation ofschool finance procedures since the turn of the Twentieth century.

This includes ample research in quantitative formulae for themeasurement an d distribution of thorough an d efficient expendituresfor publicly supported an d operated elementary an d secondary education.The development of formulae for the distribution of state an d localfunds for education is fairly extensive (Cubberly, 1905, 1916; Garms,


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1979, 1980; Johns & Morphet, 1952, 1961, 1975; Morrison, 1924, 1930;Mort, 1924, 1933; Mort, Reusser, & Polley, 1950; Strayer & Haig, 1923Swift, Fletcher, & Harper, 1922; Updegraff, 1922). As is generallyrecognized in the field, the work of H. Thomas James an d his studentsat the University of Chicago (1958, 1961, 1971, 1980; with Alan &Dy ck , 1963; an d with Kelly & Garms, 1966) provides a substantialbase for academic inquiry in the school finance field an d has beenextensively referenced.

The equity and efficiency variables in school finance, asidentified by James in 1961 an d 1963, are reviewed in the contextof the school finance reform efforts of the 1960s and 1970s. SinceJames' research, many equity an d fiscal response studies have beencompleted (Aaron, 1974; Adams, 1979, 1980; Barro, 1972, 1974; Berne& Stiefel, 1978 , 1979; Carroll, 1979; Carroll, Cox, & Lisowski, 1979;Carroll & Park, 1979; M cClure, 1977; Netzer, 1966 ; Odden & Vincent,1976 ; Vincent, 1979; Vincent & Adams, 1978). With the search forschool finance equity consequences well under way, Jencks (1972) an dothers questioned the efficiency of educational expenditures notwithstanding inequities in financing. O thers include Jarvis an d Gann whoas forerunners of the nation-wide property tax reform movement,clarified the political limitations of school finance reform, an dfocused the school finance equity needs of the taxpayer group.

The first section of this review also includes treatment offederal legislation with significantly impacts school finance an d itsmany equity considerations (P.L. 88-352, The Civil Rights Act of 1964


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23P.L. 89-10, The Elementary an d Secondary Education Act of 1965), an d ofsignificantly related state and federal court decisions: Brown v.Board of Education, 1954, 1955; Hobson v. Hansen, 1967 , 1971; evittownv. Nyquist, 1982; Mclnnis v. Shapiro, 1968 ; Robinson v. Cahill, 1973;Rodriguez v. San Antonio Independent School District, 1973; an d thepivotal decisions of Serrano v. Priest, 1971, 1974, 1975, 1976 . Theidentification of trends and issues establishes a pattern of inquiryfrom which school finance expert opinion in the literature an d thefield can be assessed.

The second section of this review identifies an d investigates theimportance of current concepts, issues an d understandings of pertinenceto the financing of the public schools. These include: (1) thedefinition and measurement of equity; (2) the relationships of propertytax reform an d school finance reform; (3) public opinion an d politicalsupport of public schools; (4) local, state, an d federal responsibilityfor the financing of the public schools; (5) the provision of equaleducation opportunity; (6) free choice an d privatization; and (7) theimportance of school finance policy an d procedural issues. It s fromthis section that empirical data selected to facilitate furtherconceptual development has emerged.

The History an d Social Context of Public School Financean d Public School F inance Reform

The Origins of State School Finance TheoryEl lwood P. Cubberly (1905) was the first to develop a theory of

state support for school finance an d the first to apply equality as a


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24uniform criterion to school finance support systems. The followingquotation, which has often been cited in the literature, represents theconceptualization of state responsibility for the provision of elementary and secondary education:

The state owes it o itself and to its children notonly to permit of the establishment of schools, but alsoto require them to be establishedeven more, to requirethat these schools, when established, shall be taughtby a qualified teacher for a certain minimum period oftime each year, an d taught under conditions an d according to requirements which the state has, from time totime, seen fit o impose. While leaving the way open forall to go beyond these requirements the state must see thatnone fall below (p. 16).

As James (1961) has observed, Cubberly's investigations assumed anequal demand or local preference for education, indicated in the following passage from James' original study:

Cubberly's investigation, clearly premised on theassumption of a universality of demand for education,led him to the conclusion that the state shoulddistribute funds to local schools in such a way asto equalize "the burdens an d advantages of education."Subsequent ly Cubber ly an d others, notably Strayer an dHaig (1923) contributed to the development of amechanism for implementing the policy of equalization--the foundation program (p. 19).


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25Recognizing the unequal distribution of wealth, as reflected in

varying property tax yield, Cubber ly applied the concept of statesupport to the necessity of apportionment an d equalization of stateschool funds as follows:

Theoretically all the children of the state areequally important an d are entitled to the sameadvantages; practically this can never be quitetrue. The duty of the state is to secure for all ashigh minimum of good instruction as is possible, butnot to reduce all to the minimum to equalize theadvantages to all as nearly as can be done with theresources at hand; to place a premium on those localefforts which will enable communities to rise above thelegal minimum as far as possible; an d to encourage communities to extend their energies to new an d desirableundertakings (p. 17).

Cubber ly further recognized in 1905 that few states had developed"a just an d equitable plan for distributing the funds at hand"(p. 253).

Based in part on the "thorough an d efficient system of education"clause in many state constitutions, some of the earliest educationalacts of the states involved the equalization of educational opportunity.As Burke (1956) has noted, over two-thirds of the states were alreadymaking grants to poorer subdivisions by 1925 (p. 396). Strayer an dHaig (1923) stated that "equalization of educational opportunity" meant


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"equalization of school support," "prescribed minimum standards," an draising:... he funds necessary for this purpose by local

or state taxation adjusted in such manner as tobear upon the people in all localities at the samerate in relation to their taxpaying ability...(p. 174).

Strayer an d Haig also called for the provision of supervision an dcontrol for all the schools through a state department of education.

Paul R. Mort (1924), a student an d colleague of Strayer atColumbia University, first proposed the measurement of the need forfiscal support for a "satisfactory minimum program." His concept of"weighting" for pupils with exceptional learning characteristics, an dhis identification of the elements to include in a minimum programremain significant variables in current methods of determining fiscalneutrality. He also advanced the idea of the basic funding unit, the"instructional or teacher unit" for state support of public education.What has become known as the Strayer-Haig-Mort foundation program isa result of a sequence of thought which emphasizes local initiative/effort/control an d which tends to equate local self government withdemocracy itself.

A lesser known school finance theorist, Updegraff (1922) hadalso developed concepts of state support based upon fundamentallocal support of public education. He advocated a variable levelfoundation formula, unlike the Strayer-Haig formula, an d likeCubberly, combined equalizing an d incentive criteria within the same


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27formula. His model for state support was later used by Coons, Clune,an d Sugarman (1970) in the development of power equalization formulae.Power equalized or guaranteed yield formulae replaced Strayer-Haig-Mort foundation programs in a number of states during the 1970's.Among the principles of state support proposed by Updegraff (1922)are included the following:

The purpose of state aid should not only be to protectthe state from ignorance, to provide intelligent workersin every field of activity, and to educate leaders, butalso to guarantee to each child, irrespective of wherehe happens to live, equal opportunity to that of an yother child for the education which will best fit imfor life (p. 117).

James (1971) has noted that perhaps the most pervasive value inthe school finance literature is equality. Cubberly (1905) made auseful distinction between equality of educational opportunity an dequality in the burdens of taxation required to support schools.While uniform state-administered tax programs equalize the tax burdensto support education, equality of educational opportunity ha s not beenhistorically realized by uniform state grants per pupil. Jamesfurther concluded the following in 1971:. .. fter my studies of state school finance done

earlier in this decade were completed,Ioncludedthat the variations in levy rates were probably asgreat after fifty years of effort to equalize them


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28as they were when Cubber ly first studied them in 1905(p. 5).. n o a m o u n t o f e m p i r i c a l q u a n t i t a t i v e r e s e a r c h i nschool finance would ever settle the ancient an d oftenbitter dispute about the egalitarian an d the libertariandilemma that has perhaps been the dominant value conflictin our nation from its beginnings. The full state funding of elementary an d secondary education would be along step to the egalitarian side (p. 10).The origins of state school finance theory reflect the development

of formulae an d programs for state support of local public education,while the mainstream of research and academic thought has tended toemphasize the importance of local control (libertarian) over uniformstate-wide equalization (egalitarian). Equity for taxpayers at thelocal level, then as now, seems to have mitigated equal educationalopportunity for all pupils regardless of where they live in a state.

M usgrave (1959) has clarified the dilemma from a public financepoint of view through the classification of education as a "meritpreference" rather than as a "social preference." Social preferences,for example, national defense, are assumed to be diffused an d possessedby all citizens. Merit preferences, for example, education, aredesired an d possessed by "only a select number" of the population.Assuming a universal demand for public education ignores state allocation of available resources among competing programs an d services an d


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29continues to make equalization of educational opportunity an d educational revenues a difficult an d continuing process. Again James(1961) provides a pertinent summary of the issue:

Early students of school finance chose to treat education in the context of social preferences, therebyassuming that demands for education are universal, anassumption generally unacceptable in public financetheory. Furthermore they often insist on the viewpoint that education is a unique branch of government,to be supported through decisions made separately fromdecisions on support of other services of government.Public finance investigators, on the other hand,generally view education in the context of meritpreferences, are unable or unwilling to deal with thedata available from school finance studies, an d arguefor balancing out preferences for education along withpreferences for other public programs. Somewhere in therelatively unexplored structure of underlying valuesthat shape demands for education probably lie some datawhich, when revealed, will provide new insights for bothgroups of investigators (pp. 17-18).

Equality an d AdaptabilityThe criterion of equality pervades school finance theory an d

includes the following assumptions:


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301. There is or should be a universal demand for

elementary an d secondary education (Cubberly, 1905).2. States should equalize the variable burdens an d

advantages of public education by proportioning an ddistributing funds to local subdivisions (Strayer& Haig, 1923).

3. Standards for equal educational opportunity arelogically based upon a prescribed minimum programfor each student, including elements and "weightings"for exceptional learner characteristics and disadvantaged pupil populations (Mort, 1924; Mort,Reusser, & Polley, 1950).

The criterion of adaptability is generally considered as thesecond major concept in school finance theory. Mort an d his students(1924, 1950) first recognized that local public demand for educationalservices was widely variable. Emphasis on local control was viewedas a positive safeguard against excessive uniformity an d as an important element of adaptability, local choice, personal f reedom, etc. In1950, Mort, Reusser, an d Polley stated as follows:

...our whole emphasis on local control and operationof schools had as a very important purpose of potentialcontribution to adaptability. This is what people meantwhen they said that local control an d support encouragedexperimentation. These measures embolden communit iesto try new ways of meeting newly emerging problems(p. 207).


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Pittinger (1925) used the terms "principle of equalization" an d"principle of stimulation" for equality and adaptability an d indicatedthe polarity or contradiction they posed for state school financesystems. These are the essential themes in the development of schoolfinance literature. Until the beginnings of the "Age of Equality"with the Brown v. Board of Educat ion (1954) decision by the U.S.Supreme Court, the equality/adaptibility criteria have been straddledby Strayer-Haig-Mort type foundation programs. Although Updegraff(1922) had earlier proposed variable ratio foundation plans whichattempted to reconcile the criteria, the almost universal adoptionof Strayer-Haig-Mort type formulae precluded further attempts untilthe beginnings of the school finance reform efforts of the 1950's an d1960's. With the research of Wise (1968) and Coons, Clune, an dSugarman (1970); an d with the Robinson v. Cahill (1973) an d Serranov. Priest (1971, 1974, 1975, 1976) state supreme court decisions inN e w Jersey an d California, the legal an d conceptual groundwork for thedevelopment of new procedures to reconcile the criteria was reaffirmed.

James (1958), in his Ph . D . dissertation at the University ofChicago, suggested that "the success of the foundation program hascome, not from equalizing among local units the costs of educationborne by the property tax, but as a device for the allocation by statelegislatures of the costs of schools among several revenue sources"(pp. 19-20). This is to say that state legislatures, having recognizedwhat school finance theorists have not, that public demand for education is variable rather than universal, have tended to use foundation


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32programs as an optional revenue source to assure adaptability/localcontrol first an d equality/equalization second. This would accountfor continuing disparities in the funds available to support educationat local levels within a state, notwithstanding numerous attempts atreform an d multiple measurements of equity.Local Control and Individual Worth

The mainstream of school finance literature has consistentlyvalued and emphasized the importance of local control of education.Although it eems that libertarian viewpoints logically might correlatewith valuing local control an d that egalitarian viewpoints logicallymight correlate with a state controlled and equalized school financesystem, the ubiquitous acceptance of local adaptability has consistently precluded this recognition. A decided minority, notably Swift,Fletcher, an d Harper (1922) an d Morrison (1924, 1930) have thought ofthis "localism" as excessive. Swift (1922) comments:

That as a nation we are failing to provide thousandsan d thousands of prospective citizens with theeducational opportunities essential to individual an dnational intelligence, morality an d welfare is onlytoo evident . .. fter fifty years of support by localtaxation, we find ourselves in an educational situationmarked by economic and educational inequalities . . .it ould seem that the time has arrived when w e shouldundertake to ascertain whether or not a thoroughgoingmodification, perhaps, indeed a complete reversal of


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33our traditional policies of school support may not benecessary. M ay not the solution of our financialdifficulties lie in shifting the burden in such amanner as to make the proper portion of its weightrest upon the state rather than upon the localcomnunities (p. 3).

Given the current professional consensus of school finance reform, itmay be that Swift's comment is as timely in 1982 as it as in 1922.

Henry C. Morrison 0924, 1930) has been referred to as theforgotten theorist of public school finance. In his major text,School Revenue, published in 1930, he made the following three majorobservations:

1. There were great inequalities of wealth amongschool districts that caused great inequalitiesin educational opportunity.

2. Constitutionally, education was a state functionand local school districts had failed to assurethe efficiency an d equity of elementary andsecondary education within the various states.

3. State equalization funds such as from theCubberly-Updegraff-Strayer-Haig-Mort axis ofthought would continue to fail to meet educationalneeds.

Morrison (1930) proposed a model of state support in which all localschool districts are abolished and the state becomes the unit for


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taxation an d administration of the public schools. He furthersuggested that the income tax rather than the property tax was mostequitable for state school financing.

Clarifying Morrison's contributions as a school finance theorist,James (1961) comments as follows:

Morrison argued against vesting excessive discretionin the local district. Like Swift, he saw the importance to the nation of the education of its youth,an d felt that the well-being of the individual wasof greater importance to the nation in the long runthan the doctrine of local control (p. 26).

Anticipating present an d future charges of paternalism, Morrisonstated as early as 1924 that:

He who decries as paternalistic effective concern onthe part of the state for the education of all of itsyouth islittleaware how nearly neglect an d fiscalinequality touch interests which he holds most dear.In the end, the poor schools are traceable to inadequatelocal support, to untrammeled localism, to the fatuousbelief that a fiscal system appropriate to pioneer dayscan with non-essential changes be applied to theeconomic and political conditions of the twentiethcentury (p. 59).

Morrison identified the polarity or contradiction between localcontrol an d individual worth, simul taneous to Updegraff's identification


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of the polarity or conflict between the equality an d adaptabilitycriteria. Although neither theorist's ideas were particularly wellaccepted when introduced in the 19201s Mort (1950) later recognizedUpdegraff's contribution to possible reconciliation of the equality/adaptability conflict. Current district power equalization formulaeas recommended by Coons, Clune, an d Sugarman (1970) an d as interfacedwith state supreme court actions such as Serrano v. Priest (1971)an d Robinson y, Cahill (1973) are actually rediscoveries of Updegraff'svariable ratio foundation plan.This clear emphasis on individual worth, for individuals an d forthe nation, remains tangent to the mainstream of American politicalthought, particularly with reference to the primacy of local control.Johns an d M orphet (1975), in their third edition of what many considerto be the basic school finance textbook, have conmented as follows:

Morrison's ideas on state school finance were not wellreceived. At that time, great emphasis was being givento local initiative an d local home rule. In fact, localself government was almost equated to democracy itself inthe political thought of Morrison's time. The Cubberly-Updegraff-Strayer-Haig-Mort axis of thought was in themainstream of American political thought and, therefore,widely accepted. However, the defects that Morrisonsaw in local school financing are as evident today asin his time. Furthermore, educational opportunities arefar from being equalized among school districts within


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most states, an d there is more complaint about theinequities of local property taxes for schools thanever before. It s interesting to note that, in recentyears, Hawai i has established a state system of education with no local school districts that is similar tothe model advocated by Morrison (p. 215).

The individual worth of the educated individual to the societygenerally, an d to the local civil community particularly, is significant. W h e n the primacy of local control discriminates againstequitable funding for individuals in on e subdivision when compared toanother, the process of equal educational opportunity is confounded.The economic decline an d racial polarization of urban communit ies canbe attributed at least in part to the unresolved dilemma of equitablestate school financing systems. James, Kelly, an d Garms (1966 ) madethe following rather bleak assessment, which was requoted by James(1980) in his foreword to the First Annual Yearbook of the AmericanEducat ion F inance Association:

In our society the educated are capital assets to acommunity, an d the uneducated are liabilities. Aslong as a city has empty spaces within its boundaries,itmatters little hat educated citizens who are ableto w in social and economic privileges move out to theedges of the city an d those who cannot remain at itscore. It s when the educated cross the boundary an dleave the city, subtracting their productive skills andcapital wealth from the pool of the city, and adding


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37both to another civil division, that the city isweakened. If for each educated person it oses,the city must accept in exchange an uneducatedperson, then as long as that pattern of changepersists the decline of the city is inevitable(p. 16).

Given the current status of the adequacy an d equity of schoolfinancing, a need for continued conceptual development is emergent.In a generally recognized major explication of the concepts ofequity an d their relationship to school financing plans, Berne andStiefel (1979) commented as follows:

This paper emphasizes the need for continued conceptualdevelopment of the ways in which policy tools affectdifferent kinds of school finance equity. N o empiricalwork is presented, in part because it s the author'sperception that, at this point, relatively more attentionshould be paid to the conceptual groundwork (p. 109).

Since the conceptual groundwork in school finance theory through theearly 1950s is complex an d multi-faceted (See Figure 1, p. 38), itmaybe that a process of rediscovery as well as discovery will effectivelyaddress the need for further conceptual treatment.

As indicated in Chapter I, he empirical work of this paperprovides a basis for the identification of current expert opinions an dvalues regarding school finance concepts an d issues. These opinionsan d values, as reported, will represent an d reflect a current


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1900

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J O R D A N B E R N EF O R B I S O D D E N S T I E F E L' K E O U N M G E N B L I C KI N \ V I N C E N T B E R K EG U T H R I E

C A R R O L LB A R R O

ALEXANDERTHOMAS

BENSON

F E D E R A LC O N T R O L( E Q U A LP R O T E C T I O N )

G A R H ST R O NFRIEDMAN L.W I S E M A NJENCKS C O O N SC L U N ES U G A

F E D E R A LS T I M U L A T I O N( T A X C R E D I T S )J A M E S( L I B E R T A R I A N / E G A L I T A R I A ND I L E M M A )J o h n sM O R P H E T( S Y S T E M S A N A L Y S I S )

MUSGRAvEF R I E D M A N M( V O U C H E R S )

L O C A LCOKTTOL

M O R T( W E I G H T I N G )( S A T I S F A C T O R Y M I N I M U M )PITTMERENDING U N I T S )S T R A V E R - H A I G S W I F TF L E T C H E RH A R P E R

( P R O P E R P O R T IO F H E I G H T O NS T A T E R A T H E R

( F L A T R A T I O F O U N D A T I O N P R O G R A M )P D E G R A F F( V A R I A B L E R A T I O F O U N D A T I O N P R O G R A M )

L O C A L C O M M U N I T I E S )

C U 8 B E R L V( S T A T E R E S P O N S I B I L I T Y ) U N I F O R M C R I T E R I A )( L O C A L | N C E N T I V E S ) EGALITARIAN!

1980

DOMAINOF

STATECONTROL

IMTJSON( F U L L S T A T EA S S U M P T I O N )( A B O L I T I O N O FL O C A L S C H O O LD I S T R I C T S )

Figure 1. A Chronology of Public School Finance Theory


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conceptua l f ramework, what Guthrie (1980) refers to as the "interaction between value streams." The juxtaposition of these valuestreams within the contemporary school finance parameters of equity,efficiency, and liberty have significant predictive value forsubsequent developments in the continuing evolution of schoolfinance reform.Legislation an d Litigation, 1950-1980.

Guthrie (1980) has observed, regarding recent school financehistory, that the time periods from 1955-65 an d 1965-75 have beenreferred to as "Age of Equality" an d the "Era of Efficiency". Hefurther comments that "such tidy separations, however expedient,are overly facile an d meaningless", believing the inaccuracy an dover simplification of such a division "masks the kaleidoscopictensions that interact continuously to shape an d reshape Americapolicy" (p. 5). Although considerable attention has recently beengiven in the literature to school finance litigation, and to statelegislative changes in aid-to-education formulae, relatively littleinformation is available regarding Federa l legislation which establishes educational rights an d authorizes educational expenditures. Whilein Rodriguez v. San Antonio Board of Education (1973), the U.S. SupremeCourt has ruled that education is not a fundamental right, there are anumber of groups guaranteed educational services as a matter of Federa llegislation. In light of this, the following subsection provides abrief description of pertinent educational rights an d compensatory/supplementary funds legislation enacted by the U,S.Congress an dsigned into la w by the President since the 1950's.


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40Legislation1. Service M en's Readjustment Act of 1954. Public Law 78-346.

Known commonly as the G.I. Bill of Rights, this act providedtuition al lowances an d other expenses for higher educationfor veterans of the U.S. Armed Services. The legislationfunctioned as a modified educational voucher plan, providingtuition, fees, an d living expenses for programs of highereducation and/or advanced training approved by the Veteran'sAdministration.

2. National D efense Education Act of 1958. Public Law 85-864 .Known commonly as NDEA, this act was passed primarily in response to a demand for scientific an d technological excellenceto "catch up with the Russians", who had successfully launched"Sputnik I, he first unmanned earth satellite, in 1957. N D E Aprovided funds for the purchase of scientific equipment byelementary/secondary and higher educational programs, an d forexperienced teacher and advanced scientific summer and academicyear institutes.

3. Civil Rights Act of 1964. Public Law 88-352.This act, primarily a legislative response to the Brownv. Board of Education decision of 1954 broke new groundin tw o areas of pertinence to school finance equity. First,Section 601 prohibited federal funding for an y programs,agencies, or activities in which there existed practices ofracial discrimination; an d second, the act authorized extensive social science research to assess equal educational


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41opportunity. The very controversial Coleman Reportwas the product of this research. Socio-politicalreverberations included bussing an d its various backlashes, not the least of which remains a significantdecrease in local willingness to pay the rising costsof public education.

4. Elementary an d Secondary Act of 1965. Public Law 89-10.Known commonly as ESEA, this multi-billion dollar compensatory education program provided massive doses offunding for school districts with high percentages offamilies and children at an d below the poverty level.Although many states shrewdly equalized an d adjustedE S E A comparability requirements to accommodate the influxof new funds, E S E A monies directly impacted inequities ineducation dollars at the local level, an d actually has become a compensatory supplement to inadequately fundedstate foundation programs. The basic authorization alsoincludes provisions for compensatory funds for tw o specialpupil populations: institutionalized handicapped students(as amended by P.L. 89-313); and institutionalized dependent/neglected/delinquent youth (as amended by P.L. 88-675).All of the above funding specifications are included underwhat is known as E S E A TitleI. O ther titles of the legisla-authorized expenditures an d provided funds for library an dinstructional materials (Titles II nd IV), for innovativean d exemplary model programs (Title III), or handicapped


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42student education services (Title VI, later to become P.L.94-142, The Education of All Handicapped Act of 1975), andfor research an d dissemination activities.

5. Vocational Rehabilitation Amendments of 1973. Public Law93-112. This legislation is the civil rights act for handicapped citizens, and includes requirements to prevent discrimination against the handicapped in employment, in thedesign of buildings (archietectural barriers), and in theprovision of elementary an d secondary education, Any agencyreceiving Federal funds must comply with the provisions ofthe legislation or be subject to becoming ineligible forreceipt of those funds. The significance of this legislation,in addition to fiscal penalties for discrimination againstthe handicapped by public school systems, is the precedentestablished in the guarantee of educational rights at theFedera l level to a specific population of students. Ineffect, educational services as specified for this populationbecome a fundamental right as guaranteed by Federa l law.

6. Educat ion of All Handicapped Act of 1975. Public Law 94-142.This legislation is the educational rights act for handicappedchildren of legal school age, and includes requirements toprevent discrimination in evaluation, placement, an d provisionof instructional services. Fund ing is authorized at a fixedper pupil rate based on authorized levels of expenditures an dthe numbers of identified handicapped students submitted eachyear to the Federa l government by the states. Specific


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43requirements include multiple criteria for evaluationan d placement, testing in the native language (of the home)or mode of communication, parent participation an d due process requirements, individualized educational planning,placement in the least restrictive environment (mainstreaming),an d a full an d appropriate special education program for allhandicapped students in need of such service. This legislation is the programmatic companion of P.L. 93-112, an d provides the basic guarantee of educational rights for a specificpopulation of students; a fundamental Federa l right, asrequired through enacted legislation..

LitigationThis subsection includes a topical listing of court cases related

to school finance but not directly involving fiscal litigation. Alsoincluded is an 11 page figure (Figure 2, pp. 48-58), a state-by-statesummary of all adjudicated an d pending school finance litigation up toan d including the June 23, 1982 reversal of the N e w York State AppellateCourt decision for the plaintiff by the N e w York State Court of Appeals(the highest state court). This particular case, Levittown v. Nyquist(1982), along with Mclnnis v. Shapiro (1970), Serrano v. Priest (1974,1976), Robinson v _ . Cahill (1973), an d Rodriguez v, San Antonio Board ofEducation (1973) are considered the cornerstones of the judicial reformmovement in school finance an d are treated in detail in the concludingsection of Chapter II. O the r adjudicated an d pending school financecases, an d a state-by-state listing of equalization approaches, arealso included in Figure 2.


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44The cases listed an d described here, analogous to the legis

lation previously described, represent related educational rightswhich have been identified for certain classifications of studentsand under certain conditions. Taken together, these cases representthe beginnings of a formidable body of "judge-made law" (as formerSupreme Court Associate Justice Benjamin A, Cardozo would say) whichmay point toa logical an d eventual recognition of education as a fundamental right for all children of legal school age in a free anddemocratic society.

1. Brown v. Board of Education. 347 U.S. 483, 495 (1954), 349U.S. 294 (1955). Although no direct relationship betweenschool finance policy an d "de jure" segregation exists, theBrown case significantly heightened social consciousness regarding inequities in public schooling. The language of thecourt was clear and unmistakable. With Associate U.S.SupremeCourt Justice Hugo Black's opening statement, "Haddock v.Haddock is hereby overruled", the power of "stare decisis"(the primacy of legal precedent) was set aside. "Separate butequal is inherently unequal" for any public school pupil augured a new thrust for equal treatment/equal opportunity fora new suspect classification.

2. Hobson v. Hansen. 26 5 F .Supp. 902 ( D D C 1967), 327 F .Supp. 844( D D C 1971). Spending disparities within the Washington, D . C .School District were determined to be discriminatory regardinga "tracking" system where black students were separated fromwhite students an d spending for teacher salaries, etc, was


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45considerably higher in white student tracks. The HonorableJudge Skelly Wright held this procedure to be a violationof equal protection.

3. Mills v. Board of Education. 348 F.Supp. 866 ( D D C 1972).This case was similar to Hobson (above) in that a violationof equal protection was found because of spending disparitiesan d unequal educational opportunity because of tracking. InM i11s, however, the suspect classification was the handicappedstudent population, found to be inequitably segregated intoprograms where expenditures an d services were not comparableto those provided for nonhandicapped peers.

4. Keyes v. School District N o. 1. 40 L W 5002 (Colo. 1973)The Keyes case applied the separate but equal/unequal rule ofBrown on a "de facto" as well as a "de "jure" basis. SouthernSchool Districts could not legislate separate programs by race;an d northern school districts could not just let it appen inneighborhood schools in all black and all white communit ies.

5. Lau v. Nichols. 414 U . S . 56 4 (1974).The Lau case determined that non-English speaking childrenwould

A Comparison and Analysis of School Finance Practitioners

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