Financial Evolution

Faced with lawsuits, higher expectations for academic performance, and limited funding, state policymakers are looking for new and better ways to finance public education.

By Lynn Olson

States are at a crossroads over how they raise and distribute money for K-12 education.

Historically, states have focused on how to allocate aid across school districts that have widely different tax bases to achieve some level of fiscal parity. States have paid far less attention to what schools and districts do with that money and the results they produce.

Now that states have set ambitious performance goals for their students—and the federal No Child Left Behind Act of 2001 has demanded that all children achieve those standards in reading and mathematics by 2013-14—the push is on to link education...