Education Commentary

Fiscal Equity and National Goals

By William L. Taylor & Dianne M. Piche — March 20, 1991 7 min read

If the campaign of President Bush and the nation’s governors for education reform is to proceed beyond the stage of lofty ideals, these leaders must confront directly the problem of securing equity in funding public schools.

The problem is not a hidden one. Despite more than two decades of reform efforts in the courts and state legislatures, states continue to rely on antiquated property-tax systems as the principal method for financing public schools. The results are little more than making the education of our children subject to a lottery in which the affluent hold most of the tickets. The winners are children fortunate enough to live in property-wealthy districts which generate large sums for education often with very little tax effort. The losers are children in property-poor districts which cannot afford to provide basic educational service even when they tax at a high rate and receive some state and federal aid.

In dollar terms, children who live in the wrong place are big losers. In Texas, for example, a court found in 1990 that the average per-pupil expenditure in the 100 wealthiest districts was $7,233, compared with $2,978 in the 100 poorest districts. In depressed Trenton, N.J., only $130,556 in property wealth stood behind each child in 1989, while in nearby affluent Princeton, the figure was more than $1.2 million.

Not surprisingly, the principal losers in this system are those who are most in need of assistance--minority and economically disadvantaged children who reside in disproportionate numbers in rural areas and in cities that must use much of their property wealth to meet overwhelming social needs. Moreover, the poor are locked in; they cannot afford to relocate in districts that provide excellent services at low cost.

Interest in the issue of fiscal inequity has been rekindled by decisions over the past two years by the highest courts of Kentucky, New Jersey, Texas, and Montana, striking down school-finance systems for failing to comply with state constitutional guarantees that a “thorough and efficient education” will be made available to all children. The decisions breathe new life into the movement to reform school-finance systems, and in some respects--Kentucky’s mandate to restructure the education system, for example--are pathbreaking as well.

But it is uncertain whether the decisions will have wide impact. Few state courts share the vision of the states that have acted. State legislatures are in the midst of a major budget crunch. And governors, like New Jersey’s James Florio, who speak out for resource redistribution to benefit at-risk children may find themselves politically at-risk.

Since the problem is national in scope, it ought to be addressed at the national level. When legislative proposals have been made in the past by former U.S. Representative Augustus Hawkins and others, the objections have been two-fold: (1) that fiscal reform is an unavailing strategy since “money makes no difference” in educational outcomes and (2) that the issue is properly resolved at the state or local level and should not become the subject of “federal control.” Neither argument withstands scrutiny.

The proponents of the “money makes no difference” argument cite several production-function studies that reveal little connection between expenditures and outcomes (usually scores on standardized tests). A short answer might be the one propounded some years ago by an advocate for change--that if money makes no difference in education, the poor as well as the wealthy should have the opportunity to experience that disappointment. A longer answer is that while money itself may not make a major difference, it purchases services that do make a difference, particularly in the education of economically disadvantaged children.

In our recent study for the Education and Labor Committee of the U.S. House, we synthesized a large body of research on the components of effective education. There is a broad and growing consensus among educators, based on the experience of the past three decades, that money invested in quality preschool and early-childhood-education programs, small classes, reading programs in the early grades, experienced and well-educated teachers, parental-involvement initiatives, and counseling and social services produces positive results.

So it is thoroughly predictable that when the poorest districts in Texas do not participate in the state’s preschool program, because of inadequate facilities and lack of matching resources, there will be a price to be paid in lost educational opportunities, fewer high-school graduates, fewer productive citizens, and more victims of social pathology, including addiction, welfare dependency, criminal behavior, and teenage pregnancy.

And there can be no doubt that children in the Princeton, N.J., district, which has one computer for eight children, science laboratories in all its high schools, and multiple language offerings in middle schools, will fare better than children in Camden, which has one computer for 58 children and struggles with an inadequate curriculum and overcrowded classrooms.

As to the federal government, certainly its role in education is limited, but the core responsibility that was delineated in the 1960’s and that is now widely accepted is to help the special needs of economically disadvantaged children and to assure equality of opportunity. The federal policy of assisting at-risk children, as manifested in Chapter 1, is based on the premise that funds and services provided with state and local funds are “comparable” and that federal assistance is a supplement. But state fiscal inequity renders this notion of a level playing field a fiction.

Our study reveals that property-rich districts like Englewood, N.J., are able to provide a wide range of services, including preschools, elementary counselors, social workers, parental-involvement programs, and many others, while poorer districts like Trenton and Camden must rely on their Chapter 1 funds to furnish only a fraction of the services routinely available in wealthier districts. Since these services are interdependent and can work well only in combination, state fiscal inequity thwarts the objectives of Chapter 1.

Accordingly, our study asks the Congress to consider legislation requiring states to provide assurances that as to essential educational services, such as preschool, all students in the state who are eligible for Chapter 1 aid are receiving services comparable to those provided to children who are not economically disadvantaged.

While there are reasons for the federal government not to become embroiled in overhauling state finance systems, it must at least insist on this modicum of equity if the purposes of federal aid are not to be frustrated. A first step would be a Congressional mandate to the U.S. Education Department to collect and report data on the services provided by school districts. Without such information, it will be hard for anyone to know what is being done to achieve our “national goals.” An opportunity for more comprehensive action may come when the Congress considers the reauthorization of Chapter 1 in 1993.

One final note: An examination of the gross disparities in educational revenues and services reveals the hollowness of the current debate about “choice.” Under a “choice” system, almost every parent, if provided with sufficient information about educational services, would make the rational decision to enroll her child in the Princeton, Beverly Hills, Highland Park, Montgomery County, or Great Neck school systems of the nation. But no choice proposal includes the transportation or other services that would make this possible and obviously, if means were furnished, these systems would rapidly become overloaded. In short, if the Bush Administration, the nation’s governors, educators, and political leaders are serious about reform, they will focus their attention on how the mass of young people can be given access to resources and services that are now denied them. Only when the urban and rural public-school systems of the nation that are now being shortchanged by state fiscal systems have the means to upgrade their educational offerings will school children have real choice and access to opportunity.

William L. Taylor and Dianne M. Piche are Washington lawyers who are authors of Shortchanging Children: The Impact of Fiscal Inequity on the Education of Students At Risk, published in December by the Education and Labor Committee of the U.S. House.

A version of this article appeared in the March 20, 1991 edition of Education Week as Fiscal Equity and National Goals