The overall goal of school finance will provide funding for all schools. More specifically, school districts
want to provide an equitable and adequate education for all students. However, there have been
inequities in education since its inception. The injustices started with using local property taxes to fund
public schools. Schools started as local entities. Therefore, it made sense to support schools with local
property taxation. However, local taxes differed significantly within a given state. Thus, communities with
wealth have more money to spend per pupil, thus providing more resources. This created inequities and
subsequently can make school funding unconstitutional.
According to Odden (2019), the state legislature has discretion regarding designing the state's school
finance system. The only caveat is that all statutes regarding school finance must not conflict with the
federal or state constitution. If any part of the state's school finance system violates the state or federal
constitution, all or parts of the school finance system will be declared unconstitutional. School funding is
the number one target for plaintiffs regarding litigation. Plaintiffs often argue that school financial
systems directly conflict with federal and state constitutions. More specifically, plaintiffs argue two points
as support for their lawsuits. The first argument is that states fail to distribute resources equitably. The
second argument claims that states fail to provide adequate resources to some or all schools in the state.
In a recent court case, Espinosa v. Montana Department of Revenue, the state's no-aid provision clause
excluded religious schools from receiving scholarships from a state-supported program. The plaintiff in
the Espinosa v. Montana case won the verdict in the Supreme Court's decision.
Odden (2019) stated that there are three waves of school finance litigation. The first wave involves
violations of the Equal Protection Clause of the U.S. Constitution. The Equal Protection Clause says that
no state can deny any person equal protection. The amendment was put in place as protection for
African Americans. However, the amendment developed into the protection for all people. The Supreme
Court eventually created a series of tests to determine if any governmental action might violate the
Equal Protection Clause. The Supreme Court uses two tests to determine a violation of the Equal
Protection Clause; they include strict Scrutiny and a rational basis. Strict Scrutiny required the
government to prove that they chose the best possible solution in an effort to meet their goal. Plaintiffs
favor the Strict Scrutiny test because it holds the government to a high standard. The rational basis test
requires the government to prove that they had a rational reason for passing a law that treats people
differently.
McInnis v. Shapiro and Burruss v. Wilkerson were two modern cases regarding school finance. Both cases
challenged the constitutionality of educational funds based on unequal property taxes. The plaintiffs in
both cases argued for strict Scrutiny. They claimed that the differences in property taxes from district to
district were related to educational needs. The state prevailed in both cases. The courts ruled in favor of
the state based on the rational bases test.
The second wave involved cases based on equity. Plaintiffs raised the same claims regarding inequities as
the first wave. However, they focused on state school funding that violated the state constitution.
The Rodriguez v. San Antonio case was a landmark case because the court denied its claim the school
finance system was unconstitutional. They applied the rational basis test to their decision. The Supreme
Court made it clear that education is not a fundamental right under the U.S. constitution. This decision
led plaintiffs to take the same argument of equity and apply it to the state constitution. However, under
the state constitution, education can be defined as a fundamental right.
The third wave of school litigation involves states going beyond equal protection litigation. Plaintiffs
claim that states must provide quality education. The following cases involved adequacy.
Minoring v. Sugarman
Pauley v. Bailey
Rose v. Council for better education
The third wave included six important cases regarding adequacy. However, two cases stood out.
Edgewood v. Kirby played a major role in Texas regarding adequacy. The court case resulted in the Texas
legislation creating a two-tiered pupil-weighted system that required the wealthiest district to voluntarily
give some of their annual revenues to lower-income districts. According to Odden (2019), the system
worked well until the economic downturn, which caused six lawsuits totaling $5 billion dollars. All of the
lawsuits were based on issues regarding unconstitutional taxation, funding for students with limited
English proficiency, and charter schools. However, the Texas Supreme Court ruled that the school finance
system was constitutional because the action of the state legislature was reasonable.
Kanas has the most recent case regarding adequacy. In the case Monyoy v. State, the Kansas Supreme
Court ruled that the school finance system was unconstitutional. The courts ordered Kansas to develop a
better system. Kansas developed a better system that increased school funding by $2 billion over five
years. In April of 2018, the state legislature was trying to increase the school budget to $558 million
dollars over another five years during an election year.
According to court cases, adequacy does not mean that students must have equal outcomes. However, it
does mean that all students must achieve minimum standards but have equal opportunities to achieve
at high levels.
Most researchers agree that money does have an impact on student performance. However,
policymakers and researchers frequently disagree on how the funding is used.
Equity and adequacy are always focused on the impact on the students. This is done based on the local
and state revenue spent per pupil. Additionally, adequate staffing is an area that the state must address.
Most states use some type of full-time equivalency (FTE) to determine student attendance. FTE
determines the dollar amount state school receive based on the number of students that attend schools
in a school district. It is important that the state use the student count for all elements of the school
funding system (Odden, 2019).
The evidence-based- model estimates the school staffing based on prototypical elementary, middle, and
high schools. In Georgia, this model is used for staffing all schools. For example, in my school of 1,500
students, I have four assistant principals and four counselors. If my enrollment increases to 1,600
students, I will receive an additional assistant principal and counselor.
State and federal governments use intergovernmental grants to influence the behavior and focus of the
local school. They achieve this by proving money earmarked for specific initiatives. State and federal
governments use multiple types of grants for school finance equalization.
Unrestricted general aid, matching grants, and categorical grants are popular grants that are frequently
used. Unrestricted aid provides additional funding to districts with no restriction on how to use the
funds. Unrestricted funds provide an equal amount of per-pupil revenue to each district based on
student enrollment counts. Additionally, unrestricted aid can go to districts based on their per-pupil
revenue. Again, there is no restriction on the use of the grant money.
Matching general grants are used to link the level of state general aid to the level of effort made by the
local school district. The most common matching grant system used is the guaranteed tax base (GTB)
program. This program is used to equalize the revenue-raising ability of each school district and link the
level of state aid to the level of the local school districts. Categorical grants are different than general
unrestricted grants because they have restrictions on how they are used. Categorical grants come with
restrictions for a specific purpose. For example, my school is a Title I school. We receive additional
funding based on our low-income numbers. This number is based on free and reduced lunch numbers.
The funds must be used for struggling students from low-income backgrounds.
Fiscal equalization allows districts to transfer funds across the district for equity. Additionally, this allows
the district to provide quality education to all of its students.
According to Odden (2019), school finance formulas affect the equity and adequacy of a school district.
Additionally, school finance formulas can be technical and political. Flat grants were the first formal
formula used for public schools. During the 19th century, states began to require local districts to provide
a public elementary school and provide them with a flat grant. The flat grant was based per school to
help support the local elementary school. Over time flat grants became expensive and created equity
issues because local communities that could afford their own schools still received the flat grant, which
abled them to have additional resources. Foundation programs were created after the flat grants were
not adequate as the main funding system. According to Odden (2019), George Strayer and Roger Haig
created a formula that is still used by many states today. Strayer and Haig realized that the flat rate was
not enough money to help local communities provide basic education. Strayer and Haig added a local tax
match to the formula. The local tax math was tied to local tax property.
Guaranteed Tax Base Programs were put in place to fix the unequal distribution of the local property tax
base. GTB programs eliminate the inequity regarding property tax by guaranteeing, through state aid
allocations, that each district can function as if it had equal property tax revenue. GTB fully addresses
unequal access to local property tax.
Some states use a combination foundation and guaranteed tax base. For example, Missouri uses a two-
tier system. Missouri used the minimum foundation prior to 1977; however, in late 1977, the district
underwent school finance reform and adopted the GTB program. However, Missouri decided to keep the
foundation program, ensuring a base level of revenue in addition to the GTB formulas.
The final category is the full state funding program. This type of funding simply means that the state sets
the per-pupil spending amount for all schools in the state. A district can not go above or below this set
amount.
Student-Based Budgeting ensures that the focus stays on the students. According to research is the most
effective way to fund special needs students. Districts that do not use Student-Based Budgeting take
focus on the student. Student-Based Budgeting allows for dollars to follow the individual students no
matter their school.
Tiered funding is based on the Evidence-Based Approach. Students are funded and supported by three-
tiers in response to the intervention program. Tier I includes funding for core instruction for all students.
Tier 2 funding includes funds for additional resources for students like tutoring. Tier 3 funding is
designated for all special education students.
The Individuals with Disabilities Education Act (IDEA) monitors how each state provides educational
services for special education students. Each state must distribute the federal funds to school districts.
IDEA funding typically ranges from 10%-20%.
The proactive response in special education, also known as response to intervention (RTI), requires the
school to provide a solid instructional program for all students. Additionally, the school will provide
funding for students as they move up, requiring more interventions.
The U.S. Department of Education(office of civil rights) enforces and monitors the statutes regarding Title
IX. OCR was designed to protect people from discrimination based on sex in education programs.
Title IX applies to public schools and any organization that receives federal funding. Any organization that
receives federal funds must operate in a nondiscriminatory manner. There are multiple areas where
frequent violations cause organizations to lose funds.
The main area that causes districts financial strain is the area of athletics. School districts are required to
provide the same level of athletic opportunities for male and female athletes. For example, school
districts can lose funding for providing equal athletic opportunities for female athletes. For instance, if a
female athlete wants to play full-contact football and there is not a full-contact female football team, the
female students have the right to play on the boy's team. School districts have been sanctioned for not
allowing female athletes to play football.
OCR enforces the law regarding Title IX and investigates and addresses all complaints regarding Title IX.
Additionally, they work with schools and other organizations that receive federal funds to provide
guidance and recommendations regarding compliance.
The Supreme court ruled that states can not exclude religious schools from accessing public funds based
solely on them being religious schools. The ruling was based on Carson v. Makin, stating that not
allowing the religious school to receive Maine's voucher was a violation of the 14th amendment. Maine
will be required to allow a religious school in a small voucher program. These voucher programs are
based on the voucher that has been traditionally provided to public and private schools but excluded
religious schools.
School vouchers give parents the opportunity to choose a private school for their children to attend.
Under voucher programs, funds typically used by the school system would be allocated to the families
that opted out of their public school education. School vouchers have been popular and have become a
political football. Currently, there are sixteen states and a couple of districts that provide various voucher
programs. There is conflicting research regarding vouchers and their impact on student achievement.
Charter schools have an uncertain future. According to D'Agostino (2018), Charter Schools are losing
support from the democratic party. Republicans began pushing back against Charter schools and
focusing on religious and private schools (Saiger, 2012). The ruling by the Supreme Court is an example
that religious schools are becoming more popular because they will be included in more voucher
programs across the state.
According to Lueken (2021). School choice critics claim that choice programs drain public education of
much-needed funding. Based on the need for state budgets to be balanced and that they must provide
an adequate education for all its students is a concern. However, researchers conclude that students that
are exposed to school choice within the district show modest gains. I believe that school choice will
continue to be a popular choice for parents.
Privatization is not suitable for education. Research shows that Charter schools have not improved
education. In fact, according to the Stanford CREDO study, Charter schools' performance is about the
same as public schools. Additionally, the motivation to make a profit off of students causes students to
lose out because the goals get lost in the desire for a profit. Low-performing students get lost in the
shuffle because they require additional resources that cost money.
