Analysis of equality of educational opportunity and taxpayer equity : through the modeling and testing of a computer bas...


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Analysis of equality of educational opportunity and taxpayer equity : through the modeling and testing of a computer based public school finance simulation for a selected state
Physical Description:
xi, 249 leaves : ; 28 cm.
Bookman, Michael Kurt, 1946-
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Subjects / Keywords:
Education -- Finance -- Mathematical models -- West Virginia   ( lcsh )
Education -- Finance -- Mathematical models   ( lcsh )
Educational equalization -- Mathematical models   ( lcsh )
Educational equalization -- Mathematical models -- West Virginia   ( lcsh )
Educational Administration and Supervision thesis Ph. D   ( lcsh )
Dissertations, Academic -- Educational Administration and Supervision -- UF   ( lcsh )
bibliography   ( marcgt )
non-fiction   ( marcgt )


Thesis--University of Florida.
Bibliography: leaves 234-247.
General Note:
General Note:
Statement of Responsibility:
by Michael Kurt Bookman.

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University of Florida
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All applicable rights reserved by the source institution and holding location.
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oclc - 04165288
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Full Text








This study would have never been possible without

the contributions and support of many people and organi-

zations. A number of these people and organizations de-

serving special acknowledgments are

The West Virginia State Department of Education for

their cooperation in helri r) obtain the raiuired data;

Mr. William Hamilton who facilitated the transmission

of data, and helped in making essential data available to

the researcher;

Dr. John L. Jones who started the researcher on the


The Institute for Educational Finance for their help,

sense of humor, and togetherness;

Dr. Linda Crocker for helping the researcher in a

time of need, and general understanding and patience;

Dr. Kern Alexander for his patience, guidance, help,

and all round guiding light;

Dr. James Hale, committee chairman, for his "fan-

tastic" help and support. Without his understanding and

judgment, many questions would have never been answered.


Sid Bookman for his support, help, and wisdom from


Isabel Bookman, the reason for the researcher being

in education, and an inisniration;

Finally, my wife, Kay, for her continual support,

patience, and tolerance during the preparation of this

study. Without her being there, this might not have been



ACKNOWLEDGMENTS . . . . . . . . . ii

LIST OF TABLES ... . . . . . . . . .vi

LIST OF FIGURES . . . . . . . . .. vii

ABSTRACT . . . . . . . . . . .. viii


I INTRODUCTION . . . . . . . . 1

Background and Rationale . . . . 1
Statement of the Problem . . . . 7
Procedures . . . . . . . . 8
Delimitations . . . . . . .. 10
Limitations . . . . . . .. 10
Definition of Terms . . . . .. 11


Equality of Educational Opportunity . 13
Litigation-Fiscal Equality of Educational
Opportunity . . . . . . .. 22
State Support Plans for Education . .. 35
Educational Finance in West Virginia. . 52
Simulations . . . . . . .. 61
Summary . . . . . . . .. 75

MODEL . . . . . . . . . . 78

The NEFP Model . . . . . . .. 78
The West Virginia Model . . . .. 82

AND TAXPAYER EQUITY . . . . . .. . 104

Present School Finance in West Virginia 105
Analyses of Simulated Alternatives. . 121
Variation Between Plans . . . .. 125
Summary . . . . . . . . 142




Summary . . . . . . . .
Implications . . . . . . .
Recommendations . . . . . .






E STATE FILE . . . . . . .

F STATE AID, 1976-77 . . . . .

REFERENCES . . . . . . . . .


. . 159

. . 162

. . 184

. . 199

. . 230

. . 235

. . 237

. . 248


S. 144

* 144
* 151
* 155



1 Effect on Additional Allocations for
Professional Educator State Aid' Formula 58

2 Assessed Valuation of Nonutility Property
in West Virginia (1975) . . . . .. 60

3 Basic Data Code Sheet . . . . . .. 85

4 Calculated Data Code Sheet . . . . .. 93

5 Preliminary Computations Public School Support
Program Supplementary Information 1976-1977 109

6 State and Local Funds per Pupil 1976-1977 I. 111

7 Weighted Values and Revenue from Local
Property Tax 1976-1977 . . . . . . 115

8 Total Program Dollars and Total State Aid per
Pupil by Funding Pattern . . . . .. 127

9 Weighted Foundation Program Cost Figures. . 135

10 Progressivity Value . . . . . .. 139



1 Conceptual Framework for Simulation . . 64

2 Sample Input of the West Virginia School
Finance Computer Simulation Model Utilizing
an Unweighted Pupil Unit . . . .. 102

3 Sample Input of the West Virginia School
Finance Computer Simulation MOdel Utilizing
a Weighted Pupil Unit . . . . .. 103


Abstract of Dissertation Presented to the Graduate Council
of the University of Florida in Partial Fulfillment
of the Requirements for the Degree of Doctor of Philosophy



Michael Kurt Bookman

August, 1977

Chairman: Dr. James A. Hale
Major Department: Educational Administration & Supervision

The primary objectives of this study were to (1) iden-

tify and collect data necessary to generate alternative

funding patterns for public school finance, (2) to develop

computational subroutines and decision sets in a computer

simulation model that would provide alternative funding

patterns, and (3) to simulate ana evaluate alternative

funding patterns relative to the concepts of equal educa-

tional opportunity and taxpayer equity. Tnese three objec-

tives were then applied to the state of West Virginia.

The National Education Finance Project (NEFP) ori-

ginally developed a computer simulation which was designed

to simulate the effects of decisions for a prototype state.

This simulation consisted of two main data files, which were

identified as M FILE and D FILE. TheM FILE was additionally

subdivided into aB FILE and C FILE. Basic informational

data about the school districts, such as demographic,


enrollment, program, salaries, et cetera, are contained

in theD FILE; whereas, the C FILE stored results of compu-

tations for later retrieval. D FILE contained the alterna-

tive decision sets available to the user in regard to

programs, distribution, and revenue decisions. Three

additional files were created in the simulation, and are

designated as LSTATE, SSTATE, and STATE. These three

files were the key elements of the simulation in that

they enabled the interaction of the input decisions rela-

tive to the base data. For purposes of this study, the

STATE file was created, and computational subroutines

relative to both general school finance and the state of

West Virginia were written and stored in this file. Addi-

tional options included a comparisonssection between the

alternative selected and the 1976-1977 state plan, and a

Lorenz Curve and Gini Index to enable further analysis

of equity.

Although the analysis of data was place specific,

West Virginia, the procedures employed are generalizable

to any state. Analysis of data was accomplished in four

parts. First, the 1976-1977 state plan was analyzed rela-

tive to the concepts of equality of educational oppor-

tunity and taxpayer equity. The results indicated that

the 1976-1977 state aid formula showed a high correlation

between the amount of money available to a district and

the number of professional educators employed in a district.

This factor was significant considering the state alloca-

tions are based on professional educator salaries. Wealthy

districts thus tend to have more professional educators

per student, and subsequently receive more state aid than

poorer districts. Likewise, the composition of the gen-

eral fund indicated a heavy reliance on tax sources which

place a greater burden on low-income groups.

The second part of the analysis demonstrated the

convergence of foundation, percentage equalizing, and

guaranteed yield programs when one considers only dollar

allocations in regard to equity, which is referred to as

vertical equity. In part three, concern for student needs

(horizontal equity) was provided for in a weighted founda-

tion program. The level of funding utilized remained con-

stant throughout, to illustrate redistributional effects of

state aid. The results indicated that a basic program can

fulfill both the requirements of vertical and horizontal

equity, and thus meet equality of educational opportunity

criteria. Finally, the fourth part analyzed the 1975-1976

general revenue fund relative to the criteria of taxpayer

equity. Using the NEFP tax progressivity index, results

indicated a tax base which appeared to place a greater

burden on low income groups. An alternative was generated

which produced a higher progressivity measure.

A simulation provides the necessary analytical tool

which enables experimentation on a system without in-

curring the risks of direct experimentation. The examples

cited were representative of the capabilities of the

adapted simulation model, and demonstrate the potential

use by researchers, planners, and managers connected with

educational finance.



Background and Rationale

Equality is a concept which the United States has

expressed as one of the basic principles upon which this

country was founded. The Preamble to the Constitution is

illustrative of this point when it stated, "We hold these

truths to be self-evident, that all men are created equal."

The idea still endures, with President Carter declaring that

one of the issues about which his administration is con-

cerned deeply is the issue of "human rights."

However noble an idea, the implementation of such an

ideal as equality has had its limitations. Throughout

history equality has been defined and applied differen-

tially, depending upon who was defining and applying the

concept to whom. Because of this problem, legislatures

(federal and state) have attempted to be more specific in

their intent, with the ultimate objective being that through

a combination of all the pieces of legislation, a more

general interpretation of the concept of equality could be

derived. However, the courts, being the main interpreters

of legislation, have encountered the same definitional

problem of equality as have legislatures.

Some have suggested that through education, equality

is an obtainable goal. This hope is due to the fact that

these same people believe that it is through expanded edu-

cational opportunities that a degree of equality will be

achieved. But, as with most general terms, the concepts

of equality and educational opportunity seemed to confound

the definitional problems already encountered. Given that

school districts provide different educational programs

and fiscally support education at various levels, the con-

troversy of what constitutes equality in education has

evolved to a point where fiscal policies seem to be the

focus of legislators, courts, and educators.

Laws, policies, and procedures for the assessment,

collection, and distribution of revenues to support public

education have been a major issue facing legislatures,

courts, educators, and citizens. The ultimate end of which

is to provide for equality of educational opportunity,

which McCarthy (1977) has characterized as being "firmly

rooted in democratic philosophy and shares an exalted

position with monogomy, brotherhood, and peace" (p. 159).

Public education exists, as the term implies, to

serve society and for the benefit of society. Thus, being

a merit want of society, it should be reflective of the

needs and goals for the society in which it exists. To

facilitate this end, adequate revenues must be provided

to finance public education and to meet the goal of equal-

ity of educational opportunity.

The concept of fiscal equality, although easy to

state, is in fact a complex and dynamic concept. McClure

(1975) suggested that educational equality means "that every

individual should be able to develop to fullest capacity,

given reasonable effort and motivation, and to continue in

ways that enable her or him to perform as effectively as

possible" (p. 102). By this and similar definitions by

others, the concept evolves as fiscal equity rather than

fiscal equality.

The delineation between the two concepts, equality

and equity, being that equality implies uniformity of sup-

port (or service), whereas equity implies differential sup-

port (or service) based upon need. Alexander (1977) ex-

panded upon the concept of equity when he defined it as

generally consisting of at least three aspects-"equality,

utility, and efficiency" (p. 453).

Simple horizontal equality is referred to by economists

as treating equals, equally. But, due to its broad inter-

pretation, equals and equality have become relative terms.

This same drawback of interpretation is also encountered

when one considers the concept of utility. If taxpayers

receive a maximum return for their investment, and they

continue to receive that maximum, then equality occurs.

But, the economic principal of marginal utility suggests

that the value placed upon those returns has differential

utility, and therefore the degree of utility applies.

Efficiency on the other hand addresses itself to a "bal-

anced and comprehensive taxing structure covering all major

forms of activity without falling exclusively on one particu-

lar aspect of the economic system" (Alexander, 1977, p. 455).

Since equality is a goal of public school finance

practice, R. L. Johns (1977) stated the general criteria for

judging achievement thereof as,

(1) The finance program should result in substan-
tial equalization throughout the state. (2) The
program should be fiscally neutral; the quality
and quantity of a child's education should not
be dependent on per capital wealth of the school
district in which he lives. (3) The program should
be financed by an equitable system of taxation.
(4) The program should promote the efficient use
of school funds. (p. 499)

Meeting the criteria as mentioned by Johns (1977)

had been the objectives of state legislatures, courts,

educators, and the lay public, but it has often been a
"patch-work" or "piece-meal" approach. The emphasis to

correct inequities within state formulas has been accom-

plished through "add-ons" to the current formula, or by

raising funding levels within the existing formula. The

result of the corrections has been general confusion on the

part of legislators, educators, and citizens as to what the

end result means to individual school districts.

Hale (1975) addressed the equity of state financial

plans for education in terms of distributional equity and

taxpayer equity. Distributional equity is concerned with

the allocation phase of school finance in regard to testing

the equity of "equal access to resources based upon need,"

whereas taxpayer equity is concerned with the revenue dimen-

sion in regard to testing the equity concept of "equal

treatment-of-equals who have the ability to pay" (Hale,

1975, p. 22). But, as Tanner and Kondwros (1977) stated,

the problems of "enormous growth in expenditures" over

revenues and the inability of local governments to generate

enough revenues have generally prevented both quality edu-

cation and equality of education.

Tanner and Kondwros (1977) stated five reasons why

current state aid formulas appear to be inadequate. They

first concluded that variations in the tax bases, assess-

ment procedures and tax rates make a heavy reliance on the

property tax which they further concluded was an inadequate

source of funding. Second, flat grant provisions within

many state formulas help in maintaining discrepancies.

Third, variations for cost-of-living and delivery systems

are seldom considered in present formulas. Fourth, equaliz-

ing formulas that are based on property wealth "frequently

do not correlate with individual income" (Tanner & Kondwros,

1977, p. 2), and this is a crucial relationship in the

ability of a school district to generate revenue.

Fifth, present formulas do not take into account high cost

programs necessary to meet the needs of various children.

To deal with equalization of educational opportunity

and taxpayer equity issues in a comprehensive study of

school finance requires the use of the most efficient tool

available to show the impact of policy decisions, and to

allow for analysis of alternatives. Through the use of a

computer simulation researchers and planners can quickly

and accurately answer questions in regard to the impact of

proposed plans on individual school districts (Johns,

1977, p. 508).

It is within the computer-based simulation that pro-

gram decisions, distributional decisions, and revenue de-

cisions can be analyzed in relationship to a state as a

whole. The simulation model provides the needed planning,

management, and research tool for school finance policy-

makers and policy-managers.

School finance specialists and researchers have sug-

gested that almost all state-local public school support

programs in use throughout the United States essentially

are the same, with the variation being within the definition

of terms used (Johns, 1968). These variations in definitions

actually determine the degree of equality of educational op-

portunity contained in the state plan. One focus of this

study was to determine the variation from equalization of

several alternative public school finance plans through

the use of a computer model adapted for that purpose.

Statement of the Problem

The focus of this study was to adapt and test a

computer-based school finance simulation model that would

provide computational subroutines to generate alternative

sets of program and fiscal decisions. The problem was to

generate alternative sets of public school finance program

and fiscal decisions and demonstrate their respective

contribution to equalization of educational opportunity

and taxpayer equity. The specific aspects of the problem


1. Identification of the data elements necessary

to generate alternative funding patterns for

various public school support formulae.

2. To develop calculation subroutines and decision

sets necessary to simulate various public

school funding patterns.

3. To simulate four alternative funding patterns

and to evaluate the results relative to gen-

erally accepted criteria of equalization of

educational opportunity and taxpayer equity.


The general procedures for this study were conducted

in three phases:

1. Data were identified and collected which

enabled production of program and fiscal de-

cisions relative to alternative school finance

funding plans.

2. Calculation and decision subroutines were

developed which enabled alternative patterns of

school finance to be modeled.

3. Analysis of the alternative school funding plans

in regard to both equalization of educational

opportunity and taxpayer equity criteria.

S- Data were identified and collected which enabled pro-
duction of the program and fiscal decisions relative to
alternative school finance funding plans.

Since West Virginia school finance programs are based

on student and teacher data of the previous year, data were

available to duplicate the 1976-1977 funding plan.

Programmatically, for the purposes of this study, the

decision was made to generate alternative funding patterns

based on kindergarten, elementary, secondary, special

education (for 10 exceptionalities or maladies or 4 delivery

systems, using full time equivalency enrollment) and voca-

tional education (for eight categories, using full time

equivalency enrollment). Additional programmatic data used

included salaries of professional educators, special services

and modifying factors, and fiscal data relative to both

state and local revenue and wealth.

Data collection was limited to information that was

obtainable at the state level. The State Department of

Education, State Department of Transportation, and State

Tax Collectors Office were the prime sourcesof information

regarding local school districts.

2 Calculation and decision subroutines were developed
which enabled alternative patterns of school finance to
be modeled.

Following collection of data necessary to simulate the

alternative patterns of school finance, a decision manual

was developed to provide researchers and planners options

as to programs, allocations, and to sources of revenue.

Then by modification of the National Education Finance

Project simulation, calculational subroutines were developed

to enable execution of the desired decisions.

3 Analysis of the alternative school funding plans in
regard to both equalization of educational opportunity
and taxpayer equity criteria.

Foundation plan, percentage equalization plan, and

guaranteed yield plan were decided as the basic options

that were utilized in the model for analysis. Equalization

of educational opportunity and taxpayer equity criteria

were applied to each, and served as the basis for analysis.


1. The study was limited to the state of West


2. Enrollment figures used were based on a full

time equivalency basis.

3. Analysis was limited to generalized funding

patterns (foundation plan, percentage equalizing

plan, and guaranteed yield).

4. Programmatic data and fiscal data were obtained

that reflected the 1976-1977 basis of support

for public schools. However, data for the base

year that was unavailable were substituted by

1975-1976 data.


Through the use of computer simulations, state planners

and researchers can analyze the equalization effects of

various alternative patterns of school finance funding

strategies. Though the study was limited to the state of

West Virginia, generalizations may be inferred to other

states if similar data and structure exists.

Definition of Terms

Actual costs. Actual costs were used for the purposes

of this study to denote total expenditures incurred for

the specific category referenced.

Approved costs. Approved costs for the purposes of

this study were used to denote approved allocations by the

state for the specific category referenced.

Delivery system. Delivery system for the purposes of

this study were used to denote a specific modality of

instruction within the special education program.

Distributional decisions. Distributional decisions

for the purposes of this study were used to refer to the

total state and local support of the basic state program,

procedures for distribution and procedures for local incen-

tive, if desired.

Fiscal capacity. Fiscal capacity refers to the total

resources a governmental unit has available to them to tax

and generate revenue for public purposes, which includes


Fiscal equity. Fiscal equity is a concept which

states that all divisions within a state should have access

to similar revenues for public purposes, including educa-


Fiscal neutrality. Fiscal neutrality is a concept

that was established within the Serrano (1971) decision.

The court stated that a state must provide each district

with relatively equal financial capacity, regardless of

that districts spending patterns or program offerings.

Malady. Malady or exceptionality was used synony-

mously for the purposes of this study, and denoted a par-

ticular special education category. The categories that

were used in the model included: educable mentally re-

tarded, trainable mentally retarded, learning disabilities,

behavioral disorders, physically handicapped, multiple

handicapped, visually handicapped, auditorily handicapped,

communication disorders, homebound and gifted.

Professional educator. Professional educator for

the purposes of this study was defined as a teacher,

supervisor, principal, superintendent, librarian, or any

other person regularly employed for instructional purposes.

Program decisions. Program decisions for the pur-

poses of this study were used to enable determination of

programs and units of a state school program, cost differ-

entials (if appropriate) and other special modifying


Revenue decisions. Revenue decisions for the pur-

poses of this study were used to refer to tax sources of

both state and local governments to provide funds for

education, and the desired rates associated with each

revenue source.



The review of related literature is divided into five

major sections. The first reviews the concept of equality

of educational opportunity. The second section reviews the

major litigation that has occurred in regard to fiscal

equality of educational opportunity. The third section

reviews the various state support plans for education. The

fourth section reviews educational practice in West Vir-

ginia (historical and current), and the final section

reviews concepts and uses of simulation.

Equality of Educational Opportunity

Since the formation of the United States in 1776, the

concepts of equality and opportunity have been mentioned in

several major policy documents of the nation's beliefs and

goals. In addition, the concepts have been defined and

redefined by many, depending on their point of reference

or interest.

Four examples of the emphasis on equality and oppor-

tunity are as follows. First within the Declaration of

Independence is expressed,

We hold these truths to be self-evident, that
all men are created equal, that they are endowed
by their creator with certain unalienable Rights,
that among these are life, liberty and the pur-
suit of happiness.

Second, within the Constitution, the Fourteenth Amendment

reaffirmed the concept of equality when it stated,

No state shall make or enforce any law which shall
abridge the privileges or immunities of citizens
of the United States; nor shall any State deprive
any person of life, liberty or property, without
due process of law; nor deny to any person .
the equal protection of laws.

Third, within the Universal Declaration of Human Rights and

the UNESCO Constitution, the United States again stated

its commitment to the concept of equality, and specifically

to educational opportunity when they pledged to affirm,

The concept of equality of educational opportunity
without regard to race, sex or any distinction
economic or social. (UNESCO, 1945, Article 1, b)

And, fourth, Section 402 of the Civil Rights Act, as cited

by James Coleman (1966), charged the United States Office

of Education to undertake a survey,

Concerning the lack of availability of equal edu-
cational opportunity for individuals by reason of
race, color, religion, or national origin in
public educational institutions at all levels
in the United States. (p. iii)

The previously mentioned documents and statements have

expressed a commitment by the federal government to provide

for citizen equality, especially in regard to educational

opportunity. Generally, the previous statements have been

held as the global concepts of equality of educational

opportunity. Specifically, a United States Supreme Court

decision of 1937, in regard to Social Security, provided

the precedent for interpreting the "general welfare" pro-

vision of Article I, Section 8 of the Constitution in light

of equality of educational opportunity. The court stated,

Nor is the concept of general welfare static.
Needs that were (considered) narrow or parochial
a century ago may be interwoven in our day with
the well being of the Nation. What is critical
or urgent changes with the times. (Helvering v.
Davis, 1937, 301 US 619)

Justice Frankfurter in a later decision similarly expressed

the changing nature of equal protection when he stated

that, "It is not a yardstick. It .is a process" (Joint

Anti-Facist Refugee Concern v. McGrath, 1951, 341 US 123,

162). What the justice was expressing was that general

welfare, of which education could be a provision, is a

changing concept, and requires modification over time. In

regards to "equal treatment for purposes of Equal Protec-

tion Clause," the Supreme Court stated that this too "does

change" (Harper v. Virginia Board of Elections, 1966,

.383 US 663, 669). This decision, although relating to

voting rights, later was relied upon by the California

Supreme Court in the Serrano case (487 P.2d 1241) regarding
"wealth" as a suspect classification.

Charles Benson (1965) provided the following statement

in regards to public education and equal protection:

The only universally accepted criterion of a
public activity is that it affords equal
treatment to equals. With respect to schooling,
this implies that any two children of the same
abilities shall receive equivalent forms of
assistance in developing those abilities, wherever
they live in a given state and whatever their
parent's circumstances are. (p. 62)

Prior to the industrial revolution the concept of

equality of educational opportunity had little or no rele-

vance. Children during this time were an integral part of

the family unit and were expected to follow in their fam-

ily's interests. The child's education was considered only

important in the aspect of acquiring necessary skills to

further the family's economic and'social unit.

The result of the industrial revolution was that the

family unit underwent a great change. Men began being em-

ployed outside the family unit and thus they no longer pro-

vided homebound vocational training for the young. Coupled

with the fact that factories required minimum skills, the

need for public education became a concern for the general

populace. But, as Coleman (1968) stated, this concern was

to the exclusion of Indians and Southern blacks and little

was done to encourage the poor. Coleman (1968) had

summarized this post-industrial revolution when he stated:

The history of education since the industrial
revolution shows a continual struggle between 2
forces: the desire by members of society to have
educational opportunity for all children, and the
desire of each family to provide the best educa-
tion it can afford for its own children. (p. vii)

With the turn of the twentieth century, education

began to be redefined. Traditional college preparatory

secondary schools began to modify their curriculum to meet

the needs of the majority of students who were not college

bound. And, the concept of "separate but equal" was re-

affirmed for black children (Plessey v. Ferguson, 163 US 537,

1896). This provision continued over the next half century

until it was struck down by the Supreme Court in Brown v.

Board of Education of Topeka (347 US 493, 1954) where it

stated in dictum:

Today, education is perhaps the most important
function of state and local .government ..
In these days, it is doubtful that any child
may reasonably expect to succeed in life if he
is denied the opportunity to an education. Such
an opportunity, where the State has undertaken
to provide it is a right which must be made
available to all on equal terms.

The Supreme Court's statement of value was similarly

stated by Thomas Jefferson (cited in Division of Surveys

and Fields, 1956) at the country's beginning when he said,

"If a nation expects to be ignorant and free in a state of

civilization, it expects what will never be" (p. 1).

Adam Smith (reprint, 1905) in 1776 similarly said in The

Wealth of Nations that education is a value to all society

and the expenses of it should "be defrayed by the general

contribution of the whole society" (p. 212).

Value implies something of worth, and education pro-

vides many economic and social benefits to society which

Johns, Alexander, and Jordan (1972) example as

improvement of the environment in which production
takes place, greater flexibility and adaptability
of the labor force, and greater ability to develop
technical improvements and incorporate them into
production processes. Conversely, externalities
of a negative nature, from the lack of education.
(p. 57)

Theodore Schultz (1970, pp. 29-57) also discussed and recog-

nized the economic factors involved in education. Addi-

tionally, Alexander (1976) provided an in-depth discussion

of the economic factors involved in education in his article

"The Value of An Education." He stated that

Economic measures of educational benefits are
inadequate to capture the full value of an
educated citizenry. . Estimates of social
returns to education do not . identify the
true values to society of higher levels of edu-
cation . for its contribution is the preven-
tion of many social problems. (p. 466)

In regard to providing all citizens with the social

and economic benefits a nation may offer, the concept of

equality of educational opportunity emerged. Anderson

(1965) stated that "Parity of opportunity is the simplest

definition of equity: If a group makes up 10% of the

population, it should receive 10% of the places" (pp.

341-342). He later discussed variations of his basic

propositions which included:

(1) an equal amount of education to everyone,
(2) enough education to bring everyone to a
given standard, (3) enough education to permit
each person to reach his potential, (4) continual
education so long as gains in learning per input
of teaching matched an agreed norm. (p. 342)

The first variation Anderson discussed is one concept

of equality while variations two, three, and four more

fully express the concept of equity. And, as the Supreme

Court expressed, this is the concept toward which educa-

tional finance practices must evolve. The Court said,

The Equal Protection Clause does not require
absolute equality or precisely equal advantages.
Nor, indeed in view of the infinite variables
affecting the educational process, can any system
assure equal quality of education except in the
most relative sense. (411 US 24, 1973)

Hale (1975) explained that the theoretical concept of

equity must be assessed in terms of distributional equity

and taxpayer equity. Distributional equity concerns itself

with the allocation dimension of school finance in regard

to equal access to resources based upon fiscal and/or edu-

cational need. Whereas taxpayer equity concerns itself

with the revenue dimension of school finance in regard to
equall treatment of equals who have the ability to pay"

(Hale, 1975, p. 22).

Distributional equity is concerned with a uniform

definition of need. Fiscal need takes into account vari-

ations of district's ability to finance the educational

needs of children within the district which some may define

as enrollment accounting, either average daily membership

(ADM) or average daily attendance (ADA) or full time

equivalency (FTE). Educational need as defined by some may

be defined as programs, curriculum, teacher in-service,

et cetera. Cubberley (1906) stated that as one reduces the

variations in the index used, the more equitable the pro-


Taxpayer equity is concerned with the revenue dimen-

sion of school finance, and the relationships of local,

state, and federal support and tax bases utilized by each.

The major sources of revenue generated by the federal govern-

ment are the personal and corporate income taxes, whereas

state government's major tax bases are sales and gross re-

ceipts, personal income, and corporate income. The primary

source of local revenue for school support is the ad valorem

taxes levied on real property, which is considered an in-

equitable measure of taxpaying ability.

Alternatives suggested to replace the property tax

as an effective measure of district wealth or fiscal capacity

have included combinations of measures that currently exist.

Ahlf (1964) suggested a combination of equalized property

value, family income and effective buying income as the

most effective measure of fiscal capacity. Others, such as

James and Cronin (1969) stated that neither property nor

income individually measure wealth, but a combination of the

two is appropriate. Per capital income, median family in-

come, and income per pupil represent the most often used

measures of fiscal capacity in school finance research.

Whatever the source or the base, Due (1970) suggested

that taxpayer equity required

(a) Equal treatment of equals. Persons regarded
as being in similar circumstances are taxed
the same.

(b) Distribution of the overall tax burden on
the basis of ability to pay, as measured by
income, by wealth, by consumption.

(c) Exclusion from tax of persons in the lowest
income groups, on the grounds that they have
no taxpaying capacity.

(d) A progressive overall distribution of tax
relative to income, on the basis that tax
capacity rises more rapidly than income. (p.293)

Reflecting on Due (1970), Alexander and Jordan (1976)

concluded their analysis of equity offered that a state

school finance program must contain

(a) An adequate determination of the fiscal
ability of the local school district and
should adjust each district's allocation in
terms of its relationship to the state estab-
lished standard

(b) Adequacy of funds for a child's educational
opportunity should not be compromised by the
social citizenry's lack of educational aspira-
tions as reflected in the local tax rate or

(c) Should recognize . the individual educa-
tional needs of all children throughout the

(d) Provisions for greater funding to those school
districts which, because of the high cost of
delivering education, cannot provide equal
services. (p. 337)

Fiscal and educational differences of school dis-

trict's must be considered if equity is to be attained.

The failure of states to recognize these differences in

their allocation dimension has caused court challenges to

most state funding patterns. An analysis of past and pend-

ing litigation follows in the next section.

Litigation-Fiscal Equality of Educational Opportunity

Litigation may be utilized by citizens for at least

four uses as stated by Gilhool (cited in Vacca, 1975, p.

120). These uses are (a) to secure substantive rights,

(b) create new environments to enforce or create rights for

citizens, (c) to make visible facts that had previously been

unknown, and (d) redress of grievances.

The first three uses of litigation discussed by

Gilhool have been evident in litigation involving financing

of public education. The substantive right being sought

was equal access to educational opportunity. The plain-

tiff sought to change the financial plans of various states,

and thus bring the inequities in the current system to the

attention of the public (Vacca, 1975, p. 120). The primary

litigation involved challenges based on the equal protec-

tion clause of the Fourteenth Amendment of the Constitution,

and has been divided into three generations by Alexander

and Jordan (1972, pp. 470-508).

The first generation of cases regarded "State School

Finance Programs in the Taxation Context" where the finan-

cial programs created unconstitutional classifications or

violation of equality and uniformity in requirements for

taxation (Alexander & Jordan, 1972, pp. 472 and 481).

This period lasted approximately 60 years from the early

1910's until the late 1960's and involved taxpayers seeking

tax relief for themselves. Within these cases, the tax-

payers attempted to restrain state legislatures from enact-

ing laws dealing with equalization measures. But, "The

courts established the constitutionality of using the

equalization method" (Alexander & Jordan, 1972, p. 495).

The Supreme Court also established a "test" to determine

constitutionality of a states' tax program, which Justice

Jackson (Bell's Gap Railroad Company v. Pennsylvania,

1890) had stated as:

Equal protection does not require identity of
treatment. It only requires that classification
rest on real and not feigned differences, that
the distinction have some relevance to the purpose
for which the classification is made, and the
different treatment be not so disparate, relative
to the difference in classification, as to be
wholly arbitrary. (134 US 232)

In 1912, the Supreme Court of Maine, in Sawyer v.

Gilmore(83 A. 673, 1912) interpreted that the state's

constitutional provision for requiring only equality of

assessment and not equity of distribution to be constitu-

tional. The issue was that a property tax had been collected

statewide, but was being distributed to the exclusion of

unorganized townships. The court concluded that since the

plan was established by the legislature, and if the popu-

lace felt it was unjust, it was up to the populace to

rectify, not the courts.

This first generation of cases attacked equality of

financial public education based on the Fourteenth Amend-

ment of the U.S. Constitution and similar provision of the

constitutions of the various states. The decision in the

Sawyer case was typical of the cases litigated within this

generation. The degree of equalization afforded by the

various states was conditioned by the phrase "insofar as

it is possible" (Alexander & Jordan, 1972, p. 481)

The second generation of cases were characterized as
"educational need" cases and are classified as "pre-Serrano."

These cases challenged the concept that educational support

was a function of the district's wealth, and that indi-

vidual needs and deficiencies should be considered.

Two cases were prime examples of litigation in this

generation. They were Mclnnis v. Shapiro (293 F.Supp. 327,

1968) in Illinois, and Burruss v. Wilkerson (310 F.Supp.

572, 1969) in Virginia. In Mclnnis the plaintiffs chal-

lenged the State of Illinois financial plan as being a

violation of the equal protection clause of the U.S. Con-

stitution. Plaintiffs contested that as the plan existed,

there was a wide variation in per student expenditure, and

that the variation should be based only on need. The court

concluded that the plaintiffs had neither clearly stated

the fiscal equalization issue nor the educational need

issue. Since "judicially manageable standards" had not been

provided for need, and the Fourteenth Amendment did not re-

quire expenditures based on need, the Illinois plan was not


Similarly in the Burruss case, plaintiffs argued that

state allocations should be based on educational need. The

court concluded that disparities were not based upon invidi-

ous discrimination by the state, but were produced by de-

ficient taxable value in the district. In his comment,

Circuit Judge Bryan (Burruss v. Wilkerson, p. 574) ex-

pressed a "hands off" attitude when he stated

Courts have neither the knowledge, nor the
power to tailor the public moneys to fit the
varying needs of these students throughout the

Florida's financial plan was challenged and ruled uncon-

stitutional by the state supreme court in that it prevented

poor counties "from providing as good an education for

their children as richer counties" (Hargrave v. Kirk, 1971,

313 F.Supp. 944, 1970; Vacated 490 US 479, at p. 945).

This decision was later vacated by a federal district court.

Although the decision might be viewed as a loss in regard

to equity, Alexander (1975) pointed out that had the

original decision stood, it would have "deterred equaliza-

tion rather than increasing it" (p. 18). The main issue

in Hargrave was that plaintiffs from wealthy districts

were trying to remove a state cap on millage. The intended

purpose was to enable poorer counties to raise more money,

but in the final analysis, so would the wealthier districts,

thus not really reducing the variations between the dis-


The next generation of cases, which Alexander and

Jordan (1972, p. 482) classified were typified by the fact

that a "child's education cannot be a function of school

district wealth" or what is called the Serrano Era.

On August 30, 1971, the California Supreme Court

decided the Serrano v. Priest (487 P.2d 1241) case. The

plaintiff contended that the California plan for financing

education "makes the quality of education . a function

of the wealth of the children's parents and neighbors, as

measured by the tax base of the school district in which

said children reside" (Serrano v. Priest, 1971, p. 1252).

In their decision the court stated that there is a "com-

pelling state interest" involved in financing education,

since education was a "fundamental interest" (Serrano v.

Priest, 1971, p. 1258). By their interpretation of educa-

tion as a guaranteed fundamental right, the court applied

the "strict scrutiny" test, and determined that wealth was

a suspect classification, and could not be used as a con-

dition of a child's education opportunities. The strict

scrutiny test shifted dramatically the burden of proof

from the plaintiffs to the state. Infact, rarely has a

state been able to exhibit a governmental goal sufficiently

compelling to withstand strict scrutiny analysis (McCarthy,

1977, p. 160).

Within a year following the Serrano decision, 52

similar cases were filed in 31 states (Geske & Rossmiller,

1977, p. 517).

Six weeks following Serrano, the United States Dis-

trict Court in Minnesota used the' findings of Serrano in

Van Dusartz v. Hatfield (334 F.Supp. 870, 1970). Again,

as with Serrano, plaintiffs contended that the Minnesota

financial plan made spending per pupil a function of wealth,

and thus violated the equal protection clause of the Four-

teenth Amendment. Applying the "fiscal neutrality" concept

and "strict scrutiny" concept as defined in Serrano, Judge

Lord stated that students in public school "enjoy a right"

for a level of funding unaffected by variations in taxable

wealth in their district (at p. 872).

In not requiring uniformity of expenditures as was

the case in Serrano, the court interpreted fiscal neu-

trality as saying that

The fiscal neutrality principle not only
removes discrimination by wealth but also allows
free play to local effort and choice,and openly

permits the state to adopt one of many optional
school financing systems which do not violate
the equal protection clause. (Van Dusartz, 1971,
p. 877)

The Michigan State Supreme Court held in Milliken v. Green

(203 N.W. 389 Mich. 1, 2d 457, 1972) that the school fi-

nance provision violated the state constitution. The court

in applying the "compelling states' interest" and the test

of "rationality" concluded that there was an inherent in-

equality in the property tax bases which created unequal

support (at pp. 462-463). As with other cases, the court

did not require absolute equality in distribution. Sub-

sequently, with a change of judges in 1973 a new decision

ruled the evidence did not prove children in low wealth

districts were deprived of equal protection, and thus the

decision was vacated (390 Mich. 389, 212 N.W.2d 711,


In New Jersey, the Supreme Court was asked to decide

on the New Jersey plan of financing schools in Robinson v.

Cahill (62 N.J. 473, 303 A.2d 273, 1973). The lower court

had determined that the plan in operation violated the

state and federal provision of equal protection, and the

state had failed to provide a "thorough and efficient

system of public schools." However, when Robinson was

appealed, the Rodriquez decision had just been handed down

by the U.S. Supreme Court and the New Jersey Supreme Court

refused to review the equal protection issue. But, the

court did affirm the lower court decision that the consti-

tutional mandate of "thorough and efficient" had not been

met. The courts concern was that the "end product" meet

the mandate, and that the process was up to the legisla-

ture to design what was necessary to fulfill the requirement.

Implicit within "thorough and efficient" the court charged

that "the Constitution's guarantee must be understood to

embrace that educational opportunity which is needed in

the contemporary setting to equip a child for his role as

a citizen and as a competitor in the labor market" (303 A.2d

295, 1973).

Lucas (1972) has suggested that the basic assumption

underlying Serrano generation cases involved

1. The equal protection clause applies, at
least as it relates to education in the
public schools, to the state as an entity.

2. Equal protection is denied to the taxpayer when
a given millage per dollar of taxable property
"buys" less education per school child in one
district than it does in another.

3. The school children in the districts with the
lower tax yield per child from a constant
millage are denied equal protection.

4. "Poor" children live in districts with low
totals of taxable property, and consequently
it is argued that the local tax system of
school financing is, de facto, a wealth classi-
fication, to be viewed with particular sus-
picion. (pp. 18-20)

This four-year period (1969-1973), characteristic of

successful challenges to state school finance provisions,

was brought to an end when the U.S. Supreme Court made

their decision in San Antonio Independent School District

v. Rodriguez (411 US 1, 1973, 337 F.Supp. 280, 93 S.Ct.1278

U.S. Supreme Court, 1973). In this now famous decision, the

U.S. Supreme Court held that financial plans that produced

differences in educational opportunities among school

districts did not violate the Constitutional provision of

equal protection.

The Court, in its conclusion, stated first that the

Constitution makes no provision for education; therefore,

it is not a fundamental right, and the strict scrutiny

test (Serrano) does not apply. Secondly, the appellees

were unable to prove that poor people lived in poor dis-

tricts and thus no class per se was being discriminated

against--since a "class of disadvantaged 'poor' cannot be

defined in customary equal protection terms" (411 US 19).

Echoing previous decisions, Justice Powell restated the

doctrine that the solution to the problem is with the law-

makers, not thecourts (San Antonio v. Rodriguez, 1973, at


Some have considered a fourth generation of equali-

zation cases to be those based on Civil Rights actions

(Lau v. Nichols, 1974, 94 S.Ct. 786) and challenges to

state constitutional provisions. The latter seems espe-

cially valid in light of the fact, most, if not all state

constitutions provide for education in addition to contain-

ing an equal protection clause. However, state courts

have returned mixed decisions on this issue.

The same opinion as Rodriguez was reaffirmed in the

Northshore School Dist #417 v. Kinnear (530 P.2d 178, 84

Wash.2d 685, 1974) when the court recognized the importance

of schools, but also restated that it was not a constitu-

tional guarantee. Chief Justice Hale echoed Justice

Powell when he stated that the legislature, not the courts

should "provide for a general and uniform system of public

schools" (at p. 196).

Stofstall v. Hollins (110 Ariz. 88, 515 P.2d 590,

1973), an Arizona case, was similarly concluded with the

statement that education was a state constitutional right,

but the financing plan did not violate the "equal protection"

clause or "general and uniform" clause of the state con-

stitution. The court, however, did not relate fiscal equal-

ity and the "general and uniform" provision of the state


Similarly the Idaho Supreme Court (Thompson v. Engle-

king, 537 P.2d 635, 1975) held that even though the state is

constitutionally charged with "establishing and maintaining

a general, uniform, and thorough system of public, free,

common schools for children," this does not require equal

amounts allocated throughout the state.

The trend in this era has not all been bleak. A

Connecticut court held that the constitutional requirement

that the legislature enact "appropriate" laws to provide

free public education was not being met by the current

financial plan (Horton v. Meskill, 1974, 31 Conn.Supp. 377,

322 A.2d 113). Final decision is pending on appeal to the

state supreme court.

A trial court in Washington (Seattle School Dist. No. 1

v. Washington, Cir. No. 53950, 1976) held the state finan-

cial plan violated the state constitutional provision for

ample funding of educating all children within its borders.

Georgia's constitutional provision of providing an adequate

education for all citizens is similarly under challenge

(Thomas v. Stewart, Docket No. 8275 (Polk County Superior

Court, 1976). The Washington decision is on appeal to the

state supreme court and the Georgia case is also expected

to reach that state's supreme court.

With all the litigation that has occurred in the past

10 years, one would have expected closure on the issue of

equality and financing the public schools. Part of the

problem that now exists is that although intending the

same thing, each state constitution uses different terms,

and thus one settlement does not apply to another state.

The fact that education is a "state's right" was elaborated

on in Horton v. Meskill (1974) when the court stated

Because educational finance systems vary from
state to state, and because the provisions of
state constitutions vary from state to state,
decisions in other states raising the issue under
a state constitution are of little value as
precedents. (31 Conn.Supp. 377, 332 A.2d 813)

West Virginia's system of financing public schools

was under litigation (Pauley v. Kelley, Civil Action 75-

1268) based on a "thorough and efficient" clause of the

state constitution (Article XII S.1). The "Lincoln County

Case," as it was called, presented a challenge similar to

the one argued in Robinson v. Cahill (62 NJ 473, 303 A.2d

273, 1973) especially in light of the similarity in wording

ofthe West Virgina and New Jersey Constitutions.

Prior to the "Lincoln County Case," the West Virginia

court had expressed its opinion of the "thorough and

efficient" clause and the importance of education when it


The will of the people, through the basic law
enacted by them, that a thorough efficient system
of free schools is of paramount importance in a
free society and that neither the legislative
nor the executive branch of government may per-
form any act which would result in the eliminating
of this safeguard. (State ex rel. Brotherton v.
Blankenship, 1973, 207 S.E.2d 436, 1973)

On June 14, 1977, the Thirteenth Judicial Circuit

Court, Justice Smith presiding, stated that

It seems clear from the record that Lincoln
County is not providing these basics, and that
the school system in that county falls short
of that constitutional mandate. (Pauley v.
Kelley, 1977, p. 6)

By that, the judge was referencing the constitutional pro-

vision of "thorough and efficient" schools. However, when

the compelling state interest test was applied, a class

of suspect poor could not be identified (similar to

Rodriguez). In finding for the defendants, Justice Smith


Where the state is failing to meet its consti-
tutional responsibilities, it retains the
obligation to do so through other means of sup-
plemental funding. But the fact that the State
is failing to meet its total constitutional
responsibility does not render unconstitutional
the statute which established the funding
mechanism for meeting part of that responsi-
bility. (Pauley v. Kelley, 1977, p. 13)

In regards to the confusing constitutional questions

involved in this and other decisions, Justice Powell of

the U.S. Supreme Court stated:

One need only look to the decisions of this
Court--to our reversals, our recognition
of evolving concepts, and our 5 to 4 splits--
to recognize the hazard of even informed
prophecy as to what are "unquestionable con-
stitutional rights." (Wood v. Strickland,
1975, 420 US 329)

In summary, "What has now become clear is that the

courts have provided only an opportunity, not an answer;

a starting point for reform, not a solution to the unfair-

ness and irrationality of educational funding in America"

(Berke, 1974, p. x).

State Support Plans for Education

The previous two sections noted that much has

transpired in the area of equal educational opportunity.

But, as Michelson (1974) summarized, "Equality is a ri-

diculous place to end school finance, but a good place to

start" (p. 442).

In discussing state financing of education, the

reference is usually made to state-aid formula. Cope

(1969) commented that usually these formulas are generally

accepted without adequate questioning, based on apparent

validity. He continued by adding .that once accepted, they

tend to grow more rigid and detailed, and that "formulas

merely bring confusion out of chaos" (Cope, 1969, p. 30).

Pierce, Garmes, Guthrie, and Kirst (1975) described how

simple formulas, over time, have had to be modified to

satisfy interest groups or correct injustices within the

formula. They concluded much the same as Cope (1969) when

they stated, "Over time these small changes make the school

finance formula a mesh of adjustments and computations"

(p. 122). Most authors in the field concur with Cope

and Pierce et al. summary of most state funding formulas.

Although cloaked by many names and different terms,

state funding programs (formulas) can generally be grouped

as either flat grant, equalization programs, or complete

state and federal support. Prior to the analysis of these

plans a brief historical perspective on state funding and

the early theorists will be discussed.

Prior to the formation of the United States, educa-

tion had been considered a colonial state function. The

Massachusetts Bay Colony in 1642 and 1647 through court

decisions and the Deluder Satan Act established that parents

must provide for the education of their children, and that

if a town consisted of 50 families or more, a teacher must

be provided. This early attempt by the colonists was later

modified into what was known as "The New England Plan."

The ideas of compulsory attendance, local control and

local support of education were encompassed within this


The Constitution of the United States is silent with

regard to education. Due to this omission, whether inten-

tional or not, education thus became a state function accord-

ing to the Tenth Amendment since any power not expressly

mentioned within the document would reside with the states.

Most states during the nineteenth century assumed

responsibility for public education by "authorizing the

levy of local school taxes for the support of the public

schools" based on a school census with little concern for

equality of educational opportunity or a minimum educational

program for all children (Johns, Alexander, & Jordan,

1972, p. 2). There existed throughout the century neither

an integrated plan nor conceptual theory of school finance.

Early Theorists

The concept of state control was now established and

accepted by most people. But, there was no real philosophy

or practice of state aid throughout the country. Then,

with the dawning of the twentieth century, several philos-

ophers emerged. These early philosophers were associated

with the major universities of the time, namely Teachers

College, Columbia University, University of Chicago, and

the University of Pennsylvania (Johns et al., 1972, p. 3).

Ellwood P. Cubberley is known for "formulating the

basic concepts of state school support" (Cohn, 1974, p. 14).

Cubberley was a student at Teachers College, Columbia Uni-

versity, and received his doctorate from there in 1905.

One year later, his revised dissertation was published

under the title School Funds and Their Apportionment.

In his book, Cubberley analyzed basic state school

financing from a historical perspective, a legal perspec-

tive, and wealth distribution effects of the Industrial

Revolution, and the evidence of unequal educational oppor-

tunities within a state (Johns et al., 1972, p. 3). Cub-

berley believed both the state and local governments shared

responsibility for school finance and that local needs,

fiscal effort,and pupil attendance should be referenced

when allocating financial aid. Cubberley applied his basic

philosophy of state responsibility when he stated:

Theoretically all the children of a state are
equally important and are entitled to have the
same advantages; practically this can never be
quite true. The duty of the state is to secure
for all as high a minimum of good instruction as
is possible, but not to reduce all to the mini-
mum; to equalize the advantages to all as nearly
as can be done with the resources at hand; to
place a premium on those local efforts which
will enable communities to use above the legal
minimum as far as possible; and to encourage
communities to extend their educational energies
to new and desirable undertakings. (p. 17)

Cubberleysuggests that a state-wide school tax might

best equalize the fiscal burden among school districts and

that the best basis for fund allocation was a combination

of a unit designation, which he called "teacher employed"

and aggregate days attendance. He further suggested cre-

ation of a "reserve fund" to supplement districts which were

at maximum legal effort, but could not generate sufficient

revenue to meet minimum state demands (pp. 250-254).

Harlan Updegraff is known "for justifying the rewards

for local effort on the basis of efficiency" through his

1921-22 analysis of New York and Pennsylvania schools

(Cohn, 1974, p. 19). Through his analysis of the financial

policies of these states he added the concept of local

effort in addition to the concepts of Cubberley, with whom

he agreed.

Updegraff's basic principles were that (a) local

support was fundamental; (b) local districts should have

enough taxable property for school purposes (without an

undue burden on property owners); (c) part of the support

should come from the state, based on certain factors (in-

versely to districts' wealth); (d) state aid should increase

efficiency of citizens in democratic government; and (e)

guarantee equal opportunity (cited in Johns et al., 1972,

p. 6).

Not only did he articulate his concepts, Updegraff

introduced two new concepts, the first of these concepts

being the idea of the teacher unit for defining a district's

need; the second was an equalization plan for distributing

state aid.

Updegraff's teacher unit was different from Cubberley's

teacher employed unit, in that within the context of the

teacher unit, a predetermined number of students per class

would compose a teacher unit. Within the context of the

equalization plan, Updegraff proposed that a scale be

established whereby increasing amounts of aid were provided

by the state for increasing amounts of local effort.

Updegraff's plan provided for helping those districts who

helped themselves. This was achieved by increased support

to those districts who were low in property value but were

at a high level of effort.

Several states now use a variation of Updegraff's

percentage equalizing plan, which will be dealt with later

in this chapter. The plan can also be modified through

addition of a recapture and redistribution clause (Coons

et al., 1970), p. 207), in what is referred to as "Power

Equalization." Updegraff's plan has been categorized,

by some, to provide incentives to local districts for

quality education (Johns et al., 1972, p. 7).

George D. Strayer and Robert M. Haig are best known

for "emphasizing the equalization of educational oppor-

tunity" (Cohn, 1974, p. 17). While associated with Colum-

bia University they analyzed New York's state plan for

financing schools, which was Cubberley's Flat Grant Plan.

They concluded that equalization of educational oppor-

tunity and reward for local effort were not complimentary,

but at variance to each other (Cohn, 1974, p. 17). They

attempted to define equalization in terms of a minimum

educational program, or what has become known as "The

Minimum Foundation Program."

Within their plan, as was explained in Financing of

Education in the State of New York (1923) they established

the necessities for a state to provide for "equalization

of educational opportunity" or "equalization of school

support" (Johns et al., 1972, p. 8). The necessities were

defined as (a) within localities, children will be offered

a prescribed minimum of equal education; (b) in relation

to the abilities of the taxpayers of the locality, revenue

for education would be raised by the state or local taxa-

tion at a uniform rate; and (c) "to provide adequately

either for the supervision and control of all the schools,

or for their direct administration by a state department

of education" (Strayer & Haig, 1923, p. 174).

The steps Strayer and Haig presented for establish-

ment of their plan consisted of (a) the state establishing

the cost needed per pupil for a satisfactory minimum pro-

gram; (b) the state computing a property tax rate necessary

to finance the established program, using the wealthiest

district as the base; (c) the tax rate established is then

levied by all districts; and (d) any difference between what

is raised and the amount necessary to finance the minimum

program is contributed by the state.

Strayer and Haig did not concur with either Cubberley

or Updegraff in their reward for local effort, although in

their plan they did allow local districts to levy above

the minimum. Therefore, as Cohn (1974, p. 18) stated, they

did not provide for equal educational opportunity, but

minimum educational opportunity. Charles Benson (cited

in Coons, Clune, & Sugarman, 1970, p. 65) critiqued the

Strayer-Haig Plan when he said,

In most states, nearly all districts, rich and
poor, do tax at a level above the minimum, so
that the foundation program is indeed but a foun-
dation upon which the districts with richer tax
bases continue to build much finer houses than
do poorer districts. Under this plan, equal
educational opportunities in terms of balancing
offerings, wealth and effort is a hoax.

Paul R. Mort was known for "developing the minimum

foundation program" (Cohn, 1974, p. 18). A student of

Strayer at Columbia University, he attempted through his

dissertation, Measurement of Educational Need (1924), to

define the satisfactory minimum program conceptualized by

Strayer and Haig. That is why many felt that more than

a theorist, Mort was a disseminator and developer (Johns

et al., 1972, p. 10).

Mort stated a minimum state program should provide

that (a) if a program existed in all or most districts

within the state, they were acceptable for the equaliza-

tion program; (b) if unusual expenses occur for meeting

minimum program outside of local control, they too were

eligible; and (c) if uncommon conditions require additional

offerings, these also may be included (Mort, 1924, pp. 6

and 7). Mort, like Cubberley, considered local leeway very

important (Cohn, 1974, p. 18). He especially encouraged

districts to go over the minimum and provide for innova-

tion and change. Additionally, the fact that classroom

costs varied from place to place, whereas other costs

remained constant in regards to number of pupils, concerned

Mort, and initiated his development of the concept of the

weighted pupil. The concept simply takes the number of

students in a school times a factor, which is based on

things such as size of school, transportation, high school,

et cetera, and yields an adjusted enrollment as an attempt

to provide for differential costs.

Henry C. Morrison is best known for "advocating that

the state should become the sole unit of taxation and ad-

ministration of public schools" (Cohn, 1974, p. 20).

Morrison expressed his ideas in his book School Revenue

(1930), which he authored while on the staff at the Uni-

versity of Chicago. Morrison maintained that because of

the fiscal discrepancies between districts, all previous

attempts had failed to meet educational need and provide

an equitable tax system. He further stated that the state

should be the taxing unit and administrator of the schools

through use of what he suggested was the most equitable

tax, income tax.

Although Hawaii is the only state to date which has

adopted full state funding, New Mexico, Kentucky, and North

Carolina rank high in percentage of state support, 87, 83,

and 81 percent, respectively, with seven additional states

providing at least 70 percent (Tron, 1976, p. 10).

Funding Plans

Although all states have what they call unique
"equalization" funding formulas or programs, all may be

classified as either flat grants, equalization grants, or

complete state and federal support (Johns & Salmon, 1971,

p. 122).

Before continuing with the analysis of each, an im-

portant concept needs to be defined since reference is

made by legislatures that in the area of school finance,

the purpose is equalization of educational opportunity.

For purposes of this study, the Johns and Salmon (1971)

definition was used:

Financial equalization is most nearly accomplished
when the following two factorsare met; (1) edu-
cational needs of the student population are taken
into consideration before the allocations are made,
and (2) the variation of the ability of the local
school districts to support education is reduced
or eliminated through the utilization of state
sources. (p. 120)

Cohn (1974, p. 27) visually illustrated the two determinants

of equalization, when he discussed the Critical Issues in

Evaluation of Equalization Effort, which are consistent

with the Johns and Salmon definition.

Flat Grant Programs as formulated by Cubberleyrepre-

sented sums of money distributed to school districts based

on a unit allocation (per student, classroom, etc.). They

can be further categorized as being uniform or variable

(Johns & Salmon, 1971, p. 121), and are used in addition

to one of the other plans to be discussed.

Under "uniform flat grants," an amount is distributed

per unit, with no consideration given to either educational

need or fiscal capacity. In contrast, variable flat grants

are distributed on a rate per unit, but a weighting factor

is applied to compensate for some factor beyond the school

districts control. With either type, the ultimate disposi-

tion can be general or special.

Flat grants do provide for some degree of equaliza-

tion in that on a uniform basis, wealthy districts pay in

more than they receive. But, as Alexander and Jordan

(1976) commented, flat grants are a viable equalization

plan only to the degree school districts are at or near

fiscal capacity, or if the grants, "were large enough to

approach full state funding" (p. 355).

Equalization grants consider variations in the abil-

ity of local school districts to tax, but not all take

into consideration the needs of the pupils (Johns & Salmon,

1971, p. 122). The ultimate disposition of these grants,

as with flat grants, can be for either a general or

specific purpose.

To analyze these types of grants more productively,

they will be discussed in the context of the types as out-

lined by Johns and Salmon (1971), and by Cohn (1974).

The categories are (a) Strayer-Haig and Mort plan,

(b) percentage-equalizing or state-aid ratio, (c) district

power equalizing, and (d) guaranteed valuation program.

With the Strayer-Haig and Mort Plan, the state de-

termines a minimum satisfactory level of education per

child, a levy is then required of all districts against their

property valuation, and the difference between the amount

raised and the amount needed for the satisfactory minimum

is provided by the state (Johns & Salmon, 1971, p. 123).

The modifications developed by Mort were the concept of

the weighted pupil and the determination of the uniform

levy. Mort utilized the weighted 'pupil in dealing with

the ideas of fiscal capacity and need, whereas he cate-

gorized the original plan as only providing for the former.

Strayer and Haig had stated that the levy was to be deter-

mined by the wealthiest district in the state levying a

rate which would provide the per pupil expenditure level

established by the state as the minimum program. Mort's

modification shifted the focus from the state's wealthiest

per pupil district (Cohn, 1974, pp. 33-34). He further

suggested that another "key district" could be identified,

e.g., the district at the 75th percentile of per pupil


The extent to which a foundation program equalizes

is dependent on the expenditure level the state sets and

the tax rate chosen by the district. A high foundation

level enables more expenditures and less disparities be-

tween districts. However, as the districts tax above the

mandated rate, the wealth of the district becomes a key

factor, thus causing wide disparities again.

Although it has advantages over flat grants, Alexander

and Jordan (1976) summarized this plan when they stated that

"It does not provide for fiscal equalization of local lee-

way beyond a minimal level," and because of requiring a

local millage it has been found objectionable in many

states (p. 355). Likewise, the Education Commission of

the States criticized this plan as setting conservative

per pupil expenditure amounts and being "below a practical

level of support" (1975, p. 4). They concluded that:

If a child had his choice of place to be educated
in a state with a "foundation" system, he would
be well-advised to find a wealthy suburb, which
may not be subject to tax limitations imposed on
some municipalities and which has a very high
assessed valuation. He could expect to find
this suburb peopled with well-educated professional
types who do not protest spending for schools,
at least for their own children. (ECS, 1975,
p. 4)

Percentage-equalization or the state aid ratio pro-

gram (Johns & Salmon, 1971, p. 123) is unique in that the

locality determines the level of expenditure. As Updegraff

originally proposed the plan, it was a variable-level

equalization program which attempted to reconcile equali-

zation of educational opportunity and reward for local

effort. Coons, Clune, and Sugarman (1970, p. 165) stated

that in focusing on the local budget and preserving local

incentive, the plan placed value on effort not wealth.

Under this plan, the state agrees to pay the districts

a predetermined percentage of the total expenditures, with

the ratio of district's wealth per pupil to the state's

average district wealth per pupil as the relationship.

The plan allows for state funds to be allocated in an in-

verse proportion to taxpaying ability (measured by property

value per pupil).

Without a minimum or fixed dollaramount, dollars per

pupil would be a function of local effort alone, which is

characteristic of another equalization plan called "power-

equalizing" (Alexander & Jordan, 1976, pp. 346-357).

In addition to the typical concern for equalizing

a district's property valuation per pupil, Coons, Clune,

and Sugarman's concern was on effort. The power equalizing

plan assures an equal yield for an equal effort or as

Cohn (1974) stated "calls for equal state aid to districts

based on equal tax effort" (p. 35). Coons et al. (1970)

stated the plan allows districts to establish and determine

their own levels of spending,with tax effort being the key

(p. 202). Regardless of the district's wealth, if its

effort is high it will be assured of higher expenditures.

"Moreover, if a district can raise educational funds for

a given tax effort, in excess of the stipulated amount

set by the state, the excess must be transferred back to

the state" (Cohn, 1974, p. 35). The transfer-back, or
"recapture" is considered by some an essential part of

the district power equalizing plan. An example would be

that if two districts "impose the same property tax rate,

they will have identical educational funds per pupil,"

regardless of their wealth or poverty (Cohn, 1974, p. 35).

With this recapture provision this formula truly can be

called both positive and negative in the amount of state

equalized aid to the district.

The main point emphasized under this plan is that

local boards (districts) know best what expenditures are

needed to meet their educational goals, and therefore

should control the purse strings. However, Alexander and

Jordan (1976) stated that if the state would establish no

local fiscal standard, it would abdicate its responsibility

to provide for an equal system of education (p. 357).

Coons, and his associates (1970), recognized yet another

problem concerning the average district, in that rich dis-

tricts might wind up being equalized down (p. 167). In

the final analysis, depending on the schedule established

by the state, Michelson (1974) stated, "District power

equalizing preserves a lot of the status quo, with possibly

some higher local school tax rates thrown in" (p. 104),

especially if the cost of other services in municipalities

are considered.

Another equalizing approach is known as guaranteed

valuation. The state guarantees each district a fixed

valuation or tax yield per unit (Johns & Salmon, 1971, p.

123), which may or may not be weighted. The difference

between what the tax generates and the guaranteed yield is

the state's contribution (Cohn, 1974, p. 32). The effect,

this plan seems to be equivalent and provides the same

equalizing effect as the basic foundation approach (Cohn,

1974, p. 32 and Johns & Salmon, 1971, p. 123). The differ-

ence between the guaranteed valuation plan and the district

power plan being that under this plan the tax rate is

state mandated.

In essence, all plans for financing public education

are based on tax effort, tax yield, and equalized property

valuation per pupil. Allocations are distributed in an

inverse proportion to wealth, which is typically measured

by property valuation per pupil. The roles of state and

local effort differentiate the basic equalization programs

by name, but in their pure form, they are mathematically

equivalent. It is through the specific implementation that

the different equalization abilities of the shared costs

formulas become apparent.

Some of the provisions which alter the financial

plans are minimums, save harmless provisions, definitions,

et cetera. A minimum is a prescribed amount a district

receives, and can be a flat grant regardless of another

equalization provision, or the amount might be stated as

a minimum each district receives (floor). Save harmless

provisions guarantee districts that new provisions of the

financial plan, or a new financial plan will not reduce

allocations to the district from prior years. Definitions,

specifically for enrollment, are essential factors in any

financial plan, and can account for wide discrepancies

in amounts received.

Total State and Federal Support is only in evidence

in the State of Hawaii. Under this plan, units of need

determine the revenue allocation, with local ability not

considered. In defense of full state funding the National

Educational Finance Project showed a positive correlation

between the proportion of state revenue and the degree of

equalization (Johns & Salmon, 1971, p. 137). This also

supports the opinion of many, including Johns and Salmon

(1971), that greater financial equalization is achieved

when the state assumes responsibility for funding (p. 138).

The various states are funding education as they see

fit, exercising their States-rights guarantee. But an

important comment from the President's Commission on

School Finance (1972) should bear final witness to the

success of state plans:

The financial problems of education derive largely
from the evolving inabilities of the States to
create and maintain systems that provide equal
educational opportunity and equality education
to all their children. Having made that observa-
tion, we hasten to state that we are not assigning
blame, but are rather attempting to locate the
points where reforms must be achieved. Efforts by
the States over the years to eliminate or at least
reduce disparities in the delivery of educational
resources have simply not kept pace with needs
that have grown beyond the abilities of the States
to fulfill them. (p. x)

Educational Finance in West Virginia


Due to sparsity of population, and prior control by

Virginia, when West Virginia became a state in 1863, only

3 counties had free district schools. Two years following

statehood,27 counties were servicing 16,000 students,

and five years subsequent, 1756 schools existed with 1810

teachers (Department of Education, 1973, p. 1).

The state constitution was ratified in 1863, and pro-

visions were made for a "thorough and efficient" free

school system,creation for an investment fund to finance

the free schools, provision for county school superintend-

ents, and an elected general state superintendent of free

schools. The state superintendent was subsequently made

part of the executive branch of government in 1872, and

for 37 years he was the extent of the Department of Educa-

tion. Additional duties included being adjutant general

and quarter master general from 1871-1877.

In 1872 a constitutional revision was completed with

the following two provisions specified:

Art. XII, Sec. 1 The legislative shall provide, by gen-
eral law, for a thorough and efficient system of free

Art. XII, Sec. 2 The State Superintendent of Free Schools
shall have a general supervision of free schools and per-
form such other duties in relation thereto as may be
prescribed by law.

The same year the legislature established a State Board

of School Funds composed of the Governor, State Superin-

tendent, Auditor, and State Treasurer.

The legislature also created, in 1872, a General

School Fund for supporting free schools, which included

the salary of the state superintendent and expenses of his

office, and which specified the sources of revenue. Schools

were to be financed by direct taxes on personal property

and real estate (10t per 100), monies received by fines

and forfeitures, and investment in United States bonds.

The state superintendent distributed all money until 1939

when the Board of School Finance, which now consisted of

State Superintendent, Tax Commissioner, and Director of

the Budget, assumed responsibility for disperson of funds.

By 1933, the depression had caused many districts

to close, because of declining property values and tax

incomes the legislature consolidated districts; redefin-

ing a district as a county. Prior to 1933, the General

School Fund provided 5 percent of total cost of district

schools; this amount grew to 53 percent in 1965 (Pearson &

Fuller, 1969, p. 1354), and to approximately 58 percent in


Funds for homebound (crippled) children were appropri-

ated in 1941, and categorical aid was enacted into the

code. Similarly, when the Works Progress Administration

ceased supporting the school lunch program in 1942, the

state assumed the responsibility. Finally, in 1972, $200

million was appropriated under the Better Schools Amend-

ment for all counties to provide additional classroom


Current System

West Virginia's current system of allocating monies

is based on what is referred to as a "demand formula." It

is unique in that the legislature must fund what the

formula determines is necessary to finance education in

the state.

The first step in determination of funds in the

formula is the computation of the Foundation Allowance for

Professional Educators ( 18-9A-4). Using a minimum state

salary matrix, professional educators are provided for at

a rate not to exceed 55 educators per 1000 children.

The second step is a Foundation Allowance for Other

Personnel ( 18-9A-5) and it is allocated based on two

computations. An amount equal to 14 percent of the allo-

cation for professional educators is ascertained and dis-

tributed to the counties in proportion to the adjusted en-

rollment. Then, an amount equal to 6 percent of the alloca-

tion for professional educators is determined and distributed

to the counties in proportion to the number of full-time

bus drivers.

The third step is a Foundation Allowance for Fixed

Charges ( 18-9A-6) and it is determined by addition of the

allowances for professional educators and other personnel,

then multiplying this sum by the current social security

rate plus 2 percent. Items included for coverage are FICA,

Workman's Compensation, property insurance, and so forth.

The money is then distributed to the counties based on the

corresponding professional educators allocation to the


The fourth step is a Foundation Allowance for Trans-

portation Costs ( 18-9A-7) which is determined by a five

step process. Eighty percent of each county's actual

transportation costs are determined, excluding salaries.

That sum is then added to the total cost of insurance

premiums on buses, buildings, and equipment used in the

transportation program. Ten percent of the replacement

value of the bus fleet is then added, along with a figure

that equals 80 percent of the cost of contracted transpor-

tation services and public utility transportation services.

Finally, aid in lieu of transportation is added based on a

state average amount per pupil.

The fifth step is a Foundation Allowance for Adminis-

trative Costs ( 18-9A-8), which is calculated as being

1 percent of the allocation for professional educators.

All counties receive an equal amount.

The sixth step is a Foundation Allowance for Other

Current Expenses ( 18-9A-9), and it is computed as being

equal to 10 percent of the allocation for professional edu-

cators and other personnel. The money is distributed to

the counties in proportion to the adjusted enrollment.

The seventh, and last step is a Foundation Allowance

Toward National Average Attainment ( 18-9A-10). When the

average expenditure per pupil in West Virginia is below

the U.S. Office of Education figures for the national

average, funds which accrue from increased local share

balances in the general school fund, it is allocated back

to the districts in proportion to the adjusted enrollment.

The seven step formula comprises West Virginia financ-

ing of public schools, and is depicted in Table 1. Each

one dollar allocated to column one, results in a cost of

$1.42 when the formula is complete. Other aspects of the

state support program includes supplemental salary alloca-

tions for professional staff (outside of basic support

program), minimum salary support for service personnel

(outside of basic support program), and early childhood

aides (outside of basic support program). Being outside

the basic support program enables the legislature to allo-

cate money where it desires without affecting the whole

program by becoming part of the formula. The state also

allocates funds for Exceptional Children, Vocational Edu-

cation Funds, Safety Education, Orphanage Aid, and School


In addition, the State provided money for Incentive

for Improvement of Program Funds ( 18-9A-14) to encourage

counties to establish new and improved programs and to

reduce class size. Finally, monies are also provided to

counties which experience increased enrollments from one year

to the next ( 18-9A-15).

Chapter 18, Article 9-A, Section 11 of the West

Virginia Code relates to the computation of local shares

for school support and to the appraisal and assessment of

property for taxes. The tax commission is directed to make


Effect on Additional Allocations
for Professional Educator State Aid Formula

Foundation Allowance @ $1.00 Distribution

(1) Professional Educator

(2) Other Personnel:

a. 14% of (1)

b. 6% of (1)

Total 20% of (1)






All Counties in propor-
tion to adjusted net
All Counties in propor-
tion to number of full
time drivers

(3) Fixed Charges

7.85% of (1) + (2)

(4) Transportation Cost
(5) Administrative Cost
1% of (1)

(6) Other Current Expense

10% of (1) + (2)

(7) National Average

All Counties based on
distribution of (1) & (2)


All Counties equally

All Counties in propor-
tion to adjusted net
enrollment ($.002 per


Note: Total Cost = $1.42

and maintain nonutility property appraisals annually.

West Virginia has four classes of property for tax purposes

and is required to assess at not less than 50 percent nor

more than 100 percent of the apprai-sed value.

The classes of property as defined by the state tax

commissioners office are (Local Government Relations

Division, 1975):

Class I All tangible personal property employed
exclusively in agriculture, including
horticulture and grazing; all products
of agriculture, including livestock, while
owned by the producer; all notes, bonds,
and accounts receivable, stocks, and any
other evidences if indebtedness.

Class II- All property owned, used and occupied
exclusively for residential purposes;
all farms, including land used for horti-
culture and grazing, occupied and culti-
vated by their owners or bona fide tenants.

ClassIII- All real and personal property situated
outside of municipalities, exclusive of
Classes I & II.

Class IV- All real and personal property situated
inside of municipalities, exclusive of
Classes I & II. (p. viii)

The local share for support of schools, as defined

in Chapter 18, Article 9-A, Section II, specifies two

factors as the determinants. First, 97.5 percent of

the value for public utility property is determined, and

47.5 percent of the value for nonutility property is

determined. Applicable rates for each class of property

are then applied on the basis of 19.6 (per $100) for

Class I, 39.2 (per $100) for Class II, and 78.4 (per $100)

for Classes III and IV. The result is the local share.

Counties may, for a period of not more than five years,

adopt an additional special levy up to 100 percent of

authorized levy; however, 60 percent of the voters must


Of the money raised by the property tax, approximately

99.5 percent remains within the counties. For the tax

year 1975, see Table 2 for a breakdown of the assess valua-

tion on nonutility property in the State of West Virginia.


Assessed Valuation of Nonutility
Property in West Virginia (1975)

Property Class Assessed Valuation

Class I $ 675,319,569

Class II 2,309,264,807

Class III 2,272,422,582

Class IV 1,767,157,366

Note: Total assessed valuation = $7,024,146,324


The terms simulation and/or model have been around

for a long time, with people generally feeling comfortable

using either term for descriptive purpose. But, what do

they mean? When is it appropriate to use the terms?

Initial review of the literature yielded the follow-

ing definition of model by Schmatz and Sippl (1972): "A

representation in mathematical terms of a process, device,

or concept" (p. 108), and that a simulation was "Subjecting

man to a complex environment similar to one in which he may

wish to operate so that he may gain a feel of its dynamic

behavior" (p. 163). In a similar manner, the Organization

for Economic Cooperation and Development (1971) defined a

model as "a theoretical description of certain aspects of

real-life process" (p. 17). Fitzpatrick (1962), likewise

defined a simulation as "a working model or represen-

tation of a system, and it is assumed that the observation

made can be transferred to the real world to make effec-

tive predictions" (pp. 9-10).

The definitions provided that models are the frame-

work or representation of a real-life environment, and that

simulations are where experiments and manipulations are

performed within the model. McLeod (1968), Manji (1972),

Cruickshank and Broadbent (1970), and Shubik and Brewer

(1972), as well as many others, appear to be in concert

with the operational definitions.

Simulations do not necessarily convey factual informa-

tion, and that may not be their purpose; they are to provide

learning experiences about situations and environments,

and it is through interacting with the simulation that learn-

ing takes place (Coombs, 1976, pp. 1-2). The learning

process may take on one or more aspects depending on the

desired result.

For purposes of this study, Armstrong and Hobson's

(1976) analysis of simulation uses was used inthat the ex-

periences could provide for education and training, deci-

sion making, research, and/or investigation (p. 88). Inbar

and Stoll (1972) and Mize and Cox (1968) concur regarding

the categorical uses.

McClosky (1972, p. 6) presented a Conceptual Frame-

work for Simulations (see Figure 1), which not only listed

similar uses as stated by Armstrong and Hobson, but also

provided a guide to development. The left side indicates

sequential steps, and the body represents concepts to be

developed within the sequence with respect to appropriate

categorical use(s).

Additionally, John Stocton (1973) expanded the uses

of simulation into the affective domain when he stated that

"One of the primary uses of a simulation is that it pro-

vides an initially imperfectly known environment and im-

poses on the participants the problem of defining a

Figure 1. Conceptual Framework for Simulation (from
"Perspectives on Simulation and Miniaturiza-
tion" by M.R. McCloskey, 1972, p. 6. Copy-
righted by the Human Resource Research
Organization, Reprinted by permission)

Definition of System
User Need-------------- Evaluation


Training Research

Definition of System
Performance Requirements--

Determination of Simulator
Cost Effectiveness--------

Selection of System
Elements for Simulation---

Construct Simulation to
Maximize Transfer---------

Specification of Simula-
tion Outputs-------------

Systems Analysis
(Inputs Throughputs Outputs)

Analysis of Performance
Requirements and Conditions
of Performance

Specification of Critical
Knowledges and Performances

Psychological Fidelity

Physical Fidelity



Terminal Criterion Performance

Verification of Transfer--

successful behavior pattern consistent with its charac-

teristics" (p. 90).

It is difficult to segregate simulation uses from

simulation advantages. Broadly speaking, simulation allows

for experimentation on a system, or a part of a system, or

problem associated with a system, without directly dealing

with the system (Mize & Cox, 1968, p. 1).

Shubik and Brewer (1972) concluded their analysis

of simulation uses in very much the same manner as Mize

and Cox (1968), but expanded on the situations where

simulations would be most desirable when they stated:

Simulation provides the meais for gaining
experience and for making and correcting
errors without incurring the costs or risks
of actual application . they should be
used when (1) it is either impossible or
extremely costly to observe certain processes
in the real world, (2) the observed system is
too complex to be described by a set of mathe-
matical equations, (3) no straightforward analyti-
cal technique exists for solution of appropriate
mathematical equations, and (4) it is either
impossible or very costly to obtain data for
more complicated mathematical models describing
the system. (pp. 81-82)

Additional advantages cited by various authors

(Shubik, 1964; Tansey & Unwin, 1969; Cruickshank & Broad-

bent, 1970; Carter & Huzan, 1973; and Chapman & Cousins,

1974) include permitting self expression of the learner,

safe, economical, experientially based, trainee controls

results, and relevance. While minimized, some of the

disadvantages cited by these same authors include the fact

that not all real life situations fit neatly or accurately

into a prepared program, and that some users may be poorly

prepared to experiment with the model.

With the capability to store an abundance of informa-

tion on various subjects, and its ability to manipulate and

analyze a multitude of data at such rapid speeds, the

computer became a perfect medium for simulation.

H. G. Wells, over 80 years ago, in an obscure novel

(cited in Bailey, 1977, p. 157), stated,

If humanity . cannot collectively invent
devices and solve problems on a much richer scale
than it does at the present time, it cannot hope
to achieve any very much finer order or any more
general happiness than it now enjoys.

Somewhat in response to Mr. Well's challenge, computer

technology has developed and advanced knowledge further

and faster than it has ever progressed.

In essence, a computer is "a general instruction-
obeying machine" (Williamson, 1970, p. 181). Being an

analytical tool, and most simulations being analytical

techniques, Shubik and Brewer (1972) discussed computer

simulations ability to analyze events and systems over

periods of time. Expanding this idea, Cohen and Cyert

(1965) concluded their analysis with

Computer models and man-machine simulations offer
an unparalleled means by which we can: (a) formu-
late extremely detailed and highly precise
models of organizational behavior; (b) test the
empirical validity of these models; (c) experi-
mentally manipulate the models in a way which

is usually prohibitive with real-world organiza-
tions; (d) predict the future behavior of existing
or redesigned organizations; and (e) train people
to behave more effectively in an organizational
setting. (p. 158)

The major criticism of computer simulations lie with

the fact that since the machine only does what it is in-

structed to do, it cannot take assumptions for granted.

This limitation, therefore, precipitates the necessity for

more structure within the simulation, which may therefore

further remove it from the real world (Inbar & Stoll,

1972, p. 23).


The development of games and simulations has evolved

over many centuries. Anytime someone acted as though he

were someone else, he was regarded as simulating that person

or that event.

Taylor and Walford (1972) traced simulations back to

what they referred to as war games. "Wei-hai," a 5000

year-old Chinese game, which is believed to be the ancestor

of chess, is considered one of the oldest recorded simula-

tions (p. 20). Although used for amusement, the intent of

the early simulations seemed to be in the area of education

and training and decision making of junior military offi-

cers. Past campaigns were presented with the participant

making responses to conditions and observing resultant

responses and outcomes. Military use has continued through

present day.

With its success in the military, both in ancient

and present times, simulation was then introduced into the

business field through the encouragement of the American

Management Association (Taylor & Walford, 1972, p. 23).

Stressing the importance of training in this area, the

American Management Association held a special symposium

on the topic in 1961. Tansey and Unwin (1969) noted that

the main focus was initially toward training new managers,

but, being on a piecemeal basis, it lacked continuity.

Finally, the Association developed "Top Management Deci-

sion Simulation" where people were provided with experien-

tial learning, as to the role and functions of executives.

Decisions were made, and the participants saw the results

of their actions.

Through the actions of the American Management

Association and others, simulation has become a vital

element in the business environment. Tansey and Unwin

(1969) elaborated on this when they explained that because

of the influence of simulations, an international organiza-

tion was set up to, "devise new approaches to training, to

popularize management education, and to assemble informa-

tion" about management and behavior world wide (p. 8).

With management's new emphasis on behavior, simula-

tions were developed dealing with its general research use.

With this emphasis on behavior, the natural evolution into

the social sciences occurred with the development of the

"Inter-Nation Simulation," developed by the RAND Corpora-

tion. Participants in this game actually engaged in issues

concerning politics and crises (Taylor & Walford, 1972,

p. 24). Recent simulations have dealt with social issues,

both historical and current, where participants have been

confronted with examining the origins of World War I ("Alpha

Crisis"), the effects of television advertising ("Pace"), and

various contemporary social issues ("Women's Lib," "Food

and Feedback," and "Watergate").

Through the use of simulations in the physical sci-

ences, the investigative purpose of simulations was developed

to its fullest potential. Within the physical sciences all

four purposes, education and training, decision making,

research, and investigations, have been crystalized. Con-

temporary simulations within this area are reflected in

biology ("Simulation of Biological Processes"), chemistry

("Computer Modeling of Photochemical Smog Formation"),

physics ("Simulation for Introductory Physics"), and medi-

cal education ("A Simulated Mental Hospital as an Under-

graduate Teaching Device"). The list above is only repre-

sentative of many simulations listed in ERIC, developed in

these and other areas within the physical sciences.

Simulations have also been developed and used in

such disciplines as mathematics, languages, engineering,

education, etc. The field is endless, wherever man seeks

knowledge, simulations are and have been developed to

assist in gaining the desired knowledge.

Educational Uses--General

The field of education has not been void in its use

of simulations. Although business is generally given

credit for the evolution of simulations from military use,

education had been using simulations prior to the American

Management Association Symposium on Simulations.

John Dewey in the early 1920's (cited in Boocock &

Shild, 1968, p. 56) listed three advantages for the uses

of simulation in education as making activities meaningful,

relief from boredom and strain, and as a translation of edu-

cational progressivism into classroom practices. Chartier

(1973) and Braum (1975) echoed these same positions in

regards to interest and participation in simulations.

With the added dimension of computer simulations,

Mclssac and Boardman (1969) stated "simulations will lead

to a better understanding of the educational system and

that from the improved understanding will come educational

practice" (p. 3). Braum (1970) similarly stated that,

"Utilization of computer simulation offers the teacher an

opportunity to enrich significantly his students direct

learning experiences in areas that are not available other-

wise" (p. 151).

Simulations have been developed within most disciplines,

and, therefore, the educational aspects of those disciplines

have simulations. For an extensive list of simulations for

education, see The Guide to Simulation/Games for Education

and Training (Zuckerman & Horn, 1973), which lists over

600 simulations by categories.

Educational Uses--Administration

Educational administrators in the early 1960's de-

sired a way to train theircurrent and prospective leaders

through some method other than lecture and seminar. As

the American Association of School Administrators expressed

in 1960, "Administration is talked about rather than ob-

served or felt"(Wynn, 1964, p. 170).

The first breakthrough was The Jefferson Township

School District Simulation (Wynn, 1964, p. 170). This

simulation resembled business simulations from which it was

copied (Tansey & Urwin, 1969, p. 9), but it was regarded

as the breakthrough that was desired. The simulation

itself was designed as an on-the-job experience for 232

elementary school principles which confronted them with

"in-basket" items (Wynn, 1964, p. '171). In-basket refers

to situations that are presented to the participant

as though they had or were to occur, and the participant

must react to the situations through written communica-


Initially simulations were used by universities

since most of the development of these training vehicles

occurred there. But, with commercial firms and local

school districts developing simulations, simulation use

occurs within both avenues of educational administration

training (pre and post).

Within the area of educational administration, the

field of finance was in need of new tools for training,

evaluating, and forecasting future directions and trends.

The National Education Finance Project developed a com-

puterized financial simulation which was designed as "a

management information model . as a tool for better

decision making . to simulate the consequences of

alternative decisions in regard to the financing of public

elementary and secondary education" (Boardman, Jordan, &

Alexander, 1971, p. 1).

Regarded as the pioneer in its area, the NEFP model

has been used for instruction in Education Finance classes

at the University of New Mexico and the University of

Florida. The simulation has also been adapted for manage-

ment and research uses by the state of New Mexico (Huxel,

1973), and for the province of Sergipe, Brazil (de Mello,

1975). The simulation was used to a limited extent in

designing the Florida Educational Finance Program of 1973.

Other simulations have been developed in the area of

higher education finance (Gaunt & Haight, 1976; Holdberg,

1973) and many others by various states and organizations

to facilitate planning (Education Finance SURC, 1974;

Pierce, Garmes, Guthrie, & Kirst, 1975; Odden & Vincent,

1976; Minicucci, 1976; and Ohio Education Review Committee,


Pierce, Garmes, Guthrie, and Kirst (1975) summarized

the major justification for using'financial simulation as

A state which undertakes reform of its school
finance system faces a large and complicated
task. Not only must the present system be
analyzed to document any problems or inequities
that might exist, but predictions must also be
made of how proposed changes will affect local
districts in the state. . Given this situa-
tion, one of the most useful tools a state can
have is a simulation which gives it the capacity
to quickly and accurately establish the impact
of recommended change. (p. 122)

The benefits of computer simulations to educational

finance have been cited by many, but they can be summarized


1) knowing the fiscal impact of new policies,

2) knowing the impact of changes in existing
policies, and

3) ability to analyze effects and differences of
various financial plans.

Anyone concerned with educational finance, legisla-

tors, educators, business managers, school boards, parents,

among others, must be able to deal with major policy ques-

tions such as those cited by the NEFP (1971), in regards

to future planning.

1) What pupil population will be served?

2) What kinds of programs should be recognized in
the state aid program?

3) Will necessary variations in unit costs of dif-
ferent educational programs be recognized or
ignored in allocating state funds?

4) What kind of educational services will be funded
in the state plan?

5) Will the isolated small schools and the programs
of the core city be considered?

6) Will state funds be apportioned on the flat grant
basis which ignores differences in the wealth
of local school districts, or on the equalization
basis which provides more state funds per unit
of educational need to districts of less wealth
than to districts of greater wealth?

7) What proportion of school revenue will be pro-
vided by the state and what proportion will come
from local sources?

8) What will be the total cost of the basic state

9) Where will we get the money to support the basic
state program?

10) To what extent will the state permit local dis-
tricts to provide services and experiences not
supported in the basic state program? (p. 2)

Finally, before adoption, four criteria have been

identified by the Academy for Educational Development

(1973) concerning usefulness of a computer simulation


1) Performance. How effective is the system in
providing needed answers? How appropriate is
it to stated needs? How well does it reflect
institutional policy?

2) Utility. How useful is the system? How often
will it be used and how many people will partici-
pate in its application? Is it flexible enough
to accept major changes in organizational

3) Time. What is the time required for installation?
How much time is required for collecting base
data necessary to operate the system? What is
the time required to retrieve information?

4) Cost. Is the value of the information worth
the cost of implementation? Will it save money
in terms of time and personnel? Is a model
needed at current costs? (p. 27)


Equality of educational opportunity is a deeply

rooted American ideal. Although long advocated, until

recently it was to the exclusion of various groups in our

society. The concept now has evolved to mean equal access

to educational resources with consideration being given

to the needs of each child.

The courts have and are being called upon to judge

whether state financial plans do provide for equality of

educational opportunity. Having dismissed education as not

being a right guaranteed by the U.S. Constitution, the

Supreme Court has placed determination of equity back to

state legislatures and courts, with mixed results.

Full state support of education appears to provide

the most equitable funding pattern available. However, it

should be remembered that allocation methods will determine

the degree of equity. The basic tenent of Cubberley that

state taxes and state distributions best provide taxpayer

equity and program equalization remains true today; only

the means of achieving those desired goals remain.

West Virginia does not have full state funding,

although it does have a unique "demand" formula. Based

on inputs to the first step of the formula for the number

of professional educators, the steps that follow it are

generated to produce what the legislature must fund. How-

ever, the legislature has provided allocations outside the

basic formula to supplement programs and bypassed the "add-

on" costs of instituting additions within the present


To deal with the complexity of various funding plans

and formulas, simulation models, especially computer

simulations, facilitate researchers and planners in deci-

sion making involving educational finance. Decisions are

reflective of short- and long-range effects of alternative


funding patterns and are capable of being analyzed in

light of equity/equality criteria.



The NEFP Model

The National Education Finance Project (1971) de-

veloped a computer simulation model to facilitate researchers

and planners in the area of fiscal planning for public edu-

cation. The original simulation contained information

regarding a 32 district prototype state, and through inter-

action of the various decisions involving programs, revenues

and wealth, alternative financial support models were


Data Files

The computer simulation consists of two main files,

which are designated as an M FILE and a D FILE. The M FILE

is subsequently subdivided into a B FILE and a C FILE.

Both the B FILE and the C FILE are storage files for the

data analysis. The B FILE contains the base data for the

districts, such as demographic information, enrollment

counts, et cetera, whereas the C FILE, or calculations

file, stores the results of calculations, which can then

be accessed through the command PRINT. The D FILE pro-

vides the input decisions, which are then used in the

simulation to generate alternative finance models. The

input decisions allow the user(s) to make program decisions,

distributional decisions, and revenue decisions, with a

multitude of variations. It is by the variations that

the current plan can be duplicated, or other options gen-

erated to allow researchers to examine consequences of


The output of desired data is accomplished through

the interaction of the M FILE and the D FILE. The inter-

action of these files is achieved through the utilization

of three additional files, which are called LSTATE, SSTATE,

and STATE. Within these three files are contained the

mathematical equations that "cover all possible combina-

tions of input decisions" (de Mello, 1975, p. 71). The

LSTATE and the SSTATE are files that relate directly to

the NEFP program and represent a total and an abbreviated

version of the calculations necessary to run the model.

The STATE file on the other hand is a dummy (blank) file,

and enables the user(s) to create their own calculation

arrays. These files are accessed through the respective

commands of LCALC, SCALC, or CALC. The results of any

calculation are then subsequently stored in the C FILE

and retrieved by the command PRINT Cxxx (the appropriate

file number).

Other NEFP Capabilities

Several analytical subroutines are currently avail-

able to users of the simulation. Other subroutines may be

added by linking them to the data sets utilizing standard

IBM utilities. Descriptions of the main subroutines cur-

rently available to the user are

AVE: This procedure calculates the average of a
basic (B) or calculated (C) data array.
Initiation of this procedure is invoked by
the input "AVE" followed by one space and,
at most, one array key.

Example 1: AVE B035
Example 2: AVE'C610

CORR: This procedure correlates any of the basic
(B) or calculated (C) data arrays using the
Pearson Correlation Coefficient. Initiation
of this subroutine is invoked by the input
"CORR" which must be followed by one space
and exactly two array keys separated by a

Example 1: CORR B361,B364
Example 2: CORR B362,C615
Example 3: CORR C500,C845

GRAPH: This procedure is invoked by the key word
"GRAPH" followed by one space and up to
four basic (B) and/or calculated (C) data
codes. One of the data codes may be used
for the title which cannot exceed 20 charac-
ters in length and is separated from the
other data codes by ampersands. This routine
causes a histogram to be printed with the
decisions numbered along the horizontal axis
and the scale along the vertical axis.

Example 1: GRAPH C797,C793,C794,& PROPERTY
Example 2: GRAPH B010,C770
Example 3: GRAPH C970

RANGE: This procedure calculates the range for any
Sof the basic (B) or calculated (C) data
arrays. It is invoked by the input "RANGE"
which is followed by one space and, at most,
one array key.

Example 1: RANGE B360
Example 2: RANGE C580

SUM: This procedure calculates the sum of any
basic (B) or calculated (C) data array. It
is invoked by the input "SUM" and is followed
by one space and, at most, one array key.

Example 1: SUM B006
Example 2: SUM C700

PRINT: This procedure allows the user to print by
district, a tabular listing of any basic
(B) or calculated (C) data array. Initiation
of this routine is invoked by the input
"PRINT" followed by one space and, at most,
six array keys.

Example 1: PRINT B100,B360,B361,B362,B363,B364
Example 2: PRINT B100,B360,C990,C991
Example 3: PRINT C500,C600

Other: Computations may be specified in the input
stream to create new calculated data arrays.
Placement of the equations must precede the
CALC command and be designated as calculated
(C) data C994 through C999.

Example 1: C994=B001/C500
Example 2: C997=C500*D400+C620

Additionally, the model provides for the subroutine

DECISIONS, which retrieves a list of the input decisions,

and the subroutine SCORE, which allows the user(s) "to

output an evaluation table with an overall model score

for percent of deviation from full equalization and a tax

progressivity score" (NEFP, 1971, p. 3). Both the sub-

routine DECISIONS and SCORE are invoked by use of the key

words indicated.

Within the NEFP model are two key subroutines for

purposes of use by researchers and planners, and these

routines are the "CREATE" and "UPDATE" routines. The

CREATE routine enables the user(s) to recreate either the

M FILE and/or the D FILE with new data. This is in con-

trast to the UPDATE routine which enables the user(s) to

make alterations within an array in either the M FILE or

D FILE. The UPDATE routine is especially useful in updating

base data information in the B FILE in subsequent years,

so the entire simulation need not be recreated.

The West Virginia Model

Having identified information relating to programs

and enrollments, special services and modifying factors,

receipts and expenditures, and wealth indications as the

basic data necessary to run the simulation, data relative

to these concepts were collected from the West Virginia

State Department of Education, State Department of Trans-

portation, Tax Commissioners Office and the Institute for

Educational Finance. Several changes and alterations to

each file in the simulation were required to enable alter-

natives based on West Virginia basic data to be generated.

A sample run of the CREATE routine utilized to create the

West Virginia model is included in Appendix A.

West Virginia's I FILE

Many new arrays were added to both the B and C FILE,

with some of the original arrays having their labels

(titles) changed. Likewise, some of the original arrays

were deleted due to their inappropriateness for West Vir-

ginia. Additionally, since West Virginia contains 55

districts, track size, block size, and logical record

length of the program had to be increased to enable handling

of the increased amount of data. To facilitate the changes

necessary, a new M FILE was created for West Virginia

through utilization of the CREATE subroutine.

West Virginia's B FILE

This file required extensive changes to accommodate

all necessary data. The changes occurred within all

sections of this file which included programs and enroll-

ments, special services and modifying factors, receipts

and expenditures, and wealth measures. Several additional

arrays were included to enable duplication of West Vir-

ginia's current enrollments, funding patterns, and

uniquenesses within the state system. The "B" arrays used

for West Virginia are listed in Table 3, and the defini-

tions of the arrays can be found in Appendix B. Each

B data array contains the key name (Bxxx), a title, and

55 data elements. The data elements represent values

associated with respective West Virginia school districts.

In the section of the B FILE designated to store

program and enrollment data, it was decided that to accur-

ately account for students by programs, full time equiva-

lency enrollment (FTE) counts would be used. Other enroll-

ment data were unavailable in useful form; however, enroll-

ment and average daily membership arrays are contained

within the simulation, should data become available.

Additionally, arrays for 10 special education exceptionali-

ties and 4 special education delivery systems were included

as selective options for specific accounting of students

in those programs. Eight vocational-technical categories

were also established for FTE student accounting by pro-


Arrays designated for special services and facilities

were also changed and redefined to account for items, such

as, revenue distinctions within the school food service

program and costs associated with specific aspects of the

school transportation program.


Basic Data Code Sheet



State Local
Allocation for Professional Educators 001
Allocation for Other Personnel--Part A 002
Allocationfor Other Personnel--Part B 003
Allowance for Fixed Charges 004
Allowance for Transportation 005
Allowance for Administrative Costs 006
Allowance for Other Current Expenses 007
Allowance for National Average Attainment 008
General School Fund Distribution 009
Local Share 010
Incentive for Program Improvement 011
Supplemental Early Childhood Aides 012
Supplemental Teachers' Salaries 013
Supplemental Service and Auxilliary Salaries 014
Supplemental Aid for Children's Homes 015
State Aid for Increased Enrollment 016
Special Education Allocation--Out of
Formula Grants 017
Special Education Allocation--Out of
Formula Homebound Instruction 018
Special Education Allocation--Out of
Formula Additional Grants 019
Special Education Allocation--Out of
Formula Aid to RESA 020
State Aid to RESA 021
Teacher Education Centers 022
Vocational Day School (1976) 023
Vocational Adult Education (1976) 024
Area Vocational Programs (1976) 025
Vocational Act of 1968--State (1976) 026
West Virginia Social Security Work
Incentive (1976) 027
Other State Revenue (1976) 028

TABLE 3 (continued)




Property--Nonutility Class I
Property--Utility Class I
Property--Nonutility Class II
Property--Nonutility Class III
Property--Utility Class III
Property--Nonutility Class IV
Property--Utility Class IV





Square Miles
Population, Total (1975)
Rate of Growth (%) (1970-1975)


Current Program
Grades K-12
Special Education

4 yr. old

Educable Mentally Retarded
Trainable Mentally Retarded
Learning Disabilities
Behavioral Disorders
Physically Handicapped
Multiple Handicapped
Visually Handicapped
Auditorily Handicapped












TABLE 3 (continued)


Communication Disorders 180 182
Homebound 185 187
Gifted 190 192

Agriculture 196 197
Distributive Education 200 202
Health Occupations 205 207
Home Economics 210 212
Business/Office Occupations 215 217
Technical 220 222
Industrial 225 227
Other Vocational (Code 99) 230 232

Special Education Delivery
I Self Contained 235 237
II Resource 240 242
III Itinerant 245 247
IV Optional 250 252

Low Income 340 345
Low Achievement 341 346

Transportation (1)
Average Daily Route Miles (1976) 360
Number of Pupils Transported (1976) 361
Sparsity Cost Variation 362
Approved Costs (1977) 363
Actual Costs (1976) 364

Transportation (2)
Average Daily Miles (1976) 065
Bus Drivers Salaries (1976) 066
Other Transportation Salaries (1976) 067
Transportation Costs--Nonsalary
(1976) 068

TABLE 3 (continued)

1 B"

Capital Outlay and Debt Service
Approved Project Costs
Actual Project Costs
Depreciation Allowance
Debt Service



School Food Service
Participating Pupils (Total) 370
Federal Food Service Revenue 371
Total Food Service Revenue 372
Total Food Service Expenditure 373


Professional Educator Training & Experience*

Experience Level**

Training Levels***
T-1 T-2 T-3 T-4 T-5






Grade Levels


Cost of Living

Below 25th Percentile
Above 75th Percentile

Under 100

100-150 150-200





TABLE 3 (continued)



Federal (1)
Title I (1976) 475
Other (1976) 476

Federal (2)
Forest Reserve (1976) 077
Federal Impact Aid PL874
(1976) 078
EHA VI-B Federal (1977) 079
Vocational Act (1976) 080

Local Regular and Excess
Levies 478
Other Local 479

Expenditures (K-12)

Net Current Expenditures
(1976) 480
Social Security (1976) 481
Teacher Retirement (1976) 482
Other Retirement (1976) 483
Special Services
Capital Outlay--See
Special Services
Debt Service--See Special
School Food Service--See
Special Services