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An examination of the effects of local school district discretionary levies on the fiscal equity of a state foundation distribution system

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Title:
An examination of the effects of local school district discretionary levies on the fiscal equity of a state foundation distribution system
Creator:
Maiden, Jeffrey A
Publication Date:
Language:
English
Physical Description:
viii, 157 leaves : ill. ; 29 cm.

Subjects

Subjects / Keywords:
Aggregation ( jstor )
Capital distributions ( jstor )
Correlation coefficients ( jstor )
Education ( jstor )
Equal education ( jstor )
Equity ( jstor )
Finance ( jstor )
Funding ( jstor )
Gini coefficient ( jstor )
Schools ( jstor )
Education -- Finance -- Florida ( lcsh )
School boards -- Finance -- Florida ( lcsh )

Notes

Thesis:
Thesis (Ph. D.)--University of Florida, 1994.
Bibliography:
Includes bibliographical references (leaves 151-156).
General Note:
Typescript.
General Note:
Vita.
Statement of Responsibility:
by Jeffrey A. Maiden.

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University of Florida
Holding Location:
University of Florida
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Copyright [name of dissertation author]. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
002023961 ( ALEPH )
AKL1502 ( NOTIS )
32886011 ( OCLC )

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AN EXAMINATION OF THE EFFECTS OF LOCAL SCHOOL DISTRICT
DISCRETIONARY LEVIES ON THE FISCAL EQUITY
OF A STATE FOUNDATION DISTRIBUTION SYSTEM














BY


JEFFREY


MAIDEN


A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY




























Dedicated


to the memory of my stepfather,


John Robert Snyder.













ACKNOWLEDGEMENTS


express


deep


appreciation


Lord


Savior


Jesus


Christ.


thank


unlimited,


match


ess


grace,


providing


eternal


salvation


human


race


, and


making


this


dissertation


possible


support


guidance


committee


chair


, Dr


Craig


Wood,


een


invaluable


He has


been


mentor


teacher


over


last


four


years


, and


could


never


express


true


apprec


nation


what


done.


Thanks


Honeyman.


also


Through


committee


Dr. Honeyman


cochair


have


, Dr. David


acquired


appreciation


school


finance


data


analy


S1S


as well


as the


proper


perspecti


never


taking


"stuff"


seriously


Acknowledgement


goes


to Dr


David


Miller


from


whom


have


developed


an appreciation,


respect,


fascination


research


data


analysis


educational


measurement.


Further


acknowledgement


goes


to Dr


Linda


Crocker


providing


opportunity


acquire


coll


teaching


experience.


Thanks


to Dr


. James


Hensel


always


being


available


support


and


direction


dissertation


writing


process






Last


appreciation


to both


encouragement


least


parents


during


this


would


like


stepparents.


entire


process


to express


Their


my deep


support


been


crucial.

















TABLE OF CONTENTS


ACKNOWLED GEMENTS .................. .. .. .. ..... .. i11

ABSTRACT .. .. .. .. ........ ... .... .. ... .... ....vil

CHAPTER 1 INTRODUCTION ..... ................ .. .. ... 1


Purpose of the Study.......
Research Question...........
Significance of the Study...
Limitations.. ...
Delimitations...............
Overview of the Methodology.
Design of the Study ........


NoPTER 2 REVIEW OF THE LITERAL.
PTER 2 REVIEW OF THE LITERA


.. .. .. .. .. .. .. .. 6


.. .. .. .. .. .. .. .. 8
..............................38


The Theory of Per-pupil Funding Equity.
School Finance Equity Court Cases......
Foundation Method of Financing Schools.
Previous Florida School Finance Equity
Conclusion .... ...... .. .............
Notes .......... ... ..... .. .. .. .........


Population..
FEFP .
Design......
Measurement.
Conclusion..
Notes .


.. ..............12
.... ............ 20
. .. .. ....... .. 43
Studies. .........51

S. ......... 64


. .. .77
......................................... 80
. .. .. 89
.. .. .. . .92
. ....................... t110
. f . ft. t t t t t t t f f 111


Resource Accessibility.


S .. .. 118


CHI


CHAPTER 4 RESULTS ... .................. .. .. ...117


_____~


-- ~ w -- _1 -- T .w w wi i


TURE .. .. .. .. .. ....11


CHAPTER 3 METHOD ... ........ .. .. ..77












Summary. ....
Observations..
Conclusions...
Implications..
Notes ..


APPENDIX A FEFI

APPENDIX B RAW


BIOGRAPHICAL SKETCH


S. . 135
S. S . .137
S. . 141
S. . 143
. ...... ... ..146


? COST FACTORS .. ....... ........... .. .. 147

DATA .... .. .. .. ....... 148


. . 157


CHAPTER 5 DISCUSSION. .. .. .. .. .... 13


LIST OF REFERENCES .. ................. ................... .. 151














Abstract


Dissertation


the University
Requirements fi


Presented


Florida


to the


in Partial


Degree


Doctor


Graduate


School


Fulfillment


Philosophy


AN EXAMINATION


OF THE


DISCRETIONARY


OF A STATE


EFFECTS


LEVIES


FOUNDATION


OF LOCAL


ON THE


FISCAL


DISTRIBUTION


SCHOOL


DISTRICT


EQUITY
SYSTEM


Jeffrey


August,


Maiden

1994


Chairman:
Cochair:


Major


Craig


David


Department


Wood


. Honeyman
: Educational


Leadership


This


disequalizing


quantitative


effects


study


was


local


designed


school


examine


district


discretionary


levies


when


applied


to a foundation


system


education


finance.


1992


data


Florida


used


Education


study


Finance


were


Program,


obtained


which


from


included


equalized


foundation


component


separate


discretionary


revenue


sources.


These


discretionary


sources


, the


current


operation


discretionary


levies


capital


outlay


and


maintenance


levies


, were


based


entirely


on property


taxation








yield.


Resource


accessibility


measures


indicated


increasing


variability


distribution


resources


discretionary


revenues


from


either


sources


were


added


to foundation


revenues.


capital


outlay


maintenance 1

accessibility


evies


contributed


variation


than


more


to the


current


resource


operation


discretionary


levies.


addition


discretionary


revenues


from


each


source


demonstrated


neutrality


noteworthy


disequali


distribution


zing


system.


effect

The


on the


wealth


effects


capital


outlay


and


maintenance


revenues


were


more


acute


than


effects


current


operation


discretionary


revenues.


Both


discretionary


equivalence


revenue


yield


when


sources


combined


decreased


with


level


foundation


revenue


source


The


capital


outlay


maintenance


source


more


disequalizing


effects


in the


realm


taxpayer


equity


than


current


operation


discretionary


source.


Replications


current


study


in states


with


similar


systems


education


finance


are


warranted.


Additionally,


studies


into


fiscal


equity


effects


as well


as the


costs


incorporating


statewide


equalization


programs


discretionary


levies


are


recommended.














CHAPTER


INTRODUCTION


Fiscal


equity


as it relates


to financing


schools


rich


tradition


education


finance


literature.


Broadly


defined,


fiscal


equity


school


finance


refers


condition


fair


a given state

education give


broad


treatment


should

n their


nature


provided


varying


theory


students,


equivalent


educational


fiscal


that


support


needs


equity,


students


for

Because


best


understood

following


fisc


this


divided


section

equity

study p


includes


through

provides


defined

a short

analysis

more co


various


components.


description


mplete


components.

discussion


theory

Chapter

the


development


theory


equity


realm


financing


education.


Fiscal


degree


equity


equity


is most


among


commonly


groups,


discussed


students


terms


taxpayers.


Equity


among


students


a reference


to the


basic


fairness


distribution


educational


resources


among


students.


Most


per-pupil


equity


studies


include


examination


equity


0 l-* A-


a --


A~C~~Uf 0


1_ I -


t-^ Y.*


, f, ^ l










Horizontal


equity


refers


an equal


treatment


equals.


A horizontally


equitable


condition


is one


which


equal


resources


are


available


to pupils


with


equal


needs


Vertical


equity,


conversely


,refers


to unequal


treatment


unequal s

varying


these


Because


levels


needs.


students

resources


Under


have


varying


per-pupil


concept


are


vertical


educational

necessary


equity


needs,

to meet


such


differences


are


taken


into


account


Wealth


neutrality


support


wealth


neutrality,


or equality


education


state,


alternatively


known


opportunity,


students


local


fiscal


degree


related


community


to which


to the


which


they


are


educated.


A wealth


neutral


condition


one


which


fiscal


support


students


is not


related


to the


fiscal


conditions


local


school


districts


Taxpayer


equity


refers


to the


basic


fairness


among


taxpayers


a state


in terms


their


support


education.


Taxpayer


equity


exists


to the


extent


that


equal


effort


support


education


results


equal


resources


per-pupil


Education


finance


researchers


have


also


been


interested


other


theoretical


considerations


school


funding


systems.


Most


common


are


adequacy,


efficiency,


exce


llence.


Adequacy


a reference


to whether


students


n^ -. r-'f


-~~n -LL a 4--Lt -- A1


1 a


L


^


f


L .


ft r ^










fairness,


adequacy


stresses


acceptability


level


support


throughout


distribution.


Excellence


degree


refers


educational


to the

quality


concept

In the


attainment


school


a high


finance


context,


such


excellence


quality.


implies


Efficiency,


fiscal

on the


support

other h<


sufficient


and,


to fund


as a finance


construct

resources


significant


implies


Thouc

constr


maximizing

;h adequacy,

ucts worthy


educational

excellence,


further


output

and


given


minimum


efficiency


research,


equity


are

has


a longer


history


as a school


finance


theory


generated


a tremendous


number


individual


studies.


Purpose


Studv


A foundation


system


school


funding


pertinent


context


provides


state


fiscal


funding


a minimally


equity


to guarantee


acceptable


that


each


level


system


every


theoretically


child


education.


Because


each


child


is guarant


this


foundational


level


funding,


theory


equality


educational


opportunity


provided


through


distribution


system.


Yet,


despite


this


recognition


states


to take


an active


funding


role


order


to equalize


to a minimally


acceptable


level


children,


foundation


system


typically


include


allowing


local


stricts


4- a 1 A- -A--S


1 -


,II,,,


t


L










funding


assure


each


child


a minimally


acceptable


level


education,


represented


foundation


funding


level,


allows


districts


discretion


raise


funds


beyond


this


minimum.


Because


a foundation


funding


plan


designed


to promote


equity,


are


tension


permitted.


results


Thus


when


unequalized


, discretionary


millage


discretionary


rates


levies


and


resultant


levies


are


problematic


sense


equity.


According


to Wood


Thompson,


The problem i
leeway, the s
foundation.
discretionary
first sought
not to permit


is once
unaided


again


perplexing.


cheme


would


state


village, it
to eliminate.


discretionary
thwarted. Th


discretionary


state


no longer


fails


equalized


local


a minimum


to equalize


restores


Further, if
millage, the
basic fact


counters


village


inequality


state


minimum
is that


it
did


concept
any


equalization,


while
only


denying


other


loca


option


scretionary


solution


1 leeway violate
is to limit the


village,


is only


minimum


intent


amount


clear


that


a compromise


According


to Thompson,


Wood,


Honeyman,


three


problems


related


to equity


emerge


districts


are


permitted


to levy


discretionary


dollars


to supplement


a minimum


foundation


program.


First,


basic


foundation


program


does


include


provisions


equalization


funds


derived


from


millage


rates


above


minimum


foundation


level.


Second,


distri


must


send


less


'AA.'.


discretionary


millaae


^f


_L_ L_










problem


related


to the


inclusion


discretionary


levies


minimum


foundation


program.


Research


Question


research


question


addressed


this


study


was,


state


with


a foundation


program


support


schools


including


one


or more


discretionary


millage


rates,


to what


extent


levies


resulting


from


application


discretionary


millage


rates


introduce


inequities


into


system


distributing


education


funding?"


Significance


the


Study


study


theory


was


per-pupil


intended


fiscal


to make


equity,


a contribution


which


to the


rich


school f

research


finance

activi


literature

ty among s


focus


school


finance


a great


scholars.


The


deal

study


was


local


intended


school


possible


to provide


districts


education


insight


to strive

children


to the


for p

within


problem


providing


allowing


best


parameters


distribution


formula


while


maintaining


fiscal


fairness


throughout


a state.


foundation


program


is by


most


popular


method


financing


public


education.


Currently


, thirty-eight


rI ,,


r 1.1










foundation


system


state


Florida


was


chosen


this


study.


Florida


is one


most


populous


states


nation


serves


one


largest


public


school


enrollments.


This


study


was


intended


to provide


examination


public


school


system


Florida,


with


particular


attention


to its


funding


methodology.


Limitations


current


study


was


limited


to the


theory


equity,


without


assessments


adequacy,


effic


iency,


or excellence.


Equity


equity,


assessments


wealth


were


limited


neutrality,


to horizontal


taxpayer


equity.


per-pupil


Vertical


equity


was


addressed.


A macroanalysis


a state


system


distributing


education


resources


was


included


study,


microanalysis.


Assessments


equity


distribution


resources


among


districts


were


made.


No effort


was


made


examine


distribution


within


districts.


Delimitations


Data


fiscal


were


year,


taken


1992


from


-93,


one


most


state


recent


included


in which


only


data


one


were


available.


Fiscal


data


were


additionally


limited


to those


- ,


r --


- .


C~,


4 *










study


secondary


examined

schools o


fiscal


nly.


data


Neither


from


public


private


elementary


schools


nor


higher


education


organizations


were


considered.


Overview


Methodoloav


foundation


distribution


system


state


Florida


was


used


study.


Data


study


were


taken


from


Florida


Education


Finance


Program


(FEFP)


1992-93


school


Year.


FEFP


included


a foundation


basic


support


program


in addition


to two


unequalized


discretionary


village


rates,


discretionary


millage


capital


outlay


among


maintenance


districts


millage.


derived


Mean


from


per-pupil


foundation


revenues


program,


discretionary


levies,


capital


outlay


maintenance


levies


were


used


to analyze


equity


FEFP


distribution.


per-pupil


revenues


were


divided


into


seven


levels


aggregation


which


included


combinations


foundation,


discretionary,


capital


outlay


and


maintenance


revenues.


Equity


was


measured


according


to three


standards.


first


was


resource


accessibility,


which


provided


assessment


-pupil


horizontal


equity.


second


was


wealth


neutrality


, using


per-pupil


assess


valuation


as the


1-"n C.


et C 1


r a a


- -A -


m L -


f-*r


iLt -; _-3


_ -


*..









following


section


includes


a summary


contents


study.


Design


of the


Study


Chapter


provided


an introduction


to the


study.


nature


problem


was


presented


as well


as the


specific


research


significance


delimitations


and


question


study


addressed.


as well


an overview


Following


was


limitations


methodology.


the

and


Chapter


presents


a review


literature


pertinent


to the


study.


This


includes


a description


historical


development


theory


fiscal


equity


as well


as a summary


court


cases

was 1


through


egally


which


tested.


the

The


equity


state


literature


foundation


review


further


systems


eludes


both


a written


description


of the


foundation


method


distributing


research


education


studies


dollar


concerning


a review


Florida


s foundation


previous

distribution


system.


Chapter


includes


a description


research


methodology

includes a


in greater


detail


discussion


than p

results


provided


above.

study


Chapter

while


Chapter


includes


a summary


as well


as conclusions


and


implications


derived


from


study.











2Thomas


York:
Burrup


Macmillan
, Vern Br


Jones,


Publishing
imley, Jr,


Introduction


Company,
and Rulon


to School
1985), 5;
Garfield,


Finance


(New


Percy


F inancina


Education


in a Climate


of Change,


(Boston:


Allyn


Bacon,


1988


Lawrence


, 79-80


Pierce,


James


. Guthrie,


ol Finance


Walter


Education


. Garms,
Policy:


Enhancing
(Englewood


Efficiency.


Cliffs


Eaualitv.


Choice


NJ: Prentice-Hall,


1988)


, 2nd


, 130;


David


Monk,


Educational


Finance:


An Economic


Anoroach


(New


York:


McGraw-Hill,
Education Fi


1990


-nance


35;
Law:


Craig


Wood


Constitutional


David


Challenges


. Thompson,
to State Aid


Plans--An


Analvsi


Strategies


(Topeka,


KS: National


Organization
C. Thompson,
Leadership f
NY: Longman


Legal
Craig


Schools


Publishing


Problems


Wood,


: Concerts


Group,


in Education,


David


1993)


Honeyman,


Practices


David


scal


(White


Plains,


1994


Berne


Leanna


Stiefel,


Measurement


Eauitv


in School


University


Guthrie,


McCarthy,
Secondary


Press


Finance
, 1984),


Garms, al
Stephen


Education


(Baltimore
13; Burrup
Pierce, 302


Thomas,


(Columbus


:Me


: The


Johns


, Brimley,


Dean


Hopkins


and
Webb,


Financing Elemen
rrill Publishing


Garfield,
Martha 1


tarv


, 1988),


Monk


Standards
Standards
Aid Progr


Wood


Re.


am,


and


Robert


State


levant to
" Journal
Thompson


Berne


School


Secti


Leann


Programs:
on 5(d) (2


of Education


, 18


; Thompson,


a Stiefel, "
Philosophies


Finance


Wood,


Equity
and


Federal
(Summer


Impact
, 1993),


Honeyman,


4Berne


Steifel,


Measurement


Eauity


, 13;


Burrup,
Pierce,


Berne


Brimley, a
302; Webb,
d Stiefel,


Thompson,


Wood


Garfield,


McCarthy,
"Equity S


, and


Guthrie


and


Thomas,


Standards,


" 95


, Garms,


189;
; Woo


Monk,
d and


and


37-39


Thompson,


Honeyman,


5Berne


Stiefel,


Measurement


Eauitv,


Burrup,
Thomas,


Brimley,


189;


Berne


Garfield,
d Stiefel


80-81;


, "Equity


Webb


, McCarthy


Standards,


, and


" 95


6Berne


and


Stiefel,


Measurement


Equity,


41-42


Guthrie,


Garms,


Pierce,


Webb,


McCarthy,


and


Thomas,


192;


Berne


Stiefel


, "Equity


Standards,


" 96-97


3Robert











8Guthrie


, Garms


Thoma


School


Longman,


, and


Austin


Finance


1991)


: Its2
, 225;


Pierce,
Swanson


Economics
Thompson


and


Wood


150-152


Webb,


Richard


Politics


, and


New


McCarthy
. King,
York:


Honeyman,


9Arthur


Stellar,


"Implications


Programmati


Excellence


The


Equity,


" in


Fiscal. Leaal.


Van
and


Mueller


Political


Mary


. McKeown


AsDects


Elementary


Secondary


Education


(Cambridge


, MA: Ballinger


1986);
Pierce


Burrup
, 29.


, Brimley


, and


Garfield,


Guthrie


, Garms


, and


10Burrup


, Brimley


, and


Garfi


eld,


Guthrie


, Garms


, and


Pierce


, 28-34;


Swanson


Webb


King


, 259


, McCarthy


, and


Thomas


, 192;


Monk


, 4-11;


-278.


1lBerne,


"Equity


Issues,


" 159


Andrea
United


Stephen
C. Hyary


States
Study


and


Canada.


States


David
Publi


Smith


School


1990-91


, Stephen


Finance


, vol.


B Lawton


, and


Proarams


Albany


Center


, 1992


13Wood


Thompson,


14Thompson,


15Gold,


Wood


Smith,


Lawton


Honeyman


, and


Hyrary,


-224

18.


. Gold,
(eds.),


, NY:














CHAPTER


REVIEW


OF THE


LITERATURE


In Chapter


research


question


addressed


this


study


was


presented.


Specifically,


this


study


dealt


with


effects


moneys


raised


through


local


discretionary


millage


rates


on fiscal


equity


a state


foundation


distribution


system.


This


chapter


includes


a summary


literature


related


to the


study.


The


chapter


begins


with


a summary


development


theory


of educational


funding


equity,


which


was


introduced


chapter


of this


study


to which


this


study


was


intended


to contribute.


Subsequently


discussion


turns


to d


decisions


rendered


federal


state


court


systems


dealing


with


problem


providing


equitable


systems


education


funding


states.


Following


this


summary


of relevant


court


cases


is a discussion


foundation


system


distributing


state


funds


to local


school


districts.


final


section


this


chapter


includes


a summary


previous


studi


equity


distribution


school


funds


through


foundation


system


Florida,


state


from


which


data


were


derived.










Theory


Per-Puoil


Funding


Eauity


nature,


providing


an equitable


system


funding


education


requires


state


to provide


greater


financial


support


to less


wealthy


local


education


agencies


because


such


stricts


have


access


to the


same


fiscal


resources


which


wealthier


district


have


access.


Following


discussion


historical


development


theory


equity


relates


to state


financial


support


public


education.


With


publication


monograph


1906,


Ellwood


Cubberley


was


first


modern


scholar


to discuss


concept


equity


relates


to school


finance.


Cubberley


was


first


to develop


concept


that


schools


a state


should


considered


a state


system


schools,


rather


than


series


local


systems,


in order


to foster


equitable


funding.


According


to equalize


resources


to Cubberley,


advantages


available


to all


to the


duty


school


state


state


children


Cubberley


was


considering

theorized


that


that


state


could


itself


generate


should


revenue


provide


fiscal


equivalent


to districts


to other


areas


state


in order


to equalize


educational


opportunity


throughout


state.


According


to Cubberley,


[A]id


should


needs


bear


some


community


definite


and


relationship
the efforts


-- _- 1 A-


* '


SI


S1 --


1


*1


t


K


1


l


_










guarantee


a certain


minimum,


or foundational,


level


funding


each


child.


In collaboration


with


Haig,


Strayer


argued


that


order


to achieve


equalization


educational


opportunity:


[I]t wo
schools


uld


or make


furnish


within


the
stat


opportunities
(2) to raise


purpose


such


manner


localities


their
adequa


control
direct


local


necessary
other a
children
e with e
D to som


ability;


to establi


arrangements
in every 1


qual


e


funds ne
or state


as to bear
at the same


sufficient


ocality


educational


prescribed


cessary r
taxation


upon
rate


tax-paying
tely either


school


admini


education.


station,
6


minimum
This


adjusted


the people
in relation


in all
to


to provide


supervision


, or for


a state


and


their


department


Strayer


envisioned


that


each


local


district


provide


a level


taxation


that


would


provide


funding


minimally


acceptable


level


education


applied


residents

wealthiest


wealthiest


district,


district


in applying


state.


this


rate,


would


raise


money


required


to finance


schools


within


strict


s borders.


The


state


would


grant


each


remaining


district


enough


money


that,


combination


with


funding


raised


locally,


supported


this


minimally


acceptable


level


education.


Strayer


held


that


same


local


tax


rate


should


exerted


throughout


state


In this


respect,










district

Strayer


citizens


believed


that


district


allowing


districts


so desired.

to generate


moneys


beyond


those


resulting


from


statewide


local


effort


rate


would


have


disequalizing


effects


Strayer


claimed


that


"logical


conclusion"


equalizing


educational


opportunity


was


a full


, statewide


system


schools.


administration


Yet,

being


localization


strongly


grounded


financing

American


tradition,


Strayer


maintained


that


some


degree


of local


control


should


maintained


a state


Harlan


Updegraff


, writing


early


1920s,


concurred


state


order


however,


with


should


to provide


that


early


poorer


equal


addition


proponents


districts


opportunity.


distri


equity


more


that


generously


Updegraff


should


argued,


rewarded


effort


sense


willingness


raise


educational


revenues


through


taxation.


Equalization


funding


from


state


, acc


ording


to Updegraff,


should


a function


effort


forth


each


district.


result


same


same


effort


level


from


fiscal


distri


support


would


education


funding


unit.


Updegraff


believed


that


such


a system


would


promote


A----~ ~ ~ ~ ~ -- I -A........


I


L. -


I_


A


- t ^ -


_ -


I


A ___ __ ^ I -


"1 -


.. 1










required


to exert


greater


effort


order


to provide


an acceptable


level


education.


Through


equalizing


system


that


rewards


effort,


state


would en

mandated


courage


localities


foundational


rise


level,


above


therefore


a certain


with


state


state


assistance


each


district


would


a position


best.


Henry


Morrison,


like


previously


mentioned


providing


researchers


equitable


supported


funding


theoretical


education,


ideal


took


concept

funding


a step


further


public


advocating


schools


Morrison


completee

believe


statewide

i funding


inequities


emanated


from


fundamental


flaw


existence


localized


funding


educational


enterprise.


Morrison


proposed


that


instead


providing


a system


distribution


state


funds


inverse


proportion

Strayer,


to local


a system


district

which d


needs,


districtt


as advocated

organization


bypa


ssed


should


come


into


fruition.


each


student


would


provided


an equivalent


level


funding


from


revenue


generated


through


state


taxation.


Under


American


ideal


federalism,


according


to Morrison,


states


* .,


maintained


plenary


, S


power


over


* .- ..


I


1










state


level


funding


circumventing


local


control


without


imparting


damage


on the


American


system


governance.


Morrison


argued


that


revenue


these


state


funds


could


come


from


among


four


sources


in any


combination.


These


included


property


taxes


levied


statewide


state


income


taxes


, state


taxes


on corporations,


income


from


state


school


lands


or invested


school


fund


Paul


College,


. Mort,


expanded


a student


concept


Strayer


initially


at Teacher


developed


Strayer


Haig


that


state


should


establish


and


help


support


a foundational


level


education


children.


Because


a foundational


level


education


should


based


on educational


need,


Mort


developed


idea


quantifying


educational


need


using


school


finance


policy.


According


to Mort


, the


educational


need


. of
composite
community


public


a community


of those


that


would


educational


offering


regarded


as the


element


cost


demanded


state pr
children


ogram


making


a satisfactory


opportunity.
element would


cost


available
minimum ed


relative
determined


weighting


to all


ucational


each


18


d










state.


Mort


referred


to this


method


as the


"satisfactory


equalization


program.


Mort


discussed


specific


planning


such


equalization


program.


ssroom,


expressed


teacher


units


, was


cost


unit


plan.


Basic


ally,


according


to Mort,


each


child


would


have


available


where


ssroom


a program


or teacher


of satisfactory


equipped


equal


point


zation


education


would


met.


Each


community,


in turn,


would


have


suffi


cient


classroom


units


to appropriately


educate


children


that


community.


concept


per-pupil


equity


specifically


relates


to the


foundational


state


distribution


system


was


developed


scholar

finance


career,


authors.


Mort

21 as

For


throughout

well as by


.I


example,


remainder


other


Edgar


notable


Morphet


school


discussed


important


elements


which


should


included


in a


worthwhile

granted an


foundation


adequate


program.


level


education,


children sh

financed


lould


jointly


state


respect


tive


local


districts.


system


should


promote


equality


educational


opportunity


among


students


state.


Local


districts


should


able


to fund


schools


above


S1 a a a


* *


* *










substantial


contribution


to the


foundational


level


order


that


no undue


burden


would


placed


on the


local


districts.


foundations


concept


equity


were


laid


these


scholars.


With


their


writings


theory


equity


relates


to education


funding


developed,


late


1960s


and


early


1970s


many


states


established


systems


which


state


made


corrections


existing


National


inequities.


Education


According


Foundation


to data


provided


Project,


late


1960s


forty-two


states


used


equalization


programs


fund


school


seven


states


employed


non-equalizing


flat


grant


distribution


systems,


one


state,


Hawaii,


used


a system


complete


state


federal


support.


Strayer-Haig


foundation


plan


was


most


popular


equalization


plans,


with


thirty-four


states


using


this


method


that


time.


Although


incorporated


vast


equalization


majority


formulas


states


into


had


respective


school


finance


systems


early


1970s


, the


degree


which


these


systems


were


truly


equalizing


was


questionable.


In 197


, the


President


s Commission


School


Finance


conducted


a nationwide


study


on the


*


i i l










Texas.


ratio


95th


percentile


to the


perc


entile


ranged


from


to 1.2


to 1


Maryland


to 5


to 1


Wyoming.


ratio


90th


percentile


10th


percentile


ranged


from


to 1


Georgia


and


West


Virginia


to 3


to 1


Montana


Clearly,


even


states


where


accomplished,


greatest


relatively


large


equalization


disparities


been


in per-pupil


financial


support


existed.


Similar


results


were


found


area


wealth


neutrality


among


states.


ratio


maximum


to the


minimum


to 1


property


North


Dakota


valuations


to 182


per-pupil


to 1


ranged


Kansas.


from

The


95th


North


to 5th


Dakota


percentile


to 9


ratios


to 1


ranged


New


from


Mexico.


to 1


90th


10th


percentile


Hampshire


ratios


North


ranged


Dakota


from


to 6


to 1


to 1


New


New


Mexico


is apparent


that


resource


accessibility


to fund


education


varied


widely


among


districts


states


(excluding


Hawaii,


which


included


no local


funding


schools


with


some


variations


being


extreme.


Because


continued


existence


these


inequalities


nation'


courts


became


a significant


- -- ^ -A -- 2 a --


SI I


_ _%- 1-,


-...-.--~-I


,~,,, L,~,


i L


s.










courts,


majority


from


early


1970s


through


present


These


challenges


to state


distributions


school


funds


will


be discussed


following


section.


School


Finance


Eauitv


Court


Cases


A plethora


challenges


to state


public


school


distribution


systems


have


been


decided


federal


state


court


systems.


Because


purpose


this


study


specifically


related


to distributional


equity


foundation


system


public


school


finance,


only


those


cases


which


have


involved


challenges


to foundation


systems


equity


grounds


will


discussed.


A small


number


of school


finance


equity


cases


have


been


decided


federal


court


system.


These


cases


involved


challenges


to funding


distribution


based


on the


constitutional


theory


equal


protection


clause


U.S.


Constitution.


claim


usually


made


was


that


system


funding


that


treated


students


distribution


in poorer


system


deprived


districts


unfairly,


students


poorer


districts,


as defined


per-pupil


property


wealth,


educational


opportunity.


These


cases


have


been


unsuccessful


in terms


reforming


state


funding


methodologies


to decrease


per-pupil


funding


disparities.


m 1 1. 1 -- r-


m b *


_ _%- "


r .


IIu


p









whether


Texas


system


financing


public


schools


was


violation


equal


protection


clause


fact


that


children


residing


school


districts


with


relatively


property


values


were


provided


an education


at a lower


level


funding


Such


than


disparities


children


funding


residing


level


in wealthier


allegedly


districts.


resulted


deprivation


educational


opportunities


these


children


. District


Court


Western


Texas


ruled


that


finance


system


indeed


violated


equal


protection


clause.


court


ruled


that


funding


disparities


created


suspect


classification


children


residing


poorer


districts,


that


these


children


were


denied


fundamental


right


of education


because


substandard


funding


court


applied


strict


scrutiny


test,


state


failed


to demonstrate


a compelling


interest


maintaining


such


a system


which


violated


this


fundamental


right.


. Supreme


Court


reversed


decision


on appeal.


Court


decision


declined


use


strict


scrutiny


standard


three


reasons.


First


, the


appellees


could


demonstrate


that


suspect


class


was


disadvantaged


system.


reason


existed


to believe


that


poor


people


state


resided


districts


with


lower


property


----1-~-~- An


J7










supplements)


children.


Therefore,


education


per


was


denied


child


state;


some


children


were


simply


others

Court,


provided


The


"does


Third,


fundamental


education


less


equal


funding


protection


require


Court


right.


was


extremely


absolute


ruled


Court


that


their


clause,


education


according


equality


education


declared


important


that


to society,


than


to the


advantages


was


although


was


province


court


to pick


choose


certain


substantive


rights


(such


guarantee


as education)


equal


protection.


to call


To be


fundamental


and


fundamental,


thus


such


a right


must


explicitly


or implicitly


mentioned


in the


Constitution.


Because


education


was


a fundamental


right


and


because


no suspect


class


was


involved,


according


to the


Court,


only


a rational


relationship


between


school


finance


stem


state


purpose


would


need


to be


demonstrated.


In the


Court


s view,


Texas


foundation


system


was


designed


to extend


education


to all


children,


to improve


quality


Legislature


had


chosen


facilitate


funding


schools


largely


through


local


sources


to promote


local


autonomy


control


education,


which


strongly


grounded


American


tradition.


Furthermore,


_


_ I 1










rational


relationship


test,


was


declared


Court


to be


in compliance


with


equal


protection


clause


Because


precedent


established


Rodriguez


case,


state


court


systems


became


primary


means


attacking


These


state


challenges


finance sy

typically


stems


on equity


involved


grounds.


allegations


violation


given


state


s constitutional


equal


protection


guarantee,


education


arti


constitution,


both.


overall


results


these


challenges,


terms


judicial


determination


distributional


equity


state


finance


systems


light


these


constitutional


provisions,


have


been


mixed.


The


landmark


case


challenges


to state


school


finance


distribution


methodologies


in state


court


systems


was


Serrano


Priest


allegation


was


that


disparities


in per-


pupil


funding


among


California


school


districts


(based


relative


equal


property


protection


values


clause


resulted


both


violation


California


of the


Constitution


Fourteenth


Amendment


to the


Constitution.


California


In its


Supreme


Court


decision,


eventually


court


decided


applied


case.


strict


scrutiny


test

this


to the

measure


state


school


because


finance


cation


system.


was


court


a fundamental


justified


right


SI e *


%I- ---_- --


- -~


i I










court


declared


"irrefutable"


fact


that


a suspect


class


consisting


discriminated


against


less

t due


wealthy

to the


individuals


nature


had


been


finance


system.


appellees


scrimination


individuals.


discrimination


against


court


affected


argued


school


that


districts


, however,


a class


ruled


people


system


, not


that


resulted


a class


this


residing


these


poor


districts.


court


also


ruled


that


education


was


a fundamental


right


which


clause


should


both


protected


constitutions.


equal


Education,


protection


according


to the


court


, was


significant


future


economic


social


success


students.


Education


was


also


declared


to be


necessary


an enlightened


citizenry


, capable


engaging


fruitful


civic


and


political


activities


Therefore,


finance


system


failed


strict


scrutiny


standard


because


state


could


demonstrate


no compelling


interest


in maintaining


year


following


Serrano,


a decision


New


Jersey


court


was


rendered


concerning


that


state


finance


distribution


system


issue


was


constitutionality


New


Jersey


foundation


system


funding


schools


Supreme


Court


New


Jersey


eventually


decided


case


, declaring


foundation


system


in violation


4





I


..













between


expenditures


overall


educational


quality.


Although


New


Jersey


time


case


ranked


third


nation


in terms


total


expenditure


per-pupil


education,


disparities


among


districts


were


nevertheless


large.


determine


The (

just


court

how


admitted


much


that


expenditure


although


per-pupil


was

was


difficult

enough,


clearly


some


districts


expenditure


was


totally


inadequate


(e.g.,


based


on such


factors


as conditions


facilities


academic


status


students).


The


court


believed


some


children


were


definitely


receiving


inadequate


education.


"thorough"


required


New


Jersey


Constitution


meant


thorough


something


beyond


education


minimum


therefore


was


according


being


to the


provided


court.


every


child,


constitutional


mandate


was


being


violated


Furthermore,


fostering


local


control


education


could


used


to justify


a system


with


huge


inequities


pupil


expenditures.


Real


control


was


illusory


poorest


local


districts


that


limited


resources


available


to them.


court


applied


strict


scrutiny


standard


to the


system


could


find


no compelling


state


interest


which


justified


school


finance


system.


court


expressed


_ -. -


L 1_


vl


I*










foundation


system


violation


. Constitution63


New


Jersey


Constitution.


Following


Serrano


Robinson,


state


foundation


distribution


formulas


many


states


were


challenged


respective


state


court


systems.


Michigan


s system


school


finance


was


challenged


that


state


s court


system,


claim


being


made


that


system


was


in violation


both


Michigan


. Constitutions.


U.S.


Constitutional


issue


was


disposed


court


citing


Rodriauez


as precedent


In deciding


state


constitutional


issue,


court


focused


on the


relationship


between


inputs


* .e.


available


monetary


resources)


and


educational


opportunities


court


stated


that


evidence


had


been


provided


that


students


in the


poorer


districts


were


significantly


more


deprived


educational


opportunity


than


students


wealthier


districts


The


court


further


stated


that


no proof


was


available


that


eliminating


per-pupil


funding


disparities


among


stricts


would


somehow


increase


opportunity


students


residing


in poor


districts.


state


s constitutional


obligation,


according


to the


court,


was


children


to provide


throughout


a basic


state.


system

The


schools


Michigan


Constitution










foundation


system


Michigan


was


upheld


as constitutionally


valid.


foundation


system


Idaho


was


challenged


violating


challenge


both


was


U.S.


based


on per-pupil


Idaho


Constitutions.


funding


The


disparities


resulting


from


a heavy


reliance


on local


valorem


taxation


to fund


education


Idaho.


Supreme


Court


Idaho


upheld


constitutionality


finance


system.


According


to the


court,


availability


funds


was


a very


important


factor


determining


educational


adequacy.


Yet,


Court


could


dare


that


smaller


expenditure


levels


resulted


declared


a denial


that


equal


Legislature


protection.


was


court


exercising


further


plenary


power


in developing


administering


a valid


system


financing


schools.


court


would


establish


itself


as a


"super


legislature"


interfere


with


this


authority.


court


unnecessary


found


in that


use


education


strict


was


scrutiny


a fundamental


test


right


state


as a rational


basis


developing


and


admini


control


steering


foundation


education.


program


Therefore,


fostering


foundation


local


plan


was


upheld


as constitutional.


constitutionality


Oregon


state


foundation


__










funding


schools


resulting


in alleged


deprivation


educational


opportunity


students


living


in poorer


areas


state.


Supreme


foundation


Court


Oregon


system.


upheld


court


constitutionality


not


answer


question


whether


education


was


a fundamental


right


therefore


subject


to equal


protection


guarantees


Nevertheless,


court


declared


that


no child


been


deprived


access


to a minimum


level


education


even


though


educational


program


offerings


available


to children


varied


widely.


court


system


was


agreed


to allow


that


local


the objective

control over e


education


finance

. While


admitting


that


lack


adequate


resources


diminished


local


control


poorer


district


, the


court


could


not


conclude


that


equal


protection


been


violated


because


such


diminution.


court


also


agreed


that


perhaps


other


systems


finance


could


developed


more


adequately


equalize


per-


pupil


expenditures


in education.


, the


court


saw


this


no reason


to strike


down


current


system


unconstitutional.


court


ruled


that


Oregon


Constitution


mandate


uniform


funding


per-pupil


across


_


_ *


A


I _


I


1










In West


Virginia,


school


finance


system


was


declared


unconstitutional


State


Supreme


Court


Appeals


based


on both


equity


adequacy


grounds.


court


ruled


that


mechanisms


thorough


free


financing

education


the

and


schools


equal


denied


protection,


children


both


violations


court


West


declared


Virginia


education


Constitution.


a fundamental


constitutionally


protected


right


West


Virginia


The


court


found


"broad


comprehensive


constitutional


inadequacies


structure


compos


ition"


entire


school


system,


including


method


finance


Some


districts


were


"woefully


inadequate,


" though


needed


some


degree


improvement.


finance


system


particular


was


declared


discriminatory


court.


Funding


should


have


been


emphasized


state


level


instead


local


to eliminate


funding


disparities


based


on local


wealth.


therefore


was


in violation


state


constitution


because


a thorough


effi


cient


system


schooling


was


being


provided.


Ohio


scrutiny


system.


Supreme


standard


Finding


Court


declined


examining


no fundamental


to apply


Ohio


interest


finance


strict


distribution


involved,


only










constitutionality


legislative


acts


should


assumed


unles


a clear


violation


were


evident.


The

purpose


state


promoting


, according


local


to the


control


court,


over


educati'


as a rational

on, a tradition


dating


back


to the


Northwest


Ordinance


1785.


Traditionally,


attempted


General


to ameliorate


Assembly


funding


through


disparities.


years


Although


per-pupil


funding


inequities


were


real,


system


was


irrational


Additionally,


wide


discretion


should


given


to the


General


Assembly,


court


should


exercise


great


circumspe


action


defer


legislative


insight


area


financial


provi


education.


Although


discretion


was


unlimited


General


Assembly


had


abused


to the


extent


that


finance


system


should


declared


unconstitutional


Therefore,


court


ruled


that


system


was


violation


Ohio


Constitution.


Georgia


Supreme


Court


ruled


that


state


school


financing


system,


despite


interdistrict


per-pupil


funding


inequities,


was


in violation


Georgia


Constitution.


state


financing


system,


according


court


, bore


a rational


relationship


to the


state


purpose


providing


a minimum


level


school


funding


to each


student.


court


admitted


that


finance


system


_


i


L_


--X


f










(wealthier


salaries,


districts


superior


could


curricula,


afford


higher


better


instructional


supplies


plant


facilities,


state


finance


scheme


constitutional


requirement


providing


basic


educational


opportunities


to all


children.


court


declared


that


although


state


should


beyond


educational


constitutional


opportunities,


requirement


providing


of providing


equal


basic


expenditures


child


was


reached


required


because


state


state.


Constitution


This


conclusion


provided


great


was


detail


about


institution


of education


mentioned


nothing


about


equalizing


expenditures


court


also


declared


that


although


education


was


vital


was


a fundamental


right


implicitly


or explicitly


guaranteed


ruling


Constitution.


non-fundamentality


U.S.


Rodriguez,


Supreme


Court


although


not


binding


with


regard


to state


constitutional


issues,


provided


worthy


guidance.


Therefore,


strict


scrutiny


model


was


used


Georgia


court.


The


court


decision


made


clear


that


Georgia


school


finance


system


was


a poor


one


in terms


equity,


and


urged


Legislature


to develop


a more


equitable


system


funding


schools.


Yet


court


refused


to rule


that


Al A%


--













to the


court,


term


"adequate"


was


specifically


defined


Constitution.


It would


have


been


difficult


determine


a judicially


manageable


standard


to determine


whether


pupils


are


rec


giving


an adequate


education,


court


declared,


it would


defer


to the


legis


lature


assess


adequacy


court


could


justify


declaring


state


school


financing


system


inadequate


because


per-pupil


funding


disparities


existed.


New


York


Court


Appeals


ruled


that


New


York


foundation


distribution


system


violate


either


New


York


Constitution


or the


equal


protection


clause


U.S.


Constitution.


court


in its


decision


declared


that


New


York


had


consistently


been


among


nation


leader


per-


pupil


school


funding.


Disparities


among


districts


did


exist,


metropolitan


areas


were


hardest


hit.


However


, no claim


had


been


made


that


district


provided


schooling


below


state


mandated


requirements;


only


disparities


were


question.


Because


complex


nature


funding


schools,


court


declared


that


was


best


left


to the


Legislature


staff


professionals


executive


branch.


Though


court


was


responsible


overseeing


compliance


with


constitutional


mandates


, no


violation


was


evidenced


in thi


case.


llr


1 _










education,


funding


disparitie


are


result


local


wealth


differences


legislative


actions


Therefore,


according


to the


court


, no violation


either


constitution


been


demonstrated.


Furthermore,


though


court


considered


education


important,


was


fundamental


right.


court


further


found


that


state


Constitution


required


only


that


a system


free


public


schooling


provided,


equitable


per-pupil


educational


funding.


state


had


complied


with


this


requirement


establishing


minimum


standards,


both


funding


other


educational


areas,


with


which


local


school


boards


must


comply.


Therefore,


school


finance


system


was


ruled


violative


of either


constitution.


Maryland


Supreme


Court


declared


that


state


s school


foundation


distribution


system


constitutionally


valid


light


. Constitution


, the


Maryland


Constitution,


Maryland


laration


Rights


With


regard


to the


state


was


constitutional


required


issue,


to provide


court


exact


ruled


funding


that


levels


state


pupil


event,


state


undertaken


through


years


provide


increased


equalization


expenditures


, and


current


formula


helped


ease


inequities.


"thorough


and


aC d1 *


K


I










education.


With


shared


responsibility


some


measure


funding


differentiation


should


expected.


Citing


Rodriauez112


dealing


with


U.S.


Constitutional


issue,


court


ruled


that


education


should


declared


a fundamental


right,


therefore


strict


scrutiny


should


applied


because


non-fundamentality


nonexistence


a suspect


class


based


on wealth


alone.


Furthermore


, no purposeful


discrimination


state


was


in evidence


Only


rational


basis


test


need


appli


state


had


a rational


basis


using


formula


state


foster


school


local


funding


control


formula


autonomy.


was


Therefore,


in violation


either


constitution


or the


Declaration


Rights.


The


Arkansas


Supreme


Court


declared


that


state


s school


finance


rational


system


unconstitutional


relationship


test


using


court


less


could


rigorous


find


rational


funding


relationship


among


between


districts


disparity


needs


per-pupil


individual


districts.


issue


in the


case


was


whether


financing


system


provided


state


foundation


plan


violated


Arkansas


Constitution.


court


use


strict


scrutiny


test


this


case,


therefore


avoided


question


whether


education










school


districts


rejected


claim


with


regard


that


to funding


purpose


court


foundation


plan


was


to promote


local


control


education,


declaring


that


provi


sion


more


equitable


funding


would


diminish


local


control.


Furthermore,


levels


-pupil


funding


deprived


poor


districts


effective


control


education.


In Oklahoma,


state


school


finance


system


was


charged


with


violating


equal


prote


action


clause


U.S.


Constitution


several


provi


sions


Oklahoma


Constitution.


rendered


a decision,


Oklahoma

declaring


Supreme


Court


system


eventually


constitutionally


valid.


challenge


to the


system


was


that


inequitable


per-pupil

foundation


funding

plan d


levels


eprived


which re

children


suited


from


distri


state


with


lower


property


violation

declared


values


opportunity


equal


that,


under


protection


equal


a good


clause


protection


education,


court

legislative


analysis,


acts


such


as the


foundation


plan


should


considered


valid


courts


unless


a suspect


class


been


deprived


rights


fundamental


right


been


violated.


Citing


Rodriauez


court


found


that


neither


these


conditions


existed.


Furthermore,


allegation


was


III 1










control


relationship


education

D existed


autonomy,


between


therefore


system


a rational


a legitimate


state


purpose.


plaintiffs


decision


argued


Rodri.uez126


that


need


U.S.


apply,


Supreme


that


Court


different


circumstances


existed


Oklahoma


than


Texas.


Court


claimed


that


state


school


systems,


including


funding


plans,


were


dissimilar.


Oklahoma


court


had


no reason

The


to rule d

plaintiffs


differently

charged t


than


hat


state


. Supreme

school f


Court


financing


system


was


in violation


several


provisions


state


constitution.


First,


because


education


is specifically


mentioned


Oklahoma


Constitution),


should


Constitution


qualify


unlike


as a fundamental


U.S.


right


court,


however,


ruled


that


mere


mention


education,


other


establish


phenomenon,


state


as a fundamental


constitution


right.


Furthermore,


providing


equitable


funding


per-pupil


was


mentioned


Oklahoma


Constitution.


Second,


plaintiff


argued


that


funding


inequities


resulted


a violation


constitutional


requirement


uniformity


application


laws


throughout


state.


The


court


countered


that


Legislature


established










plaintiffs


challenged


use


valorem


taxation


foundation


plan,


claiming


that


resultant


funding


disparities


violated


equal


protection


clause


Oklahoma


Constitution.


court


rejected


this


argument,


saying


that


foundation


plan


been


established


minimize


differences


caused


varying


levels


district


wealth


court


further


held


that


was


obligated


uphold


constitutionality


a given


Legislature


Legislature


unless


acted


could


arbitrarily


demonstrated


that


or capriciously.


Court


could


find


no such


violation


with


regard


to the


school


finance


legislation.


Thus,


finance


system


was


upheld


constitutional.


In South


Carolina,


foundation


distribution


system


was


upheld


State


Supreme


Court


valid


light


South


Carolina


Constitution.


According


to the


court,


Legislature


was


constitutionally


mandated


to provide


system


schooling,


Legislature


discretion


how


to fund


system.


Legislative


actions


such


those


relating


to funding


schools


should


normally


considered


valid


courts.


plaintiffs


also


charged


that


students


residing


poor


districts


were


denied


equal


educational


opportunity










state


money


poor


districts.


Therefore


system


was


rational


means


equalizing


educational


opportunity


Montana


foundation


distribution


system


was


charged


with


violating


Montana


Constitution.


plaintiffs


charged


that


although


state


finance


system


included


interdistrict


equali


zing


provi


sions,


per-pupil


funding


differences


among


school


districts


were


as high


as eight


one,


thus


equal


opportunity


was


being


denied.


The


defendants


argued


that


state


foundation


plan


had


been


established


to foster


equal


opportunity,


and


therefore


constitution


was


violated.


Additionally,


according


to the


defendants,


outputs


(i.e.,


assessments


based


factors


such


as standardized


test


scores


dropout


rates


should


have


been


used


measure


equal


opportunity


instead


inputs


* e.,


funding


defendants


further


argued


that


although

equal ed

control


Constitution


ucational


school


established


opportunity,

ng as a state


as a goal


document


goal.


With


state


declared


local


local


control


naturally


disparate


-pupil


spending


levels


occurred.


Montana


Supreme


Court


ruled


that


system


was


violation


constitution.


court


declared


that


state


failed


to present


convincing


evidence


that


outputs


rather


than


inputs


signified


equal


educational


opportunity










goal


a constitutional


state


to equalize


guarantee.


educational


Because


expenditures


failure


(due


part


to the


state


inadequate


failed


funding


to provide


foundation


equal


educational


program)


opportunity


children.


Texas


foundation


distribution


was


charged


with


violating


differences


Texas


in the


property


Constitution


wealth


based


school


on huge


districts


Because


percent


school


funding


statewide


was


derived


from


local


sources


because


localities


relied


heavily


volarem


taxation,


wide


school


funding


disparities


resulted.


A 700


to 1


ratio


in property


value


existed


between


wealthiest


poor


school


stricts,


while


per-


pupil


spending


was


to $2


Supreme


Court


Texas


declared


school


finance


system


unconstitutional.


court


stated


that


amount


money


spent


on pupils


a significant


impact


on educational


opportunity.


Pupils


residing


in poor


districts


were


cycle


poverty


which


deprived


them


educational


opportunity.


These


poor


districts,


despite


normally


taxing


at a higher


rate,


still


raised


less


revenue


than


wealthy


districts,


thus


giving


their


schools


a reputation


inadequacy.


Industry,


a key


increasing


local


wealth,


was










court


through


funding


admitted


years


disparities


that


attempted


through


Texas


to lessen


Foundation


Legislature


interdi


School


had


strict


Program


(FSP).


Although


was


designed


to provide


more


state


money


provided


poorer


district


to guarantee


enough


minimum


funding.


moneys


The


had


court


been


declared


that


constitutional


mandate


state


had


been


FSP.


Much


concept


court


efficiency


s discussion


as found


revolved


state


around


constitution.


court


necessarily

therefore o


declared


exc


outside


that


lusive


judi


cial


determination


realm


efficiency


political


control.


was


system


constitution


give


exclu


sive


discretion


legislature


determining


what


efficient.


Although


"effi


cient"


was


spec


ifically


defined


constitution,


a standard


was


provided


courts


use


to determine


whether


constitution


had


been


violated.


court


cons


titutional


duty


to determine


whether


legi


slature


was


fulfilling


constitutional


duty


state


argued


that


"efficient"


meant


simple


and


inexpensive.


According


The


to the


court


found


court,


no evidence


school


this


system


to be


claim.


efficient










This


was


case,


therefore


school


system


was


financially


efficient.


In Kentucky


school


finance


system,


which


included


foundation


as well


as a guaranteed


yield


component,


was


challenged,


charge


being


that


large


school


funding


disparities


among


Kentucky


districts


violated


both


U.S.


Kentucky


Constitutions


Kentucky


Supreme


Court


declared


finance


program,


as well


entire


state


public


school


system


, in violation


Kentucky


Constitution.


high


court


in its


deci


sion


condemn


system


in light


U.S.


Constitution,


declaring


that


because


educational


system


been


ruled


violation


Kentucky


Constitution


an analysis


Constitutional


issues


was


necessary.


litigation


revolved


largely


around


concept


efficiency.


representatives


state


argued


that


because


Kentucky


Constitution


required


Legislature


provide


an efficient


system


schools,


General


Assembly,


courts,


was


organization


responsible


determining


whether


system


was


indeed


effi


cient.


court,


however,


ruled


that


constitutional


authority


review


legislation


which


established


school


finance


system


to determine


constitutionality.


I










supporting


because


efficiency


was


required


state


Constitution.


high


court


agreed


that


efficiency,


to a large


degree,


referred


to substantial


uniformity


resources


being


applied


throughout


school


system,


resulting


substantial


equal


opportunity


a good


education.


The


court


relied


on the


testimony


experts


who


claimed


that


significant


expenditure


positive


overall


correlation


quality


existed


between


of education,


and


level


that


students


who


were


provided


lower


levels


funding


were


prone


to receiving


a lower


quality


education.


These


experts


presented


data


showing


that


districts


with


per-pupil


expenditures


more


restricted


curricula


lower


overall


achievement


test


scores.


Therefore


, the


court


ruled


that


an efficient


system


common


schools


had


been


provided


because


substantially


different


levels


school


funding


among


districts


throughout


state.


Because


heavy


reliance


on local


resources


fund


public


schools


resultant


per-pupil


expenditure


differences


based


on relative


local


property


values,


General


Assembly


created


an inefficient


educational


system.


Supreme


Court


agreed


that


although


General


Assembly


had


recent


years


passed


legi


slation










summary,


challenges


to school


foundation


distribution


methodologies


in state


courts


have


with


mixed


success.


specifically


with


1 of

the


the c

equity


ases


discussed


effects


dealt


state


foundation


formulas


distributing


school


funds.


next


section


includes


a discussion


theoretical


framework


well


foundation


as examples


state


system


foundation


school

systems


finance

which


provide


a funding


component


equalizing


local


discretionary


revenues.


Foundation


Method


Financing


Schools


A foundation


program


financing


education


one


which


state


local


districts


contribute


jointly


to the


financing


education


such


a way


that


each


child


provided


a minimum


educational


program.


In order


accomplish


this


each


student,


foundation


program


based


on the


ability


districts


this


minimum


educational


program.


In other


words,


level


state


support


varies


inversely


with


local


wealth,


thereby


providing


each


district


a foundation


fiscal


support


educational


programs.


Under


a foundation


system,


theoretically,


poorest










taxing


equity


effort.


are


Thus,


recognized


both


with


per-pupil


this


as well


distribution


taxpayer


tem.


state


under


a foundation


system


generally


establishes


minimum


local


property


rate


which


districts


must


pass


order


base


receive


expenditure


state


each


funding


district


Additionally,


obtained


a minimum


to state


support.


Theoretically,


beyond


foundation


level


local


districts


are


able


to provide


funding


finance


additional


programs


or services


above


and


beyond


foundation


level


within


parameters


established


state


constitution


statutes.


Such


additional


funding


cause


disequalizing


effects


system


overall.


foundation


plan


includes


a legislatively


determined


minimum


program


from


which


a local


share


, based


legislatively


determined


rate


subtracted.


remainder


amount


support


from


state


necessary


to finance


such


a program.


Operationally,


amount


state


determined


follows


x State)


- (Vali


x state


where


state


to the


district,


- I. *


I


* *a


1 1


I










district,


state


rate


local


district


The


foundation


amount


established


state


multiplied


number


pupils


to produce


total


foundation


funding


that


district.


From


this


product


subtracted


amount


district


is required


contribute,


assessed


total


based


on the


valuation


foundation


local


that


funding


rate


district.


level


total


difference


amount


between


contributed


district


amount


state


to that


district


Currently


thirty-eight


states


use


some


modification


foundation


program


to support


public


education.


Such


funding


program


as a rationale


provision


each


child


child


state


resides


a foundational


a relatively


level


wealthy


education


local


whether


school


district

states


or a poorer


to take


one


an active


Yet,


funding


despite


role


this

order


recognition

to equalize


a minimally


acceptable


level


children,


nearly


every


one


these


states


allows


local


districts


to apply


locally


determined


millage


rates


in order


levy


funds


above


foundation


level


guaranteed


state.


Although


states


impose


certain


limitations


restrictions


on the


amount


use


these


additional


funds,


effects


may


nonetheless


disequalizing.










additional


separately


equalized


discretionary


equalized


through


funds


state.


a resource


levied


The


accessibility


districts


second


are


level


program,


either


guaranteed


base


(GTB)


or guaranteed


yield


(GTY).


A brief


discussion


operationalization


typical


GTB


and


GTY


programs


is provided


followed


a discussion


distribution


systems


states


that


at the


time


this


writing


use


or have


recently


used


a GTB


or GTY


to augment


foundation


formula.


and


GTY


systems


are


similar


to the


foundation


plan


through


that


state


include


support


equalizing


in inverse


educational


proportion


opportunity


to districts'


ability


pay.


Unlike


a foundation


state,


a state


using


or GTY


system


does


establish


a minimum


foundational


level


levied


educational


districts.


support


Rather,


a minimum


levels


rate


support


to be


are


locally


equal


determined.


access


Thus,


resources,


and


rather


than


GTY


formulas


minimum


include


funding


level


included


foundation


program.


GTB


plan


operates


on the


assumption


that


districts


should


have


access


to the


same


base


wealth


per-


pupil.


state


establishes


a guaranteed


base,


and


state


simply


provides


each


district


sufficient


funding t


hat,










expenditures


as well


as the


local


rate.


The


GTY


similar


to the


GTB


except


that


state


sets


a tax


yield


level


property


in the


state


rather


than


a tax


base


GTB


have


identi


formulas


formulas


are


mathematically


expressed


follows


Expi


x Adj


.Val


where


state


to distri


number


students


dollar


as calculated


per-pupil


state


expenditure


strict


set


Expi


district


state


share


percentage


factor


, and


.Val


is the


ratio


asses


valuation


per-pupil


district


i compared


to that


average


assessed


valuation


districts


This


method


is equitable


in terms


both


-pupil


funding


and


taxpayer


effort


Every


child


is guarantee


certain


level


funding


commensurate


with


or her


educational


local


nee


school


same


given


strict


levy


pupil


level


Each


, thus


tax


mill


effort


effort


promoting


equity


exerted


results


among


taxpayers.


Several


states


currently


use


or have


recently


used


funding


scheme


which


involves


a foundation


component


*1 S S -


1_1


I 1










to a district


is a product


weighted


pupil


count


times


guaranteed


financial


support


base


minus


local


fair


share,


which


participation

contribution


applied


local


the

based


to assessed


contribution


foundation

on a state


property


required


program.


mandated


equalized


millage


at 40


local

e rate


percent


market


value,


or a rate


which


would


generate


percent


district


s foundation


amount,


whichever


smaller.


GTB


component


is available


only


to districts


below


90th


percentile


in terms


property


wealth


per-pupil


that


levy


taxes


above


state


mandated


millage


rate.


additional


mills


above


state


mandated


level,


state


pays


difference


between


amount


actually


generated


and


amount


that


would


be generated


applying


village


rate


to the


assessed


value


property


in a district


at the


90th


percentile


In Montana,


a foundation


program


is supplemented


component.


foundation


level


support


is variable


according


to categories


based


on average


number


belonging


(ANB),


which


represents


enrollment.


foundation


level


thus


increases


with


ANB.


state


provides


funding


this


foundational


level


category


after


subtracting


portion


which


raised


county


level.


No equalization


r .-


* .


I ~ 1


I


* *










which


are


classified


isolated.


These


districts


must


raise


percent


foundation


amount.


Under


component


districts


levy


additional


mills


general


fund


counties


teacher


retirement


average


fund.


mill


state


yield


guarant


each


ees


these


a yield


equivalent


permissive


mills


Oklahoma


public


schools


are


financed


a foundation


program


supplemented


Salary


Incentive


Aid,


which


comparable


district


to a GTY


determined


supplement.


Foundation


multiplying


a legi


each


slatively


established


Base


Foundation


Support


Level


weighted


Average


Daily


Membership


(ADM).


State


foundation


determined


taking


assessed


this


product


valuation


subtracting


district


mills


from


times


previous


year


plus


mill


county


levy


other


minor


adjustments


Distri


further


apply


millage


rates


above


fifteen


mill


foundation


portion


Salary


Incentive


Aid


portion

assure


component,

a guaranteed


in which

yield.


the

Stat


state


provides


Salary


funds


Incentive


Aid


determined


multiplying


an incentive


guarantee


district


s ADM


then


subtracting


number


additional


mills


times


assessed


valuation


district


In Kentucky


state


provides


funding


to augment










district


difference


between


what


was


raised


through


application


a state


mandated


village


rate


on assessed


valuation


local


property


what


was


required


to meet


aggregate


foundation


per-pupil


funding


level


Districts


are


permitted


to exceed


this


minimum


foundational


level


, and


those


that


chose


to do


so are


provided


matching


funds


from


state


to exceed


percent


their


entitlement


ensure


a minimum


yield.


revenue


obtained


through


this


additional


statewide


levy


per-pupil


equalized


property


at 150


percent


assessment


average


Districts


are


permitted


increase


financing


an additional


percent


without


a matching


grant


from


state


A three-tiered


finance


system


used


Texas


was


recently


invalidated


Texas


Supreme


Court


However


, a brief


discussion


of the


system


existed


prior


invalidation


court


will


provided


to exemplify


operationalization


foundation


distribution


systems


augmented


or GTY


components.


Texas


system


included


a foundation,


a GTY


and


unequalized


component.


With


Tier


, the


foundational


component,


state


granted


a district


difference


between


at a certain


amount


required


foundation


to fund


level


each


what


student


was


actually


s education


levied










above


foundation


millage


rate


a certain


dollar


level


per-


pupil


each


additional


cent


rate,


a maximum


rate


taxation.


Under


Tier


additional


millage


rates


above


guaranteed


yield


band


were


permitted


matched


state


funds


present


study


included


data


from


foundation


distribution


system


state


Florida


fiscal


year


-93.


Florida


schools


were


funded


through


foundation


system,


although


state


equalize


dollars


raised


through


application


discretionary


or capital


outlay


maintenance


caused


millage


revenues


rates

raised


The

through


degree

h the


disequalization


application


these


millage


rates


was


focus


present


study.


following


studies


section

Florida


includes


s public


a review


education


previous

funding s


equity


system.


Previous


Florida


School


Finance


Eauitv


Studies


This


method


study

public


focused on

education


equity

finance


aspects

. The


foundation


foundation


plan


state


Florida,


Florida


Education


Finance


Program


(FEFP),


was


chosen


study.


following


discussion


includes


a summary


previous


equity


studies


related


to the


FEFP.


II


* 1


I


I










research


questions


which


are


specifically


relevant


to the


present


study.


first


included


extent


to which


inequalities


distribution


educational


revenues


existed


prior


to and


after


implementation


FEFP.


second


available


included


education


extent


were


to which


related


level


to district


revenues


wealth


before


and


after


implementation


FEFP.


Vaughan


examined


fiscal


data


1972-73


school


year


, prior


implementation


FEFP,


1973


, 1974


, and


1975-76


school


years,


after


FEFP


implementation


Vaughan


s conclusion


with


regard


to distribution


per-


pupil


revenues


was


that


FEFP


was


relatively


equitable.


vast


majority


Florida


s public


school


pupils


fell


between


tenth


ninetieth


percentile


district


mean


state


local


revenue


pupil.


range,


restricted


range,


federal


range


ratios


state


and


local


per-pupil


revenue


among


districts


were


relatively


after


FEFP


implementation.


Although


coefficients


variation


local


revenue


-pupil


were


relatively


high,


they


were


lower


after


FEFP


implementation


than


before


In the


area


fiscal


neutrality


, Vaughan


found


a strong


relationship


revenue,


between


with


local


effect


wealth


increasing


local


per-pupil


in strength


across


r


1


I










implementation


FEFP,


was


nevertheless


significant.


Vaughan


concluded


that


FEFP


was


very


wealth


neutral,


although


greater


wealth


neutrality


was


evident


Florida


after


implementation


FEFP.


Carroll


states,


including


portion


Park


conducted


Florida.


tudy,


which


equity


The


was


analyses


intent


a follow-up


five


Florida


to a similar


study


conducted


equity


Florida


Carroll


state


1979


was


distribution


compare


system


before


current


finance


formula


(FEFP)


with


tribution


which


existed


prior


implementation.


Includ


ed in


study


were


fiscal


comparisons


made


school


year


(before


FEFP)


against


1975-76


school


year


(after


FEFP


implementation).


These


comparisons


were


made


in terms


instructional


expenditu


res


as well


as revenues


six


levels


aggregation


These


included


general


revenues


including

Racing Co


Racing


mission


Commission


funds,


funds,


general


general


revenue


revenues


including


PL 874


revenues,


local


plus


state


revenues


, local


plus


state


plus


revenues


, and


total


revenues.


Carroll


Park


found,


through


a series


regression


equations,


significant


relation


hips


between


wealth,


based


assessed


valuation,


per-pupil


revenues


at all


levels










between


instructional


expenditures


wealth


both


before


and


after


implementation.


Carroll


and


Park


found


no significant


relationship


between


household


income


revenues


instructional


expenditures


per-pupil


before


FEFP,


yet


a significant


relationship


FEFP


community


after


resulted


s tax


implementation.


in a weakened


effort


The


relationship


availability


implementation


between


school


revenues


as well


as instructional


expenditures


Carroll


Park


concluded


that


in terms


both


per-


pupil

widene


revenue


availability


disparities


resulted


instructional


after


expenditures,


implementation


FEFP.


new


program


became


less


fiscally


neutral,


decline being

included in t


attributed


cost


formula.


adjustment


overall


factor


conclusion


reached


Carroll


Park


was


that


reform


benefitted


larger


more


urban


districts


more


readily


than


slightly


smaller


less


urban


ones.


greatest


benefit


reached


poverty


prone


school


districts


Alexander


Shiver


studied


equity


distribution


school


funds


Florida,


comparing


equity


that


existed


before


FEFP


implementation


to equity


after


implementation.


Data


from


1970


1971-72


school


A a S a


r


amA~l M A m


_I_










Alexander


Shiver


studied


levels


aggregation.


first


included


total


state


local


per-pupil


revenues


second


foundation


funds


per-pupil.


Each


level


revenue


was


studied


light


several


equity


related


statistics.


In the


both


area


range


total


and


-pupil


restricted


revenue,


range


an increase


distribution


was


evident.


standard


deviation


distribution


doubled


during


variation


foundation


years


remained


funds


study,


virtually


pupil,


while


same.


distribution


coefficient


In the


range


area


quadrupled


from


1970-71 to


1980-


while


restricted


range


nearly


quadrupled.


variation


Both


standard


increased


between


deviation


1970-71


coefficient


1980-81


area


foundation


funds


pupil


Gini


coefficients


increased


overall


after


implementation


FEFP


, both


in terms


total


state


and


local


revenue


per


pupil


foundation


fund


per


pupil.


These


coefficients


demonstrated


a decreased


level


equity


1980-81.


Alexander


Shiver


conducted


correlational


analyses


between


variables


two


which


levels


were


revenue


claimed


seven


to provide


independent


indication










between


assessed


value


per-pupil


foundation


funds


per-


pupil


as well


as personal


income


per-pupil


and


foundation


fund


per-pupil


implied


that


equalization


establi


shed


prior


to the


FEFP


been


maintained


FEFP.


overall


conclusion


Alexander


Shiver


based


on the


analysis


these


data


was


that


greater


equity


had


not


been


achieved


with


implementation


FEFP.


Stark,


FEFP


Florida


Honeyman,


in a study


Lottery


Wood


specifically


on public


examined


related


school


equity


to the


financing


aspects


effects


state.


study


included


basic


analy


ses.


first


was


degree


to which


lottery


funds


distributed


through


FEFP


(approximately


provided


to public


substitute


percent


school


existing


sources


total


state)


school


lottery


were


funds


used


funding


during


1989


school


year.


second


analysis


, the


one


relevant


to the


present


study


, included


an examination


remaining


lottery


fund


those


distributed


through


special


allocations


rather


than


FEFP


itself.


Specifically,


this


second


analysis


dealt


with


whether


these


lottery


funds


distributed


through


FEFP


had


effect


on the


equity


distribution


public


education


funds
s- i-- -


state.
a^-,


Three
I- -


levels


1 -I


aggregation


were


used


- I S -


1


'm










special


allocations


from


state's


general


revenue


fund


included


allocation


the

funds


FEFP.

, and


Third,

lottery


the FEFP

funds not


funds,


special


distributed


through


FEFP.


boxplots


showed


similarity


variation


distributions


first


levels


aggregation,


with


increased


variation


with


introdu


tion


lottery


proceeds.


Both


range


restricted


range


demonstrated


decreased


level


equity


when


moving


across


levels


increased


aggregation.


across


federal


levels


range


aggregation,


ratio,


though


demonstrated


that


Florida


system


was


equitable.


variance,


standard


deviation,


coefficient


variation


across


demonstrated


levels


cumulatively


aggregation.


disequalizing


relative


effects


mean


deviation,


on the


other


hand,


indicated


cumulatively


increased


equity


effects.


Gini


coefficient


FEFP


alone,


aggregation


level


pertinent


to the


present


study,


was


calculated


.00916


system.


reduced


, demonstrating


a great


Interestingly


.00261


, the


.00380


deal


Gini


horizontal


coefficients


, respectively,


across


equity


were


other


levels


aggregation.










Indexes


were


slightly


smaller,


.97185


.97283


, for


other


levels


aggregation.


result


Gini


Coeffi


cient


McLoone


Index


computations


demonstrated


that


least


1989


school


year,


FEFP


provided


an equitable


system


distributing


school


funds.


study


, however


addr


ess


equity


effects


scretionary


capital


outlay


maintenance


millage


levi


es.


These


effects


, for


1992


school


year


, were


addressed


present


study


O'Loughlin,


Wood


, and


Honeyman


examined


equity


distribution


FEFP


dollars


most


specifically


looking


at the


effects


revenues


provided


sparsity


supplement


formula


on per


-pupil


equity.


The


data


were


on the


1990


FEFP


calculation


including


federal


distributions


or capital


outlay


or debt


service


funding


In the


O'Loughlin


, Wood


, and


Honeyman


study


, four


elements


each


were


element


studied


being


with


examined.


cumulative


These


equity


included


effects


foundation


program,


program


supplements


, the


discretionary


local


levy


categorical


special


allocations


Within


each


element


additional


revenues


res


ulting


from


sparsity


supplement


were


examined


to determine


equity


effects










standard


deviation,


coefficient


variation,


McLoone


index,


Gini


coefficient


demonstrated


a cumulatively


sequali


zing


effect


FEFP


across


four


elements


without


sparsity


supplement,


an increased


disequalizing


effect


across


four


elements


in all


measures


except


revenues


McLoone


provided


index


sparsity


Gini


coefficient


supplement


were


when


included.


disequali


school


zing


trend


stricts


occurred


below


across


median


four


when


sparsity


element


supplements


were


included.


Gini


Coefficient


demonstrated


equalizing


trend


across


four


elements


when


sparsity


revenues


were


included.


With


regard


(correlation


coeffi


to the


cient,


wealth


coeffi


neutrality


cient


measures


determination,


slope


regression)


, a cumulatively


increase


association


pupil r

account


revenues

the sp


between


wealth


resulted


arsity


per-pupil


formula

. With


supplement


district


without


taking


per-

into


inclusion


sparsity


supplement


revenues


, a cumulative


decrease


in the


strength


association


variables


occurred.


The


overall


conclusion


was


that


basic


part


FEFP


was


relatively


equitable


, but


addition


supplements,


cretionary


dollar


categorical










dollars


bore


a strong


inverse


relationship


to the


relative


property


wealth


district.


The


sparsity


supplement


effect


reducing


this


relationship.


O'Loughlin,


Wood,


Honeyman


demonstrated


through


this


study


that


FEFP


distributed


school


funds


in an equitable


fashion


1990


school


year,


with


levies


generated


from


application


discretionary


millage


rates


having


slightly


tem.


disequalizing


study


FEFP


cifically


effects


light


examine


related


effects


capital


overall


equity


outlay


maintenance


village,


which


coupled


with


discretionary


levy


was


focus


present


study.


Currie


examined


equity


resources


capital


outlay


FEFP


Florida,


and


part


revenues


which


derived


included


from


assessments


capital


both


outlay


maintenance


village


rate.


Using


1988-89


data,


Currie


examined


four


levels


funding.


first


included


FEFP


operating


expenditures


, which


consisted


FEFP


allocation,


seventh


period


allocation,


prior


year


adjustments,


required


local


effort.


The


second


third


capital


levels


outlay


consisted


total


funding


total


dollar


dollar


value


value


state


local


capital


outlay


funding


, respectively


fourth


final










The


results


examination


at the


first


level,


FEFP,


third


level,


local


capital


outlay


funding


, were


interest


in the


context


present


study.


Results


examination


equity


FEFP


element


provided


evidence


of the


relative


equity


foundation


system


existed


during


that


fiscal


year.


third


level


included


an equity


assessment


revenues


generated


through


application


local


capital


outlay


and


maintenance


millage


rates.


Although


this


level


was


more


broadly


defined


to include


other


local


sources


capital


outlay


financing,


confounding


capital


outlay


maintenance


levies


with


other


local


sources,


examination


results


provided


insight


present


study.


levies


generated


through


application


discretionary


millage


rates


were


examined


Currie


study.


The


FEFP


level


funding


demonstrated


greatest


degree


equity


among


four


levels


studied


in terms


horizontal


equity


measures.


per-pupil


range,


restricted


range,


interquartile


range


, and


federal


range


ratio


were


calculated


.65,


$305


.15, $


.03,


.13,


respectively.


standard


deviation,


coeffi


cient


variation


, and


relative


mean


deviation


per-pupil


were


.04,


, respectively.


McLoone


Index


was










In the


area


wealth


neutrality,


Gini


Coefficient


FEFP


equity


level


correlation


was


an indication


coefficient


between


nearly


local


perfect


assess


valuation


local


property


expenditures


per-pupil


was


entire


distribution


distribution


within


a 95


percent


confidence


interval


around


mean


value.


resultant


coefficients


determination


were


.24,


respectively.


author


suggested


that


a strong


relationship


between


wealth


FEFP


exist


results


horizontal


equity


measurements


local


capital


outlay


funding


level


indicated


less


equitable


distribution


than


FEFP.


per-pupil


range,


restricted


range,


federal


range


ratio


, and


interquartile


range


were


calculated


at $


.59,


$731


.11,


and


.32,


respectively.


standard


deviation,


coeffi


cient


variation,


relative


mean


deviation


were


calculated


$217


.49,


.85,


, respectively.


McLoone


Index


was


calculated


distribution


below


median.


results


from


wealth


neutrality


measures


demonstrated


a less


equitable


distribution


from


local


capital


outlay


sources


than


from


FEFP.


Gini


Coeffi


cient


was


calculated


correlation


coefficient


between


local


assessed


valuation


per-pupil


and










coefficients


determination


were


.63,


respectively.231 The

of wealth neutrality


author


this


suggested


area


that


existed.


major


violations


Again,


revenues


resulting


maintenance


from


millage


the a

rates


application


were


capital


confounded


with


outlay


revenues


from


other


local


sources


capital


outlay


financing.


Nonetheless


, the


capital


outlay


maintenance


levies


contributed


to the


relatively


inequitable


distribution


determined


Currie


study.


summary


, though


various


elements


equity


distribution


aspects


FEFP


have


been


studied,


a need


existed


examine


equity


effects


distributions


resulting


from


discretionary


capital


outlay


and


maintenance


exhaustive


levi


present


analysis


this


study


research


represents


question.


Conclusion


This


chapter


began


with


a discussion


historical


process


which


state


governments


assumed


more


active


roles


providing


financial


support


to school


districts


recognition


need


to provide


less


wealthy


localities


larger


ideal


state


state


grants


support


to make


was


smaller


developed


bases.


early


This


scholarly


_










half


twentieth


century,


state


distribution


methodologies


judicial


were


stems


providing


level


tested


to determine


students


education.


in the


American


state


state


results


federal


governments


an equivalently


these


cases


state


were


adequate


in terms


school


finance


equity


reform


were


mixed.


Following


was


discussion


foundation


system


funding


school


most


common


previous


distribution


research


studies


system


currently


concerning


equity'


in use.

y effects


Finally,


this


Florida


funding


system


were


discussed.


purpose


discretionary


foundation


system.


this


millage

The n


study


was


levies


ext


to analyze


on the


chapter


fiscal


includes


effects


equity


a presentation


specific


methodology


which


these


effects


were


examined.


Notes


1Ellwood


Cubberley,


School


Funds


Their


Anportionment


(New


York:


Columbia


University,


1906).


4Ibid.,

3Ibid.,

4Ibid.


5George
Education in


Macmillan, 1


Strayer
State <


.9


Robert


New


York,


Haig,


vol.


(New


Financina


York:


23).













9Ibid.,


176.


10Harlan


: Financial


State
Rural


Schools


Updegraff


SuDDoort


Rural School Surv~v Vnrlr
U *-


(Ithaca


, NY: The


, 1922)


Joint


Committee


11Ibid.,

12Ibid.,


136.

110-115.


13Henry
University o


:. Mori
Chicago


son,
Press


School
, 1930


Revenue


(Chicago,


14Ibid.,

15Ibid.,

16Ibid.,


195.

208-214.

200.


17Paul


York:


Teachers


Mort,


College,


-- -


Columbia


University,


(New


1924


18Ibid.,

19Ibid.,


20Ibid.,


8-11.


e.g.,


Schools


State


(New


Suonort


American


Reusser


Company,
John W.


York
for


fnr


council o
, Public


Inc.,
Polley


Paul


: Teachers
Public Ed


2ulcEua o


Mort,


State


College,


n Education,
School Fina


1941);
, Publi


Publi~~.. ScolPanns rnrun ir


Paul


1933


nc e


Mort,


SuoDort


1926


Public


; Paul 1


(Washington,


; Paul


(New


York:


Walter


McGraw-Hi
. Reusser,
ca r olry/\ d r


Mort,


* .
and


The
Walter
11 Book


Structure.


ODeration


(New


, 1960).


York:


McGraw


-Hill


Book


Company,


Edgar


Programs,
Finanrs (


" in
' ]PIW


Morphet,


R.L.
Vn lr


"Characteristics


John


(ed.


Mzt- 4 nr 1


State


P~r~obl ems rhn


r. y ,-, n a n a


Support


a


- 2a


School


School


rce


Issues


I


, Rural


W


SuIrvpv


YVrL


NTew


Measurement


Educational


Need


ucation


Mort


I


, Problems


i


Srhrorl


r











Educational


Finance


Programs


(Gainesville


, FL: National


Education


Finance


Project,


1971)


4Ibid.


5President


Existinga


State


C ommi


School


ssion


Finance


on School
Programs


Finance


Review


(Washington,


United


States


Government


Printing


Office,


1972


26Ibid.,

27Ibid.,


. Const.


amend.


XIV


29Julie


Underwood


Deborah


Verstegen,


"School


Finance Ch
Protection
Verstegen
on Public


allenges


Analy


(eds.),
School


S1S


in Federal
," in Julie
he Imoacts


Finance


(New


Cour
K.
of L


York:


ts: Changing
Underwood an
itication an


Harper


Equal
Deborah A.
Legislation


& Row,


1990)


Antonio


Independent


School


District


SRodriguez,


(1973)


31Id.


at 17.


San


Antonio


Independent


School


District


Rodriauez,


F.Supp


33Id.


280.


at 282.


34San


Antonio,


. at


17-23.


35Id.,

36id.

37id.

38Id.,


23-24.

at 24.

at 33.

33-34.
- Ar











42Id. ,

43Id.


53-54.

at 55.


44William E.


State Courts,


Sparkman,


" in Julie K.


"School Finance Challenges in
Underwood and Deborah A. Verstegen


(eds.)


, The Impacts of Litigation and Leaislation on Public


School Finance


(New York:


Harper


& Row,


1990),


193.


45487


P.2d 1241


(1971


46Id.

47Id.


at 1244.


1250.


48The case was decided prior to the precedent


established by


Rodriauez


of using the rational


relationship


standard in light


Amendment


equal


of alleged violation of


the Fourteenth


protection clause.


49Serrano,


P.2d


at 1250.


50Id.,

51Id.0


1250

1252


-125

-125


52Id.,

53Id.,

54Id.,


1255-1256.

1256-1259.


1259-126


55Robinson v


SCahill,


A.2d 187


(1972).


56Id.,

57Id.,


58Id.,

59Id.


-190.


199-200.

at 205.












63The case was decided prior to


the precedent


established by


Rodriauez


of using


the rational relationship


standard in light of alleged violation of


Amendment


equal


the Fourteenth


protection clause.


64Robinson,


A.2d at


217.


65Milliken v.


Green,


212 N.W.2d 711


1973).


66Id.

67Id.

68Id.,

69Id.

70id.


at 714.


716.


716-718.

at 719.

at 720.


71Thomoson v.


Enkelkina,


P.2d


(1975)


638-640.

641-642.


72Id.,

73Id.

74Id.

75Id.,

76Id.,


642.


642-645.

646-653.


7701sen v


State,


P.2d 239


(1976).


78Id.,

79Id.,

80Id.,

81id.


140-142.

144-145.

145-146.


147.











84Id. at 878.

85id.

86id.


878-883.


88Board of Education of City School District.


etc.


Walter,


390 N.E.2d 813


(1980)


89Id. at 819.

90id.

91Id. at 820.

92Id. at 821.


823-826.


94Id. at 822.


95McDaniel v.


Thomas,


285 S.E.2d 156


(1981).


96Id. at 159.


160-161.

164-165.


99San Antonio,


411 U.S. 1


(1973).


100McDaniel, 285 S.E.2d at 167.

101Id. at 168.


165-166.


103 Board of Education. Levittown.


etc. v. Nvouist, N.Y.,


AqQ 1T F 2c1


(f1 QR2)


97Id.,

98Id.,


87Id.,


93Id.,.


102Id.,











106San Antonio, 41]

107Levittown, N.Y.,


U.S.


(1973).


439 N.E.2d at


364-365.


at 368-369.


109Hornbeck v.


Somerset County Board of Education,


A.2d


(M.D.


1983


1101d.

lllld.,


at 776.

776-780.


112San Antonio,


U.S.


(1973).


113Hornbeck,


458 A.2d at


787-788.


114Id.,

115Id.,

116Id.,


782-783.

786-787.

788-790.


117Duoree v


Alma School District no.


S.W.2d 90


(1983).


118Id.,

119Id.


92-93.

at 93.


120Eair...School_inanctCouncil


Oklahoma,


P.2d 1135


_~o Oklahoma. mc>... v
-


(1987


121Id.

122Id.


1138.

1144.


123San Antonio,


U.S.


(1973).


124Fair School Finance


P.2d at


1144-1146.


Incr.


108Id.


of0klahoma












1148.


128id.

129id.,

130id.,

131Id.

132id.,

133Id.,

134id.


1148-1149.

1149-1150.


1150.


1141-1142.

1142-1143.


1150.


135Richland County v.


Camobell,


1988)


364 S.E.2d


(S.C.


136Id.,


471-472.


137Helena Elementary School District No.


Montana,


P.2d 584


1 v. State of


(1989)


686.

689.

690.


138Id.

139Id.

140Id.

141Id.

142Id.


at 690.


691.


143Edaewood Indecendent School District


V Kirby.


S.W.2d 391 4

144Id.

145id.
1 AK--,


(1989


at 392.

at 393.


1 v. State of


v


Kirbyv.


,











149Rose


Council


Better


Education.


S.W.2d 186


(1989


. at


151Id.


152Id., 2

153Id. at


-209


-213

213.


. Craig


Wood


David


Thompson,


Education


Finance
Analvsi


Law


: Cons


titutional


of Strategies


Challenges.


(Topeka,


to State


KS: National


Aid


Organi


Plans
zation


: An


Legal


Problems


in Education,


1993),


155David


Honeyman,
Practices


Thompson


Fiscal
(White


Leader
Plains


. Craig


shin


Wood


Schools


, NY: Longman


, and


David


: Concerts


Publishing


and


Group,


1994


220.


156Ibid.


, 221.


157Wood


and


Thompson


158Thompson,


Wood


, and


Honeyman


159Ibid.


160Ibid.


161Stephen


Andrea
United


. Gold


Hyary


States


, David M


Public


Canada.


1990


. Smith


School


-91,


, Stephen


Finance


B Lawton,
Programs


Albany


, NY


Center


Study


States


, 199


'bzIbid.

163Ibid.


164Deborah


. Verstegen,


r~mmn oo


School


Finance


IP~ fiirnr h r-ta


at a Glance


loon\


Inc .,


, 26


, 18


ha la- t


150Id


154R


iInamroT"


I


I I I w












167Ibid.,

168Ibid.,

169Ibid.,


226.

228.


229


-230


171Ga.

172Ga.

173Ga.


Code

Code

Code


20-2-165(b)

20-2-164.

20-2-166.


174Mont


. Code


20


-301


to 20


-368


175Mont


. Code


Ann


. 20-0-301


to 20-9


176Mont


. Code


Ann


-367


to 2


-9-368.


. Code


-109


Sch.


Code


-109


(B) (3


179Ky

180Ky

181Ky


. Rev

. Rev

. Rev


. Stat

. Stat

. Stat


. Ann.

. Ann.

. Ann.


.470

.440


.440(2


Carrollton-Farmers


Branch


IndePendent


School


Dist.


Texas


S.W.2d


(1992)


183Tex


184Tex


185Tex


. Educ


. Educ


. Educ


. Code


. Code


. Code


Ann


Ann.


Ann


. 16


. 16


.252


.302


.303.


186David


Finance


Reform


Vaughan,
on Poor


"The


Impact


Minority


>f Florida
Children,


s 1973


" in


School


Robert


nI nA n fl


r.-


170Ibid.


177Ok.


1780Ok.


f ^ %y ^jn


rr rrk AC )" A


e t1 h


nhhr













189Ibid.,


25-37.


190Stephen


Eauitv
Press,


School


Carroll


Finance


Rolla


(Cambridge,


Park,


MA.: The


1983).


Search


Ballinger


191Stephen


Finance


: Results


Corporation,


. Carroll


frn


Search


(Santa


Eauitv


School


Monica,


Rand


1979).


192Carroll


193Ibid,

194Ibid,

195Ibid,

196Ibid.

197Ibid,


Park,


84-85.

85.

87.


199Kern


Florida
(Summer


School
, 1983)


Alexander


Districts,


d Lee Shiver,
" Journal of


"Equalization


Education


Among


Finance


, 55-62


200ibid.,

201ibid.,

202ibid.,

203ibid.,

204ibid.,

205ibid.,


-Inc


55-56.

56-57.

57-59.

59.

59-61.

62.


-In .


from


Pi \r/


StCatesQ


198Ibid,


I











of
199


School
3), 23


Funding,
1-242.


" Journal


Education


Finance


(Winter,


207Stark,


Florida


Honeyman,


Wood,


Lottery,


208Stark,


Florida


Honeyman,


Wood,


Lottery,


209Stark,


Florida


Honeyman,


Wood,


Lottery.-


210Stark,
Florida Lottery

211Stark,
Florida Lottery


212Stark,


,


Honeyman,
, 15-16.


Honeyman,


and


Honeyman,


Wood,


Wood,


Wood,


An Examination of the


An Examination of the


An Examination of the


An Examination of the


An Examination of the


An Examination of the


Florida


Lottery,


213j.
Honeyman,


Michael
A Studvy


O'Loughlin, R
f the Effects


. Craig


Wood, an
Sna-rsit t-


n tt Cn.an


David


on the


Ecuitv


(Gainesville,


of the


FL: UCEA


Florida


cation


Center


Finance


Education


Program


Finance,


1992).


14Ibid.,


215Ibid.,

216Ibid.,

217Ibid.,

218Ibid.,


13-14.

12.

14-24.

19-24.

24.


219Gaylon


Capital


Outlav


Currie,


Fund incr


An Examination


nf Publi


Education


-- -: --p--'a'a'.'-t ~ .~ S ~.J ar*A J s o.1.


litv


Eauitv


of the


Current


Methhnd


fl tr bt c Thd-n


Outlay


Fundinca


General


in the


itures


State


ir Education


PFl nr ral


(Doctoral


Eauitv


Dissertation,


- -- -


ExDend


Suoolement


A Comr a !i/"


DistributinG


Capital










222ibid.,

223ibid,

224ibid,

225ibid.

226ibid,

227ibid.,

228ibid.,

229Ibid.,

230ibid.,

231ibid.,

232ibid.,


120-126.

127-128.

128-129.

145-146.

132.

115-120.

120-126.

127-128.

128-129.

145-147.

153.















CHAPTER
METHOD


present


raised


through


study


local


focused


on the


discretionary


effects


millage


rates


revenues

on the


fiscal


equity


a foundation


school


distribution


system.


previous


chapter


relevant


literature


was


reviewed


chapter


includes


a discussion


method


which


these


equity


effects


were


examined.


chapter


begins


with


a discus


population


from


which


data


were


derived.


Following


a description


education


funding


system


Florida,


state


chosen


study


the design

discussion


next


data.

method


section


provides


chapter


through


a description


concludes


which


with


disequalizing


ects


local


levies


were


assessed.


Population


foundation


distribution


system


state


Florida


was


chosen


this


study


Several


reasons


were


involved


selection


Florida


as the


target


state.


First,


Florida


education


funding


system


was


well


suited


w










Additionally,


local


districts


authority


to rai


scretionary


levi


, and


revenues


generated


these


levies


were


equali


zed by


state.


Thus,


intuitively


possibility


disequalizing


exists


effects


that


when


these


added


levi


introduced


revenues


generated


through


was


foundation


to determine


program.


magnitude


purpose


these


study


disequalizing


effects


they


indeed


existed.


ond


, although


at the


time


of thi


writing


current


foundation


system


Florida


avoided


a major


equity


court


deci


sion


foundation


program


state


is susceptible


an equity


lawsuit.


Thus,


equity


effects


such


as those


examined


in the


present


study


might


relevant


in the


context


future


equity


court


decisions


Third


, the


people


Florida


are


guarant


a fi


scally


equitable


system


financing


public


schools


Funds


school


to be


stributed


such


a manner


as to


. guarantee


to each


student


Florida


public


and
which
any


school


services
0: ^ ^0


are


similar


differences


system the
appropriate


substantially


student


availability


to his
equal t


notwiths


varying


loca


programs


educational


o those


standing ge
1 economic


nee


available
graphic
factors.2


& a





m


I a













Fourth,


results


from


recent


studies


have


indicated


that


foundation


portion


Florida


s funding


system


relatively


equitable.


Therefore,


a good


baseline


existed


from


which


this


study


operated.


present


study


included


an assessment

discretionary


degree


levies


disequalization


on a relatively


equitable


introduced


foundational


system.


Fifth


states


Florida


one


one


nation


nation'


largest


most


public


populous


school


enrollments.


Additionally,


both


population


in general


and


school


enrollment


in particular


have


been


growing


rapidly


relative


to the


significant


from


nation


as a whole.


a national


Therefore


perspective


Florida


Following


is a more


detailed


cuss ion


population


present


study.


public


school


system


Florida


divided


into


sixty-seven


local


distri


, each


countywide.


In 1990-91,


state


served


an unweighted


full-time


membership


enrollment


district


with


largest


was


Dade


at 356


smallest


was


Glades


with


.46.


enrollment


Florida


s public


schools


seen


pattern


overall


growth


since


1970s


, while


nationally


school


enrollments


have


declined


slightly


during


that


time.










1989


enrollment


Florida


s public


schools,


however,

Florida


grew

public


steadily

school


during


this


enrollment


period.


was


In 1969


1,312


, the


Enrollment


had


grown


to 1


1979


,646


,583


1989


Total


expenditures


Florida


public


school


increased


rather


dramatically


during


this


same


time


period


In 1969


, total


expenditure


were


$961


273,000


In 1979


, expenditures


grown


to $2


,531,000


1989


-pupil


expenditures


likewise


have


undergone


a sharp


increase.


-pupil


expenditures


Florida


public


schools


were


,461,


3,198


, and


4,497


1969


, 1979


, and


1989


, respectively


The


average


statewide


per-pupil


expenditure


was


1990


per-pupil


expenditure


among


districts


ranged


from a

$3,836


high


Clay


County


Hamilton

following


County tc

a section


Sa low


provides


description


how


funds


are


distributed


to Florida


school


districts


FEFP


Florida


s public


schools


are


funded


primarily


through


Florida


school


funding


Education


mechanism


Finance


since


Program


1973


(FEFP),


basi


state

component










finance


more


specific


educational


needs


various


local


school


districts


Following


a brief


introductory


overview


calculation


FEFP


formula


1992-93,


after


which


a more


detailed


discussion


system


provided.


The


funds


distributed


to each


local


school


district


through


equivalent


FEFP


(FTE)


were


calculated


enrollment


each


multiplying


specific


full-time


program


education


program


cost


factor


assigned


Legi

the


slature.


base


student


resultant

allocation.


weight

This


FTEs


product


were

was


multiplied

multiplied


district


cost


differential,


which


accounted


disparate


costs


living


communities


served


various


districts.


To this


new


product


supplemental


allocations


were


added,


depending

declining


on district

enrollment


eligibility.

supplement, s


These


sparsity


included


supplement,


funding


adjustment.


When


eligible


supplements


had


been


added,


result


was


total


state


local


dollars


which


district


was


entitled.


required


local


effort,


amount


district


was


required


to contribute


order


to participate


FEFP,


was


subtracted,


resulting


State


FEFP


contribution


to that


school


district.


this










aggregate


amount


moneys


to be


distributed


to the


local


school


districts


from


state


annually


determined


through


legi


slative


appropriation


1992-93


a total


was


appropriated


from


state


treasury


to be


distributed


to the


local


stricts


through


FEFP.


this


, $40


,500,00


was


appropriated


from


State


School


Trust


Fund


remainder


from


General


Revenue


Fund.


formula


was


enrollment


driven,


therefore


each


district


funding


was


based


on weighted


FTE.


Each


district


s weighted


was


calculated


through


surveys


taken


throughout


year


student


membership


various


programs.


each


program


area


was


weighted


according


to cost


factors


ass


signed


to the


individual


program


areas.


The


weighted


district


was


product


each


program


area


program


area


s cost


factor.


In utilizing


these


program


cost


factors,


differences


educational


costs


based


on grade


level


differences


and


differences


based


on program


instruction


were


recognized.


Grade


level


programmatic


cost


factors


were


incorporated


into


FEFP


which


were


designed


to base


financial


support


on these


system


differences


of unequal


use


treatment


cost


of unequals


factors


, which


resulted


addressed










weighted


base


FTEs


student


as determined


allocation


herein


were


(BSA)


multiplied


was


set


at $2


Florida


Legi


slature


1992


school


year


Three


adjustments


were


made


to thi


amount


in recognition


varying


fiscal


conditions


faced


local


cost


stricts


differential,


These


declining


included


enrollment


district


supplement


and


sparsity


supplement.


district


cost


differential


was


intended


equalize


distributions


to districts


on the


relative


costs


living


associated


with


community


they


based


serve


on the


cost


Florida


factors


Price


used


Level


formula


Index


were


as determined


Office


Governor


Specifically


, the


sum


last


three


year


indexes


were


divided


three


multiplied


.008


added


to 0.200


In the


1992


Appropriations


, these


differential


were


indexed


such


a way


that


lowest


value


was


1.000


Additionally


, the


stricts


were


placed


in regions


corresponding


districts


state


in a given


region


s judi

were


cial

given


circuits


and


highest


all

value


calculated


district


region.


declining


enrollment


supplement


was


intended










allocation.


these


eligible


districts,


percent


decline


was


multiplied


prior


year


FEFP


unweighted


FTE


added


to the


current


year


allocation


sparsity


supplement


was


intended


ass


rural


stricts


that


faced


additional


cost


burdens


assoc


iated


with


population


sparsity


, higher


per


pupil


transportation


costs


An allocation


was


provided


to districts


with


an unweighted


ess


A total


,000


,000


was


distribute


ed through


sparsity


supplement


1992


school


year


result


addition


eligible


supplements


product


weighted


BSA


was


total


gross


state


local


FEFP


dollars


available


to the


distri


A funding


adjustment


was


applied


ensure


that


distri


received


same


percentage


change


in funding


as occurred


1991


From


this


result


aggregate


required


local


effort


RLE)


was


subtracted.


district


S RLE


was


based


product


valuation


millage


property


rate


Following


local


a di


assessed


scussion


method


ch the


millage


rates


districts


were


determined.


aggregate


required


local


revenue


used


general


or 1










local


amount


was


at $3,034


Using


rolls


provided


Department


Revenue,


commissioner


education


computed


millage


rate


which


when


applied


to 95


percent


total


nonexempt


property


in the


state


would


generate


proscribed


aggregate


required


local


effort


result


was


basic


millage


rate


districts.


Equalization


factors


were


then


used


to determine


specific


millage


rates


individual


districts.


factor


a given


district


was


equal


to the


quotient


prior


year


year


s state


aggregate


s assessment


assessment


that


district


level


divided


, subtracted


prior


from


one.


resultant


equalization


factor


was


then


multiplied


basic


millage


rate


to determine


RLE


millage


rate


district


School


board


approval


RLE


millage


rate


was


required


order


a given


district


receive


FEFP


funds


from


state.


subtraction


required


local


effort


from


gross


state


local


FEFP


dollars


resulted


state


FEFP


dollars.


To this


amount


funding


adjustments


were


made,


which


accounted


arithmetical


errors,


roll


changes,


errors


or other


allocation


errors.


result


these


adjustments


was


net


state


FEFP


dollars


combination


state


FEFP


funds


required


local


effort










Because


these


categorical


programs


special


allocations


were


special


without


included


Community


part


funding


being


analysis


programs


discussed


Comprehensive


Schools


detail


School


35 School


present


are


study,


listed


Categorical


Construction


Lunch,


these


briefly


programs


Debt


36 Instructional


Service,


Materials


Student


Transportation.


Special


Allocations


were


Blue


Print


Schools,


Career


Summer


Preparation,


Inservice


Pre-School


Institutes,


Projects,


Programs


Safe


Emphasis,


Full


Service


School


s/Interagency


Cooperation,


and


Education


Business


Cooperative.


local


Florida


revenue


given


used


year


to support


derived


public


from


schools


property


taxation.


Local


school


districts


are


authorized


to tax


property


support


education


Florida


Constitution.


support


effort


public


school


Five


categories


schools.


operating


millage,


millages


first


are


used


required


as established


local


FEFP


The


second


scretionary


village,


determined


each


local


school


board


(within


statutory


limitations)


without


a vote


electorate.


third


capital


outlay


maintenance


millage,


determined


each


school


board


Without


a vote


electorate.


remaining


millage










districts


exceeding


effort,


are


prohibited


10 mills


from


discretionary,


Florida


Constitution


combination


capital


outlay


from


required


and


local


maintenance


rates


a given


year


present


study


nonvoted


focused


millage


on the


rates


disequalizing


, discretionary


effects


millage


and


school


capital


improvement


village,


when


combined


with


revenues


obtained


through


equalized


foundation


portion


FEFP.


Thus,


focus


was


on the


disequali


zing


effects


rates


which


each


were


applied


at local


board


discretion.


discretionary


village


rate,


levie


from


which


were


equalized


state,


was


determined


each


individual


school


board


without


a vote


local


electorate.


Districts


were


permitted


use


revenues


obtained


from


application


discretionary


millage


rate


to support


current


operations.


Legislature


annually


prescribes


maximum


discretionary


millage


rate


that


districts


choo


never


to exceed


mills


The


1992-


maximum


discretionary


millage


rate


was


set


at 0


.510


mills


Florida


Legislature.


capital


outlay


maintenance


millage


rate


given d


districtt


was


determined


local


school


board










rates.


These


revenues


could


used


district


new


construction


modeling


projects,


sites


site


improvement


or expansion


new


sites


, existing


auxiliary


facilities


or ancillary


iliti


or to fund


maintenance,


renovation,


repair


existing


school


plants


These


revenues


could


furthermore


used


to support


pupil


transportation


their


use


in purcha


sing


school


buse


driver

vehicle


education


, security


vehi


vehi


, plaint


maintenance


or vehicle


related


related


to storing


or distributing


material


equipment


New


or replacement


equipment


could


also


purchased


using


these


funds.


stricts


through


were


capital


permitted


outlay


use


maintenance


revenues


rate


obtained


payments


educational


facilities


sites


under


a lease-


purchase


agreement


, as


long


as these


funds


exceed


one-


half


total


levy


from


village


rate


The


revenues


could


used


payment


certain


loans


used


finance


school


facilities


These


loans


were


restricted


term


one


year


or 1


ess


, unl


ess


otherwi


extended


lender


never


exc


four


years


Additionally


, the


amount


loan


could


exceed


one-


fourth


total


volarem


revenue


from


preceding


fiscal


year


Districts


could


also


use


these


revenues


pay


costs










Finally


, these


revenues


could


used


to support


payment


costs


leasing


relocatable


educational


facility


three


nonvoted,


locally


derived


millage


rates


used


support


school


, only


required


local


effort


portion was

equalize the


levies


supplemented


stribution


levies


matching


among


resulting


state


districts.


from


fund

The


capital


in order


discretionary


improvement


millages


were


equalized


on a statewide


basi


disequalizing


foundation


effect


program


these


revenues


levie


is the


when


focus


combined


this


with


study


following


section


includes


a discussion


spec


ific


method


which


these


equity


effects


were


examined


Desian


study


addr


ess


question


what


extent


did


local


discretionary


levies


introduce


sequalizing


effects


into


an equalized


foundation


program


previous


section


included


a summary


FEFP


as it operated


1992-93


scal


year


current


section


includes


a discussion


design


study.


scal


equity


realm


education


finance


refers


to fairness


in the


distribution


fiscal


resources.


examination


fiscal


equity


a distribution


stem










revenues


are


used


to represent


resource


availability


equity


studio


In the


current


study


, per-pupil


revenues


were


chosen


choosing


per


as the


-pupil


measurement


revenues


object


as opposed


rationale


to per-pupil


expenditures


was


fact


that


revenues


could


matched


with


their


millage


rate


source


, whereas


expenditures


were


identified


such


a source.


Thus


, in the


present


study


per-


pupil


revenues


was


representative


resources


used


support


education.


To determine


degree


disequity


caused


introduction


scretionary


millages


revenues


millages


, per-pupil


revenue


raised


capital

s were


through


outlay

examined


application


maintenance


across


seven


levels


aggregation.


first


level


included


per-


pupil

the F


revenues


EFP


stributed


An examination


through


this


foundation


aggregate


level


portion

provided


seline


from


which


degree


disequali


zation


caused


local


second


discretionary


third


levi


was


level


assess


aggregation


included


stribution


among


local


distri


-pupil


revenues


raised


through


application


discretionary


capital


outlay


maintenance


millage


rates


, respectively


An analyst


-pupil


revenues


stribution


these










included


combination


discretionary


and


capital


outlay


level


maintenance


indicated


levies,


total


results


degree


from


disequalization


this


resulting


from


levies.


fifth,


sixth,


seventh


levels


aggregation


included


combinations


first


through


fourth.


The


fifth


aggregation


through


level


included


foundation


per-pupil


portion


FEFP


revenues


combined


distributed


with


per-pupil


revenues


raised


through


application


discretionary


millage


rate.


sixth


level


aggregation


included


a combination


per-pupil


revenues


distributed


through


foundation


portion


FEFP


combined


with


per-pupil


revenues


raised


through


application


capital


outlay


maintenance


millage


rate.


results


from


these


levels


, when


compared


to the


results


from


aggregate


level


one,


indicated


through


application


magnitude


inequity


of each


introduced


unequalized


millage


rates,


respectively.


seventh


combination of the

foundation program,


final


per-pupil

the per-


level


aggregation


revenues


pupil


distributed


revenues


included


through


through


generated


application


discretionary


millage


rate,


per-


pupil


revenues


generated


through


application


capital










only


demonstrated


revenues


generated


total


through


disequalizing


millage


effects


rates


Per-pupil


revenues


across


these


seven


level


aggregation


were


examined


light


three


standards


fiscal


equity


These


included


resource


access


sibility


, wealth


neutrality


these


techniques


, and


concepts,


through


yield.


coupled


which


Following


with


they


a discussion


specific


were


each


quantitative


assessed.


Measurement


previous


design


section


data


included


study


a de


cription


In this


section


method


which


fiscal


equity


was


measured


presented


most


equity


studi


resource


accessibility


, wealth


neutrality


, and


yield


have


been


means


assess


relative


equity


a distribution


In the


present


study


measures


related


to all


three


these


equity


constructs


were


used


assess


degree


disequali


zation


introduced


millage


rates.


In the


present


study


, the


revenues


generated


through


application


discretionary


capital


outlay


and


maintenance


village


rates


were


examined


to determine


effects


on student


resource


accessibility


Resource


*


_


ii ii


m R


I


I_




Full Text
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PAGE 1

AN EXAMINATION OF THE EFFECTS OF LOCAL SCHOOL DISTRICT DISCRETIONARY LEVIES ON THE FISCAL EQUITY OF A STATE FOUNDATION DISTRIBUTION SYSTEM BY JEFFREY A. MAIDEN A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UNIVERSITY OF FLORIDA 1994

PAGE 2

Dedicated to the memory of my stepfather, Dr. John Robert Snyder.

PAGE 3

ACKNOWLEDGEMENTS I express my deep appreciation to my Lord and Savior, Jesus Christ. I thank Hirn for His unlimited, matchless grace, for providing eternal salvation to the human race, and for making this dissertation possible. The support and guidance of my committee chair, Dr. R. Craig Wood, has been invaluable He has been my mentor and teacher over the last four years, and I could never express my true appreciation for what he has done. Thanks also go to my committee cochair, Dr. Davids. Honeyman. Through Dr. Honeyman I have acquired an appreciation of school finance data analysis as well as the proper perspective of never taking "stuff" too seriously Acknowledgement goes to Dr. M. David Miller, from whom I have developed an appreciation, respect, and fascination of research data analysis and educational measurement. Further acknowledgement goes to Dr. Linda S. Crocker for providing the opportunity to acquire college teaching experience. Thanks go to Dr. James Hensel for always being available for support and direction in the dissertation writing process. lll

PAGE 4

Last but not least I would like to express my deep appreciation to both parents and stepparents. Their support and encouragement during this entire process has been crucial. iv

PAGE 5

TABLE OF CONTENTS ACKNOWLEDGEMENTS .......................................... iii ABSTRACT . . . . . . . . . . . . . . . . . . ............. vii CHAPTER 1 INTRODUCTION ...................................... 1 Purpose of the Study ...................................... 3 Research Question ....................... ........ .......... 5 Significance of the Study ................................. 5 Limitations ............................................... 6 Delimitations ............................................. 6 Overview of the Methodology ............................... 7 Design of the Study ....................................... 8 Notes ..................................................... 8 CHAPTER 2 REVIEW OF THE LITERATURE ......................... 11 The Theory of Per-pupil Funding Equity ............ .... ... 12 School Finance Equity Court Cases ........................ 20 Foundation Method of Financing Schools ................... 43 Previous Florida School Finance Equity Studies ... ....... 51 Conclusion ............................................... 63 Notes .................................................... 64 CHAPTER 3 METHOD ........................................... 7 7 Population ............................................... 77 FEFP ..................................................... 80 Design ................................................... 89 Measurement .............................................. 92 Conclusion .............................................. 110 Notes .......... ............ ...... ... ... ...... ... ........ 111 CHAPTER 4 RESULTS ....... .......... .. ....... ........ ....... 117 Resource Accessibility .................................. 118 wealth Neutrality ....................................... 124 Tax Yield ............................................... 13 0 Conclusion .............................................. 132 Notes ................................................... 134 V

PAGE 6

CHAPTER 5 DISCUSSION ............. ... .............. .... .... 135 Summary .. ... .......... .. .............. .... .. .......... 13 5 Observations .... .... ..... .............. . ..... ... .. ..... 137 Conclusions ............................................. 141 Implications ................... . ..... ... .... .. ..... 143 Notes ................................................... 146 APPENDIX A APPENDIX B FEFP COST FACTORS ....... .... .. ... ... .. ..... 147 RAW DATA ....... .... ......... .... .. .. ... .... 148 LIST OF REFERENCES .. ...... ...... . .... .. ... .... .. ...... 151 BIOGRAPHICAL SKETCH ... ............... .. ........ .. ........ 15 7 vi

PAGE 7

Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy AN EXAMINATION OF THE EFFECTS OF LOCAL SCHOOL DISTRICT DISCRETIONARY LEVIES ON THE FISCAL EQUITY OF A STATE FOUNDATION DISTRIBUTION SYSTEM By Jeffrey A. Maiden August, 1994 Chairman: R. Craig Wood Cochair: David S. Honeyman Major Department: Educational Leadership This quantitative study was designed to examine the disequalizing effects of local school district discretionary levies when applied to a foundation system of education finance. The data used in the study were obtained from the 1992-93 Florida Education Finance Program, which included an equalized foundation component and two separate discretionary revenue sources. These discretionary sources, the current operation discretionary levies and the capital outlay and maintenance levies, were based entirely on property taxation and were not equalized by the state. The system was examined in light of fiscal equity concepts of resource accessibility, wealth neutrality, and vii

PAGE 8

tax yield. Resource accessibility measures indicated increasing variability in distribution of resources as discretionary revenues from either of the two sources were added to foundation revenues. The capital outlay and maintenance levies contributed more to the resource accessibility variation than the current operation discretionary levies. The addition of discretionary revenues from each source demonstrated noteworthy disequalizing effects on the wealth neutrality of the distribution system. The effects of the capital outlay and maintenance revenues were more acute than the effects of the current operation discretionary revenues. Both discretionary revenue sources decreased the level of equivalence of tax yield when combined with the foundation revenue source. The capital outlay and maintenance source had far more disequalizing effects in the realm of taxpayer equity than the current operation discretionary source. Replications of the current study in states with similar systems of education finance are warranted. Additionally, studies into the fiscal equity effects as well as the costs of incorporating statewide equalization programs for the discretionary levies are recommended. viii

PAGE 9

CHAPTER 1 INTRODUCTION Fiscal equity as it relates to financing schools has a rich tradition in the education finance literature. 1 Broadly defined, fiscal equity in school finance refers to a condition of fair treatment of all students, that students in a given state should be provided equivalent support for education given their varying educational needs. 2 Because of the broad nature of the theory of fiscal equity, Jt is best understood if divided and defined by various components. The following section includes a short description of the theory of fiscal equity through analysis of its components. Chapter 2 of this study provides a more complete discussion of the development of the theory of equity in the realm of financing education. Fiscal equity is most commonly discussed in terms of the degree of equity among two groups, students and taxpayers. Equity among students is a reference to the basic fairness of distribution of educational resources among all students. Most per-pupil equity studies include examination of equity in light of three categories, specifically horizontal ~quity, vertical equity, and wealth neutrality. 1

PAGE 10

Horizontal equity refers to an equal treatment of equals. A horizontally equitable condition is one in which equal resources are available to pupils with equal needs. 3 Vertical equity, conversely, refers to unequal treatment of unequals. Because students have varying educational needs, varying levels of resources per-pupil are necessary to meet these needs. Under the concept of vertical equity such differences are taken into account. 4 2 Wealth neutrality, alternatively known as fiscal neutrality or equality of opportunity, is the degree to which the support for the education of students is related to the wealth of the state, but not the local community in which they are educated. A wealth neutral condition is one in which the fiscal support for students is not related to the fiscal conditions of local school districts. 5 Taxpayer equity refers to the basic fairness among the taxpayers of a state in terms of their support for education. Taxpayer equity exists to the extent that equal tax effort in support of education results in equal resources per-pupil. 6 Education finance researchers have also been interested in other theoretical considerations of school funding systems. Most common are adequacy, efficiency, and excellence 7 Adequacy is a reference to whether all students have an acceptable level of funding to support their education. 8 Thus, whereas equity stresses distributional

PAGE 11

3 fairness adequacy stresses the acceptability of the level of support throughout the distribution. Excellence refers to the concept of attainment of a high degree of educational quality. In the school finance context, excellence implies fiscal support sufficient to fund such quality. 9 Efficiency, on the other hand, as a finance construct implies maximizing educational output given minimum resources. 10 Though adequacy, excellence, and efficiency are significant constructs worthy of further research, equity has a longer history as a school finance theory and has generated a tremendous number of individual studies. 11 Purpose of the study A foundation system of school funding is pertinent in the context of fiscal equity in that the system theoretically provides funding to guarantee each and every child in the state a minimally acceptable level of education. Because each child is guaranteed this foundational level of funding, in theory equality of educational opportunity is provided through the distribution system. Yet, despite this recognition by states to take an active funding role in order to equalize to a minimally acceptable level for all children, foundation systems typically include allowing local districts to levy additional local taxes, given certain restrictions and limitations, which may not be equalized by the state. 12 In other words, a state using a foundation formula provides

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funding to assure each child a minimally acceptable level of education, represented by the foundation funding level, but allows districts the discretion to raise funds beyond this minimum. 4 Because a foundation funding plan is designed to promote equity, tension results when unequalized discretionary levies are permitted. Thus, discretionary millage rates and the resultant levies are problematic in the sense of equity. According to Wood and Thompson, The problem is perplexing. If the state equalized local leeway, the scheme would no longer be a minimum foundation. If the state fails to equalize discretionary millage, it restores the inequality it first sought to eliminate. Further, if the state did not to permit discretionary millage, the minimum concept is once again thwarted. The basic fact is that any unaided discretionary millage counters equalization, while denying local leeway violates minimum intent. The only other option is to limit the amount of discretionary millage, but it is clear that this solution is only a compromise. 13 According to Thompson, Wood, and Honeyman, three problems related to equity emerge if districts are permitted / to levy discretionary dollars to supplement a minimum foundation program. First, the basic foundation program does not include provisions for equalization of funds derived from millage rates above the minimum foundation level. Second, districts must spend less if the discretionary millage is not applied. Third, in poor districts spending resulting from discretionary levies is less because these levies are not equalized 14 The present study was designed to address the

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5 problem related to the inclusion of discretionary levies in a minimum foundation program Research Question The research question addressed in this study was, "In a state with a foundation program for support of schools including one or more discretionary millage rates, to what extent do the levies resulting from the application of the discretionary millage rates introduce inequities into the system for distributing education funding?" Significance of the study The study was intended to make a contribution to the theory of per-pupil fiscal equity, which is rich in the school finance literature and is the focus of a great deal of research activity among school finance scholars. The study was intended to provide insight to the problem of allowing local school districts to strive for providing the best possible education for children within the parameters of the distribution formula while maintaining fiscal fairness throughout a state. The foundation program is by far the most popular method of financing public education. Currently, thirty-eight states use a foundation program to distribute dollars for education. 15 Because of this popularity the funding methodology was considered worthy of further research.

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6 The foundation system of the state of Florida was chosen for this study. Florida is one of the most populous states in the nation and serves one of the largest public school enrollments. This study was intended to provide an examination of the public school system of Florida, with particular attention to its funding methodology. Limitations The current study was limited to the theory of equity, without assessments of adequacy, efficiency, or excellence. Equity assessments were limited to horizontal per-pupil equity, wealth neutrality, and taxpayer equity. Vertical equity was not addressed. A macroanalysis of a state system of distributing education resources was included in the study, but not a microanalysis Assessments of the equity of the distribution of resources among districts were made No effort was made to examine the distribution within districts. Delimitations Data were taken from one state and included only one fiscal year, 1992-93, the most recent in which data were available. Fiscal data were additionally limited to those from state and local sources, with federal funding not being addressed.

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The study examined fiscal data from public elementary and secondary schools only. Neither private schools nor higher education organizations were considered. overview of the Methodology 7 The foundation distribution system of the state of Florida was used in the study. Data for the study were taken from the Florida Education Finance Program (FEFP) of the 1992-93 school Year. The FEFP included a foundation basic support program in addition to two unequalized discretionary millage rates, the discretionary millage and the capital outlay and maintenance millage. Mean per-pupil revenues among the districts derived from the foundation program, the discretionary levies, and the capital outlay and maintenance levies were used to analyze the equity of the FEFP distribution. The per-pupil revenues were divided into seven levels of aggregation which included all combinations of the foundation, discretionary, and capital outlay and maintenance revenues. Equity was measured according to three standards. The first was resource accessibility, which provided an assessment of per-pupil horizontal equity. The second was wealth neutrality, using per-pupil assessed valuation as the basis of local fiscal capacity. The third was tax yield, which provided an indication of taxpayer equity. The

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following section includes a summary of the contents of the study Design of the study Chapter 1 has provided an introduction to the study. The nature of the problem was presented as well as the specific research question addressed. Following was the significance of the study as well as its limitations and delimitations and an overview of the methodology. Chapter 2 presents a review of the literature pertinent to the study. This includes a description of the historical development of the theory of fiscal equity as well as a summary of court cases through which the equity of state foundation systems was legally tested. The literature review further includes both a written description of the foundation method of distributing education dollars and a review of previous research studies concerning Florida's foundation distribution system. Chapter 3 includes a description of the research methodology in greater detail than provided above. Chapter 4 includes a discussion of the results of the study while Chapter 5 includes a summary as well as conclusions and implications derived from the study. Notes lRobert Berne, "Equity Issues in School Finance," Journal of Education Finance 14 (Fall 1988), 159. 8

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2 Thomas H. Jones, Introduction to school Finance (New York: Macmillan Publishing Company, 1985), 5; Percy E. Burrup, Vern Brimley, Jr, and Rulon Garfield, Financing Education in a Climate of Change. 4th ed. (Boston: Allyn and Bacon, Inc., 1988), 79-80; James w. Guthrie, Walter I. Garms, and Lawrence c. Pierce, School Finance and Education Policy; Enhancing Efficiency, Equality, and choice, 2nd ed. (Englewood Cliffs, NJ: Prentice-Hall, 1988), 130; David H. Monk, Educational Finance; An Economic Approach (New York: 9 McGraw-Hill, 1990), 35; R. Craig Wood and David C. Thompson, Education Finance Law: constitutional challenges to state Aid Plans--An Analysis of Strategies (Topeka, KS: National Organization of Legal Problems in Education, 1993), 1; David C. Thompson, R. Craig Wood, and Davids. Honeyman, Fiscal Leadership for schools; concepts and Practices (White Plains, NY: Longman Publishing Group, 1994), 53. 3Robert Berne and Leanna Stiefel, The Measurement of Equity in School Finance (Baltimore: The Johns Hopkins University Press, 1984), 13; Burrup, Brimley, and Garfield, 83; Guthrie, Garms, and Pierce, 302; L. Dean Webb, Martha M. McCarthy, and Stephen B. Thomas, Financing Elementary and Secondary Education (Columbus: Merrill Publishing co., 1988), 189; Monk, 36; Robert Berne and Leanna Stiefel, "Equity Standards for State School Programs: Philosophies and Standards Relevant to Section 5(d) (2) of the Federal Impact Aid Program," Journal of Education Finance 18 (Summer, 1993), 95; Wood and Thompson, 18; Thompson, Wood, and Honeyman, 56. 4 Berne and Steifel, The Measurement of Equity, 13; Burrup, Brimley, and Garfield, 83; Guthrie, Garms, and Pierce, 302; Webb, McCarthy, and Thomas, 189; Monk, 37-39; Berne and Stiefel, "Equity Standards," 95; Wood and Thompson, 18; Thompson, Wood, and Honeyman, 56. 5Berne and Stiefel, The Measurement of Equity, 17; Burrup, Brimley, and Garfield, 80-81; Webb, McCarthy, and Thomas, 189; Berne and Stiefel, "Equity Standards," 95. 6 Berne and Stiefel, The Measurement of Equity, 41-42; Guthrie, Garms, and Pierce, 143; Webb, McCarthy, and Thomas, 192; Berne and Stiefel, "Equity Standards," 96-97. 7James Gordon ward and William E. Camp, "An Analytic View of Two Decades of Reform in School Finance: Some comments," Journal of Education Finance 14 (Summer, 1988), 1-6.

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8Guthrie, Garms, and Pierce, 150-152; Webb, McCarthy, and Thomas, 192; Austin D. Swanson and Richard A. King, School Finance: Its Economics and Politics (New York: Longman, 1991), 225; Thompson, Wood, and Honeyman, 45-52. 10 9Arthur W. Stellar, "Implications for Programmatic Excellence and Equity," in van D. Mueller and Mary P. McKeown (eds.), The Fiscal, Legal, and Political Aspects of Elementary and secondary Education (Cambridge, MA: Ballinger, 1986); Burrup, Brimley, and Garfield, 81; Guthrie, Garms, and Pierce, 29. l0Burrup, Brimley, and Garfield, 32; Guthrie, Garms, and Pierce, 28-34; Webb, McCarthy, and Thomas, 192; Monk, 4-11; Swanson and King, 259-278. llBerne, "Equity Issues," 159. 12stephen D. Gold, David M. Smith, Stephen B Lawton, and Andrea c. Hyary (eds.), Public school Finance Programs of the United States and Canada, 1990-91, vol. 1 (Albany, NY: Center for the Study of the States, 1992), 22-23. 13wood and Thompson, 28. 14Thompson, Wood, and Honeyman, 223-224. 15Gold, Smith, Lawton, and Hyrary, 18.

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CHAPTER 2 REVIEW OF THE LITERATURE In Chapter 1 the research question addressed by this study was presented. Specifically, this study dealt with the effects of the moneys raised through local discretionary millage rates on fiscal equity of a state foundation distribution system. This chapter includes a summary of the literature related to the study. The chapter begins with a summary of the development of the theory of educational funding equity, which was introduced in chapter 1 of this study and to which this study was intended to contribute. Subsequently the discussion turns to decisions rendered in the federal and state court systems dealing with the problem of providing equitable systems of education funding in the states. Following this summary of relevant court cases is a discussion of the foundation system for distributing state funds to local school districts. The final section of this chapter includes a summary of previous studies of the equity of the distribution of school funds through the foundation system of Florida, the state from which the data were derived. 11

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12 The Theory of Per-Pupil Funding Equity By its nature, providing an equitable system of funding education requires the state to provide greater financial support to less wealthy local education agencies because such districts do not have access to the same fiscal resources to which the wealthier districts have access. Following is a discussion of the historical development of the theory of equity as it relates to state financial support for public education. With the publication of his monograph in 1906, Ellwood Cubberley was the first modern scholar to discuss the concept of equity as it relates to school finance. 1 Cubberley was the first to develop the concept that the schools of a state should be considered a state system of schools, rather than a series of local systems, in order to foster equitable funding. According to Cubberley, the duty of the state was to equalize the advantages to all school children considering the resources available to the state. 2 Cubberley theorized that the state itself should provide fiscal aid to districts that could not generate revenue equivalent to other areas of the state in order to equalize the educational opportunity throughout the state. 3 According to Cubberley, [A]id should bear some definite relationship to the needs of a community and to the efforts which it makes to provide good schools and to secure the attendance of children in them. 4 George Strayer developed the concept that the state should intervene in the funding of schools in order to

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guarantee a certain minimum, or foundational, level of funding for each child. 5 In collaboration with Haig, Strayer argued that in order to achieve equalization of educational opportunity: [I]t would be necessary (1) to establish schools or make other arrangements sufficient to furnish the children in every locality within the state with equal educational opportunities up to some prescribed minimum; (2) to raise the funds necessary for this purpose by local or state taxation adjusted in such manner as to bear upon the people in all localities at the same rate in relation to their tax-paying ability; and (3) to provide adequately either for the supervision and control of all the schools, or for their direct administration, by a state department of education. 6 Strayer envisioned that each local district provide a level of taxation that would provide funding for a minimally acceptable level of education if applied to the residents in the wealthiest district in the state. The wealthiest district, in applying this tax rate, would raise all the money required to finance the schools within the district's borders. The state would grant each remaining district enough money that, in combination with the funding raised locally, supported this minimally acceptable level of education. 7 Strayer held that the same local tax rate should be exerted throughout the state. In this respect, his conceptualization of local effort differed from that set forth by Cubberley, who believed that local districts should be free to tax at a higher level than other 13

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districts if the citizens of the district so desired. Strayer believed that allowing districts to generate moneys beyond those resulting from the statewide local effort tax rate would have disequalizing effects. 8 Strayer claimed that the "logical conclusion" of equalizing educational opportunity was a full, statewide system of schools. Yet, localization of the financing and administration being strongly grounded in American tradition, Strayer maintained that some degree of local control should be maintained in a state. 9 Harlan Updegraff, writing in the early 1920s, concurred with the early proponents of equity that the state should aid poorer districts more generously in order to provide equal opportunity. 10 Updegraff argued, however, that in addition districts should be rewarded for effort in the sense of the willingness to raise educational revenues through taxation. Equalization funding from the state, according to Updegraff, should be a function of the tax effort put forth by each district. The same effort from two districts would result in the same level of fiscal support for education per funding unit. 11 Updegraff believed that such a system would promote funding equity as well as preserve local control over education. Additionally, such a policy would correct a system in which poorer districts, out of necessity, were 14

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required to exert greater tax effort in order to provide for an acceptable level of education. Through an equalizing system that rewards for tax effort, the state would encourage localities to rise above a certain state mandated foundational level, and therefore with state assistance each district would be in a position to "be its best. 1 2 Henry C Morrison, who like the previously mentioned researchers supported the theoretical ideal of providing equitable funding for education, took the concept a step further by advocating complete statewide funding of public schools. 13 Morrison believed funding inequities emanated from the fundamental flaw of the existence of localized funding of the educational enterprise. Morrison proposed that instead of providing a system of distribution of state funds in inverse proportion to local district needs, as advocated by Strayer, a system by which district organization is bypassed should come into fruition. Thus each student would be provided an equivalent level of funding from revenue generated through state taxation. 14 Under the American ideal of federalism, according to Morrison, the states maintained plenary power over civil matters such as public education, and the local governing organizations such as school districts were simply subdivisions of states Therefore, the stage was 15

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set for state level funding circumventing local control without imparting damage on the American system of governance 15 Morrison argued that revenue for these state funds could come from among four sources, in any combination. These included property taxes levied statewide, state income taxes state taxes on corporations, and income from state school lands or invested school funds. 16 Paul J. Mort, a student of Strayer at Teacher's College, expanded the concept initially developed by Strayer and Haig that the state should establish and help support a foundational level of education for all children 17 Because a foundational level of education should be based on educational need, Mort developed the idea of quantifying educational need and us i ng it as school finance policy According to Mort, the educational need . of a community is regarded as the composite of all of those elements in the community that would affect the cost of the public educational offering demanded by a state program for making available to all children a satisfactory minimum educational opportunity. The relative weighting of each element would be determined by its effect on the cost 18 The state should employ a method through which this need, in terms of resources, is satisfied for each child 16

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in the state. Mort referred to this method as the 11 satisfactory equaiization program 11 19 Mort discussed specific planning for such an equalization program. The classroom, expressed as teacher units, was the cost unit in the plan. Basically, according to Mort, each child would have available the classroom or teacher equipped to the point where a program of satisfactory equalization of educat i on would be met. Each community, in turn, would have sufficient classroom units to appropriately educate children in that community 20 The concept of per-pupil equity specifically as it relates to the foundational state distribution system was developed by Mort throughout the remainder of his scholarly career, 21 as well as by other notable school finance authors For example, Edgar Morphet discussed important elements which should be included in a worthwhile foundation program. 22 All children should be granted an adequate level of education, financed jointly by the state and the respective local districts. The system should promote equality of educational opportunity among students in the state. Local districts should be able to fund schools above the minimum foundational level, properly maintaining a degree of local control over education. Furthermore, according to Morphet, the state should make a 17

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substantial contribution to the foundational level in order that no undue burden would be placed on the local districts. The foundations of the concept of equity were laid by these scholars. With their writings the theory of equity as it relates to education funding developed, and by late 1960s and early 1970s many states had established systems by which the state made corrections for existing inequities. According to data provided by the National Education Foundation Project, by the late 1960s forty-two states used equalization programs to fund schools, seven states employed non-equalizing flat grant distribution systems, and one state, Hawaii, used a system of complete state and federal support. 23 The Strayer-Haig foundation plan was by far the most popular of the equalization plans, with thirty-four states using this method at that time. 24 Although the vast majority of the states had incorporated equalization formulas into the respective school finance systems by the early 1970s, the degree to which these systems were truly equalizing was questionable. In 1972, the President's Commission on School Finance conducted a nationwide study on the equity status of the fifty state programs for school funding. 25 The ratio of maximum to minimum per pupil expenditures ranged from 1.3 to 1 in Hawaii to 56.2 to 1 18

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in Texas. The ratio of the 95th percentile to the 5th percentile ranged from to 1.2 to 1 in Maryland to 5.6 to 1 in Wyoming. The ratio of the 90th percentile to the 10th percentile ranged from 1.2 to 1 in Georgia and West Virginia to 3.0 to 1 in Montana. 26 Clearly, even in the states where the greatest equalization had been accomplished, relatively large disparities in per-pupil financial support existed. Similar results were found in the area of wealth neutrality among the states. The ratio of the maximum to the minimum property valuations per-pupil ranged from 1.7 to 1 in North Dakota to 182.8 to 1 in Kansas. The 95th to 5th percentile ratios ranged from 1.6 to 1 in North Dakota to 9.6 to 1 in New Mexico. The 90th to 10th percentile ratios ranged from 1.6 to 1 in New Hampshire and North Dakota to 6.9 to 1 in New Mexico. 27 It is apparent that the resource accessibility to fund education varied widely among local districts in all the states (excluding Hawaii, which included no local funding of schools}, with some of the variations being extreme. Because of the continued existence of these inequalities the nation"s courts became a significant arena in which greater equalization of support for education was promoted. State school finance systems in various states were challenged in both federal and state 19

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courts, the majority from the early 1970s through the present. These challenges to state distributions of school funds will be discussed in the following section. school Finance Equity court cases A plethora of challenges to state public school distribution systems have been decided in the federal and state court systems Because the purpose of this study is specifically related to distributional equity of the foundation system of public school finance, only those cases which have involved challenges to foundation systems on equity grounds will be discussed. 20 A small number of school finance equity cases have been decided in the federal court system. These cases involved challenges to funding distribution based on the constitutional theory of equal protection clause of the U.S. Constitution 28 The claim usually made was that the system of funding treated students in poorer districts unfairly, or that the distribution system deprived students in the poorer districts, as defined by per-pupil property wealth, of educational opportunity. 29 These cases have been unsuccessful in terms of reforming state funding methodologies to decrease per-pupil funding disparities. The landmark federal school finance equity case was .s.an Antonio y. Rodriguez, 30 which set the tone for school finance decisions in the federal courts. The primary issue was

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21 whether the Texas system of financing public schools was in violation of the equal protection clause due to the fact that children residing in school districts with relatively low property values were provided an education at a lower level of funding than children residing in wealthier districts. Such disparities in funding level allegedly resulted in the deprivation of educational opportunities for these children. 31 The U.S. District Court for Western Texas ruled that the finance system indeed violated the equal protection clause. 32 The court ruled that the funding disparities created a suspect classification of children residing in the poorer districts, and that these children were denied the fundamental right of education because of substandard funding 33 The court had applied the strict scrutiny test, and the state failed to demonstrate a compelling interest for maintaining such a system which violated this fundamental right. The U.S. Supreme Court reversed the decision on appeal. The Court in its decision declined to use the strict scrutiny standard for three reasons. First, the appellees could not demonstrate that any suspect class was disadvantaged by the system. No reason existed to believe that all poor people in the state resided in the districts with lower property values. 34 Second, the Texas foundation financing plan guaranteed a minimum level of education (through statewide funding

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22 supplements) for all children. Therefore, education per se was not denied to any child in the state; some children were simply provided less funding for their education than others. 35 The equal protection clause, according to the Court "does not require absolute equality of advantages. 11 36 Third, the Court ruled that education was not a fundamental right. The Court declared that although education was extremely important to society, it was not the province of the court to pick and choose certain substantive rights (such as education) to call fundamental and thus guarantee equal protection. 37 To be fundamental, such a right must be explicitly or implicitly mentioned in the Constitution. 38 Because education was not a fundamental right and because no suspect class was involved, according to the Court only a rational relationship between the school finance system and state purpose would need to be demonstrated 39 In the Court's view, the Texas foundation system was designed to extend education to all children, and to improve its quality. 40 The Legislature had chosen to facilitate funding of schools largely through local sources to promote local autonomy and control of education, which is strongly grounded in American tradition. 41 Furthermore, no fiscal system was completely non-discriminatory, and having some inequality was not sufficient grounds to strike down the system. 42 Therefore, the Texas foundation system withstood

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23 the rational relationship test, and was declared by the Court to be in compliance with the equal protection clause. 43 Because of the precedent established in the Rodriguez case the state court systems became the primary means of attacking state finance systems on equity grounds. These challenges typically involved allegations of violation of the given state's constitutional equal protection guarantee, the education article of the constitution, or both 44 The overall results of these challenges, in terms of judicial determination of the distributional equity of state finance systems in light of these constitutional provisions, have been mixed. The landmark case for challenges to state school finance distribution methodologies in state court systems was Serrano y. Priest. 45 The allegation was that the disparities in per pupil funding among California school districts (based on relative property values) had resulted in a violation of the equal protection clause of both the California Constitution and the Fourteenth Amendment to the U.S. Constitution. 4 6 The California Supreme Court eventually decided the case. In its decision, the court applied the strict scrutiny test to the state school finance system. The court justified this measure because education was a fundamental right and because a suspect class had been denied this fundamental interest 47 The court ruled that the system failed the strict scrutiny test and violated both constitutions. 48

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24 The court declared "irrefutable" the fact that a suspect class consisting of less wealthy individuals had been discr i minated against due to the nature of the finance system 49 The appellees argued that the system resulted in discrimination against school districts, not a class of individuals. 50 The court, however, ruled that this discrimination affected a class of people residing in these poor districts 51 The court also ruled that education was a fundamental right which should be protected by the equal protection clause of both constitutions. Education, according to the court, was significant for future economic and social success of students. 52 Education was also declared to be necessary for an enlightened citizenry, capable of engaging in fruitful civic and political activities. 53 Therefore, the finance system failed the strict scrutiny standard because the state could demonstrate no compelling interest in maintaining it. 54 One year following Serrano. a decision in the New Jersey court system was rendered concerning that state"s finance distribution system. 55 At issue was the constitutionality of the New Jersey foundation system of funding schools. 56 The Supreme Court of New Jersey eventually decided the case, declaring the foundation system in violation of the equal protection clause of both the New Jersey and the U.S. Constitutions. The court, based on a plethora of expert testimony, determined that a direct relationship existed

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25 between expenditures and overall educational quality. 57 Although New Jersey at the time of the case ranked third in the nation in terms of total expenditure per-pupil for education, disparities among districts were nevertheless large. 58 The court admitted that although it was difficult to determine just how much expenditure per-pupil was enough, clearly in some districts the expenditure was totally inadequate (e.g., based on such factors as conditions of facilities and academic status of students). The court believed some children were definitely receiving an inadequate education. 59 The "thorough" required by the New Jersey Constitution meant something beyond the minimum according to the court. A thorough education therefore was not being provided to every child, and the constitutional mandate was being violated. 60 Furthermore, the fostering of local control of education could not be used to justify a system with huge inequities in per pupil expenditures. Real control was illusory for the poorest local districts that had limited resources available to them. 61 The court applied the strict scrutiny standard to the system and could find no compelling state interest which justified the school finance system. The court expressed doubts that the system could even survive the less stringent rational relationship test. 62 Therefore the court declared

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26 the foundation system in violation of the U.S. Constitution 63 and the New Jersey Constitution. 64 Following Serrano and Robinson, state foundation distribution formulas in many states were challenged in the respective state court systems. Michigan"s system of school finance was challenged in that state's court system, the claim being made that the system was in violation of both the Michigan and the U.S. Constitutions. 65 The U.S. Constitutional issue was disposed of by the court citing Rodriguez as precedent. 66 In deciding the state constitutional issue, the court focused on the relationship between inputs (i.e., available monetary resources) and educational opportunities. 67 The court stated that no evidence had been provided that students in the poorer districts were significantly more deprived of educational opportunity than students in wealthier districts. 68 The court further stated that no proof was available that eliminating per-pupil funding disparities among districts would somehow increase opportunity for students residing in poor districts. 69 The state's constitutional obligation, according to the court, was to provide a basic system of schools for all children throughout the state. The Michigan Constitution did not require equal expenditures for all students as an expression of equal educational opportunity. 70 Therefore the

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27 foundation system of Michigan was upheld as constitutionally valid. The foundation system of Idaho was challenged as violating both the U.S. and the Idaho Constitutions. 71 The challenge was based on per-pupil funding disparities resulting from a heavy reliance on local ad valorem taxation to fund education in Idaho 72 The Supreme Court of Idaho upheld the constitutionality of the finance system. According to the court, availability of funds was a very important factor in determining educational adequacy. Yet, the Court could not declare that smaller expenditure levels resulted in a denial of equal protection. 73 The court further declared that the Legislature was exercising its plenary power in developing and administering a valid system for financing schools. The court would establish itself as a "super legislature" to interfere with this authority. 74 The court found the use of the strict scrutiny test unnecessary in that education was not a fundamental right. 75 The state had as a rational basis for developing and administering the foundation program the fostering of local control of education 76 Therefore, the foundation plan was upheld as constitutional. The constitutionality of the Oregon state foundation system was challenged in that state court system. 77 This challenge was based on the existence of substantial per-pupil spending disparities due to heavy reliance on local wealth

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for funding schools resulting in alleged deprivation of educational opportunity for students living in poorer areas of the state. 7 B 28 The Supreme Court of Oregon upheld the constitutionality of the foundation system. The court did not answer the question of whether education was a fundamental right and therefore subject to equal protection guarantees. 7 9 Nevertheless, the court declared that no child had been deprived access to a minimum level of education even though the educational program offerings available to children varied widely. BO The court agreed that the objective of the finance system was to allow local control over education. While admitting that the lack of adequate resources diminished local control for poorer districts, the court could not conclude that equal protection had been violated because of such diminution. Bl The court also agreed that perhaps other systems of finance could be developed to more adequately equalize per pupil expenditures in education. Yet, the court saw this as no reason to strike down the current system as unconstitutional. The court ruled that the Oregon Constitution did not mandate uniform funding per-pupil across the state. Rather, the state was required to provide a basic level of education to all children. B 2

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29 In West Virginia, the school finance system was declared unconstitutional by the State Supreme Court of Appeals based on both equity and adequacy grounds. The court ruled that the mechanisms for financing the schools denied children a thorough and free education and equal protection, both violations of the west Virginia Constitution. B 3 The court declared education a fundamental, constitutionally protected right in West Virginia. B 4 The court found "broad and comprehensive constitutional inadequacies in the structure and composition" of the entire school system, including its method of finance. B 5 Some districts were "woefully inadequate," though all needed some degree of improvement. B 6 The finance system in particular was declared discriminatory by the court. Funding should have been emphasized at the state level instead of local to eliminate funding disparities based on local wealth. B 7 The system therefore was in violation of the state constitution because a thorough and efficient system of schooling was not being provided. The Ohio Supreme Court declined to apply the strict scrutiny standard in examining the Ohio finance distribution system. BB Finding no fundamental interest involved, only the rational relationship test was applied to the system. B 9 Furthermore, the court ruled that, in deference, the

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constitutionality of legislative acts should be assumed unless a clear violation were evident. 90 30 The state, according to the court, had as a rational purpose promoting local control over education, a tradition dating back to the Northwest Ordinance of 1785 91 Traditionally, the General Assembly had through the years attempted to ameliorate the funding disparities. Although per-pupil funding inequities were real the system was not irrational. 92 Additionally, wide discretion should be given to the General Assembly, and the court should exercise great circumspection and defer to legislative insight in the area of financial provision for education. Although the discretion was not unlimited, the General Assembly had not abused it to the extent that the finance system should be declared unconstitutional. 93 Therefore, the court ruled that the system was not in violation of the Ohio Constitution 94 The Georgia Supreme Court ruled that the state school financing system, despite interdistrict per-pupil funding inequities, was not in violation of the Georgia Constitution. 95 The state financing system, according to the court bore a rational relationship to the state purpose of providing a minimum level of school funding to each student. The court admitted that the finance system had equalizing effects in theory though not in reality. 96 The court also conceded that a positive correlation existed between level of funding and educational opportunity

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(wealthier districts could afford higher instructional salaries, superior curricula, better supplies and plant facilities, etc.) 97 Yet the state finance scheme met the constitutional requirement of providing basic educational opportunities to all children. The court declared that although the state should go beyond the constitutional requirement of providing basic educational opportunities, providing equal expenditures per child was not required of the state. 98 This conclusion was reached because the state Constitution provided great detail about the institution of education but mentioned nothing about equalizing expenditures. 31 The court also declared that although education was vital it was not a fundamental right implicitly or explicitly guaranteed in the Constitution. The U.S. Supreme Court ruling of non-fundamentality in Rodriguez. 99 although not binding with regard to state constitutional issues, provided worthy guidance. Therefore, the strict scrutiny model was not used by the Georgia court. 1 00 The court in its decision made it clear that the Georgia school finance system was a poor one in terms of equity, and urged the Legislature to develop a more equitable system of funding schools Yet the court refused to rule that the system was in violation of the Georgia Constitution. 101 The court also ruled that the state did not violate the adequate education provision of the Constitution. According

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32 to the court, the term "adequate" was not specifically defined in the Constitution. It would have been difficult to determine a judicially manageable standard to determine whether pupils are receiving an adequate education, the court declared, and it would defer to the legislature to assess adequacy The court could not justify declaring the state school financing system inadequate because per-pupil funding disparities existed. 102 The New York Court of Appeals ruled that New York's foundation distribution system did not violate either the New York Constitution or the equal protection clause of the U.S. Constitution. 103 The court in its decision declared that New York had consistently been among the nation's leaders in per pupil school funding. Disparities among districts did exist, and metropolitan areas were hardest hit. However, no claim had been made that any districts provided schooling below state mandated requirements; only the disparities were in question. 104 Because of the complex nature of funding schools, the court declared that it was best left to the Legislature and its staff and the professionals in the executive branch. Though the court was responsible for overseeing compliance with constitutional mandates, no violation was evidenced in this case. 105 The court cited Rodriguez 106 in deciding to use the rational basis test of the school finance system. The state had a rational purpose in allowing local control of

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33 education, and the funding disparities are the result of local wealth differences not legislative actions. 107 Therefore, according to the court, no violation of either constitution had been demonstrated. Furthermore, though the court considered education important, it was not a fundamental right. 1oa The court further found that the state Constitution required only that a system of free public schooling be provided, not equitable per-pupil educational funding. The state had complied with this requirement by establishing minimum standards, both in funding and other educational areas, with which all local school boards must comply. Therefore, the school finance system was ruled not violative of either constitution. The Maryland Supreme Court declared that state's school foundation distribution system constitutionally valid in light of the U.S. Constitution, the Maryland Constitution, and the Maryland Declaration of Rights. 1 09 With regard to the state constitutional issue, the court ruled that the state was not required to provide exact funding levels per pupil. 110 In any event, the state had undertaken through the years to provide increased equalization of expenditures, and the current formula helped ease inequities. The "thorough and efficient" requirement of the state constitution denoted some measure of local control and autonomy in the realm of public

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education. With shared responsibility some measure of funding differentiation should be expected. 111 Citing Rodriguez 112 in dealing with the u.s. 34 Constitutional issue, the court ruled that education should not be declared a fundamental right, and therefore strict scrutiny should not be applied because of non-fundamentality and the nonexistence of a suspect class based on wealth alone 113 Furthermore, no purposeful discrimination by the state was in evidence. 114 Only the rational basis test need be applied, and the state had a rational basis for using the formula to foster local control and autonomy 115 Therefore the state school funding formula was not i n violation of either constitution or the Declaration of Rights. 116 The Arkansas Supreme Court declared that state's school finance system unconstitutional using the less rigorous rational relationship test 117 The court could not find a rational relationship between the disparity of per-pupil funding among districts and the needs of individual districts. At issue in the case was whether the financing system provided by the state foundation plan violated the Arkansas Constitution. The court did not use the strict scrutiny test in this case, and therefore avoided the question of whether education was a fundamental right. The court instead applied the rational relationship test, finding no such relationship between the foundation plan and the individual needs of the

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35 school districts with regard to funding. 118 The court rejected the claim that the purpose of the foundation plan was to promote local control of education, declaring that the provision of more equitable funding would not diminish local control. Furthermore, low levels of per-pupil funding deprived poor districts of effective control of education. 11 9 In Oklahoma, the state school finance system was charged with violating the equal protection clause of the U.S. Constitution and several provisions of the Oklahoma Constitution. 120 The Oklahoma Supreme Court eventually rendered a decision, declaring the system constitutionally valid. The challenge to the system was that the inequitable per-pupil funding levels which resulted from the state foundation plan deprived children in districts with lower property values the opportunity for a good education, a violation of the equal protection clause. 121 The court declared that, under equal protection analysis, legislative acts such as the foundation plan should be considered valid by the courts unless a suspect class had been deprived of rights or if any fundamental right had been violated. 122 Citing Rodriguez. 1 23 the court found that neither of these conditions existed. Furthermore, the allegation was not the complete denial of a free public education to any child, just inequitable per-pupil expenditures. 1 24 The court furthermore declared that the purpose of the plan was to allow local

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control of education and autonomy, and therefore a rational relat i onship existed between the system and a legitimate state purpose. 12s 36 The plaintiffs argued that the U.S. Supreme Court decision in Rodriguez 126 need not apply, that different circumstances existed in Oklahoma than in Texas. The Court claimed that the two state school systems, including the funding plans, were not dissimilar. The Oklahoma court had no reason to rule differently than the U.S. Supreme Court. 127 The plaintiffs charged that the state school financing system was in violation of several provisions of the state constitution. First, because education is specifically mentioned in the Oklahoma Constitution (unlike the U.S. Constitution), it should qualify as a fundamental right. 128 The court, however, ruled that mere mention of education, or any other phenomenon, in the state constitution did not establish it as a fundamental right. 129 Furthermore, providing equitable funding per-pupil was not mentioned in the Oklahoma Constitution. 130 Second, the plaintiffs argued that funding inequities resulted in a violation of the constitutional requirement or uniformity i n the application of laws throughout the state. The court countered that the Legislature had established a foundation plan that applies throughout the state in uniform fashion. 131

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37 The plaintiffs challenged the use of ad valorem taxation in the foundation plan, claiming that the resultant funding disparities violated the equal protection clause of the Oklahoma Constitution. 1 32 The court rejected this argument, saying that the foundation plan had been established to minimize the differences caused by varying levels of district wealth. 133 The court further held that it was obligated to uphold the constitutionality of a given act of the Legislature unless it could be demonstrated that the Legislature acted arbitrarily or capriciously. The Court could find no such violation with regard to the school finance legislation. Thus, the finance system was upheld as constitutiona1. 134 In South Carolina, the foundation distribution system was upheld by the State Supreme Court as valid in light of the South Carolina Constitution. 135 According to the court, the Legislature was constitutionally mandated to provide a system of schooling, but the Legislature had discretion in how to fund the system. Legislative actions such as those relating to funding schools should normally be considered valid by the courts. 136 The plaintiffs also charged that students residing in poor districts were denied equal educational opportunity. The Supreme Court, however, declared that the foundation system included a funding methodology which granted more

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state money to poor districts. Therefore the system was a rational means of equalizing educational opportunity. The Montana foundation distribution system was charged with violating the Montana Constitution. 137 The plaintiffs charged that although the state finance system included interdistrict equalizing provisions, per-pupil funding differences among school districts were as high as eight to one, and thus equal opportunity was being denied. 138 38 The defendants argued that the state foundation plan had been established to foster equal opportunity, and therefore the constitution was not violated. 139 Additionally, according to the defendants, outputs (i.e., assessments based on factors such as standardized test scores and dropout rates) should have been used to measure equal opportunity instead of inputs (i.e., funding) 140 The defendants further argued that although the Constitution established as a goal of the state equal educational opportunity, the document declared local control of schooling as a state goal. With local control naturally disparate per-pupil spending levels occurred. 141 The Montana Supreme Court ruled that the system was in violation of the constitution. The court declared that the state failed to present convincing evidence that outputs rather than inputs signified equal educational opportunity, and that funding disparities were not demonstrably caused by local control of schooling. Furthermore the court ruled that equal educational opportunity was not just an aspirational

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39 goal but a constitutional guarantee. Because of the failure of the state to equalize educational expenditures (due in part to the inadequate funding of the foundation program) the state had failed to provide equal educational opportunity for all children. 142 The Texas foundation distribution system was charged with violating the Texas Constitution based on huge differences in the property wealth of school districts. 143 Because 50 percent of school funding statewide was derived from local sources and because localities relied heavily on ad volarem taxation, wide school funding disparities resulted. A 700 to 1 ratio in property value existed between the wealthiest and poorest school districts, while the per pupil spending gap was $19,333 to $2,112. 144 The Supreme Court of Texas declared the school finance system unconstitutional. The court stated that the amount of money spent on pupils had a significant impact on educational opportunity. Pupils residing in poor districts were in a cycle of poverty which deprived them of educational opportunity. These poor districts, despite normally taxing at a higher rate, still raised less revenue than the wealthy districts, thus giving their schools a reputation for inadequacy. Industry, a key to increasing local wealth, was not attracted to localities with high tax rates and inferior schools. 145

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The court admitted that the Texas Legislature had through the years attempted to lessen the interdistrict funding disparities through the Foundation School Program (FSP). Although the FSP was designed to provide more state 40 money to poorer districts, not enough moneys had been provided to guarantee minimum funding. The court declared that the constitutional mandate of the state had not been met by the FSP. 146 Much of the court's discussion revolved around the concept of efficiency as found in the state constitution. The court declared that determination of efficiency was not necessarily the exclusive realm of the political system and therefore outside judicial control. The constitution did not give exclusive discretion to the legislature for determining what is efficient. Although "efficient" was not specifically defined in the constitution, a standard was provided for the courts to use to determine whether the constitution had been violated. The court had the constitutional duty to determine whether the legislature was fulfilling its constitutional duty 147 The state had argued that "efficient" meant simple and inexpensive. The court found no evidence of this claim. According to the court, for the school system to be efficient districts should have similar revenue available to them, providing all children with equal educational opportunity.

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This was not the case, and therefore the school system was not financially efficient. 14B 41 In Kentucky the school finance system, which included a foundation as well as a guaranteed yield component, was challenged, the charge being that large school funding disparities among Kentucky districts violated both the U.S. and Kentucky Constitutions. 149 The Kentucky Supreme Court declared the finance program, as well as the entire state public school system, in violation of the Kentucky Constitution. The high court in its decision did not condemn the system in light of the U.S. Constitution, declaring that because the educational system had been ruled in violation of the Kentucky Constitution an analysis of U.S. Constitutional issues was not necessary. 1so The litigation revolved largely around the concept of efficiency. The representatives of the state argued that because the Kentucky Constitution required the Legislature to provide an efficient system of schools, the General Assembly, not the courts, was the organization responsible for determining whether the system was indeed efficient. The court, however, ruled that it had the constitutional authority to review the legislation which established the school finance system to determine its constitutionality. Therefore, the court could pass judgment on the efficiency of the state"s school system, and thus the finance system

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supporting it, because efficiency was required by the state Constitution, 151 42 The high court agreed that efficiency, to a large degree, referred to substantial uniformity of resources being applied throughout the school system, resulting in substantial equal opportunity for a good education. The court relied on the testimony of experts who claimed that a significant positive correlation existed between level of expenditure and overall quality of education, and that students who were provided lower levels of funding were prone to receiving a lower quality education. These experts presented data showing that districts with low per-pupil expenditures had more restricted curricula and lower overall achievement test scores 1 52 Therefore, the court ruled that an efficient system of common schools had not been provided because of substantially different levels of school funding among districts throughout the state. Because of heavy reliance on local resources to fund the public schools and the resultant per-pupil expenditure differences based on relative local property values, the General Assembly had created an inefficient educational system. The Supreme Court agreed that although the General Assembly had in recent years passed legislation which provided a greater degree of equalization of funding among districts, huge per-pupil disparities among districts still existed at the time of the case. 153

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In summary, the challenges to school foundation distribution methodologies in state courts have met with mixed success. All of the cases discussed dealt specifically with the equity effects of state foundation formulas for distributing school funds. The next section includes a discussion of the theoretical framework of the foundation system of school finance as well as examples of state foundation systems which provide a funding component for equalizing local discretionary revenues. Foundation Method of Financing schools 43 A foundation program of financing education is one in which the state and local districts contribute jointly to the financing of education is such a way that each child is provided a minimum educational program. In order to accomplish this for each student, the foundation program is based on the ability of districts to pay for this minimum educational program 154 In other words, the level of state support varies inversely with local wealth, thereby providing each district a foundation of fiscal support for educational programs. 155 Under a foundation system, theoretically, the poorest district of the state should be able to financially support the appropriate level of education for each student to the same degree as the wealthiest, given the same amount of

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44 taxing effort. Thus, both per-pupil as well as taxpayer equity are recognized with this distribution system. The state under a foundation system generally establishes a minimum local property tax rate which all districts must pass in order to receive state funding 156 Additionally, a minimum base expenditure for each district is obtained due to state support. 157 Theoretically, beyond the foundation level local districts are able to provide funding to finance additional programs or services above and beyond the foundation level within the parameters established by state constitution or statutes. Such additional funding may cause disequalizing effects in the system overall 158 The foundation plan includes a legislatively determined minimum program from which a local share, based on legislatively determined tax rate is subtracted The remainder is the amount of support from the state necessary to finance such a program. 1 59 Operationally, the amount of state aid is determined as follows: Si= (Pix Fstate) (Vali x rstate) where Si is the state aid to the ith district, Pi is the number of students (as calculated in the state) in the ith district, Fstate is the foundation level as established by the state, Vali is the assessed valuation of property for the

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45 ith district, and rstate is the tax rate set by the local district. 160 The foundation amount established by the state is multiplied by the the number of pupils to produce the total foundation funding for that district. From this product is subtracted the amount the district is required to contribute, based on the local tax rate and the total assessed valuation for that district. The difference between the total foundation funding level and the amount contributed by the district is the amount of state aid to that district. Currently thirty-eight states use some modification of a foundation program to support public education. 161 Such a funding program has as a rationale the provision for each child in the state a foundational level of education whether the child resides in a relatively wealthy local school district or a poorer one. 162 Yet, despite this recognition by states to take an active funding role in order to equalize to a minimally acceptable level for all children, nearly every one of these states allows local districts to apply locally determined millage rates in order to levy funds above the foundation level guaranteed by the state. 163 Although the states impose certain limitations and restrictions on the amount and use of these additional funds, the effects may nonetheless be disequalizing. Some states that fund public schools through a foundation formula employ a two-tiered system, by which the basic program includes the equalization foundation program,

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46 and additional discretionary funds levied by districts are separately equalized by the state. 164 The second level is equalized through a resource accessibility program, either a guaranteed tax base (GTB) or guaranteed yield (GTY). A brief discussion of the operationalization of typical GTB and GTY programs is provided followed by a discussion of the distribution systems of the states that at the time of this writing use or have recently used a GTB or GTY to augment a foundation formula. The GTB and GTY systems are similar to the foundation plan in that all include equalizing educational opportunity through state support in inverse proportion to districts' ability to pay. 165 Unlike a foundation state, a state using a GTB or GTY system does not establish a minimum foundational level of educational support and a minimum tax rate to be levied by districts. Rather, the levels of support are locally determined 166 Thus, the GTB and GTY formulas include equal access to resources, rather than the minimum funding level included in the foundation program. 167 The GTB plan operates on the assumption that all districts should have access to the same tax base wealth per pupil. The state establishes a guaranteed tax base, and the state simply provides each district sufficient funding that, when combined with local funds, is equivalent to funding that would be raised given the guaranteed tax base. The local districts are allowed the discretion to determine local

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47 expenditures as well as the local tax rate. 168 The GTY is similar to the GTB except that the state sets a tax yield level for all property in the state rather than a tax base. 169 The GTB and GTY have identical formulas. The formulas are mathematically expressed as follows: Si = (Pi) (Expi) [1 (C x Adj Val i)] where Si is the state aid to district i, Pi is the number of students as calculated by the state in district i, Expi is the dollar per-pupil expenditure set by district i, c is the state share percentage factor, and Adj.Val.i is the ratio of assessed valuation per-pupil for district i compared to that of the average assessed valuation for all districts. 170 This method is equitable in terms of both per-pupil funding and taxpayer effort. Every child is guaranteed a certain level of funding commensurate with his or her educational need given the level of tax effort exerted in the local school district. Each mill of tax effort results in the same levy per pupil, thus promoting equity among taxpayers. Several states currently use or have recently used a funding scheme which involves a foundation component in combination with a GTB or GTY model. In Georg i a, for example, the Quality Basic Education (QBE) foundation program is supplemented by a GTB component Under the QBE, state aid

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48 to a district is a product of the weighted pupil count times the guaranteed financial support base minus the local fair share, which is the local contribution required for participation in the foundation program. 171 The local contribution is based on a state mandated millage rate applied to assessed property equalized at 40 percent of market value, or a rate which would generate 50 percent of the district's foundation amount, whichever is smaller. 172 The GTB component is available only to districts below the 90th percentile in terms of property wealth per-pupil that levy taxes above the state mandated millage rate. For additional mills above the state mandated level, the state pays the difference between the amount actually generated and the amount that would be generated by applying the millage rate to the assessed value of property in a district at the 90th percentile 173 In Montana, a foundation program is supplemented by a GTB component. 174 The foundation level of support is variable according to categories based on average number belonging (ANB), which represents enrollment. The foundation level thus increases with ANB. The state provides funding for this foundational level per ANB category after subtracting a portion which is raised at the county level. No equalization funds must be provided by local districts themselves with the exception of elementary districts with fewer than ten ANB

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which are not classified as isolated. These districts must raise 50 percent of the foundation amount. 175 49 Under the GTB component districts may levy additional mills for the general fund and counties for the teacher retirement fund. The state guarantees a yield equivalent to the average mill yield for each of these permissive mills. 176 Oklahoma public schools are financed by a foundation program supplemented by the Salary Incentive Aid, which is comparable to a GTY supplement. Foundation aid for each district is determined by multiplying a legislatively established Base Foundation Support Level by weighted Average Daily Membership (ADM). State foundation aid is determined by taking this product and subtracting 15 mills times the assessed valuation of the district from the previous year plus a 4 mill county levy and other minor adjustments. 177 Districts may further apply millage rates above the fifteen mill foundation portion for the Salary Incentive Aid portion component, in which the state provides funds to assure a guaranteed yield. State Salary Incentive Aid is determined by multiplying an incentive aid guarantee by the district's ADM then subtracting the number of additional mills times the assessed valuation of the district. 178 In Kentucky the state provides GTY funding to augment the state foundation distribution system. A certain per pupil dollar amount is guaranteed under the foundation portion of the state funding program. The state grants each

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50 district the difference between what was raised through application of a state mandated millage rate on assessed valuation of local property and what was required to meet the aggregate foundation per-pupil funding level. 179 Districts are permitted to exceed this minimum foundational level, and those that chose to do so are provided matching funds from the state not to exceed 15 percent of their entitlement to ensure a minimum yield. The revenue obtained through this additional levy is equalized at 150 percent of the average statewide per-pupil property assessment. 180 Districts are permitted to increase financing up to an additional 30 percent without a matching grant from the state. 181 A three-tiered finance system used in Texas was recently invalidated by the Texas Supreme Court. 182 However, a brief discussion of the system as it existed prior to its invalidation by the court will be provided to exemplify the operationalization of foundation distribution systems augmented by GTB or GTY components. The Texas system included a foundation, a GTY and an unequalized component. With Tier I, the foundational component, the state granted a district the difference between the amount required to fund each student's education at a certain foundation level and what was actually levied locally through application of a state mandated millage rate against assessed valuation of local property 183 The state under Tier II ensured that for any district that chose to tax

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51 above the foundation millage rate a certain dollar level per pupil for each additional cent of tax rate, up to a maximum rate of taxation. 184 Under Tier III additional millage rates above the guaranteed yield band were permitted but not matched by state funds. 185 The present study included data from the foundation distribution system of the state of Florida for fiscal year 1992-93. Florida schools were funded through a foundation system, although the state did not equalize dollars raised through application of the discretionary or capital outlay and maintenance millage rates. The degree of disequalization caused by the revenues raised through the application of these millage rates was the focus of the present study. The following section includes a review of previous equity studies of Florida's public education funding system. Previous Florida school Finance Equity studies This study focused on equity aspects of the foundation method of public education finance. The foundation plan of the state of Florida, the Florida Education Finance Program (FEFP), was chosen for the study. The following discussion includes a summary of previous equity studies related to the FEFP. Vaughan examined the equity aspects of the FEFP as part of a six state study of the effects of school finance reform on minority and poor students. 186 Vaughan addressed two

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52 research questions which are specifically relevant to the present study. The first included the extent to which inequalities in the distribution of educational revenues existed prior to and after the implementation of the FEFP. The second included the extent to which the level of revenues available for education were related to district wealth before and after implementation of the FEFP. Vaughan examined fiscal data for the 1972-73 school year, prior to the implementation of the FEFP, and the 1973-74, 1974-75, and 1975-76 school years, after FEFP implementation. 187 Vaughan's conclusion with regard to distribution of per pupil revenues was that the FEFP was relatively equitable. The vast majority of Florida's public school pupils fell between the tenth and ninetieth percentile of the district mean state and local revenue per pupil. The range, restricted range, and federal range ratios of state and local per-pupil revenue among districts were all relatively low after FEFP implementation. Although the coefficients of variation of local revenue per-pupil were relatively high, they were lower after FEFP implementation than before. 188 In the area of fiscal neutrality, Vaughan found a strong relationship between local wealth and local per-pupil revenue, with the effect increasing in strength across the four years being studied. A significant relationship also existed between local wealth and state and local revenues per pupil. Although the relationship was smaller after the

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implementation of the FEFP, it was nevertheless significant. Vaughan concluded that the FEFP was not very wealth neutral, although greater wealth neutrality was evident in Florida after the implementation of the FEFP. 189 53 Carroll and Park conducted equity analyses for five states, including Florida. 190 The intent of the Florida portion of the study, which was a follow-up to a similar study conducted by Carroll in 1979, 191 was to compare the equity of the Florida state distribution system before the current finance formula (FEFP) with the distribution which existed prior to implementation. Included in the study were fiscal comparisons made for the 1972-73 school year (before the FEFP) against the 1975-76 school year (after FEFP implementation). These comparisons were made in terms of instructional expenditures as well as revenues at six levels of aggregation These included general revenues not including Racing Commission funds, general revenues including Racing Commission funds, general revenue plus PL 874 revenues, local plus state revenues, local plus state plus PL 874 revenues, and total revenues. 1 92 Carroll and Park found, through a series of regression equations significant relationships between wealth, based on assessed valuation, and per-pupil revenues at all levels of aggregation, both before and after the implementation of the FEFP. 193 Additionally, a significant relationship was found

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54 between instructional expenditures and wealth both before and after implementation. 194 Carroll and Park found no significant relationship between household income and revenues and instructional expenditures per-pupil before the FEFP, yet a significant relationship after implementation. 1 95 The implementation of the FEFP resulted in a weakened relationship between a community's tax effort and the availability of school revenues as well as instructional expenditures. 196 Carroll and Park concluded that in terms of both per pupil revenue availability and instructional expenditures, widened disparities resulted after implementation of the FEFP. The new program became less fiscally neutral, the decline being attributed to the cost adjustment factor included in the formula 197 The overall conclusion reached by Carroll and Park was that the reform benefitted larger and more urban districts more readily than slightly smaller and less urban ones. The greatest benefit reached the less poverty prone school districts. 198 Alexander and Shiver studied the equity of the distribution of school funds in Florida, comparing the equity that existed before FEFP implementation to equity after implementation. 199 Data from the 1970-71 and 1971-72 school years, before the FEFP, and the 1974-75, 1976-77, 1978-79, and 1980-81 school years, after the implementation of the FEFP, were used in the study.

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55 Alexander and Shiver studied two levels of aggregation. The first included total state and local per-pupil revenues and the second the foundation funds per-pupil. Each level of revenue was studied in light of several equity related statistics. In the area of total per-pupil revenue, an increase in both the range and the restricted range of the distribution was evident. The standard deviation of the distribution doubled during the years of the study, while the coefficient of variation remained virtually the same. 200 In the area of foundation funds per pupil, the distribution range quadrupled from 1970-71 to 1980-81, while the restricted range nearly quadrupled. Both the standard deviation and the coefficient of variation increased between 1970-71 and 1980-81 in the area of foundation funds per pupil. 201 The Gini coefficients increased overall after the implementation of the FEFP, both in terms of total state and local revenue per pupil and foundation funds per pupil. These coefficients demonstrated a decreased level of equity by 1980-81. 202 Alexander and Shiver conducted correlational analyses between the two levels of revenue and seven independent variables which were claimed to provide indication of wealth. 203 The authors argued that increased positive correlations between five of the independent variables and total revenue and largely increased positive correlations

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56 between assessed value per-pupil and foundation funds per pupil as well as personal income per-pupil and foundation funds per-pupil implied that the equalization established prior to the FEFP had not been maintained by the FEFP. 20 4 The overall conclusion of Alexander and Shiver based on the analysis of these data was that greater equity had not been achieved with the implementation of the FEFP. 205 Stark, Honeyman, and Wood examined equity aspects of the FEFP in a study specifically related to the effects of the Florida Lottery on public school financing in the state. 20 6 The study included two basic analyses. The first was the degree to which the lottery funds distributed through the FEFP (approximately 67 2 percent of total lottery funds provided to public schools in the state) were used to substitute for existing sources of school funding during the 1989-90 school year. The second analysis, the one relevant to the present study, included an examination of the remaining lottery funds, those distributed through special allocations rather than the FEFP itself. Specifically, this second analysis dealt with whether these lottery funds not distributed through the FEFP had an effect on the equity of the distribution of public education funds in the state. Three levels of aggregation were used in the analysis. The first included funds distributed through the FEFP through which the degree of equity of the FEFP itself could be determined. Second, the FEFP funds plus

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57 special allocations from the state's general revenue fund not included in the FEFP. Third, the FEFP funds, special allocation funds, and lottery funds not distributed through the FEFP. 207 The boxplots showed similarity in variation of distributions for the first two levels of aggregation, with increased variation with the introduction of lottery proceeds. Both the range and the restricted range demonstrated decreased level of equity when moving across the levels of aggregation. 208 The federal range ratio, though it increased across the levels of aggregation, demonstrated that the Florida system was equitable. 209 The variance, standard deviation, and coefficient of variation demonstrated cumulatively disequalizing effects across the levels of aggregation. The relative mean deviation, on the other hand, indicated cumulatively increased equity effects. 210 The Gini coefficient for the FEFP alone, the aggregation level pertinent to the present study, was calculated at .00916, demonstrating a great deal of horizontal equity in the system. Interestingly, the Gini coefficients were reduced to .00261 and .00380, respectively, across the other two levels of aggregation. 211 Likewise, the McLoone Index of 97545 indicated a large measure of equity in the FEFP distribution The McLoone

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Indexes were slightly smaller, .97185 and .97283, for the other two levels of aggregation 212 58 The results of the Gini Coefficient and McLoone Index computations demonstrated that, at least in the 1989-90 school year, the FEFP provided an equitable system of distributing school funds. The study did not, however, address the equity effects of the discretionary and capital outlay and maintenance millage levies. These effects, for the 1992-93 school year, were addressed in the present study. O'Loughlin, Wood, and Honeyman examined the equity of the distribution of FEFP dollars, most specifically looking at the effects of the revenues provided in the sparsity supplement of the formula on per-pupil equity. 213 The data were based on the 1990-91 FEFP calculation, not including federal distributions or capital outlay or debt service funding. In the O'Loughlin, Wood, and Honeyman study, four elements were studied with the cumulative equity effects of each element being examined. These included the foundation program, program supplements, the discretionary local levy, and categorical and special allocations. 214 Within each element the additional revenues resulting from the sparsity supplement were examined to determine the equity effects of this particular feature of the FEFP. 215 The overall results were that the dispersionary measures (range, restricted range, federal range ratio, variance,

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59 standard deviation, coefficient of variation, McLoone index, and Gini coefficient) demonstrated a cumulatively disequalizing effect of the FEFP across the four elements without the sparsity supplement, and an increased disequalizing effect across the four elements in all measures except the McLoone index and the Gini coefficient when the revenues provided the sparsity supplement were included. A disequalizing trend occurred across the four elements for school districts below the median when sparsity supplements were included The Gini Coefficient demonstrated an equalizing trend across the four elements when the sparsity revenues were included. 216 With regard to the wealth neutrality measures (correlation coefficient, coefficient of determination, and slope of the regression), a cumulatively increased association between wealth per-pupil per district and per pupil revenues resulted in the formula without taking into account the sparsity supplement. With the inclusion of the sparsity supplement revenues, a cumulative decrease in the strength of association of the two variables occurred. 217 The overall conclusion was that the basic part of the FEFP was relatively equitable, but the addition of supplements, discretionary dollars, and categorical supplements had disequalizing effects on the distribution of education dollars, with the most pronounced effect being that of the discretionary levy. Additionally, the distribution of

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60 dollars bore a strong inverse relationship to the relative property wealth of the district. The sparsity supplement had the effect of reducing this relationship. 218 O'Loughlin, Wood, and Honeyman demonstrated through this study that the FEFP distributed school funds in an equitable fashion in the 1990-91 school year, with the levies generated from application of the discretionary millage rates having slightly disequalizing effects in light of the overall system. The study did not examine the effects of the equity of the FEFP specifically related to the capital outlay and maintenance millage, which coupled with the discretionary levy was the focus of the present study. Currie examined the equity of resources for capital outlay in Florida, part of which included assessments of both the FEFP and revenues derived from the capital outlay and maintenance millage rate. 2 1 9 Using 1988-89 data, Currie examined four levels of funding. The first included FEFP operating expenditures, which consisted of the net FEFP allocation, the seventh period allocation, prior year adjustments, and the required local effort. The second and third levels consisted of the total dollar value of state capital outlay funding and the total dollar value of local capital outlay funding, respectively. The fourth and final level included the combination of state and local capital outlay funding. 220

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61 The results of the examination at the first level, the ~EFP, and the third level, local capital outlay funding, were of interest in the context of the present study. Results of the examination of the equity of the FEFP element provided evidence of the relative equity of the foundation system as it existed during that fiscal year. The third level included an equity assessment of the revenues generated through application of the local capital outlay and maintenance millage rates Although this level was more broadly defined to include other local sources of capital outlay financing, confounding the capital outlay and maintenance levies with other local sources, examination of the results provided insight for the present study. The levies generated through application of the discretionary millage rates were not examined in the Currie study. The FEFP level of funding demonstrated the greatest degree of equity among the four levels studied in terms of horizontal equity measures. The per-pupil range, restricted range, interquartile range, and federal range ratio were calculated at $368.65, $305.15, $143.03, and .13, respectively. 221 The standard deviation, coefficient of variation, and relative mean deviation per-pupil were $91.79, .04, and .03, respectively. 222 The McLoone Index of .97 was an indication that the distribution of funds to districts below the median was nearly perfectly equitable. 223

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62 In the area of wealth neutrality, the Gini Coefficient of .01 for the FEFP level was an indication of nearly perfect equity. 224 The correlation coefficient between local assessed valuation of local property and expenditures per-pupil was .42 for the entire distribution and .49 for the distribution within a 95 percent confidence interval around the mean value. The resultant coefficients of determination were .18 and .24, respectively. 22 5 The author suggested that a strong relationship between wealth and FEFP did not exist. 226 The results of the horizontal equity measurements of the local capital outlay funding level indicated less equitable distribution than the FEFP. The per-pupil range, restricted range, federal range ratio, and interquartile range were calculated at $886.59, $731.55, $85.11, and $310.32, respectively. 227 The standard deviation, coefficient of variation, and relative mean deviation were calculated at $217.49, .85, and .70, respectively. 228 The McLoone Index was calculated at .67 for the distribution below the median. 22 9 The results from the wealth neutrality measures demonstrated a less equitable distribution from the local capital outlay sources than from the FEFP. The Gini Coefficient was calculated at .19. 230 The correlation coefficient between local assessed valuation per-pupil and local capital outlay revenues per-pupil was .72 for the entire distribution and .79 for the distribution within a 95 percent confidence interval around the mean. The associated

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63 coefficients of determination were .52 and .63, respectively. 231 The author suggested that major violations of wealth neutrality in this area existed. 232 Again, the revenues resulting from the application of the capital outlay and maintenance millage rates were confounded with revenues from other local sources of capital outlay financing. Nonetheless, the capital outlay and maintenance levies contributed to the relatively inequitable distribution as determined in the Currie study. In summary, though various elements of the equity of distribution aspects of the FEFP have been studied, a need existed to examine the equity effects of the distributions resulting from the discretionary and capital outlay and maintenance levies. The present study represents an exhaustive analysis of this research question. conclusion This chapter began with a discussion of the historical process by which state governments assumed more active roles in providing financial support to school districts in recognition of the need to provide less wealthy localities larger state grants to make up for smaller tax bases. This ideal of state support was developed by the early scholarly work of school finance theorists who, writing in the early half of the twentieth century, advocated state interventions in order to foster per-pupil funding equity. In the latter

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64 half of the twentieth century, state distribution methodologies were tested in the American federal and state judicial systems to determine if state governments were providing all students in the state an equivalently adequate level of education. The results of these cases in terms of school finance equity reform were mixed. Following was a discussion of the foundation system of funding schools, the most common distribution system currently in use. Finally, previous research studies concerning equity effects of this Florida funding system were discussed. The purpose of this study was to analyze the effects of the discretionary millage levies on the fiscal equity of a foundation system. The next chapter includes a presentation of the specific methodology by which these effects were examined. Notes 1 Ellwood P. Cubberley, School Funds and Their Apportionment {New York: Columbia university, 1906). 2rbid., 17. 3rbid., 4. 4rbid. 5George D. Strayer and Robert M. Haig, The Financing of Education in the state of New York, vol. 1 {New York: Macmillan, 1923). 6rbid., 174. 7rbid., 174-175. 8rbid., 175-176.

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65 9Ibid., 176. lOHarlan Updegraff, Rural school survey of New York State: Financial Support (Ithaca, NY: The Joint Committee on Rural Schools, 1922). llibid. 136. 12Ibid., 110-115. 13Henry c. Morrison, School Revenue (Chicago, IL: University of Chicago Press, 1930). l4Ibid., 195. 15Ibid., 208-214. 16Ibid. 200. 17 Paul R. Mort, The Measurement of Educational Need (New York: Teachers College, Columbia University, 1924). l8Ibid., 1. 19Ibid., 6. 20Ibid. 8-11. 21see, e.g., Paul R. Mort, state support for Public Schools (New York: Teachers College, 1926); Paul R. Mort, state support for Public Education (Washington, D.C.: The American Council on Education, 1933); Paul R. Mort and Walter c. Reusser, Public School Finance (New York: McGraw-Hill Book Company, Inc., 1941); Paul R. Mort, Walter C. Reusser, and John w. Polley, Public school Finance: Its Background, Structure, and Operation (New York: McGraw-Hill Book Company, Inc., 1960). 22Edgar Morphet, "Characteristics of State Support Programs," in R.L Johns (ed.), Problems and Issues in school Finance (New York: National Conference of Professors of Educational Administration, 1952). 23Roe L. Johns and Richard G. Salmon, "The Financial Equalization of Public Schools Support Programs in the United States for the School Year 1968-69," Status and Impact of

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Educational Finance Programs (Gainesville, FL: National Education Finance Project, 1971), 122. 2 4 rbid. 25president's Commission on School Finance, Reyiew of Existing state school Finance Programs (Washington, D.C.: United States Government Printing Office, 1972). 26rbid 13 27rbid. 14. 28u.s. Const. amend. XIV. 66 29Julie K. Underwood and Deborah A. verstegen, "School Finance Challenges in Federal Courts: Changing Equal Protection Analysis," in Julie K. Underwood and Deborah A. verstegen (eds ), The Irot>acts of Litigation and Legislation on Public School Finance (New York: Harper & Row, 1990), 177. 30 san Antonio Independent school District v, Rodriguez. 4 11 U S 1 (1973). 3 1 rd. at 17 32 san Antonio Independent school District v, Rodriguez. 337 F.Supp 280 33rd. at 282. 34 san Antonio, 411 u.s. at 17-23. 35rd., 23-24. 36rd. at 24. 3 7 rd at 33 38rd., 33 34. 39rd. at 40. 40rd. at 45. 4lrd., 48-50.

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42rd., 53-54. 4 3rd. at 55. 67 44william E. Sparkman, "School Finance Challenges in State Courts," in Julie K. Underwood and Deborah A. Verstegen (eds.), The Impacts of Litigation and Legislation on Public School Finance (New York: Harper & Row, 1990), 193. 45487 P.2d 1241 (1971). 46rd. at 1244. 47rd. at 1250. 48The case was decided prior to the precedent established by Rodriquez of using the rational relationship standard in light of alleged violation of the Fourteenth Amendment equal protection clause. 49 serrano. 487 P.2d at 1250. 50rd., 1250-1252. 51rd., 1252-1253 52rd., 1255-1256. 53rd. 1256-1259. 54rd., 1259-1263. 55 Robinson y. Cahill, 287 A.2d 187 (1972). 56rd., 189-190. 57rd., 200-205. 58ra., 199-200. 59rd. at 205. 60rd. at 211. 61rd., 212-213. 62rd. at 214.

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63The case was decided prior to the precedent established by Rodriguez of using the rational relationship standard in light of alleged violation of the Fourteenth Amendment equal protection clause. 64 Robinson. 287 A.2d at 217. 65 Milliken V, Green. 212 N.W.2d 711 (1973). 66rd. at 714. 6 7 rd. at 716. 68rd., 716-718. 69rd. at 719. 7 0rd. at 720. 71 Thompson Y, Enkelking, 537 P.2d 635 (1975). 72rd., 638-640. 73rd., 641-642. 7 4rd. at 642. 75rd., 642-645. 76rd., 646-653. 77 olsen y, state. or. 554 P.2d 239 (1976). 78rd., 140-142. 79rd., 144-145. 80rd., 145-146. 8 1 rd. at 147. 8 2 rd. at 148 83pauley V, Kelley. 255 S.E.2d 859 (1979). 68

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84rd. at 878 85rct. 86rct 87rd., 878-883. 88 Board of Education of city school District, etc, v, Walter, 390 N.E.2d 813 (1980). 89rct at 819. 90rct. 91rct. at 820. 92rct. at 821. 93rct., 823-826. 94rct. at 822. 95 McDaniel v. Thomas, 285 s.E.2d 156 (1981). 96rct. at 159 97rd., 160-161. 98rct., 164-165. 99 san Antonio. 411 u.s 1 (1973). lOOMcDaniel, 285 S.E.2d at 167. l0lrct at 168. 102rd., 165-166. 69 103 Board of Education, Leyittown, etc, v, Nyquist. N.Y., 439 N.E.2d 359 (1982). 104rd. at 363. 105rd 363-364.

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106san Antonio. 411 u.s. 1 (1973). 107Leyittown, N.Y., 439 N.E.2d at 364-365. 108ra. at 368-369. 109ttornbeck v, somerset county Board of Education. 458 A.2d 758 (M.D. 1983). ll0ra. at 776. lllra., 776-780. 1 1 2san Antonio. 411 u.s. 1 (1973). 113ttornbeck, 458 A.2d at 787-788. 114ra., 782-783. 115ra., 786-787. 116ra., 788-790. 70 117pupree v, Alma school District no. 30. 651 s.w.2a 90 (1983). 118ra., 92-93. 119ra. at 93. 120pair school Finance council of Oklahoma. Inc. v, Oklahoma. 746 P.2d 1135 (1987). 121ra. at 1138. 122ra. at 1144. 123san Antonio. 411 u.s. 1 (1973). 124Fair school Finance, 746 P.2d at 1144-1146. 12sra., 1146-1147. 1 2 6san Antonio. 411 u.s. 1 (1973). 127 Fair school Finance, 746 P.2d at 1147.

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128rd. at 1148. 129rd., 1148-1149. 130rd., 1149-1150. 131rd. at 1150. 132rd., 1141-1142. 133rd., 1142-1143. 134rd. at 1150. l3 5 Richland County Y, Campbell, 364 S.E.2d 470 (S.C. 1988) 136rd., 471-472. 137ttelena Elementary school District No, 1 v, state of Montana. 769 P.2d 584 (1989). 138rd. at 686. 139ra. at 689. 140rd. at 690. 141rd. at 690. 142rd. at 691. 143Edgewood Independent school District v. Kirby. 777 S.W.2d 391 (1989). 144rd. at 392. 145rd. at 393. 146rd. at 392. 147rd. at 394. 148rd., 394-398. 71

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149 Rose v. The council for Better Education, Inc .. 790 S.W.2d 186 (1989). 150rd. at 215. 151rd 208-209. 152rd. 210 213. 153rd at 213. 72 154R. Craig Wood and David c. Thompson, Education Finance Law: constitutional Challenges to state Aid Plans: Ao Analysis of Strategies (Topeka, KS: National Organization of Legal Problems in Education, 1993), 25. 155David C. Thompson, R. Craig Wood, and Davids. Honeyman, Fiscal Leadership for schools: concepts and Practices (White Plains, NY: Longman Publishing Group, 1994), 220. 156rbid., 221. 157wood and Thompson, 26. 158Thompson, wood, and Honeyman, 223. 159rbid. 221. 160rbid. 222. 161stephen D Gold, David M. Smith, Stephen B Lawton, and Andrea c Hyary (eds.), Public School Finance Programs of the united states and Canada, 1990-91. vol. 1 (Albany, NY: Center for the Study of the States, 1992), 18. 162rbid., 22-23. 163rbid. l6 4 Deborah A verstegen, School Finance at a Glance (Denver CO : Education Commission of the States, 1990), 2. 165 Thompson, Wood,and Honeyman, 225 166rbid., 225-226.

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167Ibid. 226. 168Ibid., 228. 169Ibid., 229. 17 0Ibid., 229-230. 171Ga. Code 20-2-165(b). 172Ga. Code 20-2-164. 173Ga. Code 20-2-166. 174Mont. Code Ann 20-9-301 to 20-9-368. 175Mont. Code Ann. 20-0-301 to 20-9-366. 176Mont. Code Ann. 20-9-367 to 20-9-368. 177ok Sch. Code 70 18-109.2(B) (1). 178ok. Sch. Code 70 18-109.2(B) (3). 179Ky. Rev. Stat. Ann. 160.470(12) (a). 180Ky. Rev. Stat. Ann. 157.440(1) (a). 181Ky. Rev. Stat. Ann. 157.440(2). 73 182 carrollton-Farmers Branch Independent school Dist, v. Texas. 826 s.w.2d 489 (1992). 183Tex. Educ. code Ann. 16.252. 184Tex. Educ. Code Ann. 16.302 185Tex. Educ. Code Ann. 16.303. 186oavid Vaughan, "The Impact of Florida's 1973 School Finance Reform on Poor and Minority Children," in Robert Brischetto (ed.), Minorities, the Poor, and school Finance Reform (Washington: National Institute of Education, 1979). 18 7 Ibid., 15. 188Ibid., 17-25.

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74 189rbid. 25-37. 190stephen J. Carroll and Rolla E. Park, The Search for Equity in School Finance (Cambridge, MA.: The Ballinger Press, 1983). l9 1 stephen J. Carroll, The Search for Equity in School Finance; Results from Five States (Santa Monica, CA: The Rand Corporation, 1979). 192carroll and Park, 83. l93rbid, 84-85. 194rbid, 85. 195rbid, 87. 196rbid. 19 7 rbid, 88. 198rbid, 91. 199Kern Alexander and Lee Shiver, "Equalization Among Florida School Districts," Journal of Education Finance 9 (Summer, 1983), 55-62. 200rbid., 55-56. 201rbid., 56-57. 202rbid., 57-59. 203rbid., 59. 204rbid., 59-61. 2 05rbid., 62. 206steven D. Stark, Davids. Honeyman, and R. Craig wood, An Examination of the Florida Lottery (Gainesville, FL: UCEA Center for School Finance, 1991); Steven Stark, David S. Honeyman, and R. Craig Wood, "The Florida Lottery: Its Use as a Substitute for Existing Funds and its Effects on the Equity

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of School Funding," J:Qurnal Qf Educ at iQn finance 18 (Winter, 1993) 231-242. 20 7 stark, Honeyman, and Wood, An 1::xaminatiQn Qf the FlQrida LQtterv, 7 208stark, Honeyman, and Wood, An Examinat iQn Qf the FlQrida LQtterv, 13. 209stark, Honeyman, and Wood, AD 1::xaminatiQn Qf the FlQrida LQttery, 14. 210s tark, Honeyman, and Wood, AD ExaminatiQn Qf the flQrida LQtterv, 15-16. 2llstark, Honeyman, and Wood, AD ExaminatiQn Qf the FlQrida LQtterv, 16. 212s tark, Honeyman, and Wood, An Examinsat ,iQn Qf the FlQrida LQtterv, 16-17. 213J. Michael O'Loughlin, R. Craig Wood, and David S. Honeyman, A Study Qf the Effects Qf the sparsity Supplement Qn the E@itY Qf the FlQrida EducatiQn Finance PrQgram (Gainesville, FL: UCEA Center for Education Finance, 1992). 214rbid., 13-14. 2l5rbid., 12. 216rbid., 14-24. 217 Ibid., 19-24. 218rbid., 24. 2l9Gaylon D. Currie, An ExaminatiQn Qf the Equity Qf capital outlay Funding Qf Public EducatiQn: A CQwarisQn Qf the Equity Qf the current MethQd Qf Distributing capital outlay Funding in the state Qf FlQrida and the E@ity Qf General Expenditures fQr EducatiQn (Doctoral Dissertation, University of Florida, 1992). 220rbid, 98. 221rbid., 114-120. 75

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76 222rbid., 120-126. 223rbid, 127-128. 224rbid, 128-129. 225rbid, 145-146. 22 6rbid 132. 227 Ibid., 115-120. 228rbid., 120-126. 229rbid., 127-128. 230rbid., 128-129. 231rbid., 145-147 232rbid., 153.

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CHAPTER 3 METHOD The present study focused on the effects of revenues raised through local discretionary millage rates on the fiscal equity of a foundation school distribution system. In the previous chapter the relevant literature was reviewed. This chapter includes a discussion of the method by which these equity effects were examined. The chapter begins with a discussion of the population from which the data were derived Following is a description of the education funding system of Florida, the state chosen for the study. The next section provides a description of the design of the data. The chapter concludes with a discussion of the method through which the disequalizing effects of the local levies were assessed. Population The foundation distribution system of the state of Florida was chosen for this study. Several reasons were involved in the selection of Florida as the target state First, Florida's education funding system was well suited to the question being addressed. The Florida distribution system included a foundation component in which per-pupil r-evenues were equalized by the state among the districts. 77

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78 Addit i onally, local districts had the authority to raise two discre t ionary levies and the revenues generated by these levies were not equalized by the state Thus, intuitively the possibility exists that these levies introduced disequalizing effects when added to revenues generated through the foundation program. The purpose of this study was to determine the magnitude of these disequalizing effects, if they indeed existed. Second, although at the time of this writing the current foundation system of Florida has avoided a major equity court decision, 1 the foundation program of any state is susceptible to an equity lawsuit. Thus, equity effects such as those examined in the present study might be relevant in the context of any future equity court decisions. Third, the people of Florida are guaranteed by law a fiscally equitable system for financing public schools Funds for schools are to be distributed in such a manner as to ... guarantee to each student in the Florida public school system the availability of programs and services appropriate to his educational needs which are substantially equal to those available to any similar student notwithstanding geographic differences and varying local economic factors. 2 Assessing the extent to which equity aspects of these legal require m ents were being met was addressed in the present study

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79 Fourth, results from recent studies have indicated that the foundation portion of Florida's funding system is relatively equitable. 3 Therefore, a good baseline existed from which this study operated. The present study included an assessment of the degree of disequalization introduced by discretionary levies on a relatively equitable foundational system Fifth Florida is one of the nation's most populous states and has one of the nation's largest public school enrollments. Additionally, both the population in general and school enrollment in particular have been growing rapidly relative to the nation as a whole. Therefore, Florida is significant from a national perspective. 4 Following is a more detailed discussion of the population of the present study. The public school system of Florida is divided into sixty-seven local districts, each countywide. In 1990-91, the state served an unweighted full-time membership enrollment of 2,043,046.57. The district with the largest FTE was Dade at 356,960.28 and the smallest was Glades with 915.46. 5 The enrollment of Florida"s public schools has seen a pattern of overall growth since the 1970s, while nationally school enrollments have declined slightly during that time. In 1969-70, the public school enrollment nationwide was 41,934,376. This enrollment had fallen to 38,288,911 a decade later in 1979-80, and had fallen further to 37,778,512

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by 1989-90. The enrollment of Florida"s public schools, however grew steadily during this period. In 1969-70, the Florida public school enrollment was 1,312,693 Enrollment had grown to 1,464,461 in 1979-80 and 1,646,583 in 1989-90. 6 Total expenditures for Florida public schools has increased rather dramatically during this same time period. In 1969-70, total expenditures were $961,273,000. In 197980, expenditures had grown to $2,766,468,000 and to $8,228,531,000 by 1989-90. 7 Per-pupil expenditures likewise have undergone a sharp increase. Per-pupil expenditures in Florida public schools were $2,461, $3,198, and $4,497 in 1969-70, 1979-80, and 1989-90, respectively. 8 80 The average statewide per-pupil expenditure was $4,475 in 1990-91. The per-pupil expenditure among districts ranged from a high of $5,489.00 in Hamilton County to a low of $3,836 in Clay County. 9 The following section provides a description of how funds are distributed to Florida school districts. EEIT Florida"s public schools are funded primarily through the Florida Education Finance Program (FEFP), the state school funding mechanism since 1973. 10 The basic component of the FEFP is a foundation formula which is equalizing in nature. The state in addition to the foundational grants provides categorical funding and special allocations to

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81 finance more specific educational needs of the various local school districts. 11 Following is a brief introductory overview of the calculation of the FEFP formula in 1992-93, after which a more detailed discussion of the system is provided. The funds distributed to each local school district through the FEFP were calculated by multiplying the full-time equivalent (FTE) enrollment of each specific program of education by the program cost factor assigned it by the Legislature. The resultant weighted FTEs were multiplied by the base student allocation. This product was multiplied by the district cost differential, which accounted for disparate costs of living of the communities served by the various districts. To this new product supplemental allocations were added, depending on district eligibility. These included the declining enrollment supplement, sparsity supplement, and funding adjustment. When eligible supplements had been added, the result was the total state and local dollars to which the district was entitled. The required local effort, the amount the district was required to contribute in order to participate in the FEFP, was subtracted, resulting in the State FEFP contribution to that school district. To this result, adjustments were made, resulting in the net state FEFP allocation to the district. 1 2

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82 The aggregate amount of moneys to be distributed to the local school districts from the state is annually determined through legislative appropriation. 1 3 For 1992-93 a total of $4,165,594,766 was appropriated from the state treasury to be distributed to the local districts through the FEFP. Of this, $40,500,00 was appropriated from the State School Trust Fund and the remainder from the General Revenue Fund. 14 The formula was enrollment driven, and therefore each district's funding was based on weighted FTE Each district's weighted FTE was calculated through surveys taken throughout the year of student membership in the various programs. 15 The FTE for each program area was weighted according to cost factors assigned to the individual program areas The weighted FTE for the district was the product of the FTE of each program area and the program area"s cost factor. 16 In utilizing these program cost factors, differences in educational costs based on grade level differences and differences based on program of instruction were recognized. Grade level and programmatic cost factors were incorporated into the FEFP which were designed to base financial support on these differences 17 The use of cost factors resulted in a system of unequal treatment of unequals, which addressed the problem of vertical equity. A list of the cost factors assigned by the Florida Legislature for the 1992-93 fiscal year is included in appendix A.

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Weighted FTEs as determined herein were multiplied by the base student allocation (BSA) 18 The BSA was set at $2,256.98 by the Florida Legislature for the 1992-93 school year. 19 Three adjustments were made to this amount in recognition of varying fiscal conditions faced by the local districts. These included the district cost differential, the declining enrollment supplement, and the sparsity supplement. The district cost differential was intended to equalize distributions to districts based on the relative costs of living associated with the communities they serve. The cost factors used in the formula were based on the Florida Price Level Index as determined by the Office of the Governor. Specifically, the sum of the last three year's indexes were divided by three, multiplied by 0.008 and added to 0.200. 20 In the 1992 Appropriations Act, these differentials were indexed in such a way that the lowest value was 1.000. Additionally, the districts were placed in regions corresponding to the state"s judicial circuits, and all districts in a given region were given the highest value calculated for any district in the region. 21 The declining enrollment supplement was intended to alleviate the decrease in funding which accompanies a drop in enrollment. Districts with a decrease in unweighted FTE from the prior year were provided an 83

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allocation. 22 For these eligible districts, 50 percent of the decline was multiplied by the prior year FEFP per unweighted FTE and added to the current year allocation. 23 The sparsity supplement was intended to assist rural districts that faced additional cost burdens associated with population sparsity (i.e., higher per pupil transportation costs) 24 An allocation was provided to districts with an unweighted FTE of 19,000 or less. A total of $20,000,000 was distributed through the sparsity supplement for the 1992-93 school year. 25 84 The result of the addition of eligible supplements to the product of the weighted FTE and the BSA was the total gross state and local FEFP dollars available to the district. A funding adjustment was applied to ensure that the district received the same percentage change in funding as occurred in 1991-92. 26 From this result the aggregate required local effort (RLE) was subtracted. The district's RLE was based on the product of the RLE millage rate and the local assessed valuation of property. 27 Following is a discussion of the method by which the RLE millage rates for all districts were determined. The aggregate required local revenue used for general funding of schools (in addition to the state contribution through the FEFP) is determined on an annual basis by the Legislature. 2-B For the 1992-93 fiscal year, the aggregate

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85 local amount was set at $3,034,690,407. 29 Using the tax rolls provided by the Department of Revenue, the commissioner of education computed the millage rate which when applied to 95 percent of the total nonexempt property in the state would generate the proscribed aggregate required local effort. 3 0 The result was the basic millage rate for all the districts. Equalization factors were then used to determine the specific RLE millage rates for the individual districts. The factor for a given district was equal to the quotient of the prior year's state aggregate assessment level divided by the prior year's assessment of that district, subtracted from one. The resultant equalization factor was then multiplied by the basic millage rate to determine the RLE millage rate for the district. 31 School board approval of the RLE millage rate was required in order for a given district to receive FEFP funds from the state. 32 The subtraction of the required local effort from the gross state and local FEFP dollars resulted in the state FEFP dollars. To this amount funding adjustments were made, which accounted for arithmetical errors, tax roll changes, FTE errors or other allocation errors. The result of these adjustments was the net state FEFP dollars. 33 The combination of the net state FEFP funds and the required local effort represented the foundation element of the FEFP. In addition to foundation funding, categorical program funds and special allocations were made to the districts.

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86 Because these categorical programs and special allocations were not part of the analysis of the present study, these special funding programs for 1992-93 are listed briefly without being discussed in detail. Categorical programs included Comprehensive School Construction and Debt Service, 34 Community Schools, 35 School Lunch, 36 Instructional Materials, 37 and Student Transportation. 38 Special Allocations were Blue Print for Career Preparation, Pre-School Projects, Safe Schools, Summer Inservice Institutes, Programs of Emphasis, Full Service Schools/Interagency Cooperation, and Education Business Cooperative. 39 The local revenue used to support public schools in Florida for any given year is derived from property taxation. 40 Local school districts are authorized to tax property for support of education by the Florida Constitution. 41 Five categories of millages are used for support of public schools. The first is the required local effort school operating millage, as established in the FEFP. 42 The second is the discretionary millage, determined by each local school board (within the statutory limitations) without a vote of the electorate. 43 The third is the capital outlay and maintenance millage, determined by each school board without a vote of the electorate. 44 The remaining two millage ca t egories require both local school board and voter approval. The fourth category is a special school operating millage 45 and the fifth is a debt service millage. 46 Local

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87 districts are prohibited by the Florida Constitution from exceeding 10 mills from the combination of the required local effort, discretionary, and capital outlay and maintenance rates in a given year 47 The present study focused on the disequalizing effects of the two nonvoted millage rates, discretionary millage and the school capital improvement millage, when combined with revenues obtained through the equalized foundation portion of the FEFP. Thus, the focus was on the disequalizing effects of the two rates which each were applied at local board discretion The discretionary millage rate, the levies from which were not equalized by the state, was determined by each individual school board without a vote by the local electorate. Districts were permitted to use revenues qbtained from the application of the discretionary millage rate to support current operations. The Legislature annually prescribes the maximum discretionary millage rate that the districts may choose, never to exceed 1.6 mills. 48 The 199293 maximum discretionary millage rate was set at 0.510 mills by the Florida Legislature. 49 The capital outlay and maintenance millage rate for a given district was determined by the local school board without the approval of the electorate. There are statutory requirements and restrictions concerning the levies resulting from the application of the capital outlay and maintenance

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88 rates. These revenues could be used for district new construction and modeling projects, sites and site improvement or expansion to new sites, existing auxiliary facilities or ancillary facilities, 50 or to fund maintenance, renovation, and repair of existing school plants. 51 These revenues could furthermore be used to support pupil transportation by their use in purchasing school buses, driver education vehicles, plaint maintenance related vehicles, security vehicles, or vehicles related to storing or distributing materials and equipment. 52 New or replacement equipment could also be purchased using these funds. 5 3 Districts were permitted to use the revenues obtained through the capital outlay and maintenance rate for payments for educational facilities and sites due under a lease purchase agreement, as long as these funds do not exceed one half of the total levy from the millage rate. 54 The revenues could be used for the payment of certain loans used to finance school facilities. 55 These loans were restricted to a term of one year or less, unless otherwise extended by the lender but never to exceed four years. Additionally, the amount of the loan could not exceed one-fourth of the total ad volarem revenue from the preceding fiscal year. 56 Districts could also use these revenues to pay costs related to complying with state and federal environmental requirements and regulations governing school facilities. 57

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Finally these revenues could be used to support payment of the costs of leasing relocatable educational facilities. 58 89 Of the three nonvoted, locally derived millage rates used for support of schools, only the required local effort portion was supplemented by matching state funds in order to equalize the distribution among districts. The discretionary levies and the levies resulting from the capital improvement millages were not equalized on a statewide basis. The disequalizing effects of these levies when combined with foundation program revenues is the focus of this study. The following section includes a discussion of the specific method by which these equity effects were examined. Design This study addressed the question, "To what extent did local discretionary levies introduce disequalizing effects into an equalized foundation program?" The previous section included a summary of the FEFP as it operated in 1992 93 f i scal year The current section includes a discussion of the des i gn of the study. Fiscal equity in the realm of education finance refers to fairness in the distribution of fiscal resources. Any examination of the fiscal equity of a distribution system requires measurement of fiscal resources in order to determine the degree to which the distribution is equitable. Generally, either per-pupil expenditures or per pupil

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90 revenues are used to represent resource availability in equity studies. In the current study, per-pupil revenues were chosen as the measurement object. The rationale for choosing per-pupil revenues as opposed to per-pupil expenditures was the fact that revenues could be matched with their millage rate source, whereas expenditures were not ~dentified by such a source. Thus, in the present study per pupil revenues was representative of resources used to support education. To determine the degree of disequity caused by introduction of revenues raised through application of the discretionary millages and capital outlay and maintenance millages, per-pupil revenues were examined across seven levels of aggregation. The first level included the per pupil revenues distributed through the foundation portion of the FEFP. An examination of this aggregate level provided a baseline from which the degree of disequalization caused by the two local discretionary levies was assessed. The second and third levels of aggregation included the distribution among the local districts of per-pupil revenues raised through application of the discretionary and the capital outlay and maintenance millage rates, respectively. An analysis of per-pupil revenues distribution in these two levels of aggregation demonstrated the relative degree of fiscal inequity, if any, of each of the locally determined millage rate levies. The fourth level of aggregation

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91 included the combination of the discretionary and the capital outlay and maintenance levies, and the results from this level indicated the total degree of disequalization resulting from the two levies. The fifth, sixth, and seventh levels of aggregation included combinations of the first through fourth. The fifth aggregation level included the per-pupil revenues distributed through the foundation portion of the FEFP combined with the per-pupil revenues raised through application of the discretionary millage rate. The sixth level of aggregation included a combination of per-pupil revenues distributed through the foundation portion of the FEFP combined with the per-pupil revenues raised through application of the capital outlay and maintenance millage rate. The results from these two levels, when compared to the results from aggregate level one, indicated the magnitude of the inequity introduced through application of each of the two unequalized millage rates, respectively. The seventh and final level of aggregation included the combination of the per-pupil revenues distributed through the foundation program, the per-pupil revenues generated through application of the discretionary millage rate, and the per pupil revenues generated through application of the capital outlay and maintenance millage rate. The results from this final level of aggregation, when compared to the results from aggregate level one which included the foundation portion

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only demonstrated the total disequalizing effects of the revenues generated through the two millage rates. 92 Per-pupil revenues across these seven levels of aggregation were examined in light of three standards of fiscal equity These included resource accessibility, wealth neutrality, and tax yield. Following is a discussion of each of these concepts, coupled with the specific quantitative techniques through which they were assessed. Measurement The previous section included a description of the design of the data for this study. In this section the method by which fiscal equity was measured is presented. In most equity studies resource accessibility, wealth neutrality, and tax yield have been the means of assessing ~he relative equity of a distribution. 59 In the present study measures related to all three of these equity constructs were used to assess the degree of disequalization introduced by the two millage rates. In the present study, the revenues generated through the application of the discretionary and capital outlay and maintenance millage rates were examined to determine the effects on student resource accessibility. Resource accessibility is a per-pupil equity construct which refers to the degree to which all students have access to a roughly equivalent resource base of fiscal support for education.

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93 The more equivalent accessibility to resources among students, the greater the degree of fiscal equity in the system for distributing these resources. The mean, range, restricted range, federal range ratio, variance, standard deviation, and coefficient of variation are typically used to measure resource accessibility. 60 The mean is a measure of the central tendency of a distribution. The mean is calculated using the following formula: [L(Pi Xi) / LPi] / N where Pi refers to the number of pupils in district i, Xi is the per-pupil revenue in district i and N is the number of districts in the state. 61 In the present study a mean amount of per-pupil revenues was calculated at each level of aggregation. Comparisons of district wide mean per-pupil revenues with the statewide mean provided a precursory assessment of the differences in resource accessibility among the districts. The range refers to the difference between the highest value and the lowest value in a given distribution. In the present study, the range represents the difference between the maximum and the minimum per-pupil revenues among all the districts. The following formula is used to calculate the range:

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94 Highest Xi Lowest Xi where Xi is the per-pupil revenue in district i. 62 In the present study a separate range was calculated at each level of aggregation. Larger ranges are evidence of less equivalent resource accessibility, whereas smaller ranges indicate greater resource accessibility equivalence. In the present study, the particular concern was the amount of growth of the range with the inclusion of the discretionary and capital outlay and maintenance levies into revenues distributed through the foundation program The restricted range is the difference between the per pupil revenues of the district at the 95th percentile and the revenues per pupil of the district at the 5th percentile. The restricted range has an advantage over the range by virtue of the fact that the extremes of the distribution are not included in the calculation of the restricted range. Therefore, the restricted range is less influenced by outliers than the range. 63 The following formula is used to calculate the restricted range: Xi at 95 percentile Xi at 5 percentile

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where Xi is the per-pupil revenue generated in district i. 64 In the present study a restricted range was calculated for per-pupil revenues at each of the seven levels of aggregation. 95 Larger restricted ranges are an evidence of less equivalent resource accessibility, whereas smaller ranges are an indication of greater resource accessibility equivalence. In the present study, the particular concern was the amount of growth of the restricted range with the inclusion of the discretionary and capital outlay and maintenance levies into the revenues generated through the foundation program. The federal range ratio refers to the ratio of the restricted range to the per-pupil revenues of the district at the 5th percentile. The following formula is used to calculate the federal range ratio: (Xi at 95 percentile Xi at 5 percentile) / Xi at 5 percentile where Xi is the per-pupil revenue generated in district Xi. 65 In the present study a federal range ratio was calculated for per-pupil revenues at each of the seven levels of aggregation included in the present study. The federal range ratio is typically restricted to values ranging from Oto 1. The lower a federal range ratio, the more equivalent the accessibility to resources, with 0

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indicating perfect equity. Increasing federal range ratios indicate increasing inequity in the distribution of funds. 96 In the present study, the particular concern was the amount of growth of the federal range ratio with the inclusion of the discretionary and capital outlay and maintenance levies into the revenues distributed through the foundation program. The variance refers to the average of the squared deviations from the mean. Increasing variance is associated with increased variation in the distribution. The variance is calculated using the following formula: L[Pi (Xp Xi) 2 ] / LPi where Pi refers to the number of pupils in district i, Xp is the mean revenues per pupil for all pupils in the state, and Xi is per-pupil revenues in district i. 66 In the present study the variance in the distribution of per-pupil revenues was calculated at each level of aggregation. Increasing variance is an indication of less equivalent resource accessibility, whereas decreasing variance is an indication of greater resource accessibility equivalence. In the present study, the particular concern was the amount of growth of the variance with the inclusion of the discretionary and capital outlay and maintenance levies into the revenues distributed through the foundation program.

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The standard deviation is the square root of the variance. The following formula is used to calculate the standard deviation: {I[Pi (Xp Xi) 2 ] / IPi} 97 where Pi refers to the number of pupils in district i, Xp is the mean revenues per pupil for all pupils in the state, and Xi is per-pupil revenues in district i. 67 A standard deviation was calculated for the revenues per-pupil at each of the seven levels of aggregation in the present study. Larger standard deviations are associated with less equivalent resource accessibility across a distribution, and therefore greater inequity. Smaller standard deviations are associated with greater resource accessibility equivalence, and therefore greater equity. In the present study, the particular concern was the amount of increase in the standard deviation with the inclusion of the discretionary and capital outlay and maintenance levies into the revenues distributed through the foundation program. A coefficient of variation is the ratio of the square root of the variance of the distribution to the mean of the distribution. Thus, whereas the variance and the standard deviation are expressed in terms of the units in the distribution, the coefficient of variance provides a standardized ratio, which normally falls between O and 1.

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98 The following formula is used to calculate the coefficient of variation: {I[Pi {Xp Xi) 2 ) / IPi} / Xp where Pi refers to the number of pupils in district i, Xp is the mean per-pupil revenues for all pupils in the state, Xi is per-pupil revenues in district i, and Xp is the mean per ~upil revenues for all districts. 68 In the present study the coefficient of variation was calculated for per-pupil revenues at each level of aggregation. The coefficient of variation normally falls between 0 and 1. The lower a coefficient of variation, the more equivalent the accessibility to resources, with O indicating perfect equity. An increasing coefficient of variation indicates increasing inequity. In the present study, the particular concern was the amount of growth of the coefficient of variation with the inclusion of the discretionary and capital outlay and maintenance levies into the revenues distributed through the foundation program. Through the application of the preceding quantitative measures the degree of resource accessibility, the equivalence of levels of support for education on a per-pupil basis, was assessed. The level of support for the present study was expressed as per-pupil revenues. An equitable system of funding schools is one in which all students have

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99 roughly equivalent access to resources for education. Resource accessibility, however, is not the sole determinant of the degree of fiscal equity in an education funding system. Equity may also be assessed through measuring the degree of wealth neutrality and equivalent tax yield. Following is a discussion of the measurement of wealth neutrality specifically related to the question addressed in the present study. Wealth neutrality, also referred to as fiscal neutrality, is a theoretical concept implying lack of relationship between local fiscal conditions and fiscal support for education. A wealth neutral system of distribution i s one in which a student's level of financial support for education is not a function of the relative wealth of the district in which he or she is educated. 69 The degree of wealth neutrality is generally measured through regression techniques, through which the relationship between local fiscal conditions and education resources is quantified. 70 The regression measurements typically include the correlation coefficient, coefficient of determination, and regression coefficient In addition, two econometric measures the Gini coefficient and the McLoone index provide a measure of wealth neutrality. 71 A discussion of these measures and their use in the current study, beginning with chose related to regression, follows

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100 Correlation refers to the strength, or degree, of the relationship between two variables. The correlation coefficient provides a measure of the strength of association. 72 A correlation coefficient is restricted to values ranging from 1.0 to 1.0. A positive correlation coefficient indicates a direct relationship between the two variables, with increasing values of the first variable being associated with increasing values of the second variable. A correlation coefficient of 1.0 indicates a perfect positive relationship between the two variables. Conversely, a negative correlation coefficient indicates an inverse relationship between two variables. In this case, an increase in the value of the first variable is associated with a decrease in the value of the second variable. A correlation coefficient of -1.0 indicates a perfect inverse relationship between the two variables. A correlation coefficient of 0 indicates that no relationship between the two variables exists. In assessments of wealth neutrality, a measure of local district wealth is correlated with support for education on a per-pupil basis. In the present study, per-pupil revenues were chosen as the variable representing support for education and district assessed valuation was chosen as the variable representing local wealth. Assessed valuation was the logical choice given the fact that local revenues for

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school support are raised through property taxation in Florida. 101 Ideally, a correlation coefficient of zero indicates perfect wealth neutrality, an indication that students' level of education support is not dependent on local wealth. An increasing correlation coefficient is associated with decreasing wealth neutrality and therefore greater inequity. 73 A negative correlation coefficient provides evidence that as local assessed valuation increases, there is a corresponding decrease in revenues per-pupil generated. Technically, this is not an indication of inequity. 74 The specific formula used to calculate the correlation coefficients for wealth neutrality assessments is as follows: l[pi (Xi Xp) l{pi (xi xp)2 1 (Wi Wp)] / (Wi Wp) 2 ]} where Pi is the number of pupils in district i, Xi is the revenues per-pupil in district i, Xp is the mean per-pupil revenues for all districts, Wi is the assessed valuation per pupil in district i, and Wp is the mean assessed valuation per-pupil for all districts. 75 In the present study the correlation coefficient was calculated at each level of aggregation. Of particular interest in assessing the effects on the wealth neutrality of the FEFP distribution system was any increase of the

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102 correlation between local assessed valuation and per-pupil revenues with the inclusion of revenues raised through application of the discretionary and capital outlay and maintenance millage rates into revenues provided through the foundation system. Such an increase, if any, was indicative of the degree of disequalization resulting from these levies. The second measure used in assessing the degree of wealth neutrality is the coefficient of determination. Whereas the correlation coefficient is a measure of the strength of association between two variables, the coefficient of determination represents the percent of variation in a dependent variable that is explained by a predictor variable. The coefficient of determination for a two variable model is calculated by squaring the correlation coefficient. Thus, a coefficient of determination is restricted to values between O and 1, with O indicating none of the variance in the outcome variable explained by the predictor variable and 1 indicating 100 percent of the variance explained by the predictor variable. Of course, the coefficient of determination, unlike the correlation coefficient, does not indicate whether the relationship between the two variables is positive or negative. 76 A coefficient of determination of O is an indication of perfect wealth neutrality, and therefore distributional equity Such a coefficient indicates that none of the variations among districts in per-pupil revenues can be

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accounted for by variations in local wealth. Increasing coefficients of variation indicate increasing variance explained by local wealth, and therefore is evidence of decreased wealth neutrality and greater inequity. 103 In the present study, the percent of variation in local assessed valuation was used as the predictor of per-pupil revenues. A coefficient of determination was calculated for per-pupil revenues at each level of aggregation. Of particular interest was any increase in the proportion of variance in per-pupil revenues explained by local wealth when revenues generated through application of the discretionary millage rates and capital outlay and millage rates were added to per-pupil revenues distributed through the foundation system. The third quantitative tool used to assess wealth neutrality is the regression coefficient, also known as the slope of the regression equation. The regression coefficient is based on regression analysis, a process through which an outcome, or dependent, variable is mathematically expressed ~s a function of one or more predictor, or independent, variables. 77 This relationship is expressed by the following equation:

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104 where Yi is the is the outcome variable for i, Bo is the intercept term, gl is the regression coefficient or slope of the predicted line, Xi is the value of the predictor variable at i, and Ui is the error at i. 78 Thus, while a correlation coefficient indicates the strength of the relationship between two variables, the regression coefficient provides a measure of the magnitude of the change in one variable associated with the change in the other variable. A regression coefficient, unlike the correlation coefficient and coefficient of determination, is not expressed in standardized units. The regression coefficient is expressed in terms of the units of measurement of the outcome variable, and may be computed using the following formula: L[Pi (Xi Xp) (Wi Wp)] / L[Pi (Wi Wp) 2 ] where Pi is the number of pupils in district i, Xi is the revenues per-pupil in district i, Xp is the mean per-pupil revenues for all districts, Wi is the assessed valuation per pupil in distr i ct i, and Wp is the mean assessed valuation per-pupil for all districts 79 A regression coefficient in the present study was expressed as the dollar amount of change in per-pupil revenues resulting in a one dollar change in assessed valuation per-pupil A regression coefficient was calculated at each level of aggregation.

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In the present study, the change in the regression coefficient when per-pupil revenues raised through application of the discretionary and capital outlay and maintenance millage rates were added to the per-pupil revenues distributed through the foundation system was of particular interest. Any resultant increase in this relationship indicated decreasing wealth neutrality and decreased fiscal equity 105 These three regression measures were used to assess the relationship between wealth and revenues. Two econometric measures, the Gini coefficient and McLoone index, were also used to assess the effects of wealth neutrality caused by the two levies. In measures of wealth neutrality the Gini Coefficient demonstrates how far the distribution of revenues is from providing each percentage of pupils with an equal percentage of the revenues. B o The following formula is used to calculate the Gini coefficient: Li lj [Pi Pj (Xi Xj)] / 2 (1Pi)2 Xp where li is the sum for district i, lj is the sum for district j, Pi is the number of pupils in district i, Pj is the number of pupils in district j, Xi is the revenues per pupil in district i, Xj is the revenues per pupil in district j, and Xp is the mean revenues per pupil for all districts B l Gini coefficients are limited to values ranging from Oto 1.

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106 A Gini coefficient of O indicates perfect wealth neutrality and therefore equity in the distribution, while a Gini coefficient of 1 indicates complete systematic inequity. In the present study the Gini coefficient was calculated for revenues at each level of aggregation. The amount of increase, if any, of the Gini coefficient from the foundation level of aggregation to each aggregate level including the combination of the revenues distributed through the foundation system plus the two locally determined millage rates provided indication of the magnitude of the inequity introduced by the resultant levies. The McLoone index indicates the ratio of the actual sum of per-pupil revenues for pupils below the median to the sum of per-pupil revenues that would exist if each pupil below the median were at the median per-pupil revenue level. 82 Thus, the McLoone Index conceptually is relevant to a foundational distribution, wherein a certain minimally acceptable level would be available for all students. In this case, this minimally acceptable level would be the statewide median per-pupil revenues. The following formula is used to calculate the McLoone Index: L ( 1... j ) (Pi Xi) / Mp l:(1.. j) (Pi)

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107 where districts 1 through j are below the median, Pi is the number of pupils in district i, Xi is the per-pupil revenues in district i, and Mp is the statewide median revenues per pupil for all districts. The McLoone Index is restricted to values between O and 1. A value of O indicates complete lack of wealth neutrality and therefore inequality below the median. Values approaching 1 indicate that pupils in districts below the median have been provided more equitable distribution of revenues. In the present study McLoone indexes were calculated for per-pupil revenues at each level of aggregation. Of particular interest was the change in the McLoone Index when the per-pupil revenues from the application of the discretionary and capital outlay and maintenance millage rates were added to the revenues distributed through the foundation system. Such a change, if any, was indication of the impact of these two levies on fiscal equity for those districts below the median in terms of per-pupil revenues. The preceding measures assessed the degree to which the two levies affect the wealth neutrality of the foundation system. Wealth neutrality and resource accessibility provided two sets of standards through which the degree of equity of a distribution system is assessed. A third area of equity assessment was tax yield.

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108 In studies of education finance systems tax yield refers to the relationship between the degree of local fiscal effort directed toward supporting education and the resulting resources. Tax yield therefore is associated with taxpayer equity, in which equal effort should result in equal yield. Through tax yield equity assessment the relationship between the tax effort exerted in the local districts and the per pupil revenues generated through the tax is measured. The degree of equivalence of tax yield is demonstrated by the extent to which the degree of effort exerted by the taxpayers in a district is related to the per-pupil revenues generated through application of these tax rates. The relationship may be measured through regression techniques. The correlation coefficient provides a measure of the strength of association between the tax rate and the resultant per-pupil revenues generated through application of these tax rates. The higher a positive correlation coefficient, the more the equivalent yield given equivalent effort. A correlation coefficient of 1.0 indicates perfect ~quity. A correlation coefficient of zero indicates no relationship between effort and yield, which is an inequitable situation in that yield should be positively related. Negative correlation coefficients indicate even greater inequity, meaning that with increased tax effort there is an associated decrease in per-pupil revenues. A

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109 correlation coefficient of -1 implies the greatest degree of taxpayer inequity. The correlation coefficient is calculated as follows: l[Pi (Xi Xp) l{Pi (Xi Xp)2] (Ti Tp)] / (Ti Tp) 2 ]} where Pi is the number of pupils in district i, Xi is the per-pupil revenues in district i, Xp is the mean per-pupil revenues for all districts, Ti is the per-pupil millage rate for district i, and Tp is the mean per-pupil tax rate for all districts. In the present study the correlation coefficient was calculated at each level of aggregation. Of particular interest was any decrease in the correlation coefficient resulting from the addition of revenues generated through application of the discretionary and capital outlay and maintenance millage rates to the revenues distributed through the foundation portion of the FEFP. The second measure of tax yield is the regression coefficient. Typically the rate of local property taxation is regressed on per-pupil revenues resulting from these rates. The regression coefficient thus provides an indication of the magnitude of the relationship, if any, between tax effort and per-pupil revenues. A regression coefficient is calculated using the following formula:

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110 L[Pi (Xi Xp) (Ti Tp)] / L[Pi (Ti Tp)21 where Pi is number of pupils in district i, Xi is per-pupil revenues in district i, Xp is the statewide mean per-pupil revenues, Ti is the per-pupil tax rate for district i, and Tp is the statewide mean per-pupil tax rate. These regression coefficients express the dollar change in per-pupil revenues given a one mill change in the tax rate. In the present study, the change in the regression coefficient when per-pupil revenues raised through application of the discretionary and capital outlay and maintenance millage rates were added to the per-pupil revenues distributed through the foundation system was of particular interest. The amount of decrease, if any, in the regression coefficient indicated the decrease in the magnitude of the change in revenues per-pupil associated with a one mill increase in tax effort beyond the required local effort. Decreases in this relationship indicated shrinking tax yield equivalence and decreased fiscal equity. The two preceding regression measures were used to assess the equivalence of tax yield, particularly with regard to the addition of two unequalized levies. Together with the measures of resource accessibility and wealth neutrality, the degree of disequalization of the two local levies was assessed.

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conclusion The present study examined the effects of revenues raised through local discretionary millage rates on the equity of a foundation school distribution system. The chapter inciuded a discussion of the method by which these equity effects were examined. 111 Chapter 3 began with a discussion of the population from which the data used in the study were derived. Following this discussion of the population was a description of the ~ducation funding system of Florida, the state chosen for the study. The next section provided a description of the design of the present study. Chapter 3 concluded with a discussion of the method through which the disequalizing effects of the local levies were assessed. Chapter 4 includes a discussion of the results of the study. Notes 1 christensen v, Graham, Dist. court of App., case No. 88-69, has at the time of this writing not been decided; In Florida Department of Education v, Glasser. 622 so.2d 944 (Fla. 1993), a related case recently decided, the Supreme Court of Florida ruled that the Legislature could limit local school millage below the total constitutionally maximized 10 mills. 2Fla Stat. 236.012. 3J. Michael O'Loughlin, R. Craig Wood, and Davids. Honeyman, A study of the Effects of the Sparsity supplement on the Equity of the Florida Education Finance Program (Gainesville, FL: UCEA Center for Education Finance, 1992); Steven D. Stark, David S. Honeyman, and R. Craig Wood, bn Examination of the Florida Lottery (Gainesville, FL: UCEA

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112 Center for School Finance, 1991); Gaylon D. Currie An Examination of the Equity of capital outlay Funding of Public Education: A comparison of the Equity of the current Method of Distributing capital outlay Funding in the state of Florida and the Equity of General Expenditures for Education. (Doctoral Dissertation University of Florida, 1992); Steven Stark, David S. Honeyman, and R. Craig Wood, "The Florida Lottery: Its Use as a Substitute for Existing Funds and its Effects on the Equity of School Funding," Journal of Education Finance 18 (Winter, 1993). 4 see generally R Craig Wood and David S. Honeyman, "Rapid Growth and Unfulfilled Expectations: Problems for School Finance in Florida, in James Gordon Ward and Patricia Anthony (eds.) Who Pays for Student Diversity? (Newbury Park, CA: Corwin Press, Inc., 1992) 5Division of Public schools, Profiles of Florida School Districts 1992 93 Student & staff Data (Tallahassee, FL: Florida Department of Education, 1992), 8 6National Center for Educational Statistics Digest of Education Statistics (Washington, DC: U.S. Department of Education, 1992) 59. 7Ibid ., 155 8Ibid., 161. 9 1992-93 school Profiles, 4 l0Fla. Stat. 23 6. 014 ( 1) (b) llDivision of Public Schools, 1992-93 Florida Education Finance Program (Tallahassee, FL: Florida Department of Education 1992) 1 12Fla Stat. 236. 13Fla. Stat. 236.081(1). 1 4 1992-93 FEFP, 1 15Fla. Stat. 236.081(1) (a). 16Fla. stat 236 081(1) (c).

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17 1992-93 FEFP, 12. 18Fla. Stat. 236.081. 19Laws of Florida 92-293 item 516. 20Fla. Stat. 236.081(2). 21Laws of Florida 92-293 item 516. 22Fla. Stat. 236.081(7). 23 1992-93 FEFP, 15. 24Fla. Stat. 236.081(6). 25Laws of Florida 92-293 item 516. 26 1992-93 FEFP, 16. 27Fla. Stat. 236.081(4). 28Fla. Stat. 236.081(4). 29Laws of Florida 92-293 item 516. 30Fla. Stat. 236.081(4) (a) (1). 31Fla. Stat. 236.081(4) (b). 32Fla. Stat. 236.02(7). 33 1992-93 FEFP, 19. 34Fla. Stat. 236.081(5) (a) (1). 35Fla. Stat. 236.081(5) (a) (2). 36Fla. Stat. 236.081(5) (a) (3). 37Fla. Stat. 236.081(5) (a) (4). 38Fla. Stat. 236.081(5) (a) (5). 39 1992-93 FEFP, 21. 113

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114 40Ibid., 2. 41Fla. Const. art. VII sec. 9 (a) 42Fla. Stat. 200.001(3) (a). 43Fla. Stat. 200. 001 ( 3) (bl 44Fla. Stat. 200.001(3) (d). 45Fla. Stat. 200.001(3) (c). 46Fla. Stat. 200.001(3) (e). 47Fla. Const. art. VII sec. 9 (a) 48Fla. Stat. 236 25(1). 49Laws of Florida 92-293 item 516. 50Fla. Stat. 236.25 (2) (a). 51Fla. Stat. 236.25(2) (b). 52Fla. Stat. 236.25(2) (cl. 53Fla. Stat. 236.25(2) (d). 54Fla. Stat. 236.25(2) (e). 55Fla. Stat. 236.25(2) (f). 56Fla. Stat. 237 .161. 57Fla. Stat. 236.25(2) (g). 58Fla. Stat. 236.25(2) (h). 59R. Craig Wood and David c. Thompson, Education Finance Law; constitutional challenges to state Aid Plans; An Analysis of Strategies (Topeka, KS: National Organization of Llegal Problems in Education, 1993), 47; David C. Thompson, R. Craig wood, and Davids Honeyman, Fiscal Leadership for Schools: concepts and Practices (White Plains, NY: Longman Publishing Group 1994), 252.

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115 60wood and Thompson,47-48; Thompson, Wood, and Honeyman, 253. 6 1 wood and Thompson, 48; Thompson, wood, and Honeyman, 254. 62wood and Thompson, 48; Thompson, Wood, and Honeyman, 254-255. 63T.W. Anderson and Stanley L. Sclove, The Statistical Analysis of Data. 2nd ed. (Palo Alto, CA: The Scientific Press, 1986), 109. 64wood and Thompson, 49; Thompson, wood, and Honeyman, 255. 65wood and Thompson, 49; Thompson, Wood, and Honeyman, 255. 66wood and Thompson, 49; Thompson, Wood, and Honeyman, 256 67wood and Thompson, 49-50; Thompson, Wood, and Honeyman, 256. 257. 68wood and Thompson, 50; Thompson, Wood, and Honeyman, 69Thompson, wood, and Honeyman, 252. 70rbid., 257. 71 rbid. 72Alan Agresti and Barbara Finlay Agresti, Statistical Methods for the social Sciences (San Francisco: Dellen Publishing Co., 1979), 233. 73wood and Thompson, 51. 74Robert Berne and Leanna Stiefel, The Measurement of Equity in School Finance (Baltimore: The Johns Hopkins University Press, 1984), 28. 75wood and Thompson, 51; Thompson, Wood, and Honeyman, 259-260. 76Agresti and Agresti, 234-242.

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77rbid., 15-18. 7 8samprit Chaterjee and Bertram Price, Regression Analysis by Example, 2nd ed. (New York: John Wiley & sons, inc., 1991), 3. 79Berne and Steifel, 29. 80rbid. 81Thompson, Wood, and Honeyman, 258 8 2 rbid. 116

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CHAPTER 4 RESULTS The present study addressed the following research question: In a state with a foundation program for support of schools including one or more discretionary millage rates, to what extent do the levies resulting from the application of the discretionary millage rates introduce inequities into the system for distributing education funding? Chapter 3 included a discussion of the particular data design and procedures used in the study to examine these disequalizing effects. The present chapter includes a description of the results of the analysis. The current chapter begins with a review of the methodology presented in Chapter 3. Following this review is a discussion of the results related to the measures of resource accessibility. The chapter concludes with a presentation of the results of the wealth neutrality and the tax yield measures. Data for the present study were taken from the final calculation of the Florida Education Finance Program (FEFP) from fiscal year 1992-93, 1 the most recent year for which the final calculation data were available. The study included examination of the equity of the distribution of education 117

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118 dollars among the sixty-seven Florida school districts during that fiscal year. Each of the fiscal equity measures was calculated across seven aggregation levels, the intent of which was to provide assessment of cumulative disequalizing effects. The first aggregate level included revenues distributed through the foundation portion of the FEFP. The second and third levels included revenues generated through the two unequalized millage rates, discretionary rate and the capital outlay and maintenance rate, respectively. The fourth level included the combination of the two unequalized rates. Levels five and six included a combination of the foundation revenues with the discretionary and capital outlay and maintenance revenues, respectively. The final level of aggregation included revenues from all three sources. The object of measurement included per-pupil revenues. Measurements related to three constructs of fiscal equity were used in the study. These constructs included resource accessibility, wealth neutrality, and tax yield. Following are the specific results of these measurements, beginning with those related to the resource accessibility of the distributions. Resource Accessibility Resource accessibility is a per-pupil equity construct which refers to the degree to which all students have access

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119 to a roughly equivalent resource base of fiscal support for education. The results of the resource accessibility measures for the current study are presented in Table 1. Table 1 Resource Accessibility: Measures of Variability Mean Found 2683 39 Disc 90.22 Cap 309.70 D + C 399.92 F + D 2773.61 F + C 2993 09 F + D + C 3083.31 Variance 4748.22 2421. 05 23365.73 37996.21 9199.42 33879.56 50501.18 Standard Deviation 69.19 49.20 152.86 194.93 95.91 184 06 224.72 Coeff of Variation .03 .55 .49 .49 .03 .06 07 The mean statewide per-pupil revenues provided through the foundation element of the FEFP was $2683.39. The mean per-pupil revenue generated by the discretionary ahd capital outlay and maintenance rates were $90.22 and $309.70, respectively, with the mean for the combination of the two unequalized rates measured at $399.92. The mean of the foundation revenues combined with the discretionary revenues was $2773.61 and combined with the capital outlay and

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maintenance revenues was $2993.09. The mean per-pupil revenues statewide from all three sources was $3083.31. 120 Increased variability of the distribution of revenues was evident as unequalized levies were added to the foundation revenues, based on the variance and standard deviation calculations. The variance of the revenues provided through the foundation program was 4748.22, with the standard deviation calculated at $69.19. The variance and standard deviation for the discretionary revenues were 2421.05 and $49.20. The variance and standard deviation for the capital outlay and maintenance revenues, 23365.73 and $152.86, far exceeded that of the foundation revenues though fewer aggregate dollars were involved. The revenues resulting from the combination of the discretionary and capital outlay and maintenance rates had a variance of 37996.21 and a standard deviation of $194.43. The addition of the unequalized discretionary revenues had the effect of increasing the variability of the distribution of the revenues generated through the foundation program of the FEFP. The variance and standard deviation of the foundation revenues combined with the discretionary revenues were 9199.42 and $95.91. The variance and standard deviation of the foundation revenues combined with revenues generated from the capital outlay and maintenance millage rate were 33879.56 and $184.06. The revenues generated from

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all three sources had a variance of 50501.18 and standard deviation of $224.72. 121 Clearly the estimates of distributional variability increased with the inclusion of the unequalized revenues. However, these measures were based on separate distributions, each with varying amounts of aggregate dollars involved. Therefore, examination of the coefficients of variation, providing standardized estimates of variability, was instructive. The coefficients of variation for the uncombined revenue sources were for the foundation revenues .03, for the discretionary revenues .55, and for the capital outlay and maintenance revenues .49. The coefficient of variation for the combination of the discretionary and capital outlay and maintenance revenues was calculated at .49. The inclusion of the unequalized revenues demonstrated an increase in the variability of foundation dollars, as measured by the coefficient of variation, only with the inclusion of the capital outlay and maintenance revenues. The coefficient of variation increased from .03 to .06 with the inclusion of these revenues in the calculation. However, the coefficient of variation remained at .03 when the discretionary revenues were combined with the foundation ~evenues. The coefficient of variation calculation for revenues from a combination of all three sources was .07.

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122 The preceding measures demonstrated the degree of revenue variability among Florida school districts across the seven aggregation levels. Further evidence of the effects of discretionary revenues on the fiscal equity of a foundation distribution system was obtained through examination of the range related measures of the distribution. Table 2 includes the results of the range, restricted range, and federal range ratio calculations across the seven distributional levels. Table 2 Resource Accessibility: Measures of Distributional Range Range Found 424.78 Disc 332.10 Cap 772.04 D + C 997.42 F + D 648.87 F + C 880.02 F + D + C 1105.40 Restricted Range 248.23 189.96 601.88 730.05 333.36 639.65 804.24 Federal Range ratio .10 11.93 28.84 .13 .24 .29 The range for the foundation revenues alone was $424.78, while the restricted range was $248.23 The discretionary revenues range of $332.10 and restricted range of $189.96 were nearly as large as that of the foundation revenues. The

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123 capital outlay and maintenance revenues range of $772.04 and restricted range of $601.88 far exceeded that of the foundation revenues. The range for the combination of the discretionary revenues combined with those arising from the capital outlay and maintenance millage rates was $997.42, while the restricted range was $730.05. The impact on the ranges of the distribution as discretionary and capital outlay and maintenance dollars were added to foundation dollars was evident. The range of the foundation revenues combined with the discretionary revenues was $648.87, while the restricted range was $333.36. The revenues from the foundation program combined with those raised through application of the capital outlay and maintenance millage rates had a range of $880.02 and a restricted range of $639.65. The range resulting from revenues generated from a combination of all three sources was $1105.40, while the restricted range was $804.24. The federal range ratio for the foundation revenues was .10 and for the discretionary revenues was 11.93. No federal range ratio could be calculated for the capital outlay and maintenance revenues because the district at the fifth percentile (which constitutes the denominator of the federal range ratio formula) applied no millage rate and therefore raised no dollars through this source. The federal range ratio for the capital outlay and maintenance revenues

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combined with those generated through the discretionary millage rate was 28.84. 124 The addition of unequalized dollars had the effect of ~ncreasing distributional range as evident in the increase of the federal range ratios as these revenues were added to those raised through the foundation program. The federal range ratio for the foundation dollars combined with discretionary dollars was .13, while the federal range ratio for the foundation dollars combined with those generated through the capital outlay and maintenance rates was .24. The federal range ratio calculated for the distribution of revenues from all three sources examined in this study was 29. The preceding discussion included the results of the calculations relevant to the effects of the discretionary revenues on the resource accessibility of the foundation program. Following is a presentation of the results of the calculations of the wealth neutrality measures. wealth Neutrality Wealth neutrality refers to the extent to which resources available for the education of students is not related to local fiscal conditions of the area in which the student is educated. Typical assessments of wealth neutrality include regression related measures, including the correlation coefficient, coefficient of determination, and

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125 regression coefficient. Additionally, two econometric measures, the Gini coefficient and McLoone index, may be used to measure the wealth neutrality of educational funding distribution systems. The following section includes the results of the wealth neutrality calculations. The regression related measures of wealth neutrality are included in Table 3. The correlation coefficient resulting from correlating per-pupil local assessed value of property and per-pupil revenues derived from the foundation program was .50. Thus, a positive association existed between local wealth as represented by per-pupil property value and the resources for educational support as represented by per-pupil foundation revenues With the discretionary funding source, the correlation coefficient was 99 and for the capital outlay and maintenance source .94. These relatively high correlation coefficients were not surprising given the fact that the revenues were determined through application of millage rates on assessed valuation of property The correlation coefficient for the combination of the discretionary and capital outlay and maintenance funding sources was 99. The addition of revenues from both the discretionary and capital outlay and maintenance revenue sources resulted in rather substantive i ncreases in the relationship between district property wealth and revenues per-pupil as demonstrated through the correlation coefficient

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calculations The foundation plus discretionary source correlation coefficient was calculated at 85, while the foundati o n plus capital outlay and maintenance source correlation coefficient was calculated at .97. The correlation coefficient for all three sources was .99. Table 3 Wealth Neutrality: Regressi o n Measures Found Disc Cap D + C F + D F + C F + D + C Correlation Coefficient .50 .99 94 .99 .85 .97 .99 Coefficient of Determination .25 .99 .88 98 72 .94 .98 Regression Coefficient .00034291 .00057916 .00172990 .00228479 .00092207 .00204854 .00262770 126 The coefficient of determination was useful in understanding the relationship as demonstrated by the correlation coefficients. The coefficient of determination measured the proportion of the variability of per-pupil revenues which was explained by the variability of per-pupil assessed valuation. Local per-pupil assessed valuation variability accounted for .25 of the variability in per-pupil

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127 foundation revenues, .99 of the variability in per-pupil revenues generated through the discretionary millage rate, and .88 percent of the variability in revenues generated through the capital outlay and maintenance rate. Local per pupil assessed valuation variability explained .98 of the variability in per-pupil revenues generated through the combination of both unequalized sources. The coefficient of determination for per-pupil revenues derived from the foundation program combined with current operation discretionary revenues was calculated at .72. The foundation dollars in combination with the capital outlay and maintenance dollars resulted in a coefficient of determination of .94. When all three sources were considered, the percent variation in revenues per-pupil explained by per-pupil assessed valuation was .98. The correlation coefficients and coefficients of determination provided measures of the strength of relationship between per-pupil assessed valuation and per pupil revenues generated across the seven levels of aggregation. The regression coefficients provided a indication of the magnitude of the relationship between the variables across the levels. The following section includes the results of the calculations of the regression coefficients. The regression coefficient for the foundation revenues was .00034291. The interpretation for this measure is that

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128 for every dollar increase in the independent variable assessed valuation per-pupil, there was an associated increase of $.00034291 in per-pupil revenues. The regression coefficient for discretionary revenues was .00057916, for capital outlay and maintenance revenues was .0017299, and for the combination of the unequalized dollars was .00230648. The regression coefficient resulting from the combination of foundation and discretionary revenues was .00092207, and for the combination of foundation revenues and those originating from the capital outlay and maintenance rates was .00204854. The regression coefficient for the revenues emanating from all three sources in combination was 0026277 The preceding were results of the regression measures of wealth neutrality. Additionally, two econometric measures of wealth neutrality, the McLoone index and Gini coefficient, were calculated at each aggregation level. The results of these calculations are included in Table 4. The McLoone index indicates the proportion of per-pupil revenues for districts below the median to the amount necessary to bring all these districts to the median level. T-he McLoone index for foundation revenues was calculated at .98. For current operation discretionary dollars the McLoone index was .73 and was .67 for capital outlay and maintenance revenues. The dollars generated through the combination of

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discretionary and capital outlay and maintenance revenues resulted in a McLoone index of .70. T.able 4 Wealth Neutrality: Econometric Measures McLoone Index Gini Coefficient Found .98 .01 Disc .73 .12 Cap .67 .13 D + C .70 .12 F + D 98 .01 F + C .97 .02 F + D + C .97 .02 129 The McLoone index for foundation revenues combined with current operation discretionary revenues was .98, virtually the same as for the foundation dollars alone The McLoone index for foundation plus capital outlay and maintenance revenues, .97, was not much lower. The McLoone index for revenues generated from a combination of all three sources was calculated at .97. The Gini coefficient is a quantitative measure of the extent to which the distribution of per-pupil revenues is constant across pupils. The Gini coefficient for foundation revenues was.01, for current operation discretionary revenues

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130 .12 and for capital outlay and maintenance revenues 13 The Gini coefficient resulting from the combination of both unequalized millage rates was .12. The Gini coefficient calculated from the combination of per-pupil revenues of the foundation program with per-pupil discretionary revenues remained at .01. The Gini coefficient for foundation revenues and capital outlay and maintenance revenues per-pupil was .02, while the Gini coefficient calculated for revenues from all three sources was also .02. The preceding calculations represented measurement of the effects of discretionary levies on the wealth neutrality of a foundation program. Another aspect of fiscal equity, tax yield, was measured in the present study. Following are the results of the tax yield measures. Tax Yield Tax yield is a taxpayer equity construct involving the measurement and analysis of the association between tax effort and resultant resources. In the present study two measures, correlation and regression, were used to measure the relationship between tax effort and resources across the seven levels of aggregation. Tax effort was represented by the per-pupil millage rate applied at each level, while resources was represented by per-pupil revenues resulting from these millage rates The tax yield results for the present study are included in Table 5.

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Table 5 Tax Yield Found Disc Cap D + C F + D F + C F'. + D + C Correlation Coefficient +.17 -.12 -.28 -.37 -.03 -.49 -.48 Regression Coefficient +13769.96 -83410.47 -198389.24 -268342.81 -2799.73 -75477.85 -83871. 06 131 A correlation coefficient of .17 was calculated for the foundation program funding source. This indicated that increasing tax rates were associated with slightly increasing per-pupil revenues. Both the discretionary level (. 12) and capital outlay and maintenance level (-.28) demonstrated inverse relationships between tax effort and revenues per pupil, meaning that increasing tax effort was associated with decreased per-pupil revenues. The combined unequalized tax effort correlated (-.37) with resultant per-pupil revenues. When combined with the foundation program funding source, the two unequalized sources had clear effects on tax yield. The foundation plus discretionary sources per-pupil

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132 millage rates correlated (-.03) with per-pupil revenues resulting from these rates, while foundation millage rates combined with capital outlay and maintenance rates correlated (-.49) with resultant per-pupil revenues. The combined perpupil millage rates from all three sources correlated (-.48) with total per-pupil revenues. The correlation coefficients indicated the strength of the relationship between per-pupil millage rates and per pupil revenues for each level of examination. The magnitude of the relationship was measured through regression coefficients. For the foundation program, the regression coefficient was measured at $13769.96. This indicates the magnitude with which higher levels of tax effort were associated with lower levels of revenues per-pupil. The regression coefficient calculated for discretionary effort and yield was (-$83410.47), and for capital outlay and maintenance effort and yield was (-$198389.24). The combination of discretionary with capital outlay and maintenance effort and yield resulted in a regression coefficient of (-$268342.81). The regression coefficient for the combination of foundation program with discretionary effort and yield was calculated at (-$2799.73). The combination of the foundation yield and effort with capital outlay and maintenance yield and effort resulted in a regression coefficient of

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133 (-$75477 85). Lastly ; when per-pupil yield involving all three millage rates was regressed on per-pupil revenues from all three sources, the resultant coefficient was (-$83871. 06) conclusion In this chapter the results of the a q alysis intended to address the question, "In a state with a foundation program for support of schools including one or more discretionary millage rates, to what extent do the levies resulting from the application of the discretionary millage rates introduce inequities into the system for distributing education funding?" were presented. These results were related to three constructs of fiscal equity, including resource accessibility, wealth neutrality, and tax yield. The resource accessibility issue was addressed using descriptive measures of per-pupil revenues, including the mean, range, restricted range, federal range ratio, variance, standard deviation, and coefficient of variation. The wealth neutrality issue was addressed using both regression and econometric measures. The regression measures included the correlation coefficient, coefficient of determination, and regression coefficient, in which the relationship between per-pupil assessed valuation and per pupil revenues was calculated. The econometric measures included the Gini coefficient and McLoone index, which

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134 included analysis of the distribution of per-pupil revenues. The tax yield issue was addressed using regression measures, in which the relationship between tax effort and per-pupil r.evenues was measured using the correlation coefficient and regression coefficient. Chapter 5 includes a discussion of the results, including overall conclusions and implications of the study. Notes 1 Division of Public Schools, 1992-93 Florida Education Finance Program (Tallahassee, FL: Florida Department of Education, 1992).

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CHAPTER 5 DISCUSSION In Chapter 4 the results of the analysis related to the research question, "In a state with a foundation program for support of schools including one or more discretionary millage rates, to what extent do the levies resulting from the application of the discretionary millage rates introduce inequities into the system for distributing education funding?" were presented. Chapter 5 includes a discussion of these results. The current chapter begins with a general summary of the study. Subsequent to this general summary observations are presented based on the results obtained in Chapter 4. The discussion then turns to the conclusions reached based on these observations, specifically in light of the concepts of equity discussed in Chapter 2. Chapter 5 concludes with implications of the study for further research and practice. summary The constitutions of the respective states specify that education is a state responsibility. State governments by and large are compelled by the respective state constitutions to aspire toward equity as it relates to fiscal support for 135

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136 education. As a result most states have attempted to fund the educational enterprise though a methodology that promotes equity in the distribution of resources among local education agencies. The most common method of promoting equity has been through a state foundational system of distribution. Such a system ensures each local district, and therefore each student, a certain foundational level of educational support conceivably relevant to his or her educational needs. The foundation program theoretically provides the assurance that no student falls below a certain basic level of funding However, the basis for a foundation program is provision of a minimally acceptable level of fiscal support for all children. Typically, local districts are allowed the option to exert additional taxing effort to raise additional revenues for further support of education beyond the foundational level. Thus, in theory state support programs which include a foundational element may allow some degree of inequity to exist, given the basic level of support concept inherent in the program. The degree to which certain inequities above the foundation level are tolerable have been adjudicated in several of the court systems of states which utilize such a support system. Unfortunately, no consistent pattern of court decisions exists with regard to the the extent to which the existence of some inequity is constitutionally acceptable Court decisions in the respective state court

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137 systems have been mixed in terms of the constitutionality versus unconstitutionality of state foundation systems in right of the various standards of equity, while federal courts have refused to strike down education finance systems. Without clear guidance from the courts, states have dealt with the problem of revenues generated beyond the foundation level differently. Some states simply provide an equalized foundation program and allow the additional revenues to remain unequalized. Other states have utilized various methods of equalizing the revenues generated beyond the foundation system. The state of Florida employs a foundation system as the core of its state system of fiscal support for education. Yet, the revenues generated through the two nonvoted sources beyond the foundation system are not equalized by the state. The foundation portion of the FEFP has been demonstrated to exhibit a large degree of distributional equity. A reasonable question to address, therefore, is to what extent do these local discretionary elements of the program introduce disequalizing effects into the system as a whole. This question was the subject of the current study. observations The previous section included a general summary of the present study. The current section includes observations

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based on the results of the study that were presented in Chapter 4 138 The introduction of unequalized revenues into foundation program revenues had the effect of increasing the variation in the per-pupil levels of support. This increase was evident given the increases of variance calculations and ~tandard deviations, which demonstrate aggregate dollar variability increases. Standardized variability calculations, specifically those related to the coefficient of variation, demonstrated virtually no increase in the variability g i ven the introduction of discretionary dollars. An increase in standardized variability, however, was evident as capital outlay and maintenance revenues were introduced into the distribution. Clearly, the range estimates increased as unequalized revenues are introduced into the distribution, a result that was expected because the total aggregate dollars were increasing as more revenues were involved. Both the range and restricted range calculations demonstrated increases as both discretionary and capital outlay and maintenance revenues were included in the distribution, both individually and together. Introduction of the discretionary dollars resulted in an increase of the federal range rat i o by almost a third, while capital outlay and maintenance revenues resulted in the federal range ratio being increased by a factor of two and a half.

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139 Regression measures of wealth neutrality demonstrated notable disequalizing effects of both the discretionary and capital outlay and maintenance revenues as they were combined with the revenues obtained through the foundation program. The discretionary combined with foundation revenues per-pupil demonstrated a strong positive relationship to per-pupil property wealth, while the revenues derived from foundation and capital outlay and maintenance sources had an extremely strong relationship to per-pupil property wealth. The strength of the relationship between per-pupil property wealth and per-pupil revenues virtually doubled from the foundation only revenues to revenues derived from all three sources in combination as measured by the correlation coefficient. The addition of the discretionary and capital outlay and maintenance sources had the effect of increasing the amount of variance in per-pupil revenues explained by variance in per-pupil property wealth. When examining the foundation source alone, variance in per-pupil assessed valuation explained only one-quarter of the variance in per-pupil foundation revenues. However, per-pupil property wealth explained nearly three-fourths of the variation in foundation combined with discretionary revenues per-pupil and nearly all of the variance in foundation combined with capital outlay and maintenance revenues per-pupil. Per-pupil assessed valuation likewise explained nearly all variation in per

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140 pupil revenues obtained through the combination of all three sources The distribution of the foundation revenues demonstrated a large degree of wealth neutrality as demonstrated by the Gini Coefficient. The addition of the discretionary revenues had virtually no effect on the foundation program as evidenced by the Gini coefficient calculated for these two revenue sources. The addition of the capital outlay and maintenance revenues had the effect of increasing the Gini coefficient, whether combined with foundation revenues or with both foundation and discretionary revenues. The distribution of per-pupil revenues through the foundation program below the median demonstrated a high degree of wealth neutrality as evidenced by the McLoone Index The addition of the discretionary revenues to the foundation program had virtually no effect on the distribution below the median, with the McLoone index remaining constant as these revenues were added to foundation program revenues. The addition of the capital outlay and maintenance revenues to the foundation revenues and to both foundation and discretionary revenues had negligible effects on the wealth neutrality of the distribution below the median as evidenced by the McLoone index calculations. A weak positive relationship between taxpayer effort and resultant educational resources generated through the foundation program was demonstrated through calculation of

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141 the tax yield measures. The addition of discretionary funding had the effect of eliminating this relationship, therefore decreasing equality of tax yield. The combination of the capital outlay and maintenance with foundation sources resulted in the relationship between tax effort becoming inverse. With capital outlay and maintenance funding included in the distribution, increasing tax effort was associated with decreasing per-pupil revenues generated for ~ducation. This inverse relationship was true whether the foundation and capital outlay and maintenance sources were considered or all three sources in combination were considered. conclusions The preceding section included observations based on the analysis of these data. The following section includes overall conclusions about the disequalizing effects of the discretionary and capital outlay and maintenance funding sources based on these observations. In the realm of resource accessibility, both the discretionary revenues and capital outlay and maintenance demonstrated disequalizing effects when considered in combination with foundation revenues as indicated by both the measures of range and measures of variability. Increases in both range indicators and variability indicators of resource accessibility was not surprising, however, given the fact

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142 that more dollars were involved as additional revenue sources are added to the analysis. In fact, the standardized calculation of variability, the coefficient of variation, demonstrated the least profound disequalizing effects of the two additional sources. In both the range indicators and the variability indicators, the capital outlay and maintenance source had greater disequalizing effects than the discretionary source. Both the discretionary and capital outlay and maintenance funding sources resulted in decreased wealth neutrality when added to the foundation sources, as indicated by the relationship between per-pupil wealth and per-pupil revenues. The capital outlay and maintenance funding source caused a much more acute decrease in wealth neutrality than the discretionary source. In fact, the relationship between per-pupil wealth and per-pupil revenues including the capital outlay and maintenance source is virtually a direct relationship. The two additional funding sources demonstrated less pronounced effects on wealth neutrality as measured by univariate econometric methods (Gini coefficient and McLoone Index) The effects on wealth neutrality below the median were relatively slight, as evidenced by the McLoone index. Once again, the revenues generated through the capital outlay and maintenance source have more disequalizing effects on the

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distribution than those raised through the discretionary source. 143 Both sources result in disequalizing effects in the realm of taxpayer equity The inclusion of the discretionary source tended to eliminate the positive relationship between per-pupil tax effort and per-pupil revenues that existed when the foundation source was considered alone. The capital outlay and maintenance source had far greater effects; the inclusion of this source resulted in a negative relationship between per-pupil tax effort and per-pupil revenues raised. Implications The previous section included conclusions based on the results of this study. The current section includes a discussion of implications of this study for further research and practice. Further investigation into issues closely related to those examined in the present study is certainly warranted due to the significance of these issues. Chapter 2 included a summary of state programs which allow for equalization of discretionary revenues, generally through a guaranteed tax base or guaranteed yield program. A study which looks at such a second tier equalization program for the FEFP discretionary elements would be a natural extension of the present study. Included could be an analysis of the degree to which the system maintains the high degree of equity

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144 inherent in the foundation element, while examining the cost of maintaining such equity. Examinations relevant to the discretionary millage revenues, capital outlay and maintenance revenues, or the combination could be undertaken accordingly. This study provided a thorough analysis of the effects of discretionary levies on the equity of a foundation program of state support. However, further study into the adequacy of the system is needed. Specifically, the Florida Constitution requires that "adequate provision shall be made for a uniform system of free public schools." 1 The current study addressed the uniform provision, involving equity of the distribution of educational dollars throughout the state. Further examination into the "adequate provision" requirement may be beneficial. The study examined disequalizing effects of the discretionary levy, the funds derived from which may be used to support current operation of education. 2 The capital outlay and maintenance revenues, which are restricted by state statute, 3 were also examined. Further study into the specific nature of funding in this area may also be useful. In other words, to what extent are these revenues significant to the educational enterprise in the schools? Such a research question may help in understanding the extent to which those states that use a foundation system and have

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145 additional millage rates for capital financing purposes may be said to be subject to truly disequalizing effects. The present study addressed the effects of two nonvoted discretionary millage rates. Examinations of the effects on fiscal equity of the two voted millage rates, one which may be levied for current operation and the other for debt service, 4 may be beneficial. The present study included an examination into the fiscal equity of state funding among Florida school districts. This study therefore by its nature included a macroanalysis of a foundation distribution system. A microanalysis might also be part of a viable study, which would address the equity of the distribution of funds among individual schools. Such a study would include a picture of intradistrict fiscal equity, as opposed to the interdistrict examination included in the present study. The present study included an exhaustive analysis of the effects of local discretionary millage rates on the foundation program used to finance Florida public elementary and secondary schools. Certainly similar studies in other states utilizing a foundation program to support public education in which discretionary levies are included are warranted. Any of the preceding suggested studies would be worthwhile in enlightening researchers and practitioners in the area of education finance. Certainly, such enlightenment

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146 is warranted given the significance of providing appropriate fiscal support for a quality education for all children. Notes 1 Fla. Const. art. VII sec. 9(a). 2Fla. Stat. 236.25(1). 3Fla. Stat. 236.25(2). 4Fla. Stat. 200.001(3).

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APPENDIX A 1992-93 FEFP PROGRAM COST FACTORS Baaic Program Kindergarten and Grades 1, 2, and 3 Grades 4, 5, 6, 7, and 8 Grades 9, 10, 11 and 12 Mainstream Grades K-3 Grades 4-8 Grades 9-12 Program for At-Riak Student Dropout Prevention Intensive English/ESOL K-3 Intensive English/ESOL 4-8 Intensive English/ESOL 9-12 Bxceptional Student Program 1992-93 flctora 1.014 1.000 1. 225 2.028 2 000 2 450 1. 656 1.644 1.679 1 649 Educable Mentally Handicapped 2 184 Trainable Mentally Handicapped 2.922 Physically Handicapped 3.453 Physical & Occupational Therapy, Part-Time 9.527 Speech, Language, and Hearing Therapy, Part-Time 5 475 Speech, Language and Heari ng 3 176 Visually Handicapped, Part-Time 15 145 Visually Handicapped 4.353 Emotionally Handicapped, Part-Time 3 740 Emotionally Handicapped Specific Learning Disability, Part-Time Specific Learning Disability Gifted, Part-Time Hospita l & Homebound, Part-Time Profoundly Handicapped Adult General Education Program Adult Basic Skills Adult Secondary Education Lifelong Learning Adult Disabled Vocational-Technical Program Job Preparatory 1-=..il MlU.t A griculture l. 728 1. 537 Business and Office 1.229 1. 292 D i s tributive 1.112 1. 374 Diversified 1.185 .877 H ealth 1.513 .506 Public Service 930 .959 Horne Economics 1. 261 1 433 Industrial 1 746 1. 418 Exploratory (Grades 6-12) 1. 276 Vocational Mainstream 2.325 2 812 2 914 2 049 1.896 11 611 4 396 .745 763 700 1 337 Adult supplemental 1. 516 1 114 806 1 454 1.060 1. 367 1. 332 Source: Laws of Florida 92-293 item 516. 147

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APPENDIX B RAW DATA DISTRICT RLE Mill Dis Mill Cap Mill WFTE 92 Tax Roll Alachua 6.6000 0.510 0.6650 34363.36 $3,478,806,917 Baker 6.6740 0.510 2.0000 5638.30 $203,172,343 Bay 6.6000 0.510 0.9820 30808.57 $3,795,133,278 Bradford 6.7060 0.510 1. 5000 5263.75 $302,394,024 Brevard 6.4920 0.510 2.0000 74343.45 $13,222,913,419 Broward 6.6890 0.510 2.0000 255738.60 $48,030,220,202 Calhoun 6.6780 0.000 0.0000 2746.04 $148,560,257 Charlotte 6.4910 0.510 1. 2426 18080.74 $5,953,284,806 Citrus 6.7330 0.510 2.0000 16229.15 $3,584,008,767 Clay 7 .0170 0.510 2.0000 27819.02 $2,560,042,477 Collier 5.7430 0.510 1.7470 31270.45 $14,546,382,399 C-olumbia 6.4940 0.510 2.0000 10389.28 $672,339,379 Dade 6. 7130 0.510 1. 8000 435842.50 $65,960,000,000 De Soto 6.6000 0.510 1.5000 5637.27 $563,429,292 Dixie 6.7490 0.510 2.0000 2530.99 $168,357,071 Duval 6.4930 0.510 1.7990 146121.90 $18,967,436,166 Escambia 6.9750 0.510 2.0000 60560 51 $5,230,986,632 Flagler 6.4930 0.510 1.0000 6478.80 $2,009,940,591 Franklin 6.6520 0.510 0.1890 1968.49 $330,222,577 Gadsden 6.6550 0.510 2.0000 10355.10 $470,097,137 Gilchirst 6.4930 0.510 2.0000 2659.61 $153,229,270 Glades 6.8030 0.510 1. 4000 1147 .11 $340,092,453 Gulf 6.5750 0.510 0.2050 2735.36 $518,114,292 Hamilton 6.7860 0.510 0.9090 2839. 77 $320,766,531 Hardee 6.4930 0.510 1. 8000 6154.27 $542,297,841 Hendry 6.4960 0.510 2.0000 7681. 05 $1,087,719,471 Hernando 6.7600 0.510 1.1710 17050. 08 $3,118,144,088 Highlands 6.7310 0.510 1. 6390 12939.38 $2,078,389,640 Hillsboro 6.7230 0.510 2.0000 179306.20 $23,878,301,787 Holmes 6. 5110 0.000 0.0000 4141. 29 $160,952,311 Indian Ri 6.5810 0.510 1.5283 15462.45 $5,160,114,845 Jackson 6. 7240 0.510 0.0000 11082.06 $527,890,754 Jefferson 6.4930 0.510 0.7500 2708.36 $190,317,324 Lafayette 6.6700 0.510 2.0000 1262.06 $83,518,770 Lake 6.4950 0.510 2.0000 28531.06 $4,273,371,924 Lee 6.6910 0.510 2.0000 59349.72 $18,800,716,150 Leon 6.4940 0.510 2.0000 41293.80 $4,775,685,713 Levy 6.4950 0.510 2.0000 6607.99 $566,145,772 Liberty 6.9220 0.510 0.0000 1481.31 $84,118,010 Madison 6.5680 0.510 0.0000 4007.51 $222,493,571 Manatee 6.5050 0.510 2.0000 37127.97 $8,159,607,470 Marion 6.6450 0.510 1.0000 39570.57 $4,861,806,224 Martin 6.1560 0.510 1. 6900 17224.81 $7,319,424,936 148

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149 Monroe 5.0000 0.510 0.1970 11519. 42 $6,514,269,506 Nassau 6.5870 0.510 2.0000 10601.30 $1,647,307,917 Okaloosa 6.6320 0.510 1.3000 33451.39 $3,489,704,869 Okeechobe 6.4910 0.510 2.0000 7621. 30 $764,287,540 Orange 6.4930 0.510 2.0000 145712.90 $32,261,619,201 Osceola 6.4930 0.510 2.0000 27511.64 $4,471,525,576 Palm Beac 6.4960 0.510 2.0000 162107.30 $51,030,744,544 Pasco 6.5740 0.510 1. 5030 47364.47 $6,961,601,855 Pinellas 6.4900 0.510 2.0000 136565. 50 $29,572,044,680 Polk 6.5610 0.510 1. 4130 87232.04 $10,792,982,876 Putnam 6 6510 0.510 0.0000 14843.76 $1,926,565,256 St. Johns 6.4930 0.510 1. 5000 18856.94 $3,813,970,113 St. Lucie 6.4930 0.510 2.0000 29244.81 $6,867,017,584 Santa Rosa 6.6320 0 .110 1. 4000 21135 .17 $2,100,751,939 Sarasota 6.5620 1.019 2.0000 43522.73 $14,931,123,231 Seminole 6.4930 0.510 2.0000 62148. 04 $9,970,948,164 Sumter 6.8310 0.510 2.0000 6537.74 $477,986,406 Suwannee 6.4970 0.510 2.0000 6939.02 $429,891,014 Taylor 6.4930 0.510 2.0000 4728.61 $562,380,155 Union 6.4930 0.510 1. 5000 2500.85 $82,190,841 Volusia 6.4920 0.510 1.0500 65682.33 $11,922,873,987 Wakulla 6.9020 0.510 2.0000 4491. 72 $250,373,159 Walton 6.4950 0.428 1. 4500 5605.22 $1,372,448,816 Washington 6.6310 0.510 0.0000 4916.63 $256,872,437 TOTALS 2645391 $479,892,428,547 DISTRICT State Fnd Rev RLE Rev Tot Found Rev Alachua $67,972,347 $21,831,138 $89,803,485 Baker $13,472,776 $1,311,453 $14,784,229 Bay $57,038,753 $24,054,360 $81,093,113 Bradford $12,157,298 $1,978,705 $14,136,003 Brevard $117,901,108 $81,550,996 $199,452,104 Broward $398,843,006 $307,496,733 $706,339,739 Calhoun $6,351,194 $945,735 $7,296,929 Charlotte $10,937,516 $37,067,682 $48,005,198 Citrus $20,255,961 $23,139,088 $43,395,049 Clay $55,833,897 $17,082,058 $72,915,955 Collier $6,840,013 $79,630,197 $86,470,210 Columbia $23,165,150 $4,150,178 $27,315,328 Dade $778,381,756 $423,247,923 $1,201,629,679 De Soto $11,461,685 $3,723,639 $15,185,324 Dixie $5,903,145 $1,084,036 $6,987,181 Duval $266,270,768 $116,997,785 $383,268,553 Escambia $122,832,603 $35,030,970 $157,863,573 Flagler $5,127,817 $12,507,135 $17,634,952 F,ranklin $3,578,556 $2,087,227 $5,665,783 Gadsden $24,893,545 $3,091,940 $27,985,485 Gilchirst $6,645,060 $947,966 $7,593,026 Glades $1,112,460 $2,199,740 $3,312,200 Gulf $4,553,601 $3,237,207 $7,790,808

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150 Hamilton $5,866,676 $2,068,458 $7,935,134 Hardee $12,916,437 $3,350,674 $16,267,111 Hendry $14,036,159 $6,733,161 $20,769,320 Hernando $25,643,121 $20,052,749 $45,695,870 Highlands $21,439,484 $13,290,159 $34,729,643 Hillsboro $312,282,987 $153,839,161 $466,122,148 Holmes $10,374,661 $995,562 $11,370,223 Indian Ri $8,752,152 $32,311,482 $41,063,634 Jackson $26,359,540 $3,376,897 $29,736,437 Jefferson $6,161,443 $1,175,250 $7,336,693 Lafayette $3,049,267 $529,217 $3,578,484 Lake $47,935,154 $26,674,847 $74,610,001 Lee $34,774,937 $120,127,349 $154,902,286 Leon $76,953,706 $29,983,629 $106,937,335 Levy $14,745,879 $3,503,984 $18,249,863 Liberty $3,535,190 $553,152 $4,088,342 Madison $9,433,200 $1,388,271 $10,821,471 Manatee $48,257,490 $50,673,287 $98,930,777 Marion $73,030,612 $30,836,850 $103,867,462 Martin $4,094,002 $42,953,658 $47,047,660 Monroe $3,765,645 $30,959,083 $34,724,728 Nassau $18,350,961 $10,312,006 $28,662,967 Okaloosa $66,416,421 $22,250,197 $88,666,618 Okeechobe $14,632,042 $5,386,969 $20,019,011 Orange $187,625,033 $201,039,228 $388,664,261 Osceola $44,516,436 $27,687,385 $72,203,821 Palm Beac $126,088,619 $324,563,960 $450,652,579 Pasco $80,941,198 $43,579,846 $124,521,044 Pinellas $177,530,622 $183,812,608 $361,343,230 Polk $159,690,707 $68,140,789 $227,831,496 Putnam $27,605,489 $12,172,906 $39,778,395 St Johns $25,444,171 $24,045,476 $49,489,647 St. Lucie $35,002,102 $42,358,168 $77,360,270 Santa Rosa $42,761,140 $13,321,786 $56,082,926 Sarasota $22,623,832 $93,630,685 $116,254,517 Seminole $100,485,690 $61,504,298 $161,989,988 S\.unter $14,513,263 $3,110,168 $17,623,431 Suwannee $16,037,571 $2,702,417 $18,739,988 Taylor $9,096,620 $3,534,882 $12,631,502 Union $6,470,159 $506,982 $6,977,141 Volusia $99,938,262 $73,533,133 $173,471,395 Wakulla $10,347,481 $1,649,324 $11,996,805 Walton $7,173,923 $8,472,952 $15,646,875 Washington $11,338,261 $1,961,421 $13,299, 682 TOTALS $4,089,567,760 $3,009,048,357 $7,098,616,117

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REFERENCES Agresti, Alan and Barbara Finlay Agresti, Statistical Methods for the Social Sciences (San Fransisco: Dellen Publishing Co., 1979). Alexander, Kern and Lee Shiver, "Equalization Among Florida school Districts," Journal of Education Finance 9 (Summer, 1983), 55-62. Anderson, T.W. and Stanley L. Sclove, The Statistical Analysis of Data, 2nd ed. (Palo Alto, CA: The Scientific Press 19 8 6 ) Berne,Robert, "Equity Issues in School Finance," Journal of Education Finance 14 (Fall 1988). Robert Berne and Leanna Stiefel, "Equity Standards for State School Programs: Philosophies and Standards Relevant to Section 5(d) (2) of the Federal Impact Aid Program," Journal of Education Finance 18 (Summer, 1993), 89-112. Berne, Robert and Leanna Stiefel, The Measurement of Equity in School Finance (Baltimore: The Johns Hopkins University Press, 1984). Burrup, Percy E., Vern Brimley, Jr, and Rulon Garfield, Financing Education in a climate of Change. 4th ed. (Boston: Allyn and Bacon, Inc., 1988). Carroll, Stephen J., The search for Equity in School Finance: Results from Fiye States. (Santa Monica, CA: The Rand Corporation, 1979). Carroll, Stephen J. and Rolla E. Park, The Search for Equity in School Finance (Cambridge, MA. : The Ballinger Press, 1983) Chaterjee, Samprit and Bertram Price, Regression Analysis by Example. 2nd ed. (New York: John Wiley & Sons, inc., 1991) cubberley, Ellwood P., school Funds and Their Apportionment (New York: Columbia University, 1906). 151

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152 Currie, Gaylon D., An Examination of the EQUity of Capital outlay Funding of Public Education: A comparison of the E@ity of the current Method of Distributing capital outlay Funding in the state of Florida and the EQUity of General Expenditures for Education. {Doctoral Dissertation, University of Florida, 1992). Division of Public Schools, 1992-93 Florida Education Finance Program {Tallahassee, FL: Florida Department of Education, 1992). Division of Public Schools, Profiles of Florida school Districts 1992-93 student & staff Data {Tallahassee, FL: Florida Department of Education, 1992). Florida Constitution. Florida Statutes 1992. Georgia Code 1992. Gold, Stephen D., David M. Smith, Stephen B Lawton, and Andrea c. Hyary {eds.), Public school Finance Programs of the united states and Canada. 1990-91. vol. 1 {Albany, NY: Center for the Study of the States, 1992). Guthrie, James W., Walter I. Garms, and Lawrence C. Pierce, school Finance and Education Policy: Enhancing Efficiency, EQUality, and Choice, 2nd ed. {Englewood Cliffs, NJ: Prentice-Hall, 1988). Johns, Roe L. and Richard G. Salmon, "The Financial Equalization of Public Schools Support Programs in the United States for the School Year 1968-69," Status and Impact of Educational Finance Programs {Gainesville, FL: National Education Finance Project, 1971). Johns, Roe L., Edgar Morphet, and Kern Alexander, The. Economics and Financeing of Education. 4th ed. {Englewood Cliffs, NJ: Prentice Hall, 1983). Jones, Thomas H., Introduction to School Finance (New York: Macmillan Publishing Company, 1985). Kentucky Revised Statutes Annotated 1992. Laws of Florida 1992. Montana Code Annotated 1992.

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Monk, David H., Educational Finance: An Economic A:Qoroach (New York : McGraw-Hill, 1990) 153 Morphet, Edgar "Characteristics of State Support Programs," in R.L. Johns (ed.), Problems and Issues in school Finance (New York: National Conference of Professors of Educational Administration, 1952). Morrison, Henry c. School Revenue (Chicago, IL: University of Chicago Press 1930). Mort, Paul R The Measurement of Educational Need (New York: Teachers College, Columbia University, 1924). Mort, Paul R., State suooort for Public Schools (New York: Teachers College, 1926). Mort, Paul R., state suooort for Public Education (Washington, DC: The American Council on Education, 1933). Mort Paul R. and Walter c. Reusser, Public School Finance (New York: McGraw-Hill Book Company, Inc., 1941). Mort, Paul R., Walter c. Reusser, and John w Polley, Public school Finance; Its Background, structure, and ooeration (New York: McGraw-Hill Book Company, Inc ,1960). National Center for Educational Statistics, Digest of Education statistics (Washington, DC: u s. Department of Education, 1992). Oklahoma School Code 1992 O'Loughlin, J. Michael, R. Craig Wood, and Davids. Honeyman, A study of the Effects of the soarsity suoolement on the Equity of the Florida Education Finance Program (Gainesville, FL: UCEA Center for Education Finance, 1992) President's Commission on School Finance, Review of Existing State school Finance Programs (Washington, D.C.: united States Government Printing Office, 1972). Sparkman, William E., "School Finance Challenges in State Courts," in Julie K Underwood and Deborah A. Verstegen (eds ), The Imacts of Litigation and Legislation on Public school Finance (New York: Harper & Row, 1990).

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154 Stark, Steven, Davids. Honeyman, and R. Craig Wood, "The Florida Lottery: Its Use as a Substitute for Existing Funds and its Effects on the Equity of School Funding," Journal of Education Finance 18 (Winter, 1993), 231-242. Stark, Steven D., David S. Honeyman, and R. Craig Wood, An Examination of the Florida Lottery (Gainesville, FL: UCEA Center for School Finance, 1991). Stellar, Arthur W., "Implications for Programmatic Excellence and Equity," in Van D. Mueller and Mary P. McKeown (eds.), The Fiscal, Legal, and Political Aspects of Elementary and secondary Education (Cambridge, MA: Ballinger, 1986). Strayer, George D. and Robert M. Haig, The Financing of Education in the state of New York. vol. 1 (New York: Macmillan, 1923). Swanson, Austin D. and Richard A. King, School Finance: Its Economics and Politics (New York: Longman, 1991) Texas Education Code Annotated 1992. Thompson, David C., R. Craig Wood, and David S. Honeyman, Fiscal Leadership for schools: concepts and Practices. (White Plains, NY: Longman Publishing Group, 1994). Underwood, Julie K. and Deborah A. verstegen, "School Finance Challenges in Federal Courts: Changing Equal Protection Analysis," in Julie K. Underwood and Deborah A. verstegen (eds.), The rmacts of Litigation and Legislation on Public school Finance (New York: Harper & Row, 1990) Updegraff, Harlan, Rural school survey of New York state: Financial support (Ithca, NY: The Joint committee on Rural Schools, 1922). U.S. Constitution. Vaughan, David, "The Impact of Florida's 1973 School Finance Reform on Poor and Minority Children," in Robert Brischetto (ed.), Minorities, the Poor, and school Finance Reform (Washington: National Institute of Education, 1979). Verstegen, Deborah A School Finance at a Glance (Denver, CO: Education Commission of the States, 1990).

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155 ward, James Gordon and William E. Camp, "An Analytic View of Two Decades of Reform in School Finance: Some Comments," Journal of Education Finance 14 (Summer, 1988), 1-17. Webb, L. Dean, Martha M. McCarthy, and Stephen B. Thomas, Financing Elementary and secondary Education (Columbus: Merrill Publishing Co., 1988). Wood, R. Craig and David S. Honeyman, "Rapid Growth and Unfulfilled Expectations: Problems for School Finance in Florida," in James Gordon Ward and Patricia Anthony (eds.), Who Pays for Student Diversity? (Newbury Park, CA: Corwin Press, Inc., 1992). wood, R. Craig and David c. Thompson, Education Finance Law; constitutional challenges to state Aid Plans: An Analysis of Strategies (Topeka, KS: National Organization of Legal Problems in Education, 1994). Legal citations Board of Education of city school District, etc, v, Walter, 390 N.E.2d 813 (1980). Board of Education, Levittown, etc. v. Nyquist. N.Y., 439 N.E.2d 359 (1982). Carrollton-Farmers Branch Independent school Dist. v. Texas. 826 S.W.2d 489 (1992). Christensen v. Graham, Dist. court of App., case No. 88-69. Dupree v, Alma school District no. 30, 651 s.w.2d 90 (1983). Edgewood Independent school District v. Kirby. 777 s.w. 2d 391 (1989). Fair school Finance council of Oklahoma, Inc. v. Oklahoma. 746 P 2d 1135 (1987). Florida Department of Education v. Glasser, 622 so.2d 944 (Fla. 1993). Helena Elementary school District No. 1 v. state of Montana, 769 P. 2d 584 (1989). Hornbeck v, somerset county Board of Education, 458 A. 2d 758 (M.D. 1983). McDaniel v, Thomas, 285 s.E. 2d 156 (1981).

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Milliken V, Green, 212 N.W.2d 711 (1973). Olsen v, state. or 554 P.2d 239 (1976). Pauley Y, Kelley, 255 S.E. 2d 859 (1979). Richland County v, Campbell, 364 S.E. 2d 470 (S.C. 1988). Robinson Y, Cahill, 287 A.2d 187 (1972). Rose v, The council for Better Education. Inc., 790 s.w.2d 186 (1989). San Antonio Independent school District v, Rodriguez, 411 U.S. 1 (1973). 156 san Antonio Independent school District v, Rodriquez, 337 F. Supp. 280 (1972). Serrano v, Priest, 487 P. 2d 1241 (1971). Thompson Y, Enkelking. 537 P.2d 635 (1975).

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BIOGRAPHICAL SKETCH Jeffrey A. Maiden obtained his bachelor's, master's, and doctoral degrees from the University of Florida. He has taught both in secondary and higher education in the state of Florida 157

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I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. R. Craig Wood, Chair erson Professor of Educational Leadership I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of o tor of hilosophy. Cochair Associate Profe sor of Educational Leadership I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. Cifm~UJ;/k~ arnes W. Hensel Professor of Educational Leadership I certify that I have read this study and that in my opinion it conforms to acceptable standards of scholarly presentation and is fully adequate, in scope and quality, as a dissertation for the degree of Doctor of Philosophy. M. David Miller Associate Professor of Foundations of Education

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This dissertation was submitted to the Graduate Faculty of the College of Education and to the Graduate School and was accepted as partial fulfillment of the requirements for the degree of Doctor of Philosophy. August, 1994 College of Educat~ Dean, Graduate School

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