|
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EAW9CDIDY_SYUXGU INGEST_TIME 2011-08-29T14:15:50Z PACKAGE AA00002068_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES
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
PAGE 12
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
PAGE 13
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.
PAGE 14
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.
PAGE 15
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
PAGE 16
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
PAGE 17
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.
PAGE 18
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.
PAGE 19
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
PAGE 20
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
PAGE 21
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
PAGE 22
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
PAGE 23
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
PAGE 24
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
PAGE 25
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
PAGE 26
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
PAGE 27
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
PAGE 28
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
PAGE 29
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
PAGE 30
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
PAGE 31
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
PAGE 32
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
PAGE 33
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
PAGE 34
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
PAGE 35
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
PAGE 36
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
PAGE 37
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
PAGE 38
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
PAGE 39
(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
PAGE 40
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
PAGE 41
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
PAGE 42
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
PAGE 43
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
PAGE 44
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
PAGE 45
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
PAGE 46
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
PAGE 47
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
PAGE 48
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.
PAGE 49
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
PAGE 50
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
PAGE 51
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
PAGE 52
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
PAGE 53
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,
PAGE 54
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
PAGE 55
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
PAGE 56
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
PAGE 57
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
PAGE 58
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
PAGE 59
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
PAGE 60
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
PAGE 61
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
PAGE 62
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.
PAGE 63
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
PAGE 64
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
PAGE 65
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
PAGE 66
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,
PAGE 67
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
PAGE 68
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
PAGE 69
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
PAGE 70
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
PAGE 71
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
PAGE 72
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.
PAGE 73
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
PAGE 74
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.
PAGE 75
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.
PAGE 76
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
PAGE 77
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.
PAGE 78
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.
PAGE 79
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
PAGE 80
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.
PAGE 81
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.
PAGE 82
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
PAGE 83
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
PAGE 84
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.
PAGE 85
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
PAGE 86
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
PAGE 87
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
PAGE 88
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
PAGE 89
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
PAGE 90
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.
PAGE 91
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
PAGE 92
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
PAGE 93
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.
PAGE 94
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
PAGE 95
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
PAGE 96
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
PAGE 97
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
PAGE 98
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
PAGE 99
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
PAGE 100
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.
PAGE 101
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:
PAGE 102
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
PAGE 103
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
PAGE 104
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.
PAGE 105
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.
PAGE 106
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
PAGE 107
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
PAGE 108
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
PAGE 109
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
PAGE 110
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
PAGE 111
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:
PAGE 112
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.
PAGE 113
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.
PAGE 114
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)
PAGE 115
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.
PAGE 116
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
PAGE 117
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:
PAGE 118
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.
PAGE 119
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
PAGE 120
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).
PAGE 121
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
PAGE 122
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.
PAGE 123
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.
PAGE 124
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
PAGE 125
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
PAGE 126
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
PAGE 127
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
PAGE 128
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
PAGE 129
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.
PAGE 130
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
PAGE 131
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
PAGE 132
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
PAGE 133
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
PAGE 134
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
PAGE 135
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
PAGE 136
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
PAGE 137
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
PAGE 138
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.
PAGE 139
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
PAGE 140
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
PAGE 141
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
PAGE 142
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).
PAGE 143
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
PAGE 144
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
PAGE 145
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
PAGE 146
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.
PAGE 147
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
PAGE 148
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
PAGE 149
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
PAGE 150
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
PAGE 151
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
PAGE 152
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
PAGE 153
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
PAGE 154
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).
PAGE 155
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
PAGE 156
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
PAGE 157
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
PAGE 158
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
PAGE 159
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
PAGE 160
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.
PAGE 161
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).
PAGE 162
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).
PAGE 163
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).
PAGE 164
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).
PAGE 165
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
PAGE 166
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
PAGE 167
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
PAGE 168
L]) I 1 8D I 11 UNIVERS ITY OF FLORIDA 111 1111111111111I IIIII IIIII II IIIIII IIII II IIII IIII IIII IIII IIIII I I 3 1262 08556 8888
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
Dedicated to the memory of my stepfather,
Dr. John Robert Snyder.
ACKNOWLEDGEMENTS
I express my deep appreciation to my Lord and Savior,
Jesus Christ. I thank Him 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. David S.
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.
in
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
TABLE OF CONTENTS
ACKNOWLEDGEMENTS iii
ABSTRACT VÜ
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 77
Population 77
FEFP 80
Design 89
Measurement 92
Conclusion 110
Notes Ill
CHAPTER 4 RESULTS 117
Resource Accessibility 118
Wealth Neutrality 124
Tax Yield 130
Conclusion 132
Notes 134
v
CHAPTER 5 DISCUSSION
135
Summary 135
Observations 137
Conclusions 141
Implications 143
Notes 146
APPENDIX A FEFP COST FACTORS 147
APPENDIX B RAW DATA 148
LIST OF REFERENCES 151
BIOGRAPHICAL SKETCH 157
vi
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
vi 1
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.
Vlll
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, it 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
equity, vertical equity, and wealth neutrality.
1
2
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
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
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
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.
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
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.
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.
7
The study examined fiscal data from public elementary
and secondary schools only. Neither private schools nor
higher education organizations were considered.
Overview of the NethodQloqy
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
8
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
^Robert Berne, "Equity Issues in School Finance,"
Journal of Education Finance 14 (Fall 1988), 159.
9
^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. Egualitv. and Choice, 2nd ed.
(Englewood Cliffs, NJ: Prentice-Hall, 1988), 130; David H.
Monk, Educational Finance: An Economic Approach (New York:
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 David S. Honeyman, Fiscal
Leadership for Schools: Concepts and Practices (White Plains,
NY: Longman Publishing Group, 1994), 53.
^Robert Berne and Leanna Stiefel, The Measurement of
Eouitv 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.
4Berne and Steifel, The Measurement of Eouitv, 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 Eouitv, 17;
Burrup, Brimley, and Garfield, 80-81; Webb, McCarthy, and
Thomas, 189; Berne and Stiefel, “Equity Standards," 95.
6Berne and Stiefel, The Measurement of Eouitv. 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.
10
^Guthrie, 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.
^Arthur 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.
l^Burrup, Brimley, and Garfield, 32; Guthrie, Garms, and
Pierce, 28-34; Webb, McCarthy, and Thomas, 192; Monk, 4-11;
Swanson and King, 259-278.
UBerne, "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.
^Thompson, Wood, and Honeyman, 223-224.
l^Gold, Smith, Lawton, and Hyrary, 18.
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
12
The Theory of Per-Puoil 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
13
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:
[1]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
14
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
15
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."12
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
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 using 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
in the state. Mort referred to this method as the
"satisfactory equalization program."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
education 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
18
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
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
20
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.
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 San
Antonio v. Rodriquez,30 which set the tone for school finance
decisions in the federal courts. The primary issue was
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
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."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
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
v. 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.46 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
24
The court declared "irrefutable" the fact that a suspect
class consisting of less wealthy individuals had been
discriminated 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
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
26
the foundation system in violation of the U.S. Constitution63
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
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
28
for funding schools resulting in alleged deprivation of
educational opportunity for students living in poorer areas
of the state.78
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.79
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.80
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.81
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.82
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.83
The court declared education a fundamental,
constitutionally protected right in West Virginia.84 The
court found "broad and comprehensive constitutional
inadequacies in the structure and composition" of the entire
school system, including its method of finance.85 Some
districts were "woefully inadequate," though all needed some
degree of improvement.86
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.87 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.88 Finding no fundamental interest involved, only the
rational relationship test was applied to the system.89
Furthermore, the court ruled that, in deference, the
30
constitutionality of legislative acts should be assumed
unless a clear violation were evident.90
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
31
(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.
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.100
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
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 Rodriguez106 in deciding to use the
rational basis test of the school finance system. The state
had a rational purpose in allowing local control of
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.108
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.109 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
34
education. With shared responsibility some measure of
funding differentiation should be expected.111
Citing Rodriguez112 in dealing with the U.S.
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 in 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
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.119
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.123 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.124 The court furthermore
declared that the purpose of the plan was to allow local
36
control of education and autonomy, and therefore a rational
relationship existed between the system and a legitimate
state purpose.125
The plaintiffs argued that the U.S. Supreme Court
decision in Rodriguez126 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 in 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
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.132 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
constitutional.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
38
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
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
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
40
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
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.
41
This was not the case, and therefore the school system was
not financially efficient.148
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.150
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
42
supporting it, because efficiency was required by the state
Constitution.151
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.152
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
43
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
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
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.159 Operationally, the amount of
state aid is determined as follows:
Si = (Pi x 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
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,
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
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 Georgia, for
example, the Quality Basic Education (QBE) foundation program
is supplemented by a GTB component. Under the QBE, state aid
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
49
which are not classified as isolated. These districts must
raise 50 percent of the foundation amount.175
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
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
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
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
53
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
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.192
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
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.195 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.
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
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. 204 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.206
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
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
58
Indexes were slightly smaller, .97185 and .97283, for the
other two levels of aggregation.212
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,
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
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.219 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
61
The results of the examination at the first level, the
FEFP, 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
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.225 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.229
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
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
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.
Note?
^Ellwood P. Cubberley, School Funds and Their
Apportionment (New York: Columbia University, 1906) .
2lbid., 17.
2lbid., 4.
4Ibid.
^George D. Strayer and Robert M. Haig, The Financing of
Education in the State of New York, vol. 1 (New York:
Macmillan, 1923).
6Ibid., 174.
7Ibid., 174-175.
8Ibid., 175-176.
65
9Ibid., 176.
10Harlan Updegraff, Rural School Survey of New York
State; Financial Support (Ithaca, NY: The Joint Committee on
Rural Schools, 1922).
nlbid., 136.
12Ibid., 110-115.
^Henry C. Morrison, School Revenue (Chicago, IL:
University of Chicago Press, 1930).
14Ibid., 195.
15Ibid., 208-214.
16Ibid., 200.
17Paul R. Mort, The Measurement of Educational Need (New
York: Teachers College, Columbia University, 1924) .
i^Ibid., i.
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).
22Roe 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
66
Educational Finance Programs (Gainesville, FL: National
Education Finance Project, 1971), 122.
24Ibid.
23president's Commission on School Finance, Review of
Existing State School Finance Programs (Washington, D.C.:
United States Government Printing Office, 1972).
26Ibid., 13.
27Ibid., 14.
28U.S. Const, amend. XIV.
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 Impacts of Litigation and Legislation
on Public School Finance (New York: Harper & Row, 1990), 177.
30San Antonio Independent School District v. Rodriguez,
411 U.S. 1 (1973).
3:*-Id. at 17.
32San Antonio Independent School District v. Rodriguez.
337 F.Supp 280.
33Id. at 282.
34San Antonio. 411 U.S. at 17-23.
35Id., 23-24.
36Id. at 24.
37Id. at 33.
38ld., 33-34.
39ld. at 40.
4°ld. at 45.
41Id., 48-50.
67
42Id., 53-54.
43Id. at 55.
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).
46Id. at 1244.
47Id. at 1250.
48The 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.
49Serrano. 487 P.2d at 1250.
50Id., 1250-1252.
51-Id. , 1252-1253.
52Id., 1255-1256.
53Id., 1256-1259.
54Id., 1259-1263.
55Robinson v, Cahill. 287 A.2d 187 (1972).
56Id., 189-190.
57Id., 200-205.
58Id., 199-200.
59Id. at 205.
60Id. at 211.
61Id., 212-213.
62Id. at 214.
68
83The 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.
64Robinson. 287 A.2d at 217.
65Milliken v. Green. 212 N.W.2d 711 (1973).
66Id. at 714.
87Id. at 716.
68Id., 716-718.
69Id. at 719.
70Id. at 720.
^Thompson v. Enkelkina. 537 P.2d 635 (1975).
72Id., 638-640.
73Id., 641-642.
74Id. at 642.
75Id., 642-645.
76Id., 646-653.
770lsen v. State. Or. 554 P.2d 239 (1976).
78Id., 140-142.
79Id., 144-145.
80Id., 145-146.
81Id. at 147.
82Id. at 148.
83Paulev v, Kellev. 255 S.E.2d 859 (1979).
69
84Id. at 878.
"id.
86ld.
87Id., 878-883.
88Board of Education of City School District, etc, v.
Walter. 390 N.E.2d 813 (1980).
89Id. at 819.
"id.
91Id. at 820.
92Id. at 821.
93Id., 823-826.
94Id. at 822.
95McDaniel v. Thomas. 285 S.E.2d 156 (1981).
96Id. at 159.
97Id., 160-161.
98Id., 164-165.
99San Antonio. 411 U.S. 1 (1973).
1 "McDaniel. 285 S.E.2d at 167.
101Id. at 168.
102Id., 165-166.
103Board of Education. Levittown. etc, v. Nvouist. N.Y.,
439 N.E.2d 359 (1982).
104Id. at 363.
105Id., 363-364.
70
106San Antonio. 411 u.S. 1 (1973).
107Levittown. N.Y., 439 N.E.2d at 364-365.
108Id. at 368-369.
109Hornbeck v. Somerset Countv Board of Education. 458
A.2d 758 (M.D. 1983).
110Id. at 776.
mid., 776-780.
112San Antonio. 411 U.S. 1 (1973).
113Hornbeck. 458 A.2d at 787-788.
114Id., 782-783.
115Id., 786-787.
116Id., 788-790.
117Pupree v. Alma School District no. 30. 651 S.W.2d 90
(1983) .
118Id., 92-93.
119Id. at 93.
120Fair School Finance Council of Oklahoma. Inc, v.
Oklahoma. 746 P.2d 1135 (1987).
121Id. at 1138.
122Id. at 1144.
123San Antonio. 411 U.S. 1 (1973).
124Fair School Finance. 746 P.2d at 1144-1146.
125Id., 1146-1147.
126San Antonio. 411 U.S. 1 (1973).
127Fair School Finance. 746 P.2d at 1147.
71
128Id. at 1148.
129Id., 1148-1149.
130Id., 1149-1150.
131ld. at 1150.
132Id., 1141-1142.
133Id., 1142-1143.
134Id. at 1150.
135Richland Countv v. Campbell. 364 S.E.2d 470 (S.C.
1988) .
136Id., 471-472.
137Helena Elementary School District No. 1 v. State of
Montana. 769 P.2d 584 (1989).
138Id. at 686.
139ld. at 689.
140Id. at 690.
141Id. at 690.
142Id. at 691.
443Edcrewood Independent School District v. Kirbv. 777
S.W.2d 391 (1989).
144Id. at 392.
145Id. at 393.
146Id. at 392.
147Id. at 394.
148Id., 394-398.
72
149Rose v. The Council for Better Education, Inc.. 790
S.W.2d 186 (1989) .
150Id. at 215.
151Id., 208-209.
152Id., 210-213.
153Id. at 213.
134R. 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), 25.
333David c. Thompson, R. Craig Wood, and David S.
Honeyman, Fiscal Leadership for Schools; Concepts and
Practices (White Plains, NY: Longman Publishing Group, 1994),
220.
156Ibid., 221.
157wood and Thompson, 26.
158-phompSorif wood, and Honeyman, 223.
159lbid., 221.
160Ibid., 222.
161gtephen 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.
162Ibid., 22-23.
163 ibid.
164Deborah A. Verstegen, School Finance at a Glance
(Denver, CO: Education Commission of the States, 1990), 2.
165 Thompson, Wood,and Honeyman, 225.
166Ibid., 225-226.
73
167Ibid., 226.
168Ibid., 228.
169Ibid., 229.
170Ibid., 229-230.
171Ga. Code 20-2-165(b).
172Ga. Code 20-2-164.
173Ga. Code 20-2-166.
l^Mont. Code Ann. 20-9-301 to 20-9-368.
l73Mont. Code Ann. 20-0-301 to 20-9-366.
l78Mont. Code Ann. 20-9-367 to 20-9-368.
1770k. Sch. Code 70 18-109.2(B)(1).
1780k. Sch. Code 70 18-109.2(B)(3).
^79Ky. Rev. Stat. Ann. 160.470(12)(a).
188Ky. Rev. Stat. Ann. 157.440(1)(a).
ISl-Ky. Rev. Stat. Ann. 157.440(2).
182Carrollton-Farmers Branch independent School Dist. v.
Texas. 826 S.W.2d 489 (1992).
Tex.
Educ.
Code
Ann.
16.252.
Tex.
Educ.
Code
Ann.
16.302
Tex.
Educ.
Code
Ann.
16.303.
l88David 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).
187Ibid., 15.
188Ibid., 17-25.
74
189Ibid., 25-37.
198Stephen J. Carroll and Rolla E. Park, The Search for
Ecruitv in School Finance (Cambridge, MA.: The Ballinger
Press, 1983).
191Stephen J. Carroll, The Search for Equity in School
Finance: Results from Five States (Santa Monica, CA: The Rand
Corporation, 1979).
l92Carroll and Park, 83.
193Ibid, 84-85.
194Ibid, 85.
195Ibid, 87.
196Ibid.
197Ibid, 88.
198Ibid, 91.
l99Kern Alexander and Lee Shiver, "Equalization Among
Florida School Districts," Journal of Education Finance 9
(Summer, 1983), 55-62.
200Ibid., 55-56.
201lbid., 56-57.
202Ibid., 57-59.
283lbid.
284Ibid.
288lbid.
59.
59-61.
62.
288Steven D. Stark, David S. 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
75
of School Funding,* Journal of Education Finance 18 (Winter,
1993), 231-242.
207Stark, Honeyman, and Wood, An Examination of the
Florida Lottery. 7.
208Stark, Honeyman, and Wood, An Examination pf the
Florida Lottery. 13.
209Stark, Honeyman, and Wood, An Examination of the
Florida Lottery, 14.
2;*-8Stark, Honeyman, and
Florida Lottery. 15-16.
2Hstark, Honeyman, and
Florida Lottery, 16.
212Stark, Honeyman, and
Florida Lottery. 16-17.
Wood, An Examination of the
Wood, An Examination of the
Wood, An Examination of the
2^2J. Michael O'Loughlin, R. Craig Wood, and David S.
Honeyman, ¿..study of the Effects of the Sparsity Supplement
on the Eauitv of the Florida Education Finance Program
(Gainesville, FL: UCEA Center for Education Finance, 1992) .
214lbid., 13-14.
215Ibid., 12.
216Ibid., 14-24.
217Ibid., 19-24.
218Ibid., 24.
219Gayion 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 Stat.e_.QE Florida and the Equity of
General Expenditures for Education (Doctoral Dissertation,
University of Florida, 1992).
228Ibid, 98.
22llbid., 114-120.
76
222Ibid.< 120-126.
223Ibidf 127-128.
224Ibidf 128-129.
225Ibid< 145-146.
226Ibid, 132.
227Ibid., 115-120.
228Ibid., 120-126.
229Ibid., 127-128.
230Ibid., 128-129.
231ibid., 145-147.
232Ibid., 153.
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
revenues were equalized by the state among the districts.
77
78
Additionally, local districts had the authority to raise two
discretionary 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
requirements were being met was addressed in the present
study.
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
80
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 1979-
80, 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
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.
FEFP
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
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.12
82
The aggregate amount of moneys to be distributed to the
local school districts from the state is annually determined
through legislative appropriation.13 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
district1s 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.
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
84
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
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.28 For the 1992-93 fiscal year, the aggregate
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.30
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.
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
categories require both local school board and voter
approval. The fourth category is a special school operating
millage45 and the fifth is a debt service millage.46 Local
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
obtained 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 1992-
93 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
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.53
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
89
Finally, these revenues could be used to support payment of
the costs of leasing relocatable educational facilities.58
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
fiscal year. The current section includes a discussion of
the design 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
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
identified 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
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
92
only, demonstrated the total disequalizing effects of the
revenues generated through the two millage rates.
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
the 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.
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:
[I(Pi Xi) / Xpi] / 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:
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
95
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.
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 0 to 1. The lower a federal range ratio,
the more equivalent the accessibility to resources, with 0
96
indicating perfect equity. Increasing federal range ratios
indicate increasing inequity in the distribution of funds.
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:
StPi (Xp - Xi)2] / iPi
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.
97
The standard deviation is the square root of the
variance. The following formula is used to calculate the
standard deviation:
V (Z[Pi (Xp - Xi)2] / iPi}
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 0 and 1.
98
The following formula is used to calculate the coefficient of
variation:
V {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-
pupil 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 0 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
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 is 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
those related to regression, follows.
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
101
school support are raised through property taxation in
Florida.
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:
I[pi (Xi - Xp) (Wi - Wp)] /
Kpi [V (xi - xp)2] [V (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
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 0 and 1, with 0 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 0 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
103
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.
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
as a function of one or more predictor, or independent,
variables.77 This relationship is expressed by the following
equation:
Yi = 60 + fcixi + Ui
104
where Yi is the is the outcome variable for i, So is the
intercept term, Si 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:
I[Pi (Xi - Xp) (Wi - Wp) ] / X(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 district 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.
105
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.
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.80 The following formula is used
to calculate the Gini coefficient:
Xi Xj [Pi Pj (Xi - Xj)] / 2 (XPi)2 Xp
where Xi is the sum for district i, Xj 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.81
Gini coefficients are limited to values ranging from 0 to 1.
106
A Gini coefficient of 0 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:
X(l...j) (Pi Xi) / Mp X(l...j) (Pi)
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 0 and
1. A value of 0 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.
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
equity. 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
109
correlation coefficient of -1 implies the greatest degree of
taxpayer inequity.
The correlation coefficient is calculated as follows:
I[Pi (Xi - Xp) (Ti - Tp)] /
X{Pi [V (Xi - Xp)2] [V (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:
110
X[Pi (Xi - Xp) (Ti - Tp)] / X[Pi (Ti - Tp)2J
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
i‘s 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.
Ill
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 included a discussion of the method by which these
equity effects were examined.
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
education 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
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.
2J. Michael O'Loughlin, R. Craig Wood, and David S.
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, An
Examination of the Florida Lottery (Gainesville, FL: UCEA
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 Faulty of General Expenditures fot 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).
4See 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 Pavs for Student Diversity? (Newbury
Park, CA: Corwin Press, Inc., 1992).
^Division of Public Schools, Profiles of Florida School
Districts 1992-93 Student & Staff Data (Tallahassee, FL:
Florida Department of Education, 1992), 8.
^National Center for Educational Statistics, Digest of
Education Statistics (Washington, DC: U.S. Department of
Education, 1992), 59.
7Ibid., 155.
^Ibid., 161.
91992-93 School Profiles. 4.
10Fla. Stat. 236.014(1)(b).
^Division 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).
141992-93 FEFP. 1.
15Fla. Stat. 236.081(1) (a).
16Fla. Stat. 236.081(1) (c).
113
171992
-93 FEFP. 12.
18Fla.
Stat.
236.081.
19Laws
of Florida 92-293
item
516.
20Fla.
Stat.
236.081(2).
2:*-Laws
of Florida 92-293
item
516.
22Fla.
Stat.
236.081(7).
231992-
-93 FEFP, 15.
24Fla.
Stat.
236.081(6).
23Laws
of Florida 92-293
item
516.
261992-
-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).
331992-93 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).
391992-93 FEFP. 21.
114
40Ibid., 2.
4^Fla. Const, art. VII sec. 9(a).
42Fla. Stat. 200.001(3)(a).
43Fla. Stat. 200.001(3)(b).
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).
4^Laws of Florida 92-293 item 516.
SOFla. Stat.
51-Fla. Stat.
52Fla. Stat.
33Fla. Stat.
54Fla. Stat.
^^Fla. Stat.
58Fla. Stat.
236.25(2) (a).
236.25(2)(b).
236.25(2) (c).
236.25(2)(d).
236.25 (2) (e).
236.25(2) (f).
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
Legal Problems in Education, 1993), 47; David C. Thompson, R.
Craig Wood, and David S. Honeyman, Fiscal Leadership for
Schools; Concepts and Practices (White Plains, NY: Longman
Publishing Group, 1994), 252.
115
60wood and Thompson,47-48; Thompson, Wood, and Honeyman,
253.
61-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.
68wood and Thompson, 50; Thompson, Wood, and Honeyman,
257.
69Thompson, Wood, and Honeyman, 252.
70lbid., 257.
71lbid.
7^Alan Agresti and Barbara Finlay Agresti, Statistical
Methods for the Social Sciences (San Francisco: Dellen
Publishing Co., 1979), 233.
73wood and Thompson, 51.
7^Robert 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.
116
77Ibid., 15-18.
7®Samprit Chaterjee and Bertram Price, Regression
Analysis bv Example. 2nd ed. (New York: John Wiley & Sons,
inc., 1991), 3.
7^Berne and Steifel, 29.
80it>id.
^Thompson, Wood, and Honeyman, 258.
82ifc>id.
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
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
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
Variance
Standard
Deviation
Coeff of
Variation
Found
2683.39
4748.22
69.19
.03
Disc
90.22
2421.05
49.20
.55
Cap
309.70
23365.73
152.86
.49
D + C
399.92
37996.21
194.93
.49
F + D
2773.61
9199.42
95.91
.03
F + C
2993.09
33879.56
184.06
.06
F + D + C
3083.31
50501.18
224.72
.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 and 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
120
maintenance revenues was $2993.09. The mean per-pupil
revenues statewide from all three sources was $3083.31.
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
121
all three sources had a variance of 50501.18 and standard
deviation of $224.72.
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
revenues. The coefficient of variation calculation for
revenues from a combination of all three sources was .07.
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
Restricted
Range
Federal Range
ratio
Found
424.78
248.23
.10
Disc
332.10
189.96
11.93
Cap
772.04
601.88
--
D + C
997.42
730.05
28.84
F + D
648.87
333.36
.13
+
o
880.02
639.65
.24
F + D + C
1105.40
804.24
.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
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
124
combined with those generated through the discretionary
millage rate was 28.84.
The addition of unequalized dollars had the effect of
increasing 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
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 increases in the relationship between
district property wealth and revenues per-pupil as
demonstrated through the correlation coefficient
126
calculations. The foundation plus discretionary source
correlation coefficient was calculated at .85, while the
foundation 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: Regression Measures
Correlation
Coefficient
Coefficient of
Determination
Regression
Coefficient
Found
.50
.25
.00034291
Disc
.99
.99
.00057916
Cap
.94
.88
.00172990
D + C
.99
.98
.00228479
F + D
.85
.72
.00092207
F + C
.97
.94
.00204854
F + D + C
.99
.98
.00262770
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
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
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.
The 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
129
discretionary and capital outlay and maintenance revenues
resulted in a McLoone index of .70.
Table 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
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
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.
131
Table 5
Tax Yield
Correlation
Regression
Coefficient
Coefficient
Found
+ .17
+13769.96
Disc
-.12
-83410.47
Cap
-.28
-198389.24
D + C
-.37
-268342.81
F + D
-.03
-2799.73
+
o
-.49
-75477.85
F + D + C
-.48
-83871.06
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
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 per-
pupil 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
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 analysis 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
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
revenues 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
division of Public Schools, 1992-93 Florida Education
Finance Program (Tallahassee, FL: Florida Department of
Education, 1992).
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
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
137
systems have been mixed in terms of the constitutionality
versus unconstitutionality of state foundation systems in
light 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
138
based on the results of the study that were presented in
Chapter 4.
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
standard 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 given 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 ratio 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.
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-
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
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
education. 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
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
143
distribution than those raised through the discretionary
source.
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
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
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
146
is warranted given the significance of providing appropriate
fiscal support for a quality education for all children.
Notes
1Fla. Const, art. VII sec. 9(a).
2Fla. Stat. 236.25(1).
3Fla. Stat. 236.25(2).
4Fla. Stat. 200.001(3).
APPENDIX A
1992-93 FEFP PROGRAM COST FACTORS
1992-93
Cost factors
Basic Programs
Kindergarten and Grades 1, 2, and 3
1.014
Grades 4, 5, 6, 7, and 8
1.000
Grades 9, 10, 11, and 12
1.225
Mainstream
Grades K-3
2.028
Grades 4-8
2.000
Grades 9-12
2.450
Programs for At-Risk Students
. Dropout Prevention
1.656
Intensive English/ESOL K-3
1.644
Intensive English/ESOL 4-8
1.679
Intensive English/ESOL 9-12
1 649
Exceptional Student Programs
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 Hearing
3.176
Visually Handicapped, Part-Time
15.145
Visually Handicapped
4.353
Emotionally Handicapped, Part-Time
3.740
Emotionally Handicapped
2.812
Specific Learning Disability, Part-Time
2.914
Specific Learning Disability
2.049
Gifted, Part-Time
1.896
Hospital & Homebound, Part-Time
11.611
Profoundly Handicapped
4.396
Adult General Education Program
Adult Basic Skills
.745
Adult Secondary Education
.763
Lifelong Learning
.700
• Adult Disabled
1.337
Vocational-Technical Programs
Job Preparatory
7-12
Adult
Supplemental
Agriculture 1.728
1.537
1.516
Business and Office 1.229
1.292
1.114
Distributive 1.112
1.374
.806
Diversified 1.185
.877
—
Health 1.513
.506
1.454
Public Service .930
.959
1.060
Home Economics 1.261
1.433
1.367
Industrial 1.746
1.418
1.332
Exploratory (Grades 6-12) 1.276
—
—
Vocational Mainstream 2.325
—
—
Source: Laws of Florida 92-293 item 516.
147
APPENDIX B
RAW DATA
DISTRICT
RLE Mill
Dis Mill
Alachua
6.6000
0.510
Baker
6.6740
0.510
Bay
6.6000
0.510
Bradford
6.7060
0.510
Brevard
6.4920
0.510
Broward
6.6890
0.510
Calhoun
6.6780
0.000
Charlotte
6.4910
0.510
Citrus
6.7330
0.510
Clay
7.0170
0.510
Collier
5.7430
0.510
Columbia
6.4940
0.510
Dade
6.7130
0.510
De Soto
6.6000
0.510
Dixie
6.7490
0.510
Duval
6.4930
0.510
Escambia
6.9750
0.510
Flagler
6.4930
0.510
Franklin
6.6520
0.510
Gadsden
6.6550
0.510
Gilchirst
6.4930
0.510
Glades
6.8030
0.510
Gulf
6.5750
0.510
Hamilton
6.7860
0.510
Hardee
6.4930
0.510
Hendry
6.4960
0.510
Hernando
6.7600
0.510
Highlands
6.7310
0.510
Hillsboro
6.7230
0.510
Holmes
6.5110
0.000
Indian Ri
6.5810
0.510
Jackson
6.7240
0.510
Jefferson
6.4930
0.510
Lafayette
6.6700
0.510
Lake
6.4950
0.510
Lee
6.6910
0.510
Leon
6.4940
0.510
Levy
6.4950
0.510
Liberty
6.9220
0.510
Madison
6.5680
0.510
Manatee
6.5050
0.510
Marion
6.6450
0.510
Martin
6.1560
0.510
Mill
WFTE
92 Tax Roll
.6650
34363.36
$3,478,806,917
.0000
5638.30
$203,172,343
.9820
30808.57
$3,795,133,278
.5000
5263.75
$302,394,024
.0000
74343.45
$13,222,913,419
.0000
255738.60
$48,030,220,202
.0000
2746.04
$148,560,257
.2426
18080.74
$5,953,284,806
.0000
16229.15
$3,584,008,767
.0000
27819.02
$2,560,042,477
.7470
31270.45
$14,546,382,399
.0000
10389.28
$672,339,379
.8000
435842.50
$65,960,000,000
.5000
5637.27
$563,429,292
.0000
2530.99
$168,357,071
.7990
146121.90
$18,967,436,166
.0000
60560.51
$5,230,986,632
.0000
6478.80
$2,009,940,591
.1890
1968.49
$330,222,577
.0000
10355.10
$470,097,137
.0000
2659.61
$153,229,270
.4000
1147.11
$340,092,453
.2050
2735.36
$518,114,292
.9090
2839.77
$320,766,531
.8000
6154.27
$542,297,841
.0000
7681.05
$1,087,719,471
.1710
17050.08
$3,118,144,088
.6390
12939.38
$2,078,389,640
.0000
179306.20
$23,878,301,787
.0000
4141.29
$160,952,311
.5283
15462.45
$5,160,114,845
.0000
11082.06
$527,890,754
.7500
2708.36
$190,317,324
.0000
1262.06
$83,518,770
.0000
28531.06
$4,273,371,924
.0000
59349.72
$18,800,716,150
.0000
41293.80
$4,775,685,713
.0000
6607.99
$566,145,772
.0000
1481.31
$84,118,010
.0000
4007.51
$222,493,571
.0000
37127.97
$8,159,607,470
.0000
39570.57
$4,861,806,224
.6900
17224.81
$7,319,424,936
Cap
0
2
0
1
2
2
0
1
2
2
1
2
1
1
2
1
2
1
0
2
2
1
0
0
1
2
1
1
2
0
1
0
0
2
2
2
2
2
0
0
2
1
1
148
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
Franklin
$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
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
SUmter
$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
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, 1986).
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 Ecruitv
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 Five States. (Santa Monica, CA: The Rand
Corporation, 1979).
Carroll, Stephen J. and Rolla E. Park, The Search for Ecruitv
in School Finance (Cambridge, MA.: The Ballinger Press,
1983) .
Chaterjee, Samprit and Bertram Price, Regression Analysis bv
Example. 2nd ed. (New York: John Wiley & Sons, inc.,
1991).
Cubberley, Ellwood P., School Funds and Their Apportionment
(New York: Columbia University, 1906).
151
152
Currie, Gayion d., An Examination of the Equity of Capital
Outlay Funding o£ Public Education; a comparison of the
Equity
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 qf Educetiqnel 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.
153
Monk, David H., Educational Finance: An Economic Approach
(New York: McGraw-Hill, 1990)
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 Support for Public Schools (New York:
Teachers College, 1926).
Mort, Paul R., State Support 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
SghpQi Finance; Its BackgrQynd, structure, cmd Operation
(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 David S. Honeyman,
A Study of the Effects of the Soarsitv Supplement 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).
154
Stark, Steven, 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), 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 Imacts 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).
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 Pavs 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, Leyittown, etc, y. Nyauis-L, 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).
Edgewced 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 Q.f.,Ed.U.0,atÃQIL.Y-1- 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 Countv Board of Education, 458 A. 2d 758
(M.D. 1983).
McDaniel v. Thomas. 285 S.E. 2d 156 (1981).
156
Milliken v. Green. 212 N.W.2d 711 (1973).
Olsen v. State. Or. 554 P.2d 239 (1976) .
Paulev v. Kellev. 255 S.E. 2d 859 (1979).
Richland Countv v. Campbell. 364 S.E. 2d 470 (S.C. 1988).
Robinson v. 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. Rodriquez.
411 U.S. 1 (1973).
San Antonio Independent School District v. Rodriquez. 337 F.
Supp. 280 (1972) .
Serrano v. Priest. 487 p. 2d 1241 (1971).
Thompson v. Enkelkina. 537 P.2d 635 (1975).
BIOGRAPHICAL SKETCH
Jeffrey A. Maiden obtained his bachelor's, master's,
doctoral degrees from the University of Florida. He has
taught both in secondary and higher education in
Florida.
and
the state of
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.
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 pQptor of philosophy.
DaVid 5. Hori'eymaft/ Cochair
Associate 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.
ames 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
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
Dean,
Dean, Graduate School
L¡>
1180
fÃW
. MJ/7
UNIVERSITY OF FLORIDA
3 1262 08556 8888
|
