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Education Education Finance
by
James W. Guthrie, Patrick J. Schuermann

Introduction

Education finance refers to governmental and organizational processes by which revenues are generated (through taxation, tuition, fees, and philanthropy), distributed, and expended for the operational and capital support of formal schooling. Scholars and professionals knowledgeable regarding economics, public finance, school finance, budgeting, management, accounting, education law, and intergovernmental relations typically participate in this field. Education financing should not be considered exclusively as a technical field dominated by matters of arcane financial formulas and budget categories. Rather, it also involves public policy issues at the dynamic core of any society regarding equity, efficiency, and freedom of choice. The citations included in this entry lead a user to works that encompass the operation of education financing and the many issue that characterize this field. They have been selected because of their comprehensive nature or because of their significance in influencing the field generally or a particular policy direction within the historical evolution of education finance.

General Overviews

The following general works provide a well-balanced introduction to the broad field of education finance. The panel report of the National Academy of Sciences (Ladd and Hansen 1999) is a thoughtful compilation of articles exploring contemporary issues related to the financing of public K–12 schools. Extending this treatment to include higher education and such special circumstances as rural settings, limited English proficiency, and special education, Ladd and Fiske 2008 is the most comprehensive compendium of contemporary articles on the topic. To gain insight regarding the historical roots of education finance, readers may turn to Cubberly 1905. For a philosophical treatment of the debate between the roles of markets and government on education finance, readers are directed to Friedman 1962. As nations develop and school systems evolve, new approaches to school finance emerge. Callahan 1962 describes the social forces that led to key historical transitions in the finance of American education. To better understand resource distribution analyses and the examination of the relationship between school resources and student performance, readers should turn to Coleman 1966. For those interested in the intersection of education finance and school law, Coons, et al. 1970 presents perspectives and arguments that triggered four decades of judicial action aimed at redressing school funding inequities. For a more contemporary view of the influence of funding levels on student achievement, readers should turn to the compilation of articles that make up Burtless 1996.

  • Burtless, Garry, ed. 1996. Does money matter? The effect of school resources on student achievement and adult success. Washington, DC: Brookings Institution.

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    A compendium of social science articles considering means by which economists might conceptualize analyses of schooling and the operational relationship of schools to resource input levels.

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  • Callahan, Raymond E. 1962. Education and the cult of efficiency: A study of the social forces that have shaped the administration of public schools. Chicago: Univ. of Chicago Press.

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    A valuable book recounting the historical transition in American schools to a formal bureaucratic model of governance, management, and finance.

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  • Coleman, James S. 1966. Equality of educational opportunity. Washington, DC: Office of Education.

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    A seminal report, authorized by the US Congress as a part of the 1965 Civil Rights Act, exploring the extent of resource distributional inequity between racial categories and among geographic regions of the United States.

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  • Coons, John E., William H. Clune, and Stephen D. Sugarman. 1970. Private wealth and public education. Cambridge, MA: Harvard Univ. Press.

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    This work provides a scholarly analysis of the governmental and public finance mechanisms undergirding unequal distribution of school resources and constructs a constitutional argument for adjudicating these inequitable conditions.

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  • Cubberley, Ellwood P. 1905. School funds and their apportionment. New York: Teachers College.

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    Historically significant publication regarding initial 20th-century efforts in the United States to render the financing of schools a scholarly subject, one suitable for economic and public finance study.

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  • Friedman, Milton. 1962. Capitalism and freedom. Chicago: Univ. of Chicago Press.

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    A philosophic volume specifying the economic principles of market economies and proposing that schooling be financed and provided in a manner guided more by markets and less by governments.

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  • Ladd, Helen F., and Edward B. Fiske, eds. 2008. Handbook of research in education finance and policy. New York: Routledge.

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    Extensive treatment of education finance, including all components and all grade levels as well as postsecondary schooling. Contains many useful examples, citations, and references to other relevant publications.

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  • Ladd, Helen F., and Janet S. Hansen, eds. 1999. Making money matter: Financing America’s schools. Washington, DC: National Academy Press.

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    A comprehensive description by a panel of the US National Academy of Sciences that explores issues of equity and efficiency in the financing of American schools. Concentrates on K–12 with no attention to postsecondary issues.

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Textbooks

The following works serve as comprehensive textbooks, aimed at the graduate level in school finance courses, and they cover issues related to the governance and organization of education, intergovernmental financial issues, revenue generation and distribution, and questions of resource allocation to shape institutional productivity. These textbook entries have been selected because of their prominence in the field, the breadth of their coverage, and the regard in which their authors are held professionally. Those interested in the philosophical and historical basis for financing public schools will enjoy the approach of Alexander and Salmon 1995, which integrates philosophical and historical arguments with the economic rationale for public investment in education. For those seeking leadership roles at the school and district level, Garner 2003 is highly accessible in covering the what, how, and why of school finance. Those interested in the postsecondary environment will find Meisinger and Dubeck 1994 a comprehensive resource. Additional perspectives on finance in higher education are provided in the collection of fifty-nine historical and current readings in Yaeger, et al. 2001 that address the significant influences that shape the many contexts in which higher education financial issues are addressed. For a thought-provoking examination of the consequences of education finance reform undertaken in the name of equity and adequacy, readers are encouraged to review the collection of papers found in Ladd, et al. 1999. Graduate students interested in a policy perspective on school finance across the secondary and postsecondary spectrum will enjoy the concise presentation of the subject in Odden and Picus 2008 and will benefit from examining real-world consequences of resource allocation decisions through computer simulations. Guthrie, et al. 2007 provides graduate students with a succinct and practical analysis of trends (both historical and current) in education finance, while including calculations and problem sets to extend student learning. Guthrie, et al. 2008 explores professional challenges, performance expectations, and operating conditions encountered by contemporary school leaders charged with the practical tasks associated with running a school amid social and economic complexities.

  • Alexander, Kern, and Richard G. Salmon. 1995. Public school finance. Boston: Allyn & Bacon.

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    This book is designed to help policymakers and prospective school leaders understand the financing of public schools. This work integrates the philosophical and historical basis for financing public schools with the economic rationale for public investment in education.

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  • Garner, C. William. 2003. Education finance for school leaders: Strategic planning and administration. Upper Saddle River, NJ: Prentice Hall.

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    NCATE standards-aligned content provides the nuts and bolts of school financing to ensure that once on the job, readers will make informed, effective decisions to serve students and teachers while protecting the school’s bottom line.

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  • Guthrie, James W., Christina Hart, Walter G. Hack, and I. Carl Candoli. 2008. Modern school business administration: A planning approach. Boston: Allyn & Bacon.

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    This is a comprehensive textbook explaining school business practices in general and budgeting in particular. The text covers both technical and political features of school budgeting while utilizing case studies and a problem-solving approach as vehicles for examination.

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  • Guthrie, James W., Matthew G. Springer, R. Anthony Rolle, and Eric A. Houck. 2007. Modern education finance and policy. Boston: Allyn & Bacon.

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    This foundational text introduces readers to the seminal historical and contemporary issues at the heart of education finance while paying special attention to the new realities of accountability, resource allocation, and policy.

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  • Ladd, Helen, Rosemary Chalk, and Janet Hansen. 1999. Equity and adequacy in education finance: Issues and perspectives. Washington, DC: National Academy Press.

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    This book comprises eight background chapters by authors distinguished in the fields of equity and adequacy in school finance. The chapters were commissioned by the Committee on Education Finance of the National Research Council (NRC).

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  • Meisinger, Richard J., Jr., and Lawrence W. Dubeck. 1994. College and university budgeting: An introduction for faculty and academic administrators. 2d ed. Washington, DC: National Association of College and Univ. Business Officers.

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    This accessible volume is a sound primer on budgeting. It offers practical insights and advice based on real experiences with a wide range of higher education institutions.

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  • Odden, Allan R., and Lawrence O. Picus. 2008. School finance: A policy perspective. 4th ed. Boston: McGraw-Hill.

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    A text designed for students of educational administration at the masters and doctoral levels that offers unique computer simulations in which students can apply school finance formulas to better understand the real-world consequences of resource allocation decisions.

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  • Yeager, John L., G. M. Nelson, E. A. Potter, J. C. Weidman, and T. G. Zullo, eds. 2001. Finance in higher education. Boston: Pearson Custom Publishing.

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    Reflecting the dramatic and changing landscape in higher education, this text addresses the significant influences of the media, national commissions, private think tanks, professional organizations, and the economy in shaping the many contexts in which higher education financial issues are addressed. Published in conjunction with the Association for the Study of Higher Education.

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Journals

Maintaining current knowledge in education finance constitutes a remarkable challenge. Fortunately, numerous professional publications can be referenced on an ongoing basis. This section provides an overview of professional journals that serve as outlets for scholarly analysis on issues related to education finance. It is important to note that this list is not all-inclusive; rather, it is designed to function as a springboard for knowledge of the literature in domains of education finance and policy. For articles concerned with the equity and efficiency of education resource distribution and allocation, as well as subjects such as labor economics and legal issues pertaining to resource distribution, readers should turn to Education Finance and Policy. Those interested in articles at the intersection of education finance and program evaluation will find Educational Evaluation and Policy Analysis to be an excellent source of peer-reviewed research. For a broad survey of the topic, the Journal of Policy Analysis and Management covers the wider field of public administration and management, intergovernmental relations, and public finance. To find rigorous research targeted at the important emerging issues and enduring debates associated with the field of education finance, readers are encouraged to turn to the Journal of Education Finance. For thematic treatments of the study of education policy and finance, readers can turn to the refereed research presented in the Peabody Journal of Education.

Data Sets

To conduct analyses regarding education policy questions and research in education finance, it is helpful to turn to data sets that contain education finance–related information such as enrollments, graduation rates, academic achievement, and fiscal data. The most comprehensive repository of nationwide data related to American K–12 and postsecondary education is the National Center for Education Statistics. For additional state-level data on education, readers are encouraged to turn to the State Department of Education Datasets. To supplement these education-specific data sets, readers are encouraged to mine the wealth of demographic and descriptive data contained in the US Census Bureau Data. To access education finance–related data for nations throughout the world, readers can turn to the World Bank. Additionally, for information on select countries that are members of the Organisation for Economic Co-operation and Development, readers can turn to the data collected by researchers at the Center for Educational Research and Innovation. For those interested in education data for developing countries, the United Nations Education, Scientific and Cultural Organization data sets will be an excellent resource.

Intergovernmental Relations

Government responsibility is often distributed both horizontally (e.g., judicial, executive, and legislative branches) and vertically, (e.g., national, state, and local levels). Such distribution of authority is intended to protect freedom and promote efficient use of resources. However, these distributed arrangements also trigger enormous complexity. The term intergovernmental relations captures the scholarship and legal dynamics involved in understanding this complexity. Publications cited here concentrate on explaining and understanding the many facets—legal, financial, political, and organizational—that characterize intergovernmental relations as they bear upon education policy and finance. For a historical portrait of the manner in which schools have operated as individual entities, readers can turn to Caldwell and Spinks 1988. An equally enlightening view of the interaction between individual schools and a larger district is provided in David 1996. A detailed analysis of the manner in which state school boards interact with supporting agencies is provided in Levy and Copple 1989. For those interested in the important link between education institutions and outside agencies seeking to assist adolescent students, Dryfoos 1990 will prove useful. In a similar vein, but broadening the scope along the K–12 spectrum and across agencies seeking to assist children with health, nutrition, and housing needs, Kirst 1991 is the seminal work. A critical analysis of the benefits and challenges associated with interagency coordination is provided in Crowson and Boyd 1993. For greater understanding of the role that school principals play as bridge builders between schools and communities, readers should consult Smylie, et al. 1996.

  • Caldwell, Brian J., and Jim M. Spinks. 1988. The self-managing school. Lewes, UK: Falmer.

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    Historically significant book explaining the history and the future of schools as stand-alone operating units.

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  • Crowson, Robert L., and William L. Boyd. 1993. Coordinated services for children: Designing arks for storms and seas unknown. American Journal of Education 101.2: 140–179.

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    This article explains the complexity involved when varying, sometimes vying, agencies sharing a charter regarding the welfare of children attempt to cooperate.

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  • David, Jane L. 1996. The who, what, and why of site-based management. Educational Leadership 53.4.

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    Explanation of how individual schools might possibly operate independently of a larger school district.

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  • Dryfoos, Joy G. 1990. Adolescents at risk: Prevalence and prevention. New York: Oxford Univ. Press.

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    Analyses of the complexity of interaction between government and philanthropic agencies attempting to assist teenagers.

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  • Kirst, Michael W. 1991. Integrating children’s services. Menlo Park, CA: Ed Source.

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    This report offers a comprehensive view of the manner in which services funded publicly and philanthropically regarding children’s health, nutrition, mental health, housing, and schooling can be productively integrated to maximize assistance to children and minimize public costs.

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  • Levy, Janet, and Carol Copple. 1989. Joining forces: A report from the first year. Washington, DC: National Association of State Boards of Education.

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    Each of the fifty states has a state board of education (some popularly elected, some appointed by a governor or office of a governor) responsible for contributing to the state’s education policies. Cooperation among them, and with other agencies, is explained in this report.

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  • Smylie, Mark A., Robert L. Crowson, Victoria Chou, and Rebekah A. Levin. 1996. The principal and community-school connections in Chicago’s radical reform. In Coordination among schools, families and communities: Prospects for educational reform. Edited by James G. Cibulka and William J. Kritek, 171–195. Albany: State Univ. of New York Press.

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    A principal can have a remarkable influence on the degree to which a school integrates education services with other community activities (e.g., recreation, health, mental health, housing) to the benefit of students. This book explains how such links can be productively forged.

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Federal Government

The federal government is not directly empowered by the US Constitution with authority in education. Nevertheless, via expansive judicial interpretation of the Constitution’s interstate commerce and general welfare clauses, many approved federal programs exert enormous influence on school finance particularly and school policy generally. A longitudinal portrait of the evolving federal role of the US government in education is provided in Robelen 2000. For a targeted analysis of the interaction between federal bills and local implementation on the topic of financial aid, readers should consult Fenno and Munger 1962. A thoughtful historical perspective on the role of the federal government in education is provided in Allen and Deisenroth 1952, while Viadero 2000, from a more contemporary perspective, provides a historical analysis of school funding derived from local support and state and federal contributions. Broadening the scope to include governance, Gordon 2008 provides detail regarding the increasing federal influence on education.

  • Allen, H., and C. Deisenroth. 1952. The federal government and education. Review of Educational Research 22.4: 366–374.

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    Provides a useful historical perspective on the role of the federal government in education.

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  • Fenno, Richard F., Jr., and Frank J. Munger. 1962. National politics and federal aid to education. Syracuse, NY: Syracuse Univ. Press.

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    Unusually comprehensive political science analysis of why federal government bills proposing financial aid to states and local school districts were never enacted, to that point in history.

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  • Gordon, Nora. 2008. The changing federal role in education finance and governance. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 295–313. New York: Routledge.

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    Details the historical transition from a nearly absent federal role in education finance through significant expansions in federal influence in the post–World War II period to the current peak of federal involvement with the implementation of the NCLB.

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  • Robelen, Erik W. 2000. The evolving federal role. In Lessons of a century: A nation’s schools come of age. Edited by Virginia B. Edwards, 240–241. Bethesda, MD: Editorial Projects in Education.

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    Provides a long-term analysis of the manner in which the US government has increasingly engaged in the education sphere.

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  • Viadero, Debbie. 2000. Financial burden shifts. In Lessons of a century: A nation’s schools come of age. Edited by Virginia B. Edwards. Bethesda, MD: Editorial Projects in Education.

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    Traces the evolution of school funding responsibility from virtually exclusive local support to the contemporary dominance of states, with the contribution of the federal government increasing as well.

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State Government

Under the US Constitution, state governments hold plenary authority over education. Hence, this is the major funding source for K–12 and postsecondary schools. The following citations explain this reality and describe the historical evolution of the preeminent role of states in financing American education. For an early historical perspective on the budding role of state financing of education, see Cubberley 1934. Bailey 1962 sheds insight into the evolving role of state government via political lenses. Those interested in the balancing act between local control and state responsibility for financial adequacy across school districts will find Theobald and Malen 2000 beneficial. In a similar vein, Fernandez and Rogerson 2003 assesses the equitable distribution of state resources to local education agencies. Those students interested in a concise explanation of the mechanisms whereby states distribute public resources to local districts will benefit from Guthrie, et al. 2007. For additional insight regarding intergovernmental aid formulas, and in-depth case study analysis, readers will find Picus, et al. 2007 an outstanding resource. For a solid synthesis of the evolving role of the state in education finance over the previous one hundred years, students are urged to read Corcoran and Evans 2008.

  • Bailey, Stephen K. 1962. Schoolmen and politics: A study of state aid to education in the northeast. Syracuse, NY: Syracuse Univ. Press.

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    Pathbreaking political science analysis of the manner in which state funding for education support results from partisan political dynamics. Study concentrates on New York State in the 1950s, but the story it tells applies to most states and to contemporary situations.

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  • Corcoran, Sean, and William Evans. 2008. Equity, adequacy and the evolving state role in education finance. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 332–356. New York: Routledge.

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    Examines the increasing role of the states in financing primary and secondary education during the previous one hundred years and explores some of the key explanations for these trends.

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  • Cubberley, Ellwood P. 1934. Public education in the United States: A study and interpretation of American educational history. Boston: Houghton Mifflin.

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    Useful for historical perspective on the evolution of school financing in the United States and the growing role of state government.

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  • Fernandez, Raquel, and Richard Rogerson. 2003. Equity and resources: An analysis of education finance systems. Journal of Political Economy 111.4: 858–897.

    DOI: 10.1086/375381Save Citation »Export Citation »E-mail Citation »

    Modern analysis of the status of equality of resource provision in state aid to local school districts.

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  • Guthrie, James W., Matthew G. Springer, R. Anthony Rolle, and Eric A. Houck. 2007. Modern education finance and policy. Boston: Allyn & Bacon.

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    Provides a full explanation of the mechanisms on which state governments rely in the distribution of public revenues to local school districts.

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  • Picus, Lawrence O., Margaret Goertz, and Allan Odden. 2007. Intergovernmental aid formulas and case studies. In Handbook of research in education finance and policy. Edited by Helen Ladd and Edward Fiske, 258–276. London: Routledge.

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    This article provides readers with in-depth insights regarding aid formulas and allows readers to explore intergovernmental funding approaches via case study analysis.

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  • Theobald, Neil, and Betty Malen, eds. 2000. Balancing local control and state responsibility for K–12 education: The 2000 Yearbook of the American Education Finance Association. Larchmont, NY: Eye on Education.

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    This book describes the tradeoffs that state policymakers must consider in retaining elements of local school district control when making an effort to achieve school finance equality across school districts.

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Local Property Taxation

Local school districts depend crucially on the taxation of property to generate their share of school operating resources. The following citations offer explanations of property taxation dynamics. As a starting point for inquiry regarding the economic dynamics at play in property taxation, readers should consult Netzer 1966. For greater clarity around the Tiebout theory, property taxation, and local government choices, readers will find both Oates 1969 and Zodrow and Mieszkowski 1984 informative. Those seeking a concise and readable overview of local generation of funding for education will find Monk and Brent 1997 a helpful guide. For those interested in the interplay between tax limits, school finance, and school quality, Downes and Figlio 2008 provides a thoughtful synthesis of key literature. For those seeking options for generating local revenues, McGuire and Papke 2008 provides readers with a comparative perspective on alternatives to property taxes as a means for funding schools.

  • Downes, Thomas, and David Figlio. 2008. Tax and expenditure limits, school finance and school quality. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 373–388. New York: Routledge.

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    Provides a concise summary of the literature on the relationship between tax and expenditure limits (TELs) and the fiscal structure of local governments.

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  • McGuire, Therese, and Leslie Papke. 2008. Local funding of schools: The property tax and its alternatives. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 357–372. New York: Routledge.

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    Examines the various arguments against the property tax as a means of funding schools and compares alternative sources of revenue, such as sales and income taxes, with the property tax.

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  • Monk, David H., and Brian O. Brent. 1997. Raising money for education: A guide to the property tax. Thousand Oaks, CA: Corwin.

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    Concise, comprehensive, and readable guide on the local generation of funding for schools via property taxation.

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  • Netzer, Dick. 1966. Economics of the property tax. Washington, DC: Brookings Institution.

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    Even though dated, this book provides the single best explanation of property taxation approaches and their advantages and disadvantages.

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  • Oates, Wallace E. 1969. The effects of property taxes and local public spending on property values: An empirical study of tax capitalization and the Tiebout hypothesis. Journal of Political Economy 77.6: 957–971.

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    Explains the Tiebout theory of local government service choices and analyzes the consequences for public policy of residential housing preferences.

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  • Zodrow, George, and Peter Mieszkowski. 1984. Pigou, Tiebout, property taxation, and the underprovision of local public goods. Journal of Urban Economics 19:356–370.

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    Additional insightful analysis of the impact of property taxation and impacts that result on publicly supported entities.

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Resource Allocation

School boards and their operating officers make decisions regarding the internal distribution of revenues provided by state and federal governments. The decisions they make and the results that accrue are referred to as resource allocation. The following citations describe and analyze these decision dynamics and results. Those interested in trends and potential new approaches to the financing of higher education will benefit from Callan and Finney 1997. For a balanced view of the theoretical and practical implications of resource allocation decisions on the productivity of schools, readers should consult Hartman and Boyd 1998. To better understand the financial impact of several decades of equal protection suits, readers will find Murray, et al. 1998 enlightening. Baker and Green 2008 draws on the work of key scholars across multiple domains of inquiry to provide a concise conceptual overview of educational equity and adequacy applied to school finance policy. Graduate students seeking a thoughtful analysis of statistical measures of school finance equity and methods for assessing adequacy will find Downes and Stiefel 2008 a helpful resource.

  • Baker, Bruce, and Preston Green. 2008. Conceptions of equity and adequacy in school finance. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 203–221. New York: Routledge.

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    Draws on work by scholars in the areas of public finance, law, and school finance policy to provide an overview of key literature on conceptions of educational equity and adequacy applied to state school finance policy.

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  • Callan, Patrick M., and Joni E. Finney, ed. 1997. Public and private financing of higher education: Shaping public policy for the future. Phoenix, AZ: Oryx.

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    Analyzes trends in public spending, changes in revenue sources for higher education, and the policy implications for change with a perspective on privatization.

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  • Downes, T., and L. Stiefel. 2008. Measuring equity and adequacy in school finance. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 222–237. New York: Routledge.

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    A comprehensive explanation of school financing, including an analysis of statistical approaches to measuring education finance equity and adequacy and the incentives that accompany the introduction of adequacy into state intergovernmental aid formulas.

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  • Fiske, Edward, and Helen Ladd. 2008. Education equity in an international context. In Handbook of research in education finance and policy. Edited by Helen F. Ladd and Edward B. Fiske, 276–294. New York: Routledge

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    Provides an international perspective on the financial resource allocation discussion of educational equity. Illuminates various measures countries have taken to balance access and quality.

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  • Hartman, William T., and William L. Boyd. 1998. Resource allocation and productivity in education: Theory and practice. Westport, CT: Greenwood.

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    Explanation of political interest group interactions in making governmental decisions regarding amount and distribution of financial aid to schools.

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  • Murray, S., W. Evans, and R. Schwab. 1998. Education-finance reform and the distribution of education resources. American Economic Review 88:789–812.

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    This is an unusually important analysis of the fiscal consequences of several decades of equal protection suits aimed at reducing interstate distributional inequities.

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Public Finance

A thorough understanding of the conceptual and theoretical underpinnings of education finance, both for elementary and secondary education and for postsecondary education, depends on the field of public finance, or public finance economics. The following citations provide an introduction to this field. For undergraduate and graduate students seeking a clear and coherent view of the role of government spending and taxation, Gayer and Rosen 2009 provides an accessible entry to current research and policy on public finance in education. Graduate students and specialists with a solid economic foundation who seek to understand key international theories that have impacted the field of public finance can turn to Musgrave and Peacock 1994 and Musgrave 2000. Those interested in a broad view of public finance, from both state and local perspectives, will find Fisher 2006 helpful. Those interested in private-sector management and practices, such as the outsourcing of services throughout all levels of American government, will find concise explanations in Osborne and Gaebler 1993. For graduate students seeking in-depth explanations of the various methodological approaches to measuring financial equity, Berne and Stiefel 1984 will be a helpful resource.

Higher Education

Postsecondary schooling is an extensive endeavor—more than six thousand such institutions operate in the United States alone. The operation of these various organizations entails literally hundreds of billion in dollars each year, and an extensive literature is available explaining and analyzing the generation and distribution of this massive resource flow. The following citations are illustrative of this literature. They include works drawn from the fields of economics, public finance, and higher education finance particularly. Undergraduates seeking information about the foundational economic principles and practices of financing higher education will find Cohn and Geske 1990 to be a thorough resource. For a historical portrait of how institutions of higher education have previously dealt with economic challenges, turn to Clotfelter, et al. 1991. For a classic compilation of articles that have made significant contributions to the literature in higher education, graduate students will find Becker and Lewis 1992 informative. Those interested in the returns on investment associated with acquiring postsecondary education should turn to Bowen 1997. For those undergraduate and graduate students who seek explanations for the ever-increasing costs associated with higher education, Ehrenberg 2000 offers well-balanced insights. Those interested in the intersecting issues of affordability, access, and accountability should turn to Heller 2001. For a broad-based, accessible treatment of the theoretical, practical, and policy arenas of higher education, students should consult Paulson and Smart 2001.

Equal Protection Laws

Since 1970, dozens of lawsuits have been filed, generally at state levels, questioning the constitutionality of education finance arrangements. From the 1970s through the 1990s, plaintiffs generally prevailed. Beginning at the turn of the 21st century, defendants (usually states) have begun to prevail frequently. The entries that appear here suggest a sense of the legal theory behind this reform effort and provide a reader with selected landmark case decisions. Two foundational works that students should consult to gain a solid introduction to the field of education finance law include Coons, et al. 1970 and Wise 1972. Both works center on the construction of constitutional arguments regarding the equitability of school funding, yet they reach different conclusions regarding remedies for fiscal inequity. Bosworth 2001 picks up thirty years later to trace the judicial history of the equal protection suits framed in the wake of the 1970s. For a comprehensive critique of the impact that school finance lawsuits have had on state education finance distribution and students, turn to Hanushek 2006. While many lawsuits have shaped education finance policy and practice, a few stand out as essential for students of school finance to understand. In many ways, Brown v. Board of Education is the landmark case that initiated equal protection legislation. The case that placed education finance decisions at the state level is San Antonio Independent School District v. Rodriguez. The state supreme court decision setting precedent for added revenues related to student standards is Rose v. Council for Better Education. For those interested in a continually updated online repository of legal cases with implications for school finance, the Odden and Picus 2008 companion table will be a very helpful starting point.

  • Bosworth, Matthew H. 2001. Courts as catalysts: State supreme courts and public school finance equity. Albany: State Univ. of New York Press.

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    This book traces the judicial history of the equal protection suits framed in the wake of the publication of Coons, et al. 1970 and Wise 1972.

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  • Brown v. Board of Education of Topeka. 347 U.S. 483 (1954).

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    Landmark US Supreme Court decision declaring de jure segregation of black and white students in violation of the constitutional equal protection of black students and mandating the dismantling of the then existing dual school systems through the southern part of the United States.

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    • Coons, John E., William H. Clune, and Stephen D. Sugarman. 1970. Private wealth and public education. Cambridge, MA: Harvard Univ. Press.

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      This is one of two scholarly efforts that constructed a constitutional argument enabling plaintiffs to seek redress for financial arrangements they perceived as unfair. The authors proceed to suggest remedies in the form of vouchers to families so that they might choose their children’s schools.

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    • Hanushek, Eric A., ed. 2006. Courting failure: How school finance lawsuits exploit judges’ good intentions and harm our children. Stanford, CA: Education Next Books.

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      Comprehensive explanation and critique of equal protection legal challenges to state education finance distribution.

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    • Odden, Allan E., and Lawrence O. Picu. 2008. School Finance: A Policy Perspective. Companion Table of School Finance Legal Cases.

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      A regularly updated online repository of lawsuits regarding school finance in the United States.

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    • Rose v. Council for Better Education. 790 S.W.2d 186 (1989).

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      Crucial state supreme court decision establishing precedent for plaintiff suits for added revenue in order to achieve state-promulgated learning standards for K–12 students.

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      • San Antonio Independent School District v. Rodriguez. 411 U.S. 1 (1973).

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        US Supreme Court opinion invalidating a Texas Supreme Court decision that determined the school finance system in Texas violated the federal constitution. Because of the Court’s reasoning in this decision, school finance equity is not a federal issue.

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        • Wise, Arthur E. 1972. Rich schools, poor schools: The promise of equal educational opportunity. Chicago: Univ. of Chicago Press.

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          This is the second scholarly analysis of American education finance suggesting that the equal protection clause of the Fourteenth Amendment could be construed to protect students from inequities in the financing of their schools.

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        LAST MODIFIED: 12/15/2011

        DOI: 10.1093/OBO/9780199756810-0012

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