Adequacy in School Funding
Ensuring an adequate education for all children is no easier than ensuring equity.
By Michael Imber
For more than three decades (State by State Reform in 1990s by NCES), education reformers have been suing state governments over the way they fund their schools. Currently, school finance litigation is ongoing in about half the states.
Most of the early and some of the current school finance litigation turns on the issue of equity, claiming that state funding impermissibly favors some school districts or some pupils over others.
Much of the recent litigation focuses on the issue of adequacy. In these cases, the plaintiffs claim that the education offered to some or all of a state's pupils fails to meet the level of quality required by the state's constitution. The alleged cause of this inadequacy is the state's failure to make sufficient funds available for the education of some or all of the pupils in the state. Plaintiffs typically want the court to force the legislature to modify the state's education finance system to make more money available to some or all of its school districts.
Court or legislature?
Adequacy cases raise fundamental issues regarding the relationship between the judicial and legislative branches of state government. Generally speaking, decisions concerning what level of services a state will provide to its citizens belong to the legislature.
For example, it is not up to the courts to decide whether the legislature is providing sufficient funding to maintain an adequate state police force or build an adequate system of roads. If some citizens believe they are not being provided with adequate police services or roads, their recourse is not to go to court, but to lobby the legislature for change or to attempt to elect different legislators.
By analogy, in defending their states in cases of alleged school funding inadequacies, state attorneys often argue that the state legislature has the right to fund education at whatever level it sees fit. If some citizens are dissatisfied with the level of education provided, the defendants say, their recourse should be to the legislature, not the courts.
Proponents of this position often assert that it would be undemocratic for the courts to intervene because it would remove decisions about expenditure of public funds from elected officials and give them to unelected judges.
The weakness of this argument is that it fails to account for the special status of education under state law. Unlike roads, police forces, and almost all the other services a state might choose to provide, education is mandated by the constitutions of all states. Although the language varies, most state constitutions require the state to maintain a "thorough and efficient" or "suitable" educational system or use other language that may be interpreted to require that all the state's children be offered, at no charge, an education that is "adequate."
When a service is constitutionally mandated, it becomes the duty -- not the prerogative -- of the legislature to provide that service and the job of the judiciary to ensure that the service is being provided in a constitutionally acceptable manner. So, as long as state constitutions continue to prescribe an adequate system of education, state legislatures must find a way to offer an adequate education to all children in the state. And state courts bear the responsibility of evaluating claims that the education the state is providing is not adequate.
The problem with this framework is that it creates a dilemma for state courts. On the one hand, if the education article of a state constitution is to have any meaning at all, there must be a floor below which the level of educational quality and services offered by the state may not drop. But there is nothing close to agreement on what that floor might be among legislatures, the general public, or, most significant, the many educators and researchers who have considered the issue.
For this reason, some state courts have decided to defer to the legislature, in effect declaring that an adequate education is whatever education the legislature chooses to provide. This deferential approach frees the legislature to fail to carry out its constitutionally mandated educational obligation without fear of judicial intervention. Courts that take this position are shirking their own constitutional obligation.
On the other hand, when a court decides to enforce the constitutional mandate of educational adequacy, it faces the daunting theoretical task of formulating a workable standard of educational adequacy and the daunting political task of forcing the state legislature to adhere to the standard.
A number of approaches have been tried for accomplishing the theoretical task, including examining the practices of schools judged to be exemplary or at least adequate; calculating the cost of providing students with a set of educational goods and services determined to be adequate by respected educational experts; and attempting to determine what inputs are necessary to attain a set of desired educational outcomes. None of these approaches has proven entirely satisfactory.
A problematic definition
In 1989, in Rose v. Council for Better Education, Inc., the Kentucky Supreme Court offered the most detailed and most influential definition of educational adequacy yet embraced by a court. An adequate education, wrote the court, is one whose goals are to provide each and every child with at least the seven following capacities:
The court ordered the legislature to furnish whatever level of funding is necessary to provide an education that meets this definition of adequacy.
As attractive as many educators might find the definition, however, from a legal standpoint it is problematic. How can a list of goals that each begin with the word sufficient serve as a definition of adequate when one is a synonym for the other? How can a court order a legislature to spend as much as necessary to meet certain goals when no one can calculate how much expenditure would be necessary-or even if it is possible to meet the goals at any price?
And, can a judicial decree of this kind ever be more than a set of vague principles to be implemented however and to whatever extent the legislature and educators themselves see fit?
If the answer to this last question is no, then we have come full circle. Either the legislature can do as it pleases, or every educational decision the legislature makes will be subject to scrutiny by the courts. Courts then must find a way to enforce the constitutional mandate of educational adequacy while minimizing their involvement in policy making that is better left to elected officials.
Back to equity?
To strike this balance, courts should avoid developing their own detailed conception of adequacy, but they should insist that the state have one.
When faced with a claim that a state's education system is constitutionally inadequate, courts should require the state to articulate a reasonable conception of what constitutes an adequate education and to show that its education system is reasonably calculated to provide at least that level of education to all pupils.
Currently, most states would be unable to do this.
At the same time, courts should be vigorous in their enforcement of the requirement that a state's educational services be equitably distributed to all pupils. There can be no moral or legal justification for an educational system that provides a higher quality education to students in wealthy school districts than those in poor ones, as most states currently do.
Some reformers believe that insisting on equity in the way a state funds its schools is the best way to ensure adequacy as well. They reason that since people who live in wealthy areas will always have the political power to procure adequate funding for their own schools, equitably funded schools will all be adequate.
If this reasoning is correct, then courts need not get involved in evaluating adequacy claims as long as they take seriously their obligation to enforce the equity provisions of their state constitutions. Unfortunately, however, in some states this approach might tempt the legislature to provide a level of funding that is inadequate in all schools in the state. And, unfortunately, some states are already moving in this direction.
Michael Imber is a professor of educational leadership at the University of Kansas and a frequent contributor to American School Board Journal.
School Finance Litigation and Beyond
Ensuring an adequate education for all children is no easier than ensuring equity.
By Michael Griffith, April 2005
Over the past 10 years a number of school funding court cases have produced major changes in state education policy around the country. These cases have drawn significant attention from both policymakers and the media. In a recent commentary in Education Week, Michael Rebell, executive director and counsel of the Campaign for Fiscal Equity, pointed out that school finance litigation has forced states to not only change the way they fund schools but to improve and update their states’ assessment and accountability systems. 1
As of February 2005, 45 states have been involved in some form of school finance litigation. 2 These school funding lawsuits have addressed such issues as the state’s role in assuring equitable spending among districts, providing suitable school facilities and adequate funding of programs such as those designed for special education and at-risk students.
The most recent, and now most common, trend in lawsuits against states are those based on the adequacy of K-12 education spending. Thirty-two states have faced adequacy lawsuits and 14 states have lost such suits.3 In fact, the pace of decisions on adequacy cases is increasing with high courts in seven states ruling in favor of plaintiffs in the past two years alone.
While school funding lawsuits have produced broad changes in some states, there are instances where the cost of litigation – both financially and in terms of impacts on the education system – may outstrip any benefits. This paper outlines some of the costs that school funding lawsuits pose to states and offers several strategies beyond litigation for policymakers and members of the education community.
The Cost of Going to Court
In financial terms, the impact to a state of losing in court can be staggering. Just last year in New York, for example, the state was ordered to provide up to $14 billion in additional funding to the New York City School District over a five-year period.4 After the state of Arkansas lost the school funding case, Lake View School District, No. 25 v. Huckabee5, a study commissioned by the state found that the K-12 school system needed an additional $847.3 million per year (33% increase).6
The actual cost of litigating school finance cases also can be considerable. In South Carolina, for instance, it is estimated the state spent $3.7 million to defend the Abbeville County School District v. State case. Legal costs for school districts in the case came to $6.8 million, for a total estimated cost of $10.5 million.7 And these costs are predicted to grow with the expense of appeals before the state’s supreme court.
In addition to the actual financial impact of the lawsuits, states have incurred additional costs to the education system that cannot be measured in dollars.
Delaying Needed Change
In 1991 a school finance adequacy lawsuit, DeRolph v. State, was filed against the state of Ohio. The case was active for 12 years and resulted in three different rulings from the state’s supreme court that deemed the school funding system was unconstitutional.8 While some changes were made to the funding system, including increased per-pupil spending and additional resources for school building projects, the litigation did not bring about either the funding adequacy that many school districts wanted or the reduction in local property taxes that business groups sought. Indeed, the litigation may have made state policymakers reluctant to address needed changes to the school funding system until the outcome of the case was determined. During the 1990s when many states implemented major changes to school funding systems – mostly due to the strong performing economy – Ohio made less significant changes to its system. Because the lawsuit did not succeed in prompting major change, in 2003 Governor Taft created a Blue Ribbon Task Force on Financing Student Success. Over the 12 years of the lawsuit, however, the state lost valuable time for reforming its funding system.
Limiting Change to Court Mandates
In New Jersey, the case of Abbott v. Burke was filed in 1981 in an attempt to increase funding to 30 of the state’s poorest urban districts.9 These “Abbott Districts” represent approximately 25% of the state’s student enrollment. Some hoped the case would result in wholesale changes to the state’s school funding system. Instead, while court rulings over the last 24 years have resulted in additional funds being directed to the Abbott districts, many experts believe that the ongoing litigation has produced little to nothing for the 568 other districts that represent 75% of the state’s student population. As a result, policymakers now are looking at convening a state constitutional convention to address the school funding problems that face all the non-Abbott districts in the state.
Lack of Change Even When the State Loses
In some cases a clear correlation exists between states losing a school funding court case and increased resources becoming available to districts. In 1995 the Wyoming Supreme Court ruled in favor of the school districts in Campbell County School District v. State.10 The result was immediate with an increase in per-student funding of $4,614 (82%) over the next nine years. This increase moved Wyoming from the 20th to the 8th highest spending state in the country.11.
Even though the Wyoming case showed that court rulings could produce additional funding for schools, a Kansas State University study found that is not always the case. Researchers reviewed four states that lost school funding lawsuits – Arizona, Montana, Tennessee and Washington – to determine if the court rulings had a direct impact on state education spending. The study found that although education spending increased in each state after the court rulings, these increases were not equal to the national averages during the same time period.12. Clearly, results are mixed when states lose school funding cases.
Refraining from Change When the State Wins in Court
On three separate occasions between the late 1970s and 1990s – including most recently in Marrero v. Commonwealth – the Commonwealth of Pennsylvania has defeated school funding lawsuits brought against it.13. During the time these cases were pending, no major changes were made to the state’s funding system, which contributed to an 18% gap in spending between the wealthiest and poorest districts by the late 1990s.14. To some degree, legislators were reluctant to take any action prior to a final court decision. In the seven years since Marrero was dismissed, several attempts have been made to change the state’s school funding system, but none has resulted in any major reform of the state’s school funding formula.
Answers Beyond Litigation
If litigation alone cannot solve the problems of school funding, what are some alternatives? Presented below are four key ideas, outside of litigation, that can help state policymakers and local advocates improve state school funding systems:
Work To Make Reforms Before the Courts Force a Change
In 1999 the Maryland Legislature created the Commission on Education Finance, Equity and Excellence, which was charged with reviewing potential changes to the state’s funding system. The commission –known as the Thornton Commission – was made up of state policymakers, business officials, local education staff and other members of the community. It quickly began to focus on addressing the adequacy of Maryland’s school funding system.
The Thornton Commission conducted extensive work to gather data and consider public opinion. Two independent consulting firms were hired to undertake studies of the adequacy of the state’s funding system. The commission also held several meetings over a two-year period and gathered a considerable amount of public testimony on school funding issues. Based on all these efforts and the data collected, the commission recommended the state increase funding to schools to an adequate level, the distribution formula be revamped so it is less reliant on local property taxes, and preschool education and full-day kindergarten be made available to all students in the state.
In 2002, the state Legislature adopted nearly all the recommendations of the commission. The new legislation increased funding, moved more of the funding responsibilities away from the districts and toward the state – thus creating greater equity, required every school system to provide full-day kindergarten for all students by the 2007-08 school year, and made publicly funded pre-kindergarten programs available to all economically disadvantaged four-year-old children. An increase in the cigarette tax was earmarked to partially pay for this expanded early learning program. In return for greater state spending, districts were required to enter into agreements with the state on what their student achievement goals would be. State education leaders, local school officials and the public at-large have positively received these changes. Many observers believe that by taking the initiative to work with educators and the broader community, the state has made it unlikely that litigation will be required in the near future.
Provide Greater Spending Flexibility at the School Level
Research indicates that districts that provide schools with greater control over their own funds are better able to sustain school improvement efforts over time.15 A study by Mid-continent Research for Education and Learning (McREL) found that one of the most promising ways to improve student achievement is to provide teachers with more flexibility in the way they expend classroom dollars.16 The study stresses the “... challenge of resource allocation (at the school level) begins with knowing the range of resources available.”17 McREL makes it clear that resources are more than dollars – they also include human capability and time. Local administrators must be provided flexibility over all three of these resources if they hope to maximize their schools’ educational performance. The idea of local flexibility is a laudable one but for it to be successful, local school district personnel – including teachers, principals and superintendents – must be provided with a better understanding of how school funding really works.
Several national groups are making efforts to provide school leaders with training that will help them both better understand school funding issues and make better use of funds when they are given spending flexibility. For example, the Southern Regional Education Board found that when principals spend their work hours raising funds for their schools, the results are at best mixed. But when school officials are given the power to redistribute current funds, schools experience immediate positive results.18 Providing greater flexibility in funding decisions on the school level is a low-cost/no-cost option for improving school efficiency.
Work To Implement a Student-based Budgeting Program
Most state school funding systems provide additional funds to districts for high-need students (for example, at-risk, special education or English Language Learners). Districts, however, may or may not distribute these additional funds to each school. According to a study from the Annenberg Institute, districts traditionally distribute resources to schools based not on their needs but based on pre-set staffing levels per student. The study explains how the current funding system works in most districts: “… a school might be assigned (by the district) one full-time teacher for every twenty-five students or one assistant principal for every four hundred students.”19
The current funding system in most states creates two distinct problems: first, principals have very little flexibility in the way funds are expended in their schools, and second, schools and districts cannot easily determine exactly how much is spent on each student in the district. To provide greater flexibility in local education spending, and to better understand how their education dollars are being expended, some school districts have adopted a “student-based budgeting” (SBB) system, also known as “weighted student funding.” Under this model, a school district distributes funds directly to each school on a per-pupil basis. The district determines a funding amount for an “average student” and then adds additional weights for students who require additional services (such as at-risk, ESL and special education).20 This type of system moves the responsibility for spending decisions away from district personnel and toward principals and other school-level staff.
Policymakers should be aware that an SBB system often collides with the rules established in a district’s collective-bargaining agreement. Such agreements typically allow senior teachers – who earn higher salaries – to choose the schools in which they work, so they often tend to congregate in the most affluent schools in a district. Under an SBB system, however, monies flow to where the most-challenged students reside – usually precisely in those schools where senior teachers are least likely to teach. This is especially significant because approximately 65% of education expenditures go to paying teacher salaries. Policymakers who are interested in implementing an SBB approach should make it a top priority to work closely with teacher unions to reframe the scope of collective-bargaining agreements. Some school districts – Oakland, California, for example – have already found success working with unions on this issue.21
Use Value-added Testing To Better Target Resources
Although student-based budgeting can be a useful tool for policymakers to better track school funds, it does not address where financial resources should be directed to produce the greatest growth in student achievement. To answer this question, SBB needs to be combined with a value-added testing (VAT) system. In such a system, students are tested each year to determine what, if any, growth they attain in a particular content area.22 Growth is measured by comparing individual student test results from one year to the next; test results can then be totaled to determine what “added value” a particular teacher or school has provided. When value-added testing is implemented correctly, policymakers can “… distinguish between students who test well because of family and neighborhood effects and students who are progressing well because of excellent teachers and good educational policies.”23
Because state funding and accountability systems often do not work in conjunction, trying to establish a connection between spending and student achievement is extremely difficult. Once a state, or school district, begins to use both student-based budgeting and value-added testing, policymakers will be able to make direct correlations between student expenditures and achievement. In fact, policymakers would be able to determine not only which programs are producing increased student achievement but also the exact funding levels needed to produce the maximum educational impact.
It is important for both state policymakers and local education advocates to remember that “… litigation is high-stakes gambling”24 where the payoffs and costs often are highly unpredictable. While litigation can be a powerful tool to force change in school funding policies, it should be considered a last resort. As discussed above, many other options are available. These options not only are potentially more cost effective than litigation, they also are more likely to achieve the desired education outcomes without creating the divisions between teachers, administrators, legislators and the public that litigation can create.
Michael Griffith is a policy analyst at the Education Commission of the States.
1. Rebell, Michael A. “Why Adequacy Lawsuits Matter,” Education Week (August 11, 2004).
2. ACCESS Project, Campaign for Fiscal Equity. Overview of Litigation. Information accessed from the Web on January 28, 2005. http://www.schoolfunding.info/litigation/litigation.php3
3. Burke, Molly and Michael Griffith. School Funding Adequacy Cases. Denver, CO: Education Commission of the States, February 2005, 1.
4. Supreme Court of the State of New York. Report and Recommendations of the Judicial Referees. November 30, 2004, 4.
5. ACCESS Project, Campaign for Fiscal Equity. Overview of Arkansas Litigation. Information accessed from the Web on February 3, 2005. http://www.schoolfunding.info/litigation/litigation.php3
6. Odden, Allan, Lawrence O. Picus and Mark Fermanich. An Evidenced-Based Approach to School Finance Adequacy in Arkansas. North Hollywood, CA: Lawrence O. Picus and Associates, September 1, 2003, ix.
7. “$10.5 Million Spend in Lawsuit; School Funding Case Began More Than 10 Years Ago.” Myrtle Beach Sun-News (September 21, 2004).
8. ACCESS Project, Campaign for Fiscal Equity. Overview of Ohio Litigation. Information accessed from the Web on February 7, 2005. http://www.schoolfunding.info/states/oh/lit_oh.php3
9. ACCESS Project, Campaign for Fiscal Equity. Overview of New Jersey Litigation. Information accessed from the web on February 3, 2005. http://www.schoolfunding.info/states/nj/lit_nj.php3
10. ACCESS Project, Campaign for Fiscal Equity. Overview of Wyoming Litigation. Information accessed from the Web on February 3, 2005. http://www.schoolfunding.info/states/wy/lit_wy.php3
11. National Education Association. Rankings and Estimates: Ranking of the States and Estimates of School Statistics. Washington, DC: National Education Association, 1994 and 2004 editions.
12. Thompson, David C. and Faith E. Crampton. “The Impact of School Finance Litigation,” Educational Considerations, vol. 28, no. 1, Fall 2000. Manhattan, KS: Kansas State University.
13. ACCESS Project, Campaign for Fiscal Equity. Overview of Pennsylvania Litigation. Information accessed from the Web on February 7, 2005. http://www.schoolfunding.info/states/pa/lit_pa.php3
14. The Education Trust. The Funding Gap: Lower-Income and Minority Students Receive Fewer Dollars. Washington, DC: The Education Trust, August 2002.
15. North Central Regional Educational Laboratory (NCREL). A Better Return on Investment: Reallocating Resources to Improve Student Achievement. Oak Brook, IL: NCREL, 2000.
16. Mid-continent Research for Education and Learning. Sustaining School Improvement: Resource Allocation. Aurora, CO: McREL, 2003.
18. Hoachlander, Gary, Martha Alt and Renee Beltranena. Leading School Improvement: What Research Says. Atlanta, GA: Southern Regional Education Board, March, 2001, 31.
19. Ucelli, Marla, Ellen Foley, Thandi Emdon, Constance Bond. First Steps to a Level Playing Field: An Introduction to Student Based Budgeting. Providence, RI: Annenberg Institute, June 2002, 1.
20. EdSource. “Weighted Student Formula, Concept Enlivens School Finance Debate.” EdSource Brief. Palo Alto, CA: EdSource, May 2004, 1.
21. Jeff Archer. “Actual Cost of Salaries Figures into Budgets for Oakland’s Schools.” Education Week (January 5, 2005).
22. Kwanghyun Lee and Bettie Landauer-Menchik. The Role of Value-added Assessment in Michigan’s Accountability System. East Lansing, MI: Education Policy Center, 2002.
© 2005 by the Education Commission of the States (ECS). All rights reserved. ECS is a nonprofit, nationwide organization that helps state leaders shape education policy.
Prepared for the ECS Project on School Finance Adequacy, funded by The Wallace Foundation
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