Augenblick described Michigan's action in repealing the use of property tax for school funding a "bold step" and said it appeared to him that no one was trying to destroy education in the process. He mentioned that USA Today had asked what he thought of the Michigan situation. "I said, 'It's as if they took a dose of hemlock, and the only problem is no one is standing by with the antidote.' And I think what we're here to do today is to begin the process of finding that antidote . . . ."
Augenblick explained that you must deal with three basic kinds of issues in changing the school finance system. There are philosophical issues such as how much variation should be allowed in the system and to what extent should districts be allowed to provide extra money for education. There are also technical issues and political concerns.
Most legislators skip to the third issue and spend almost no time on philosophical or technical issues. You must "hold the Legislature's feet to the fire," said Augenblick and force them to deal with the first two before they jump into the third. The problem is that even if you have agreed philosophically and overcome technical problems, you still have to deal with the issue of altering the distribution of money, and people are very uncomfortable when money gets switched around.
No matter how Michigan decides to restructure its schools, equity must be a concern. However, not only are most people - particularly policymakers - reluctant to define exactly what they mean by equity, they also often don't know what they mean. And, they are inconsistent in how they talk about it. It has been Augenblick's experience that equity has been used to justify almost anything, so he advised caution in dealing with those who use the word to justify almost any change they support.
We talk about two distinct kinds of equity: equity for taxpayers and equity for children. Across the country, some states emphasize one more than the other; others treat them more equally. Michigan's elimination of property taxes appears on the surface to be aimed completely at equity for taxpayers who perhaps view property taxes as unfair. If all that were necessary was to replace the lost property tax revenue with revenue from a tax that is perceived as fairer, the problem for taxpayers might be solved. But that alone will not solve the pupil equity problem, which takes more work.
The problem, said Augenblick, is that we don't know how funding is related to pupil performance. If we knew that, we could create a very equitable school finance system, both for taxpayers and for pupils.
Equity for school children means that all pupils can perform, test, or achieve at a standard level that the state believes to be appropriate; it also means that all pupils have an equal opportunity to develop skills beyond that level. The problem, said Augenblick, is that we don't know how funding is related to pupil performance. If we knew that, we could create a very equitable school finance system, both for taxpayers and for pupils. Some research results suggest that there are positive relationships, based on a focus on class size or characteristics of teachers. But we don't know that well enough to precisely and confidently say how to spend six or eight billion dollars in such a way that would maximize student achievement.
Without such precise knowledge, we must define pupil equity in terms of the resources that we provide the children, not the outcomes. Most of the litigation of the past 20 years has been concerned with revenue to expenditure disparities that are too great across school districts of a particular state and the strong relationship between those disparities and the wealth of the communities. With both of those conditions, the probability increases that a court will vote in favor of the plaintiffs. Recent litigation has refined those concerns and added the question of adequacy as a possibility for successfully suing a state.
Cautioning the audience that he is not a lawyer in these cases and is not offering a legal opinion, Augenblick presented his view of cases from around the country. Overall, litigation and its focus on pupil equity asserts that the state has the responsibility to assure equity for all pupils. It is the state legislature's responsibility to do that - not the state education agency's, not the school district's, not the governor's. Second, litigation states that legitimate reasons exist for revenue and expenditure levels to vary across school districts, based on different cost pressures. No one talks any more about equity meaning equality or equal dollars for every student.
No one talks any more about equity meaning equality or equal dollars for every student.
Third, litigation states that it is not necessary to achieve perfect equity, but if you don't, then the state must have a strong rationale for distributing funds in ways that do not consider either the needs of pupils or the wealth of the education providers. Although political compromises may be necessary to implement a system, they are only acceptable in the short run.
What does this mean for Michigan? How does the concern for equity affect the structure of school finance systems? First, no matter how you choose to organize public education, the distribution of funds must be based on the characteristics of the pupils, the programs in which they are enrolled, and the cost pressures faced by the service providers. Second, because it is critical that the state define what it means by an adequate level of resources, you must first define equity and then define precisely what you mean by an adequate level of resources.
Third, the state can permit additional revenues to be provided, whether by parents, schools, or school districts, but everyone must have substantially the same opportunity to raise them. Fourth, in order to control revenue disparity, the state may need to control the extent to which additional revenues are provided. Fifth, all components of the system must be considered when you talk about pupil equity and taxpayer equity. Components must include such things as regular instruction, special instruction, transportation, support services, and personnel benefits, not just what might be considered the biggest expenditures of the system.
This is possible; other states have done it. The most notable example in the last few years is Kentucky. In 1990 Kentucky revamped its school finance system at the same time that it restructured its education delivery system. In the four years that the system has been operating, no one has gone back to court or suggested that the funding system needs to be changed.
The first thing Kentucky did was define what seemed to be an appropriate per-student base level that was the same for all students. Then they adjusted that base number for a variety of pupil, programmatic, and district cost pressures, factoring in costs associated with at-risk students, special education, and a variety of other things. Therefore, although the base started out the same, in the end it was different in every school district in recognition of the pressures placed on those districts to deliver particular services to particular students.
Kentucky also allowed districts to generate funds above the base and provide support for districts with the least ability to pay. Also, they limited how much revenue any district can raise above the base, regardless of their willingness to do so. The state also provided for additional funding for a variety of noninstructional services such as technology and testing. And they have developed a system of allocating money for schools that does better than expected, so there's an incentive component.
Local property taxes provide about 30 percent of the money for education. (Kansas last year enacted a new school finance system that is very much like Kentucky's, but they use a state property tax.) So, it is possible to build a system and to fund that system from different sources than are presently being used.
None of these approaches achieves perfect equity, and all trade off between equity and local control when it comes to how much local money can be raised. Yet they all share similar characteristics. They all give broad control to school districts to decide how to spend funds; they attempt to change the way that the schools are evaluated; and they hold schools accountable based on student performance. Still, in addition to defining equity and defining your base, you also need to be able to measure equity. You need to be able to measure it so that you can monitor it over time.
URL: http://www.ncrel.org/sdrs/areas/issues/envrnmnt/go/94-waug.htm