New formula for school financing

An alternative formula for school-based financing would have three elements:

1. Each school would receive an equal base level of dollars per student. The preferred approach would be for the state to determine the base spending level and provide that amount of per student funding for each school. Of course, in states with large per-student disparities across districts and schools, a transition period would be needed. Different per student amounts could be provided for elementary, middle, and high school students, although an argument could be made to provide the same per student amount at all levels.

2. The base allotment should be augmented by a substantial amount for every poor child, since some schools have poor children who need additional services in order to learn the core curriculum. The dollar amount for this add-on should be sufficient for the school to raise the achievement of low-income children to acceptable levels of proficiency on thinking and problem-solving tasks. The amount should be at least $1,500 for each poor student - the cost of implementing the Success for All program, which has produced substantial achievement gains (Madden, Slavin, Karweit, Dolan, & Wasik, 1992).

3. States should modify all dollar allocations by some regional labor market index that adjusts for the varying purchasing power of the educational dollar. Purchasing power varies across districts and labor market regions, and therefore equal funding per student would have the effect of discriminating against urban districts, where prices are higher than in nonmetropolitan districts.

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