Association for Public Policy Analysis & Management

School Finance Reforms: Did They Increase Equity, and Does the Choice of the Equity Measure Influence the Outcomes?   Hina Khalid PhD candidate Department of Public Administration & Policy, SUNY Albany
Erika G. Martin Associate professor Department of Public Administration & Policy, SUNY Albany
  Abstract

 

State-based school finance reforms aiming to update the financing plans for K-12 education were implemented from 1970 to 2010 across the United States. The objective of these reforms was to mitigate inequities in per pupil expenditures and revenues across rich and poor school districts. A challenge of research in this area is that there are competing methods to measure equity outcomes, which makes it difficult to compare findings across studies. We did a systematic literature review to assess (i) which types of school finance plan were effective at achieving their objective of increasing equity, and (ii) if the results remain consistent across different measures of equity.

We developed a research protocol using guidelines for systematic literature reviews from the Institute of Medicine and Patient Centered Outcomes Research Institute for systematic reviews. The protocol had the following components that were specified in advance: the search strategy, the inclusion and exclusion criteria for studies, and the data extraction strategy. Due to heterogeneous outcomes, findings were summarized qualitatively and not using meta-analysis statistics. Out of the 114 identified studies, we extracted data from 15 studies that were eligible following our inclusion and exclusion criteria. The two main types of financing plans identified in the studies were foundation plans and equalization plans. In the 3 of the 15 cases reviewed, states switched from an equalization plan to a minimum foundation plan or vice versa. In 12 states minimum foundation plans were implemented pre and post reform. The equity measures extracted from the studies were the range, restricted range, federal range ratio, coefficient of variation, gini index and McLoones index. The equity results vary by type of plan and equity measure. In five studies, equity decreased on all the included measures. In one study, equity increased on all the included measures. In two studies, equity decreased on one measure and increased on the rest of the measures. In the remaining studies results diverged on two or more measures.

 We conclude that it is not possible to say if foundation or equalization plans lead to an increase or decrease in equity, as (i) the results are sensitive to the choice of the equity measure, and (ii) there is a lot of within plan variation in financing plans implemented across different states, making it difficult to compare across them. Different equity measures capture equity for different segments of the population, and as the choice of the equity measure influences study conclusions, researchers should explicitly state for which segment of the population equity is being studied. Second, comparing across financing plans is more complex than simply lumping them into two categories (equalization and foundation) as there is substantial variation in the same type of plan across different states.