Clearinghouse on Educational Policy and Management College of Education · University of Oregon
	"Search Help" Note that this is a web site search and will not search our databases ("Directory of Organizations", "In-Process Abstracts", the ERIC Database, "Publications").	Trends and Issues: School Finance Discussion Links References Resources Major Developments in School Finance Equity A Shift to School-Level Equity A movement to focus on school-level rather than district-level equity is occurring. Sporadic, short-lived gains from decades of horizontal (district-level) equity litigation are forcing practitioners and policy analysts to reevaluate prevailing assumptions and strategies (Hertert 1995). State equalization schemes--efforts to beef up spending in low-income districts, place legislative caps on wealthy districts, or redistribute recaptured, "excess" revenues to poorer districts--are more likely to improve taxpayer equity than to produce equality of schools within districts (Hertert 1995, National Conference of State Legislatures 1996). Children can still be shortchanged on the basis of geography. From Horizontal Equity to Vertical Equity Horizontal-equity formulations--those that attempt to equalize revenues among school districts--have ignored important differences among types of districts (rural, urban, and suburban) and other factors, such as size and diversity of student enrollment, student residential patterns, number of school units, and district organizational structure (Hess 1995). As G. Alfred Hess, Jr. shows in his analysis of Chicago school finances, a region’s demographics "reflect the political power in the state." Although suburbanization has shifted political power to the suburbs, a majority of people reside in less wealthy school districts. Achieving equity among different types of districts has proved to be extraordinarily difficult (Hess); so has estimating the extent of these inequities (Hertert 1995). Even if states were to play "Robin Hood" and distribute funds to schools on a per-pupil basis, the system might be considered "equalized" without being adequate (Hertert). Many experts are now espousing vertical equity, which treats pupils in "an appropriately different manner" (Berne 1995) and ensures "equitable and adequate funding to each school in the state" (Hess). This focus on revenues at the school level combines well with the current emphasis on individual school accountability for student achievement. In 1995, for example, the Chicago Panel on School Reform proposed a new school-based funding system mandating an 85 percent pass-through rate, combined with a new "state funding system based on a state property tax and a high foundation level provided entirely by the state" (Hess). This type of system has enormous potential for equalizing educational resources for innercity and special-needs students inadequately served by district-based funding formulas and categorical programs, like Title I.