CONTENTS
Preface = ⅸ
1 INTRODUCTION AND OVERVIEW TO SCHOOL FINANCE = 1
1. The Scope of United States Education Financing = 2
2. Early Developments in School Finance = 6
3. Evolution in the School Finance Problem = 11
Traditional Fiscal Disparities = 11
A Different Type of School Finance Problem = 18
The School Finance Problem as Fiscal Adequacy = 23
The School Finance Problem as Productivity = 25
2 EQUITY AND ADEQUACY FRAMEWORKS IN SCHOOL FINANCE = 26
1. School Finance Litigation = 27
Equal Protection Litigation = 28
School Finance Equal Protection Litigation = 31
School Finance Litigation Based on State Education Clauses = 35
A School Finance Legal Scorecard = 45
2. A Framework for Assessing School Finance Systems = 46
The School Finance Framework in Brief = 47
Ex Ante Versus Ex Post = 48
Unit of Analysis = 49
Objects = 51
The Group = 56
Equity Concepts = 57
Conclusion = 74
3 THE PUBLIC FINANCE CONTEXT = 79
1. Taxation Overview = 80
Trends in Federal, State, and Local Taxation = 80
Changes in Tax Structures = 82
2. Assessing and Understanding Taxation = 86
Public Finance Criteria for Evaluating Taxes = 86
3. Analysis of Individual Taxes = 97
The Income Tax = 97
The Sales Tax = 105
The Property Tax = 119
Lotteries = 137
4. Intergovernmental Fiscal Relations = 139
Advantages of a Federal Approach to Financing Governmental Services = 140
Mandates and Their Use in Intergovernmental Relations = 142
Intergovernmental Grants and Their Objectives = 144
Alternative Measures of Fiscal Capacity = 150
Final Comments on Taxation and Intergovernmental Grants = 152
4 SCHOOL FINANCE STRUCTURES : FORMULA OPTIONS AND NEEDS ADJUSTMENTS = 154
1. School Finance Equity, Adequacy, and Policy Goals = 155
2. School Finance Formulas = 156
General-Aid School Finance Programs = 159
Flat Grant Programs = 161
Foundation Programs = 167
Guaranteed Tax Base Programs = 179
Combination Foundation and Guaranteed Tax Base Programs = 189
Full-State Funding and State-Determined Spending Programs = 195
3. Adjustments for Student Needs, Education Level, Scale Economies, and Price = 197
Adjustments for Different Pupil Needs = 197
Development of Special-Needs Programs = 198
Issues in Determining Costs of Special-Needs Programs = 203
Simulation of Adjustments for Special-Needs Students = 224
Adjustments for Different Grade Levels = 226
Adjustments for Size = 230
Adjustments for Price Differences = 232
Conclusion = 234
A New School Finance Formula = 235
An Econometric Approach to Adjustments for Different Needs = 235
Chapter 4 Problems = 237
5 IMPROVING STATE SCHOOL FINANCE SYSTEMS = 241
1. A Framework for Analysis = 241
2. School Finance in Vermont = 243
The Vermont School Finance Problem = 244
Improving the Vermont School Finance System = 246
3. School Finance in Wisconsin = 249
The Wisconsin School Finance Problem = 250
Improving the Wisconsin School Finance System = 252
4. School Finance in Illinois = 255
The Illinois School Finance Problem = 256
Improving the Illinois School Finance Structure = 258
Conclusion = 262
6 ALLOCATION AND USE OF FUNDS AT THE DISTRICT, SCHOOL, AND CLASSROOM LEVELS = 264
1. Resource-Use Patterns at the National and State Levels = 266
Expenditures by Function = 266
Staffing Patterns = 269
2. Resource-Use Patterns at the District Level = 271
Expenditure Patterns across Districts within a State = 272
District Uses of New Money = 277
3. Resource-Use Patterns at the Site Level = 279
Expenditures by School and Classroom = 279
Summary and Conclusion = 286
7 WAYS TO IMPROVE EDUCATIONAL PRODUCTIVITY = 288
1. Measuring Educational Productivity = 289
What Is a Production Function? = 289
Linking Spending to Student Outcomes : Economic Research = 291
Why Is Educational Productivity So Elusive? = 296
New Ways to Assess Educational Productivity = 297
Reducing Class Size : A Brief Synthesis of the Literature = 299
Alternatives to Class-Size Reduction = 306
Market Approaches = 309
2. Improving Educational Performance Through Decentralized Management = 312
8 USING EDUCATION DOLLARS MORE WISELY TO IMPROVE RESULTS = 323
1. Examples from School Restructuring = 324
2. Staffing in America's Schools = 327
3. Resource Reallocation Possibilities = 330
Selected High-Performance School Designs = 332
What about Low-Spending Districts? = 342
The Reason Resource Reallocation is Possible = 342
4. The Process of Resource Reallocation = 345
5. Resource Reallocation in New Jersey = 349
9 CREATING AN EDUCATION SYSTEM WITH INCENTIVES = 352
1. Incentives for Students = 353
Standards for Being Promoted from One Education Level to the Next = 355
Standards for Graduation from High School = 357
Requirements for Admission into Higher Education = 359
Additional Incentives for Students = 360
Opportunities to Participate in Extracurricular School-Organized Activities = 361
2. Incentives for Teachers = 362
Goal Clarification Via Mission, Standards, and Testing = 362
Opportunities to Work Collaboratively to Improve the School = 363
Opportunities to Improve Professional Practice = 364
Incentives to Improve Knowledge and Skills = 365
Incentives to Improve Student Performance = 366
3. Incentives for Schools = 367
Incentives for Restructuring toward Higher-Performance Visions = 367
Incentives for Reallocating Education Resources to More Productive Uses = 370
Incentives for Producing Increases in Student Achievement = 371
Summary = 371
10 SCHOOL-BASED FINANCING : FORMULA FUNDING OF SCHOOL SITES = 373
1. The Overall Structure of a School Site-Based Financing System = 374
2. The Minimum School Percentage = 376
3. District Roles and Functions = 378
Core District Functions = 379
Optional District Functions = 384
4. The School Budget = 392
Functions Devolved to School Sites = 392
The School Budget = 393
Example of a School Formula = 398
Conclusion = 399
11 CHANGING TEACHER SALARY STRUCTURES = 403
1. Link to Standards- and School-Based Education Reform = 404
2. Change Teacher Compensation to Include Pay for Knowledge and Skills = 406
A New Form of the Single-Salary Schedule = 406
A Knowledge and Skill Pay Structure = 407
Examples of Knowledge- and Skills-Based Pay Structures = 411
Implementation Issues = 413
3. Provide School-Based Performance Incentives = 414
Examples of School-Based Performance Awards = 418
Research on School-Based Performance Awards = 420
4. An Example of a Comprehensive New Teacher Compensation System = 423
Conclusion = 425
Appendix = 426
Glossary = 430
References = 436
Author Index = 466
Subject Index = 473
