research, legislation, data availability, and school reform, and analyze five different concepts of school finance equity that have been prominent since the 1970s. Finally, we conclude with thoughts about the relevance of the concepts to today's challenges in school finance.

Distinctions Implicit In Analyzing School Finance Equity

Above all, the idea of equity involves value judgments about how to determine fairness in the financing of K-12 education. As such, there are many different ways to approach a definition of equity. During the last quarter century, as ideas about equity have evolved, several important distinctions have been made. In some cases, these distinctions have emerged as part of the judicial or advocacy processes that have played such an important role in school finance equity since 1970.

In order to facilitate the presentation in this chapter, we first identify and define these distinctions. Although not every distinction is important to every concept of equity, different combinations apply to each and we discuss the distinctions in enough detail to be able to use them in the sections on equity concepts.4

The distinctions characterize differences among equity concepts as applied to school finance systems. A school finance system is a set of formulas and rules for using publicly collected revenues to pay for K-12 education.5 In the United States, each state is responsible for K-12 education within its borders and thus the school finance system is established in state law, often supplemented by state department of education regulations. Revenues to finance K-12 education come almost equally from state and local sources (about 93 percent of the total) and only in a small percentage from federal sources (about 7 percent of the total). State revenues are derived from each state's general tax and other revenues, consisting in most states primarily of sales and income taxes. Local revenues are derived mostly from property taxes and, to a lesser extent, from local sales and income taxes. States usually delegate responsibility for provision of K-12 education to local school districts and then design complex formulas to govern how state funds will be distributed to those districts. A general formula often applies to all students, with varying numbers of special formulas for different types of students (e.g., at-risk, gifted, handicapped), for specific types of spending (e.g., transportation, buildings), and for differences among districts in costs and size. In addition, state legislators often design some of the formulas to provide more money to poorer districts and/or to match local spending more generously for poorer districts. The federal government's aid to states and local school districts is almost entirely for special needs students such as economically disadvantaged or at-risk (Title I) or disabled (P.L. 94-142).

Once the formulas are in place, school districts "respond" to them by deciding

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