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Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

MAKING MONEY MATTER

Financing America's Schools

Committee on Education Finance

Helen F. Ladd and Janet S. Hansen, Editors

Commission on Behavioral and Social Sciences and Education

National Research Council

NATIONAL ACADEMY PRESS
Washington, D.C.

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

NATIONAL ACADEMY PRESS
2101 Constitution Avenue, N.W. Washington, D.C. 20418

NOTICE: The project that is the subject of this volume was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the volume were chosen for their special competences and with regard for appropriate balance.

This volume was supported by Contract No. RF95194001 between the National Academy of Sciences and the U.S. Department of Education. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the organizations or agencies that provided support for this project.

Library of Congress Cataloging-in-Publication Data

Making money matter : financing America’s schools / Helen F. Ladd and Janet S. Hansen, editors ; Committee on Education Finance, Commission on Behavioral and Social Sciences and Education, National Research Council.

p. cm.

Includes bibliographical references and index.

ISBN 0-309-06528-3 (casebound)

1. Education—United States—Finance. 2. Educational productivity—United States. 3. Educational equalization—United States. 4. Educational change—United States. I. Ladd, Helen F. II. Hansen, Janet S. III. National Research Council (U.S.). Committee on Education Finance. 

LB2825+

379.1'1'0973—dc21

99-050424

Suggested citation:

National Research Council (1999). Making Money Matter: Financing America's Schools. Committee on Education Finance, Helen F. Ladd and Janet S. Hansen, editors. Commission on Behavioral and Social Sciences and Education. Washington, DC: National Academy Press.

Additional copies of this volume are available from:
National Academy Press
2101 Constitution Avenue N.W. Washington, D.C. 20418 Call 800-624-6242 or 202-334-3313 (in the Washington Metropolitan Area). This volume is also available on line at http://www.nap.edu

Printed in the United States of America

Copyright 1999 by the National Academy of Sciences. All rights reserved.

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

THE NATIONAL ACADEMIES

National Academy of Sciences

National Academy of Engineering

Institute of Medicine

National Research Council

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M. Alberts is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. William A. Wulf is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy's purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M. Alberts and Dr. William A. Wulf are chairman and vice chairman, respectively, of the National Research Council.

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

COMMITTEE ON EDUCATION FINANCE

HELEN F. LADD (Cochair),

Terry Sanford Institute of Public Policy, Duke University

THOMAS SOBOL (Cochair),

Teachers College, Columbia University

ROBERT BERNE, Vice President for Academic Development,

New York University

DENNIS N. EPPLE,

Graduate School of Industrial Administration, Carnegie Mellon University

SUSAN H. FUHRMAN,

Graduate School of Education, University of Pennsylvania

EDMUND W. GORDON,

Department of Psychology, Yale University (emeritus)

JAMES W. GUTHRIE,

Peabody College, Vanderbilt University

STEPHEN P. KLEIN, RAND,

Santa Monica, California

DIANA LAM,

Providence Public School District, Providence, Rhode Island

LAURENCE E. LYNN, JR.,

School of Social Service Administration and Harris Graduate School of Public Policy Studies, University of Chicago

GARY NATRIELLO,

Teachers College, Columbia University

ALLAN R. ODDEN,

School of Education, University of Wisconsin-Madison

TED SANDERS, President,

Southern Illinois University

ROBERT M. SCHWAB,

Department of Economics, University of Maryland-College Park

KENNETH A. STRIKE,

Department of Education, College of Agriculture and Life Sciences, Cornell University

STEPHEN D. SUGARMAN,

School of Law, University of California at Berkeley

JOAN E. TALBERT,

School of Education, Stanford University

AMY STUART WELLS,

Graduate School of Education and Information Studies, University of California, Los Angeles

JANET S. HANSEN, Study Director

ROSEMARY CHALK, Senior Program Officer

NEAL D. FINKELSTEIN, Senior Program Officer

ANNE MARIE FINN, Research Associate

THOMAS A. HUSTED, Senior Consultant

PAUL A. MINORINI, Senior Consultant

NATHANIEL TIPTON, Senior Project Assistant

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

PANEL ON SPECIAL EDUCATION FINANCE

DAVID W. BRENEMAN (Chair),

Curry School of Education, University of Virginia

MARY-BETH FAFARD,

Northeast and Island Regional Educational Laboratory, Brown University

MARGARET E. GOERTZ,

Consortium for Policy Research in Education, University of Pennsylvania

MARGARET J. McLAUGHLIN,

Institute for the Study of Exceptional Children and Youth, University of Maryland

THOMAS B. PARRISH,

Center for Special Education Finance, American Institutes for Research, Palo Alto, California

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
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×

Acknowledgments

Many people contributed in important ways to the completion of this report; and we are most grateful for their efforts. First, we appreciate the support provided by the study's sponsor, the U.S. Department of Education, and the individuals within the Office of Education Research and Improvement with whom we worked during the project: Kent McGuire, assistant secretary, James Fox, and Duc-Le To.

The committee was assisted in its review of the voluminous literature related to education finance by a number of individuals who prepared background papers. We previously published eight of these papers related to issues in equity and adequacy.1 Authors (who were not also committee or staff members) included Melissa C. Carr, William D. Duncombe, William N. Evans, Margaret E. Goertz, Sheila E. Murray, Richard Rothstein, Leanna Stiefel, and John M. Yinger. These papers, plus the comments of reviewers selected by the National Research Council (NRC) in accordance with its report review procedures, were extremely helpful in preparing the analysis in this report. We again thank the reviewers of the previous volume: John Augenblick, Dominic Brewer, William Buss, David Figlio, Eric Hanushek, David Monk, Richard Murnane, Lawrence Picus, Andrew Reschovsky, Julie Underwood, and Arthur Wise.

Unpublished background papers that also greatly assisted us in our work were prepared by Ronald Fisher, Kenneth Godwin, Laura Hamilton, Jane

1  

National Research Council, Equity and Adequacy in Education Finance: Issues and Perspectives, Committee on Education Finance. Washington, DC: National Academy Press, 1999.

Page viii Cite
Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

Hannaway, Jennifer Hochschild, Jack Jennings, Frank Kemerer, Therese McGuire, Michele McLaughlin, and Cecilia Rouse.

In addition to the many scholars whose written work informed our deliberations and is acknowledged in the report's reference list, many individuals met with us to extend our understanding of specific issues.

A technical panel on special education, set up by the committee, met four times over a year to review the particular issues involved in financing education for students with disabilities. We thank panel chair David Breneman and members Mary-Beth Fafard, Margaret E. Goertz, Margaret J. McLaughlin, and Thomas B. Parrish for their hard work and excellent analysis.

We also benefited from the advice of 23 researchers and practitioners who joined us for a one-day workshop to discuss data needs related to education finance. Participants included John Augenblick, Dominic Brewer, Jay Chambers, Matthew Cohen, Thomas Downes, Jerry Fastrup, David Figlio, Pascal Forgione, William Fowler, Jr., Michael Garet, David Grissmer, Nancy Heiligman, Linda Hertert, Philip Kaufman, David Monk, Martin Orland, Lauri Peternick, Lawrence Picus, Paul Planchon, Richard Rothstein, Leanna Steifel, Duc-Le To, and Eugenia Toma. In addition, William Clune, Ronald Ferguson, Christopher Jencks, and William Taylor joined the committee to discuss issues of adequacy and equity and student achievement.

The report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the NRC's Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.

We wish to thank the following individuals for their participation in the review of this report: Christopher Cross, Council for Basic Education, Washington, D.C.; William H. Danforth, Chairman, Board of Trustees, Washington University, St. Louis; G. Alfred Hess, Jr., School of Education and Social Policy, Northwestern University; Caroline Hoxby, Department of Economics, Harvard University; James A. Kelley, National Board for Professional Teaching Standards, Southfield, Michigan; Cora Marrett, Vice Chancellor for Academic Affairs and Provost, University of Massachusetts, Amherst; David H. Monk, Dean of the College of Education, Pennsylvania State University; Anita A. Summers, Wharton School, University of Pennsylvania; David Tyack, School of Education, Stanford University; and James H. Wyckoff, Rockefeller College of Public Affairs and Policy, University at Albany, New York.

Although the individuals listed above have provided constructive comments and suggestions, it must be emphasized that responsibility for the final content of this report rests entirely with the authoring committee and the institution.

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

Finally, we wish to express our appreciation for the efforts of the staff at the NRC in supporting the committee's deliberations and in preparing this report for publication. Alexandra Wigdor, director of the Division on Education, Labor, and Human Performance, provided valuable guidance throughout the project. Rosemary Chalk served as staff for the technical panel on special education as well as chief editor of the previously published volume of papers on education equity and adequacy. Neal Finkelstein, Thomas Husted, and Paul Minorini provided analytical support on school finance, economic, and legal issues, respectively. Anne Marie Finn brought her incomparable organizational skills to the important tasks of organizing and managing the project library, preparing briefing notes for the committee, checking the accuracy of facts and references in the report, and overseeing final preparation of the manuscript for publication. Sharon Vandivere and later Nat Tipton provided administrative support for the committee, both in arranging its meetings and in preparing this and the earlier published volume. The report also benefited from the editorial attention of Christine McShane. The committee extends its sincere thanks and appreciation to all those who assisted us in our work.

Helen F. Ladd, Cochair

Thomas Sobol, Cochair

Janet S. Hansen, Study Director

Committee on Education Finance

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
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Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
×

PART II
FAIRNESS AND PRODUCTIVITY IN SCHOOL FINANCE

 

65

3

 

EQUITY I-SPENDING ON SCHOOLS

 

67

   

The Meaning of Equity

 

69

   

Pursuing Finance Equity Through the Courts

 

71

   

Other Approaches to Spending Equity

 

81

   

Reform and Spending Inequities

 

89

   

Equity at the Dawn of the New Century

 

98

4

 

EQUITY II-THE ADEQUACY OF EDUCATION

 

101

   

Possible Meanings of Adequacy

 

102

   

The Shift Toward Adequacy

 

107

   

State Responses to the Adequacy Movement

 

110

   

Conceptual and Technical Challenges

 

112

   

Promises and Pitfalls

 

131

5

 

IMPROVING THE PRODUCTIVITY OF SCHOOLS

 

134

   

Defining and Measuring Productivity

 

135

   

Understanding Educational Productivity

 

138

   

Using Finance-Related Strategies to Improve School Performance

 

161

PART III
STRATEGIES FOR MEETING THE GOALS

 

163

6

 

ACHIEVING GOAL 1: PROMOTING HIGHER ACHIEVEMENT IN A COST-EFFICIENT WAY

 

165

   

Reducing Funding Inequities and Inadequacies

 

165

   

Investing in Capacity

 

167

   

Changing Incentives to Make Performance Count

 

176

   

Empowering Schools or Parents or Both to Make Decisions About the Use of Public Funds

 

183

   

Conclusions

 

195

7

 

ACHIEVING GOAL 2: BREAKING THE NEXUS

 

196

   

Reducing Funding Inequities and Inadequacies

 

196

   

Investing in Capacity

 

202

   

Changing Incentives to Make Performance Count

 

214

   

Empowering Schools or Parents or Both to Make Decisions About the Use of Public Funds

 

227

Suggested Citation:"Front Matter." National Research Council. 1999. Making Money Matter: Financing America's Schools. Washington, DC: The National Academies Press. doi: 10.17226/9606.
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MAKING MONEY MATTER

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The United States annually spends over $300 billion on public elementary and secondary education. As the nation enters the 21st century, it faces a major challenge: how best to tie this financial investment to the goal of high levels of achievement for all students. In addition, policymakers want assurance that education dollars are being raised and used in the most efficient and effective possible ways. The book covers such topics as:

  • Legal and legislative efforts to reduce spending and achievement gaps.
  • The shift from "equity" to "adequacy" as a new standard for determining fairness in education spending.
  • The debate and the evidence over the productivity of American schools.
  • Strategies for using school finance in support of broader reforms aimed at raising student achievement.

This book contains a comprehensive review of the theory and practice of financing public schools by federal, state, and local governments in the United States. It distills the best available knowledge about the fairness and productivity of expenditures on education and assesses options for changing the finance system.

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