What Makes a Fair School Finance System?

This working paper explores the complexities involved in defining school funding equity and fairness. In defining what they mean by fairness, state policymakers must address several issues. The first concerns fairness for whom—property taxpayers or students. In defining a fair school funding system, should the focus be on the equality of inputs, frequently measured by revenues or spending, or should the focus be on educational outcomes, namely the quality of education provided to students? A third issue involves the question of whether fairness requires that states place limits on the education spending of property-wealthy communities. The author defines five different goals that have driven school funding policies over the past 50 years. A final section reconciles equity and adequacy goals.

A companion Lincoln Institute working paper, Designing School Aid Formulas to Achieve High-Quality and Equitable Education, describes the school funding formulas necessary to achieve five broad funding goals that have driven school finance policies over the past 50 years.