Enhancing the Feasibility of School Finance Reform

Reforming state education funding systems is difficult. In this paper, we argue that the probability of success is enhanced if policymakers and reformers have access to a model of the school funding system that allows them to analyze the impacts of a range of school funding proposals. This paper describes the construction of a five-year dynamic simulation model designed to analyze school funding reform proposals in Wisconsin. The model is heavily parameterized. It includes a parallel current law model and the capacity to automatically generate tables showing the aggregate budgetary impact and the distributional impacts of any proposal. The model allows for alternative spending and property tax levy responses by individual districts in response to changes in state aid. Results from the simulation led reformers to both add and drop several provisions. The result was a more politically feasible final proposal with a lower overall cost and property tax cuts for most districts.