oversight

School Finance: State Efforts to Reduce Funding Gaps Between Poor and Wealthy Districts

Published by the Government Accountability Office on 1997-02-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




February 1997
                 SCHOOL FINANCE
                 State Efforts to Reduce
                 Funding Gaps Between
                 Poor and Wealthy
                 Districts




GAO/HEHS-97-31
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Health, Education, and
      Human Services Division

      B-275105

      February 5, 1997

      The Honorable Jeff Bingaman
      The Honorable Christopher Dodd
      The Honorable Carol Moseley-Braun
      United States Senate

      Children who come from poor families or live in poor communities often
      have low levels of academic achievement and high dropout rates. In
      addition, poor communities often lack the tax base to provide sufficient
      funding for education programs, even when they tax themselves at high
      rates. To counteract the adverse effects of poverty, the federal government
      has funded education services for low achievers in poor areas through
      specially targeted programs.1 This federal effort, however, only
      supplements the much larger role that state and local governments play.

      Many states recognize the additional cost of educating poor students and
      the struggle of poor districts to adequately fund the needs of their
      students. States have used a variety of strategies to address these
      problems. Given your interest in the issue, you asked us to determine
      (1) the size of the gap in total (state and local combined) funding between
      poor and wealthy school districts for each state, (2) the key factors that
      affect the size of states’ funding gaps, and (3) the effect of states’ school
      finance policies on the funding gap. In addition, you asked us to describe
      the implications of this information for state policies.

      To help answer these questions, we used school year 1991-92 district-level
      data, the most recent available, to analyze each state except Hawaii.2 We
      supplemented this information by contacting education officials in the
      states to determine the extent to which each state’s school finance system
      had changed since the 1991-92 school year. We used standard school
      finance measures and developed a new equity measure—implicit
      foundation level—that accounts for the effects of state policies on the
      funding levels of school districts. The implicit foundation level represents
      the minimum total funding that a state’s districts could spend per student
      if they were to make an equal local tax effort. Our approach helps explain


      1
       The Elementary and Secondary Education Act provides targeted programs to improve educational
      opportunities for students such as those who are poor or who have disabilities or limited English
      proficiency. Title I of this act is the largest federal education program for elementary and secondary
      school children and is for those whose education attainment is below the level appropriate for their
      age. It serves over 6 million children through supplemental instruction in reading, math, or language
      arts.
      2
       We did not review state targeting in Hawaii because the entire state is one district.



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                   the structural forces that drive the inequities between wealthy and poor
                   districts. Unlike some other studies, our analyses account for geographic
                   differences in education costs and student need among districts3 and use
                   income per pupil to measure districts’ ability to raise education revenues.4
                   Finally, we consulted with several school finance experts on the
                   methodology used in our review and the resulting information contained
                   in this report.5 Appendixes I to V describe our methodology in greater
                   detail. See the glossary at the end of this report for definitions of key
                   terms. We conducted our work between March and December 1996 in
                   accordance with generally accepted government auditing standards.


                   Although most states pursued strategies to supplement the local funding of
Results in Brief   poor school districts, wealthier districts in 37 states had more total (state
                   and local combined)6 funding than poor districts in the 1991-92 school
                   year. This disparity existed even after adjusting for differences in
                   geographic and student need-related education costs.7 On average, wealthy
                   districts had about 24 percent more total funding per weighted pupil than
                   poor districts.8




                   3
                    Because districts have different education costs, we adjusted all funding figures for geographic
                   differences in education costs by applying a recently developed teacher cost index. We also accounted
                   for differences in student need by adjusting the pupil count to give extra weight to those pupils who
                   were disabled or poor or by controlling for student need factors in our regressions.
                   4
                    Most school finance studies measure a district’s ability to raise revenues for education as district
                   wealth defined as property value per pupil. However, we used district income defined as resident
                   income per pupil, using total income data from the 1990 census, because we could not construct a
                   property value per pupil measure from the national district-level databases available. Furthermore,
                   beyond the field of school finance, income—as opposed to wealth—is the most commonly accepted
                   measure of the ability to raise revenue. The main limitation of our income measure is that it does not
                   include commercial or other nonresidential income and may therefore understate some districts’
                   ability to raise revenue.
                   5
                    School finance experts who reviewed our analyses and this report are Helen Ladd (Duke University),
                   Martin Orland (Department of Education’s National Center for Education Statistics (NCES)), and
                   Lawrence Picus (University of Southern California).
                   6
                    In this report, we refer to total funding as all revenue from local and state sources, including funds
                   used for capital expenditures and debt service. This excludes federal funding.
                   7
                    Unless otherwise noted, the figures in this report are in real dollars adjusted for cost and student need
                   differences within a state. App. V provides information on how to adjust each state’s figures to make
                   accurate national comparisons.
                   8
                    To account for differences in student need by district, disabled students were assigned a weight of 2.3
                   and poor students a weight of 1.2. These national weights were developed for the Department of
                   Education’s NCES. See app. II.
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Three factors affected the funding gap between a state’s poor and wealthy
districts.9 First, the extent to which a state targeted funding to poor
districts affected the funding gap. Although targeting efforts typically
reduced funding gaps, they did not eliminate them. Second, a state’s share
of total funding can reduce the funding gap, even when the targeting effort
is low. Finally, the local tax effort to raise education funding affected the
funding gap. At the local level, the greater the tax effort that poor districts
were willing to make compared with wealthy districts, the smaller the gap
in funding between these two types of districts. Poor districts in 35 states
made a greater tax effort than wealthy districts.

Because all three of these factors can affect the funding gap, analyzing the
effects of state school finance policies (targeting and state share) required
excluding the effects of the local tax effort. To do this, we estimated the
foundation level that each state’s school finance policies implicitly
supported. This implicit foundation level estimates the minimum total
funding per pupil that districts could finance if they were to make the
same local tax effort.

Our resulting analysis showed wide variations in the implicit foundation
level that state school finance policies supported in school year 1991-92.
This variation ranged from $721 in New Hampshire to $5,415 in Alaska,
with a national average of $3,134 per weighted pupil.10 The implicit
foundation levels of almost all states were less than their state average
funding levels. In 14 states, the implicit foundation level was less than half
the state average funding level.11

Although the relative tax effort of poor and wealthy districts greatly
affects the funding gaps between these districts, higher implicit foundation
levels can help reduce the gaps. Therefore, states can further reduce the

9
 For reporting purposes, we grouped the student population of each state into five groups. These
groups were determined by ranking the districts within a state according to increasing district income
and then dividing these districts into five groups, each with about the same student population. We
defined poor districts as those in the first group and wealthy districts as those in the fifth group.
Normally, each group consisted of about 20 percent of the student population. In some states,
however, the five groups may have differed greatly in the number of students because districts cannot
be statistically divided into smaller units. In a few states, one district (for example, New York City)
accounted for more than 20 percent of the student population and represented the entire group.
Nevada was divided into only four groups because of the distribution of the student population, with
the wealthiest group being group four.
10
    These amounts are adjusted nationally for differences in cost and need.
11
 The average is the maximum foundation level that is possible in a state given its total funding for
education. To achieve the maximum, states would have to optimize their policies to fund education
and target poor districts to enable all districts to finance the average funding level with an average tax
effort.



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                          funding gaps by increasing their targeting effort to poor districts,
                          increasing the state share of total funding, or increasing both. Officials in a
                          number of states reported making such changes between school years
                          1991-92 and 1995-96, although 25 states reported making little or no
                          changes in their targeting of poor districts or state share.


                          Until the 1800s, America’s schools were mainly private local entities. In the
Background                mid-1800s, several states rewrote their constitutions to create statewide
                          public education systems and establish government responsibility for
                          financing schools.12 Today, all states have constitutional provisions on free
                          public education, and, based in part on these provisions, a number of state
                          courts have ruled that education is a fundamental right subject to equal
                          protection under the law.

                          The largest single federal elementary and secondary education grant
                          program is title I of the Elementary and Secondary Education Act. The
                          program, which began in 1965, continues to focus on providing
                          compensatory services to educationally disadvantaged children through
                          categorical, program-specific grants. The fiscal year 1997 appropriations
                          for title I compensatory education for the disadvantaged was $7.7 billion.


State and Local Funding   Federal aid, however, only provides about 7 percent of the funding for
Varies                    elementary and secondary education. Nationwide, the other 93 percent is
                          about evenly split between state and local funding,13 although the state
                          share of total (state and local) funding for education varies by state.
                          Although states have increased their control over schools, state
                          contributions in the 1991-92 school year varied from 8 percent of total
                          funding in New Hampshire to 85 percent of total funding in New Mexico.14

                          States’ ability to fund education also varies. States with higher income
                          levels can provide more funding for their students. In the 1991-92 school
                          year, states’ average income per weighted pupil ranged from $41,385 in
                          Utah to $160,761 in New Jersey. States also vary in the number of students
                          with additional educational needs, such as poor or disabled students, who
                          tend to have education costs higher than average. For example, the

                          12
                             Allan R. Odden and Lawrence O. Picus, School Finance: A Policy Perspective (New York:
                          McGraw-Hill, Inc., 1992), pp. 1-19.
                          13
                            School Finance: Trends in U.S. Education Spending (GAO/HEHS-95-235, Sept. 15, 1995).
                          14
                           Our analysis excludes Hawaii, where the state provided nearly 98 percent of the total funding,
                          exclusive of federal funding, in the 1991-92 school year.



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                          student poverty rate among states in 1989 ranged from about 33 percent in
                          Mississippi to under 8 percent in New Hampshire.

                          In addition, localities’ ability to raise revenues varies widely. Localities
                          raise revenues primarily through property taxes and, to a lesser extent,
                          through local sales and income taxes. However, a heavy reliance on local
                          property taxes as a major source of school revenue has produced funding
                          disparities because school districts’ property tax bases vary widely.
                          Localities with low property values usually have low funding per pupil
                          even with high tax rates; localities with high property values have high
                          funding per pupil even with low tax rates.15 Since the late 1960s, the
                          funding gaps arising from the continued reliance on local tax revenues
                          have led to litigation challenging the constitutionality of state school
                          finance systems, with varying results.


Achieving Equitable       Researchers concerned about the equity of school finance systems—that
School Finance Systems    is, the distribution of education funding—have focused on two important
Involves Complex Issues   definitions of equity: vertical equity and fiscal neutrality. Vertical equity
                          recognizes that legitimate differences occur among children and that some
                          students, such as those who are disabled, have low academic achievement,
                          or limited English proficiency, need additional educational services. After
                          adjusting the pupil count to give greater weight to those pupils who need
                          extra educational services and adjusting the funding for cost differences in
                          educational resources, some experts would argue that funding per
                          weighted pupil should be nearly equal among districts. Fiscal neutrality
                          asserts that no relationship should exist between educational spending per
                          pupil and local district property wealth per pupil (or some other measure
                          of fiscal capacity). That is, the quality of education should be a function
                          only of the entire state’s wealth, not of a locality’s. Unlike vertical equity,
                          which calls for nearly equal funding per weighted pupil among districts
                          after adjustments have been made, fiscal neutrality allows for differences
                          in funding as long as they are not related to the districts’ taxable wealth.

                          In addition to equity, researchers are also concerned about the adequacy
                          of educational resources. Education funding is termed adequate if it
                          enables each student to achieve some minimum level of academic
                          performance. Not much is known, however, about the level of funding
                          needed to achieve a certain level of performance. As a result, determining
                          an adequate level of funding for a district is difficult.


                          15
                            Allan Odden, “School Finance in the 1990s,” Phi Delta Kappan, Vol. 73, No. 5 (1992), pp. 455-461.



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In response to legal and political pressures, states have sought to
equalize—that is, compensate for the differences in—districts’ abilities to
raise revenue for funding education. In general, states have used one or
both of the following equalization strategies: added new state or local
money to the school finance system to increase funding for poor districts
or redistributed the available funding to poor districts by modifying school
finance formulas. Redistributing education revenues may also include
recapturing the local revenues raised above an established level in wealthy
districts and giving them to poor districts.

One of the more common funding formulas used to equalize the ability of
districts to raise education revenues is the foundation program. A
foundation program sets an expenditure per pupil—the minimum
foundation—at a level that would provide at least a minimum-quality
education for every pupil. Usually, districts must put forth a minimum
local tax effort to receive state aid, which makes up the difference
between what localities raise by the required local tax effort and the
foundation amount. This funding formula results in states targeting more
state education funds, on a per pupil basis, to those districts with low tax
bases than to those with high tax bases.

Despite the seeming simplicity of this funding formula, equalizing school
finance systems is a complex and difficult undertaking. In a recent report,
we reviewed the experiences of three states that had used one or both of
the equalization strategies noted above.16 Although these states reported
reduced funding gaps, their legislative solutions reflected citizens’
concerns about increased taxes to raise more state revenues and concerns
of wealthy districts that wanted to maintain existing spending levels.




16
   School Finance: Three States’ Experiences With Equity in School Funding (GAO/HEHS-96-39,
Dec. 19, 1995).



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                        Although most states pursued strategies to supplement the local funding in
Wealthy Districts Had   their poorest districts, the strategies generally did not offset the advantage
More Education          of wealthy districts in raising local funds. These results occurred even
Funding per Weighted    after adjusting for the geographic differences in education costs and
                        student needs within each state. In most states, the total funding per
Pupil Than Poor         weighted pupil17 in districts was still largely determined by districts’
Districts in Most       income per weighted pupil.18 In other words, these states had not achieved
                        an income-based fiscal neutrality in their school finance system. On
States                  average, wealthy districts had about 24 percent more total funding per
                        weighted pupil than poor districts.

                        Figure 1 ranks states according to the extent to which total funding of
                        school districts in school year 1991-92 was linked to district income. In
                        this figure, the center line, which equals a fiscal neutrality score of 0,
                        represents the goal of ensuring that education funding is unrelated to
                        differences in district income per weighted pupil. The figure shows that
                        the total funding of districts in 37 states favored wealthier districts; that is,
                        the total funding increased as the income of the district increased.19 In
                        three states the opposite occurred—the total funding decreased as district
                        income increased.20 Among the 37 states whose school funding favored
                        wealthier districts, the amount of funding available as district income
                        increased varied widely. At the high end of the 37 states, students in
                        Maryland had about $25 more in total funding for a $1,000 increase in
                        income per weighted pupil above the state average. At the low end,
                        students in Washington had only about $4 more for a $1,000 increase in
                        income per weighted pupil above the state average.21




                        17
                          To account for differences in student need by district, disabled students were assigned a weight of
                        2.3 and poor students a weight of 1.2. These weights were developed for the Department of
                        Education’s NCES. See app. II.
                        18
                         District income is a measure of a district’s ability to raise revenue for education, which we define as a
                        district’s income per pupil adjusted for within-state differences in geographic and student need-related
                        costs. This measure includes personal income but not commercial or nonresident income of a district.
                        Somewhat different fiscal neutrality scores may have resulted if these other income categories had
                        been included. See app. III for a discussion of this variable.
                        19
                          However, another 8 states had positive fiscal neutrality scores that were not significantly different
                        from 0. These were Delaware, West Virginia, Utah, Iowa, Kansas, Mississippi, New Mexico, and Texas.
                        20
                         However, one state—Wyoming—had a negative fiscal neutrality score that was not significantly
                        different from 0.
                        21
                          Washington had the lowest positive fiscal neutrality score that was significantly different from 0.



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Figure 1: Wealthy Districts in Most States Had More Total Funding per Weighted Pupil Than Poor Districts, School Year
1991-92

                         Poor Districts Benefit                                                  Wealthy Districts Benefit

       Maryland
  Massachusetts
        Montana
         Virginia
      New York
   South Dakota
        Missouri
           Illinois
         Georgia
              Ohio
   Pennsylvania
       Michigan
        Alabama
   Rhode Island
  North Carolina
            Idaho
     Tennessee
    Connecticut
          Florida
 New Hampshire
   North Dakota
       Arkansas
       Louisiana
           Maine
        Vermont
    New Jersey
         Oregon
       Colorado
      Nebraska
         Indiana
  South Carolina
         Arizona
      Wisconsin
       Kentucky
      Minnesota
       California
       Delaware a
   West Virginia a
    Washington
              Utah a
              Iowa a
                    a
         Kansas
     Mississippia
    New Mexicoa
           Texas a
      Oklahoma
                    a
       Wyoming
          Alaska
         Nevada

                        -0.6     -0.5      -0.4   -0.3       -0.2   -0.1   0   0.1   0.2   0.3       0.4       0.5      0.6
                        Fiscal Neutrality Score

                                                                                                             (Figure notes on next page)


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                           Note: Fiscal neutrality = 0. In states with positive scores, total funding increased as district
                           income increased; in states with negative scores, total funding decreased as district income
                           increased. The fiscal neutrality score (which controls for differences in cost and need) is the
                           elasticity of total funding per weighted pupil relative to income per weighted pupil.

                           a
                               The neutrality score was not statistically different from 0.




                           Three key factors affected the size of the funding gap between poor and
Three Key Factors          wealthy districts. Two of these—targeting of state funds to poor districts
Affected Funding Gap       and the state’s share of overall education funding—represent states’
                           school equalization policies. The third factor—the relative local tax effort22
                           of poor districts to wealthy districts—stems mainly from choices made at
                           the local level. In general, increases in any one of these decreases the
                           funding gap between poor and wealthy districts.

                           Nationwide, the three factors accounted for 61 percent of the variation in
                           the income-related funding gap. Of the three factors, targeting was the
                           least important in explaining the variation in funding gaps between
                           wealthy and poor districts. The state’s share of total funding accounted for
                           more of the variation in the income-related funding gap than targeting. The
                           relative local tax effort of poor districts to wealthy districts accounted for
                           most of the variation (see app. III).


Targeting State Funds to   State targeting efforts23 typically helped to reduce but did not eliminate the
Poor Districts Helped      gap in total funding between wealthy and poor districts. These results
Reduce Funding Gap         occurred even after adjusting for geographic differences in education
                           costs and student need.24 For example, Connecticut’s wealthy districts had
                           over three times the amount of local funding as its poor districts in school
                           year 1991-92 (see table 1). In contrast, the state funding was over three
                           times higher in poor districts compared with wealthy districts; the wealthy
                           districts still had, however, about 34 percent more total funding per
                           weighted pupil than the poor districts. In Connecticut, the gap in total



                           22
                            Relative local tax effort is a state’s elasticity of local tax effort relative to income per weighted pupil.
                           Local tax effort is a ratio of a district’s local revenue to its income.
                           23
                            We define a state’s targeting effort as the elasticity of the district’s state funding per pupil to the
                           district’s income per pupil, while controlling for within-state differences in student need-related and
                           geographic costs. See app. V for a list of the states’ targeting effort and an explanation of the method
                           we used to calculate the effort.
                           24
                            We adjusted for student need by including student poverty, disability, high school, and enrollment
                           variables in the regression formula we used to determine state targeting effort. See app. V.



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                                         funding between the poor and wealthy districts was $2,559. Appendix III
                                         provides similar data for all states.

Table 1: Example of the Effect of a
State’s Targeting on Total Funding per                                         Average funding per weighted pupila                  Wealthy funding
Weighted Pupil (Connecticut), School                                                Poor group of        Wealthy group of            relative to poor
Year 1991-92                             Funding source                                  students                students                   fundingb
                                         Local                                                $2,540                   $8,486                   3.34
                                         State                                                $4,885                   $1,500                    .31
                                         Total                                                $7,426                   $9,985                   1.34
                                         a
                                          The poor and wealthy groups each represent about 20 percent of the student population.
                                         Figures do not add due to rounding.
                                         b
                                          We calculated this ratio by dividing the wealthy districts’ funding by the poor districts’ funding,
                                         that is, $8,486/$2,540.



                                         Like Connecticut, most states (33 of 49) targeted more state funds to poor
                                         districts to some degree on the basis of district income.25 Of the remaining
                                         16 states, 14 provided approximately equal state funding to poor and
                                         wealthy districts.26 Two states—Louisiana and North Dakota—provided
                                         more state funding to wealthy districts than to poor districts.

                                         Among the states that targeted more funds to poor districts, the additional
                                         amount of state funding varied widely.27 For example, for a $1,000
                                         decrease in district income below the state average, Nevada provided
                                         about $42 more in state funding per weighted pupil;28 Indiana provided
                                         about $6 more in state funding per weighted pupil.29 Appendix V provides
                                         information on all the states’ targeting efforts.




                                         25
                                           Somewhat different targeting efforts may have resulted if the measure of district income had
                                         included nonresident and commercial income in addition to resident income. See app. III for our
                                         definition of district income.
                                         26
                                             Statistically, these 14 states’ targeting efforts were not significantly different from 0.
                                         27
                                           Some states provide a minimum amount of state funding to all districts, regardless of district income.
                                         When we excluded the wealthiest 15 percent of the student population from our analysis, we found
                                         that the targeting effort substantially improved for 15 states; that is, the elasticity changed by –.15 or
                                         more. (See app. V.)
                                         28
                                           Unlike total funding per weighted pupil, state funding per weighted pupil reflects each state’s
                                         individual weighting of student need factors. We included variables in our estimation of state targeting
                                         that controlled for the student need-related costs associated with educating poor, disabled, and high
                                         school students and large numbers of students. See app. V for further explanation.
                                         29
                                             Nevada had a targeting elasticity of –1.007; Indiana had a targeting elasticity of –.099.



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A Higher State Share of                A high state share of total education funding offsets income-related
Overall Funding Offset                 funding gaps, even if the targeting effort is low. For example, Washington
Funding Gap                            had virtually no targeting effort but funded about 75 percent of the total
                                       funding for education. The poorest districts in Washington had only
                                       4 percent less ($229) to spend per weighted pupil than the wealthiest
                                       districts. In contrast, Michigan had a relatively high targeting effort but
                                       funded only about 33 percent of the total education funding in the state,
                                       which was relatively low. As a result, the poorest districts in Michigan had
                                       36 percent ($1,923) less to spend per weighted pupil than the wealthiest
                                       districts (see figs. 2 and 3). Appendix V provides information on the state
                                       share for all states.


Figure 2: Example of the Effect of a
Large State Share of Education Funds   7000    Funding per Weighted Pupil
on Minimum Targeting (Washington),
School Year 1991-92                    6000


                                       5000


                                       4000


                                       3000


                                       2000


                                       1000


                                          0
                                                     t




                                                                                       t
                                                res




                                                                                      s
                                                                                  hie
                                                 o




                                                                                 alt
                                              Po




                                                                                We




                                           Income Groups


                                                         Local Funding

                                                         State Funding



                                       Note: Funding has been adjusted for differences in geographic and student need-related costs
                                       within the state.




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Figure 3: Example of How Students in
Wealthy Districts May Have Had Much    Funding per Weighted Pupil
More Funding Despite Extensive         7000
Targeting (Michigan), School Year
1991-92
                                       6000


                                       5000


                                       4000


                                       3000


                                       2000


                                       1000


                                            0
                                                     t




                                                                                       st
                                                 es




                                                                                     hie
                                                 or




                                                                                   alt
                                                Po




                                                                                  We




                                            Income Groups


                                                         Local Funding

                                                         State Funding



                                       Notes: Funding has been adjusted for differences in geographic and student need-related costs
                                       within the state. Since school year 1991-92, Michigan has reported that its state share has
                                       increased almost 45 percentage points, which could result in a different figure.




Relative Local Tax Effort              The willingness of poor districts to tax themselves at a higher rate than
Affected Funding                       wealthy districts helped reduce the funding gap between poor and wealthy
                                       districts. In 35 states, poor districts made a higher tax effort than wealthy
                                       districts. The tax effort is defined as the ratio of district local funding to
                                       district income.30 Poor districts must make a higher level of tax effort to
                                       finance comparable education programs because the same tax effort
                                       generates less revenue in poor districts than in wealthy districts. For
                                       example, Kansas and Pennsylvania each targeted additional funds to poor
                                       districts to about the same extent and funded about the same share of
                                       total education funding. Kansas’ poor districts, however, taxed themselves

                                       30
                                        Somewhat different local tax efforts may have resulted if the measure of district income had included
                                       nonresident and commercial income in addition to resident income. See app. III for our definition of
                                       district income.



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                            about 24 percent more than the state’s wealthy districts,31 while
                            Pennsylvania’s poor districts had about the same tax effort as its wealthy
                            districts. As a result, the gap in total funding between poor and wealthy
                            districts was smaller in Kansas than in Pennsylvania (see fig. 1).


                            To determine the effects of state school finance policies on the funding
State School Finance        gap between poor and wealthy districts, we analyzed states’ school finance
Policies Reflected in       data. We developed a new equity measure, implicit foundation level, which
Implicit Foundation         indicates the extent to which these policies enable districts to finance a
                            minimum quality education for each student with an equal tax effort. Then
Level and                   we compared this level to the state average to determine states’
Equalization Effort         equalization efforts. This section describes how we developed these two
                            measures.


Implicit Foundation Level   We determined the combined effects of state equalization policies
                            (targeting and state share), while excluding the effects of local tax effort.
                            To accomplish this, we viewed each state as if it were distributing state
                            funds according to a foundation program. In such a program, the state
                            ensures all districts the ability to finance a foundation or a minimum
                            amount of funding per pupil, provided that the districts make a minimum
                            local tax effort. Using a foundation funding model and assuming all
                            districts made an equal local tax effort, we estimated the implicit
                            foundation level that each state’s equalization policies in school year
                            1991-92 could have supported. This implicit foundation level is an estimate
                            of the minimum amount of total funding that states’ districts could spend
                            per student if districts were to make an equal minimum local tax effort.32
                            This new measure, for the first time, allows analysts to examine the extent
                            to which the funding gap between poor and wealthy districts is due to
                            state equalization policies (state share and state targeting) and the extent
                            to which it is due to local policies (relative differences in local tax efforts).
                            Appendix IV explains how we developed the implicit foundation level.

                            Figure 4 illustrates the implicit foundation level using a hypothetical
                            example of two districts in a state, one poor and one wealthy. For each
                            district, we graphed how much total funding per weighted pupil is

                            31
                              However, since the 1992-93 school year, Kansas has allocated education funds through a new formula
                            that includes a statewide uniform tax rate for all districts.
                            32
                              The implicit foundation level includes both state and local funds adjusted for within-state differences
                            in student need-related and geographic costs. After making such adjustments, the implicit foundation
                            level becomes total funding per weighted pupil. See apps. IV and V for a discussion of the methodology
                            we used to calculate the implicit foundation level.



                            Page 13                                                   GAO/HEHS-97-31 Reducing Funding Gaps
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associated with a given level of tax effort.33 Since poor districts generally
receive more state funding per weighted pupil than wealthy districts, in
this example we assigned the poor district $2,500 in state funding per
weighted pupil, twice the amount the wealthy district was assigned.
Therefore, the line for the poor district starts out higher (the district has
more state money) on the graph than the line for the wealthy district
(which has less state money). As figure 4 shows, as both districts increase
their local tax effort, the wealthy district raises more local revenue than
the poor district for a given level of tax effort. For any given tax effort past
a certain point (where the lines cross on fig. 4), the wealthy district’s local
revenue more than offsets the additional state money that poor districts
receive—therefore, the total funding in wealthy districts exceeds total
funding in poor districts. The point at which the total funding lines cross is
the implicit foundation level and is the only point at which the two
districts have the same amount of total funding for the same tax effort.




33
 Since the student weights are relative to within-state differences, the student weight factors
associated with any state-level funding per pupil amount equal 1.



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Figure 4: Determining the Implicit Foundation Level


Total Funding per Weighted Pupil (Dollars)
10,000




 8,000




 6,000



                         State Average


 4,000
                 Implicit
               Foundation
                  Level




 2,000                               Minimum
                                       Tax
                                      Effort




     0
         0                              5                      10   15                        20
         Tax Effort (Local Dollars per $1,000 of District Income)

                     Wealthy District
                     Poor District




                                               Page 15                   GAO/HEHS-97-31 Reducing Funding Gaps
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Equalization Effort   We compared states’ implicit foundation levels with the maximum
                      foundation levels that would be possible given each state’s amount of total
                      funding devoted to education. We call this ratio a state’s equalization
                      effort. State average funding per weighted pupil is actually the maximum
                      foundation level (see app. IV for a mathematical explanation of this). A
                      state’s equalization effort is a measure of the extent to which districts in a
                      state can finance the state average with an average tax effort. To achieve
                      the maximum foundation level without changing the total funding for
                      education, a state could increase its effort to target funds to poor districts
                      or increase the state’s share of education funding or both.


                      States’ implicit foundation levels varied widely, averaging $3,134 per
States’ Implicit      weighted pupil, with levels ranging as low as $721 in New Hampshire to as
Foundation Levels     high as $5,415 in Alaska in school year 1991-92.34 In line with the purpose
and Equalization      of foundation programs, these implicit levels indicate the extent to which
                      states’ school finance policies ensure a level of funding assumed adequate
Efforts Varied        for districts to finance at least a minimum quality education for every
                      student with an equal local tax effort. Appendix V provides information on
                      the implicit foundation levels in each state.

                      States’ equalization efforts also varied. Only one state—Nevada—made the
                      maximum equalization effort given the total funding available for
                      education in the state. As a result, Nevada’s state school policies in school
                      year 1991-92 enabled each district to spend the state average on each
                      student with an average tax effort.35 The implicit foundation levels in the
                      other 48 states were less than their state averages, with equalization
                      efforts ranging from about 87 percent (Arkansas and Kentucky) to about
                      13 percent (New Hampshire). In 14 states, the implicit foundation level
                      was less than half the state average. Figure 5 summarizes the states’
                      equalization efforts in school year 1991-92.36

                      34
                       These figures have been adjusted for national differences in geographic and student need-related
                      costs.
                      35
                       In fact, Nevada targeted more state funds to poor districts than was necessary to allow districts to
                      spend the state average funding per weighted pupil with an average tax effort. As a result, poor
                      districts in Nevada were able to finance the state average funding level with a lower tax effort than
                      wealthy districts.
                      36
                        In addition to targeting funds to poor districts, some states also provided the same minimum amount
                      of state funding to all districts, regardless of district income. Unlike funding for lower income districts,
                      such funding for wealthy districts was not part of the targeting effort because it was not sensitive to
                      district income. Consequently, we also estimated the state implicit foundation level and equalization
                      effort, assuming the goal was to have all students except for the 15 percent of students in the
                      wealthiest districts receive the implicit foundation level. Using this analysis, we found that 16 states
                      had a net increase of 10 percentage points or more in their equalization effort. See table V.9 in app. V
                      for the results of this analysis.



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Figure 5: States’ Equalization Efforts, School Year 1991-92


         Nevada
       Arkansas
       Kentucky
          Florida
    New Mexico
   West Virginia
      Minnesota
  South Carolina
      Oklahoma
       California
          Alaska
       Colorado
    Washington
            Idaho
       Delaware
           Texas
              Utah
        Alabama
  North Carolina
         Georgia
      New York
   Rhode Island
     Mississippi
           Maine
       Maryland
       Louisiana
NATIONAL AVE.
         Indiana
      Wisconsin
         Arizona
    Connecticut
         Kansas
              Iowa
   Pennsylvania
         Virginia
       Wyoming
        Montana
              Ohio
       Michigan
   North Dakota
    New Jersey
     Tennessee
        Missouri
        Vermont
      Nebraska
           Illinois
  Massachusetts
         Oregon
   South Dakota
 New Hampshire


                      0       10   20       30        40      50   60   70   80        90      100
                      Percentage




                                           Page 17                           GAO/HEHS-97-31 Reducing Funding Gaps
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State Equalization Efforts   State equalization efforts, representing the combined effects of state
Helped Reduce Funding        targeting and state share, have an important effect on reducing the funding
Gaps                         gap between poor and wealthy districts. When we controlled for the
                             differences in the tax effort of wealthy and poor districts in each state, we
                             found that states with higher equalization efforts tended to have smaller
                             funding gaps between poor and wealthy districts, as measured by their
                             fiscal neutrality scores (see app. V). However, differences in the tax effort
                             of wealthy and poor districts still accounted for more of the variation in
                             income-related funding gaps than did states’ equalization efforts.37 That is,
                             states’ finance policies, as measured by their equalization efforts, helped to
                             reduce the funding gap between poor and wealthy districts, but
                             differences in the tax effort of these districts continued to be the more
                             important determinant of the funding gap.

                             For example, Maryland had an above average equalization effort (about
                             63 percent), yet it also had the largest income-related funding gap (see fig.
                             1). This large gap can be explained in part by the relative local tax effort:
                             wealthy districts in Maryland made a tax effort that was about 53 percent
                             higher than the tax effort of poor districts, the highest such ratio in the
                             nation. Thus, despite Maryland’s substantial efforts to equalize funding, the
                             effort did not overcome the differences in local funding by district that
                             were due, in part, to the relatively high tax effort of wealthy districts (see
                             app. III).


                             To further reduce the funding gap between poor and wealthy districts,
Large Shifts in State        states would need to increase their equalization effort by either increasing
Targeting May Be             their share of total funding, increasing their targeting effort to poor
Necessary to                 districts, or increasing both. To illustrate the extent of the change that
                             would be needed to maximize a state’s equalization effort without any
Maximize State               increase in state funding, we analyzed state targeting in school year
Equalization Efforts         1991-92, while holding the state share constant and assuming all districts
                             made an equal tax effort.38 Under this scenario, 48 states would have had
                             to reduce their funding of wealthy districts to increase their funding of
                             poor or middle-income districts39 or both. In many states, the magnitude of
                             the targeting change would have had to be significant to enable districts to

                             37
                              Nationwide, equalization effort and relative local tax effort accounted for about 63 percent of the
                             variation in the income-related funding gap.
                             38
                              In a forthcoming school finance report, we plan to more fully analyze how state targeting and state
                             share would need to change to reduce the funding gaps.
                             39
                              We defined the middle-income districts as any one or more of the middle three income groups, which
                             combined represent about 60 percent of the student population.



                             Page 18                                                   GAO/HEHS-97-31 Reducing Funding Gaps
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spend the state average with an average tax effort. Relative to the
distribution needed to attain the state average for all students, 29 states
would have had to significantly shift their funding from wealthy districts to
poor or middle-income districts or both (see table 2).




Page 19                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                      B-275105




Table 2: States That Would Have Had
to Significantly Shift Funds From                                                                          Have changed school
Wealthy Districts to Maximize         States needing to shift 35%        Would also have needed            finance system since
Equalization Efforts, School Year     or more of state funds from        to increase state funding         school year 1991-92 to
1991-92                               wealthy districts to poor or       in poor districts by 35% or       increase funding to
                                      middle-income districtsa           more                              low-wealth districts
                                      Arizona                            X
                                      California
                                      Colorado                                                             X
                                      Connecticut                                                          X
                                      Illinois                           X
                                      Kansas                                                               X
                                      Louisiana                                                            X
                                      Maine
                                      Maryland                           X                                 X
                                      Massachusetts                                                        X
                                      Michigan                                                             X
                                      Mississippi                                                          X
                                      Missouri                           X                                 X
                                      Montana                            X                                 X
                                      Nebraska                           X                                 X
                                      New Hampshire                      X
                                      New Jersey                                                           X
                                      New York
                                      North Dakota                                                         X
                                      Ohio                                                                 X
                                      Oregon                             X                                 X
                                      Pennsylvania
                                      Rhode Island                                                         X
                                      South Dakota                       X
                                      Tennessee                                                            X
                                      Vermont                            X
                                      Virginia
                                      Wisconsin
                                      Wyoming
                                      a
                                        The amount of shifting is based on a comparison of what state funding wealthy districts received
                                      and the funding they would have received if all districts could have financed the state average
                                      with an average tax effort and if no change had occurred in the state share or total funding for
                                      education.




                                      Page 20                                                 GAO/HEHS-97-31 Reducing Funding Gaps
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                       Detailed information on state equalization policies and changes in state
                       funding needed to enable districts to spend the state average for each
                       student with an average tax effort appears in the state profiles in this
                       report (see apps. VII through LV). Each profile provides information on
                       (1) the actual state and local funding distribution to districts in school year
                       1991-92 for districts in five groups of approximately equal student
                       population, according to increasing district income, and (2) how funding
                       would have been distributed among these groups if each district could
                       have financed the state’s average total funding per weighted pupil with an
                       average tax effort.40


                       We contacted state education officials to determine the extent to which
Twenty-Five States     the states had changed their targeting effort and state share between
Reported Making        school years 1991-92 and 1995-96. Twenty-five states reported making little
Little or No Changes   or no changes to their targeting effort or state share. The remaining 24
                       states reported making targeting changes that may have increased their
Since School Year      implicit foundation levels. For example, education officials in Missouri
1991-92                said that changes implemented in 1993 had increased targeting to
                       low-wealth districts and that the state’s new formula provides more state
                       funding to districts with both lower property wealth and higher tax
                       efforts.41 Six of the 24 states also reported making increases of
                       10 percentage points or more in their state share of education funding:
                       Tennessee (10), Colorado (11), Kansas (18), Utah (24), Oregon (30), and
                       Michigan (45).

                       In some cases, lawsuits challenging the constitutionality of a state’s school
                       finance system have prompted changes in targeting or state share. For
                       example, one lawsuit alleged that Tennessee’s school finance system
                       resulted in inequalities that violated the state constitution, and the state
                       has since significantly revised its system.42 Appendix LVI summarizes the
                       changes states have made between school years 1991-92 and 1995-96.

                       Of the 10 states noted in table 2 requiring the largest shifts in state funding
                       to poor districts, 5 reported making changes that provided more or much


                       40
                         Critical data in each state profile include school year 1991-92 data on the state share of total funding,
                       the state targeting effort, the average total funding per weighted pupil, the implicit foundation level (in
                       dollars and as a percent of the average), the fiscal neutrality score, and state and group data for the
                       number of districts and pupils, poverty and disabled rates, income per pupil, and tax effort.
                       41
                         We plan to analyze the effects of such increases in a forthcoming school finance report.
                       42
                          For a discussion of Tennessee Small School System v. McWherter, 851 s.w.2d 139 (Tenn. 1993), see
                       GAO/HEHS-96-39, Dec. 19, 1995.



                       Page 21                                                    GAO/HEHS-97-31 Reducing Funding Gaps
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                  more state funding to low-wealth districts than in school year 1991-92. The
                  other five states reported making little or no changes to their school
                  finance system by school year 1995-96.43


                  Recognizing the struggle of poor districts to adequately fund the education
Conclusions       needs of their students, states have used several strategies to reduce the
                  funding gap between poor and wealthy districts. States that want to
                  further reduce the funding gap between poor and wealthy districts would
                  have to continue to increase the state share of total funding, increase their
                  targeting effort to poor districts, or increase both. If targeting is increased,
                  poor and middle-income districts would receive more state funding, while
                  wealthy districts would receive less state funding. States may also increase
                  their state share of education funding. A higher state share can offset
                  income-related gaps even if the targeting effort is low, according to our
                  analysis. However, making such changes may be difficult because of
                  taxpayer concerns.

                  Decisionmakers and others can use the measures in this report—
                  particularly the fiscal neutrality score, implicit foundation level, and
                  equalization effort—to assess the equity effects of current and proposed
                  changes in state school finance policies. In addition, the implicit
                  foundation level, when compared to a standard like the state average, can
                  be used as a measure of the adequacy of funding provided by a state’s
                  school finance system. Moreover, these measures can be used to assess
                  progress over time in achieving more equity in school finance systems
                  within states.


                  The Department of Education reviewed a draft of this report and had no
Agency Comments   comments.


                  As agreed with your office, unless you publicly announce its contents
                  earlier, we plan no further distribution of this report until 30 days from the
                  date of this letter. At that time, we will send copies to appropriate
                  congressional committees and all members of the Congress, the Secretary
                  of Education, and other interested parties.


                  43
                    The five states that reported making changes as of school year 1995-96 to increase funding for
                  low-wealth districts were Maryland, Missouri, Montana, Nebraska, and Oregon. The five states that
                  reported making little or no changes since school year 1991-92 were Arizona, Illinois, New Hampshire,
                  South Dakota, and Vermont. South Dakota reported making a change that would target more funding
                  to low-wealth districts as of January 1997.



                  Page 22                                                 GAO/HEHS-97-31 Reducing Funding Gaps
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Please contact me on (202) 512-7014 or Eleanor L. Johnson, Assistant
Director, on (202) 512-7209 if you or your staff have any questions. GAO
contacts and staff acknowledgments appear in appendix LVII.




Carlotta C. Joyner
Director, Education and
  Employment Issues




Page 23                                   GAO/HEHS-97-31 Reducing Funding Gaps
Contents



Letter                                                                                            1


Appendix I                                                                                       32
                       Scope                                                                     32
Scope and              Data Sources                                                              32
Methodology            Methodology                                                               33
Overview
Appendix II                                                                                      36
                       Adjusting for Differences in Educational Resource Costs                   37
Adjusting for          Adjusting for Differences in Student Need                                 38
Geographic and
Student Need-Related
Differences in
Education Costs
Appendix III                                                                                     43
                       Calculating Fiscal Neutrality Scores                                      43
Analysis of Fiscal     Relationship Between Funding Gaps and State Share, State                  53
Neutrality               Targeting, and Relative Local Tax Effort

Appendix IV                                                                                      61
                       Equalizing School Funding With a Foundation Program                       61
Estimating States’     State Targeting Necessary to Achieve the Maximum Foundation               63
Targeting Efforts,       Level
                       State Targeting That Produces an Implicit Foundation Level                66
Implicit Foundation      Below the State Average
Levels, and
Equalization Efforts
Appendix V                                                                                       71
                       Calculating State Targeting Efforts                                       71
Estimating Equity      Calculating State Implicit Foundation Levels and Equalization             86
Measures                 Effort
                       Funding Gaps, State Equalization Effort, and Relative Local Tax           96
                         Effort




                       Page 24                                  GAO/HEHS-97-31 Reducing Funding Gaps
                          Contents




Appendix VI                                                           98

Guide to State Profiles
Appendix VII                                                         100

State Profile: Alabama
Appendix VIII                                                        104

State Profile: Alaska
Appendix IX                                                          108

State Profile: Arizona
Appendix X                                                           113

State Profile:
Arkansas
Appendix XI                                                          117

State Profile:
California
Appendix XII                                                         121

State Profile:
Colorado
Appendix XIII                                                        125

State Profile:
Connecticut
Appendix XIV                                                         130

State Profile:
Delaware




                          Page 25    GAO/HEHS-97-31 Reducing Funding Gaps
                          Contents




Appendix XV                                                          134

State Profile: Florida
Appendix XVI                                                         138

State Profile: Georgia
Appendix XVII                                                        142

State Profile: Idaho
Appendix XVIII                                                       146

State Profile: Illinois
Appendix XIX                                                         151

State Profile: Indiana
Appendix XX                                                          155

State Profile: Iowa
Appendix XXI                                                         159

State Profile: Kansas
Appendix XXII                                                        163

State Profile:
Kentucky
Appendix XXIII                                                       167

State Profile:
Louisiana
Appendix XXIV                                                        171

State Profile: Maine




                          Page 26    GAO/HEHS-97-31 Reducing Funding Gaps
                          Contents




Appendix XXV                                                         175

State Profile:
Maryland
Appendix XXVI                                                        179

State Profile:
Massachusetts
Appendix XXVII                                                       184

State Profile:
Michigan
Appendix XXVIII                                                      189

State Profile:
Minnesota
Appendix XXIX                                                        194

State Profile:
Mississippi
Appendix XXX                                                         198

State Profile: Missouri
Appendix XXXI                                                        202

State Profile: Montana
Appendix XXXII                                                       207

State Profile:
Nebraska
Appendix XXXIII                                                      212

State Profile: Nevada



                          Page 27    GAO/HEHS-97-31 Reducing Funding Gaps
                       Contents




Appendix XXXIV                                                    217

State Profile: New
Hampshire
Appendix XXXV                                                     222

State Profile: New
Jersey
Appendix XXXVI                                                    227

State Profile: New
Mexico
Appendix XXXVII                                                   232

State Profile: New
York
Appendix XXXVIII                                                  237

State Profile: North
Carolina
Appendix XXXIX                                                    242

State Profile: North
Dakota
Appendix XL                                                       247

State Profile: Ohio
Appendix XLI                                                      251

State Profile:
Oklahoma




                       Page 28    GAO/HEHS-97-31 Reducing Funding Gaps
                         Contents




Appendix XLII                                                       255

State Profile: Oregon
Appendix XLIII                                                      260

State Profile:
Pennsylvania
Appendix XLIV                                                       264

State Profile: Rhode
Island
Appendix XLV                                                        268

State Profile: South
Carolina
Appendix XLVI                                                       272

State Profile: South
Dakota
Appendix XLVII                                                      276

State Profile:
Tennessee
Appendix XLVIII                                                     280

State Profile: Texas
Appendix XLIX                                                       285

State Profile: Utah
Appendix L                                                          289

State Profile: Vermont




                         Page 29    GAO/HEHS-97-31 Reducing Funding Gaps
                          Contents




Appendix LI                                                                                        294

State Profile: Virginia
Appendix LII                                                                                       299

State Profile:
Washington
Appendix LIII                                                                                      303

State Profile: West
Virginia
Appendix LIV                                                                                       307

State Profile:
Wisconsin
Appendix LV                                                                                        311

State Profile:
Wyoming
Appendix LVI                                                                                       315

State Survey Results
Appendix LVII                                                                                      318

GAO Contacts and
Staff
Acknowledgments
Glossary                                                                                           319




                          Abbreviations

                          CCD        Common Core of Data
                          NCES       National Center for Education Statistics
                          TTR        total taxable resources


                          Page 30                                  GAO/HEHS-97-31 Reducing Funding Gaps
Page 31   GAO/HEHS-97-31 Reducing Funding Gaps
Appendix I

Scope and Methodology Overview


               The objectives of this study were to determine (1) the size of the gap in
               total (state and local combined) funding between poor and wealthy school
               districts for each state, (2) the key factors that affect the size of states’
               funding gaps, and (3) the effect of states’ school finance policies on the
               funding gaps. To help answer these questions, we used school year 1991-92
               district-level data from the Department of Education, the most recent
               available, and supplemented these data when key data were missing. We
               used standard school finance measures and developed a new method to
               measure the effect of state policies on the funding levels of school
               districts.44 We supplemented our analysis by contacting education officials
               in the states to determine the extent to which a state’s school finance
               system had changed since school year 1991-92.


               For this study, we conducted a district-level analysis of all states except
Scope          Hawaii.45 We wanted our analysis to examine state funding for regular
               school districts with students in grades kindergarten to 12, so the analysis
               excluded administrative districts and districts serving unique student
               populations, such as vocational or special education schools.46 Our
               analysis also excluded a number of small districts that had extreme
               outlying values of income per pupil.47 Finally, we excluded districts that
               lacked data for critical variables, such as poverty level. The 2,235 districts
               excluded from the analysis had a total enrollment of 335,558. The final
               database used in our analysis of the 49 states contained 14,425 districts
               with a total of 41,204,610 students, representing 99.2 percent of the
               students in 49 states.


               This study was based mainly on revenue and demographic data obtained
Data Sources   from the Department of Education’s Common Core of Data (CCD) for the

               44
                Various school finance experts reviewed this new method. The following experts were involved in
               early discussions and reviewed drafts of this report: Helen Ladd (Duke University), Martin Orland
               (Department of Education’s National Center for Education Statistics), and Lawrence Picus (University
               of Southern California).
               45
                 Hawaii’s state school system is considered one district, so no comparisons can be made about state
               allocations to different districts. Similarly, the District of Columbia and five U.S. territories (American
               Samoa, Guam, Northern Marianas, Puerto Rico, and Virgin Islands) have one-district systems and were
               not included in our analysis.
               46
                That is, we excluded districts in the Common Core of Data (CCD) with agency type codes 3 to 7 and
               school district codes 4 to 7.
               47
                 A total of 49 districts were excluded as outliers using the method developed by David A. Belsley,
               Edwin Kuh, and Roy E. Welsch, Regression Diagnostics: Identifying Influential Data and Sources of
               Collinearity (New York: John Wiley and Sons, 1980), pp. 27-30. Specifically, we used their DFBETA
               statistic as the basis for deleting outlying observations.



               Page 32                                                    GAO/HEHS-97-31 Reducing Funding Gaps
              Appendix I
              Scope and Methodology Overview




              1991-92 school year, the most current data available for a national set of
              districts. Data for the CCD were submitted by state education agencies and
              edited by the Education Department. We obtained district per capita
              income and population data directly from the 1990 census because they
              were not available in the CCD.

              For variables in our analysis that had missing or incomplete data, we
              obtained the data directly from state education offices. For example, we
              obtained district-level data for disabled students for school year 1991-92
              directly from the state education offices for nine states because the CCD
              either did not report the number of disabled students in the states or
              reported a number substantially different from one reported by another
              Education Department source.48 We made further edits on the basis of
              consultations with Department of Education experts.

              In some cases, we imputed critical data when they were missing and not
              available from other sources. We imputed income per pupil data for 199
              districts in California because the per capita income data needed to
              compute this variable were not reported by these districts.49 We also
              imputed cost index data for 310 districts, including 18 in Alaska and 72 in
              New York (mainly Suffolk County).50 The imputation method we used to
              impute cost index data was based on the recommendation of the school
              finance expert who developed the cost index.

              We conducted structured telephone interviews with state school finance
              officials to determine the extent to which states had changed their school
              finance systems since school year 1991-92. We did not, however, verify the
              accuracy of the officials’ statements.


              To measure the size of the gap in total funding between poor and wealthy
Methodology   districts, we used the elasticity of total (state and local) funding in a



              48
                The CCD did not report disabled student data for Kentucky, Ohio, Oklahoma, Pennsylvania, and
              Virginia. The CCD provided data on disabled students for Illinois, Indiana, Louisiana, and New Jersey
              that were at least 15 percent different than and at least 3,500 disabled students different from those
              reported by the Department of Education’s Office of Special Education and Rehabilitative Services for
              school year 1991-92.
              49
                We developed a formula to predict the income per pupil of the missing districts by running a
              regression between income per pupil and median housing value for districts in California whose
              median housing value was at least $5,000.
              50
               Cost index values for these districts were imputed using the value from a district with a similar
              enrollment in the same or a similar county.



              Page 33                                                   GAO/HEHS-97-31 Reducing Funding Gaps
    Appendix I
    Scope and Methodology Overview




    district relative to district income,51 a measure of a district’s ability to raise
    revenue for education. In a regression model, we used dependent and
    independent variables that were adjusted for differences in geographic
    cost and student need within the state and put into index form52 (see app.
    II). A district’s total funding per weighted pupil was the dependent
    variable; a district’s income per weighted pupil was the independent
    variable.53 Each observation was weighted by the district size to allow
    districts with larger enrollments to have a greater effect on the results.
    Appendix III describes this process in detail.

    To determine the relationship between the total funding gaps and the key
    factors affecting the size of the gaps, we conducted a regression analysis
    using a state’s fiscal neutrality score (the elasticity of total funding to
    district income) as the dependent variable and the following as
    independent variables:

•   a state’s share of total funding,
•   a state’s targeting effort (described in this app.), and
•   a state’s relative local tax effort (the elasticity of local tax effort relative to
    district income—see app. III).

    To measure the extent to which states targeted their education funds to
    poor districts, we estimated the elasticity of state funding in a district
    relative to district income.54 Using a regression model, we defined the
    dependent variable as a district’s state funding per pupil and the key
    independent variable as a district’s income per pupil. Both variables were
    adjusted for differences in geographic cost within the state (see app. II).
    To control for student need and economies of scale, we included four
    additional independent variables: poor students, disabled students, high
    school students, and district size. All variables in the analysis were put into
    index form and were included in the regression. Each observation was
    weighted by the district size to allow districts with larger enrollments to
    have a greater effect on the results. We set certain constraints on the
    regression coefficients. The resulting regression coefficient of the income

    51
     This elasticity measures the average percent change in total funding for a 1-percent increase in a
    district’s income.
    52
      To derive the index form of each variable, we measured all variables as district rates and then divided
    the district rate by its corresponding state average.
    53
      A better income measure of a district’s ability to raise revenue for education would include
    commercial and other nonresidential income in addition to personal income. However, such
    district-level data are not available for all states in a national database. Therefore, we used total
    income data from the 1990 census to determine income per pupil. App. III further explains this
    measure of district income.
    54
     This elasticity measures the average percent change in state funding for a 1-percent increase in a
    district’s income.
    Page 34                                                     GAO/HEHS-97-31 Reducing Funding Gaps
Appendix I
Scope and Methodology Overview




per pupil variable is our measure of a state’s targeting effort and measures
the elasticity of state funding relative to district income. Appendix V
describes this methodology in greater detail.

We developed an equity measure—implicit foundation level—to assess the
state policies (targeting and state share) that affect the funding gap
between wealthy and poor districts. We calculated this measure using a
formula involving a state’s share of total funding, a state’s targeting effort,
and a state’s average total funding per weighted pupil. To calculate the
targeting effort in this formula, we used the same multivariate linear
regression as the one already described, except we imposed the restriction
that the income per pupil variable have a nonpositive coefficient.
Appendix IV explains the theory behind the equity measure we developed,
and appendix V explains the regression.

Appendixes VII through LV provide profiles of each state’s school finances
in school year 1991-92. The profiles provide summary information on the
total funding per weighted pupil, states’ share of education funding, states’
targeting effort, implicit foundation level, equalization effort, and fiscal
neutrality score. To report the state profiles for school year 1991-92, we
ranked each state’s districts according to increasing district income and
then divided the districts into five groups, each with about the same
number of students.55 We then calculated the mean state, local, and total
funding per weighted pupil for each group. These funding figures were
also adjusted for differences in geographic costs within the state (see app.
II). Appendix VI provides an overview of the state profiles.

Because we relied on state and local funding data from the 1991-92 school
year, we telephoned state school finance officials to determine what
changes had occurred in the school finance systems from school years
1991-92 through 1995-96. We specifically asked about changes in targeting
that would affect low-wealth districts and changes in the state’s share of
total funding. Appendix LVI presents interview results.




55
  Normally, each group consisted of about 20 percent of the student population. In some states,
however, the five groups may have had large differences in the number of students because our
analysis was at the district level and districts cannot be statistically divided into smaller units. In a few
states, one district (for example, in Las Vegas and New York City) accounted for more than 20 percent
of the student population and represented the entire group. Finally, Nevada was divided into only four
groups because of the distribution of the student population.



Page 35                                                      GAO/HEHS-97-31 Reducing Funding Gaps
Appendix II

Adjusting for Geographic and Student
Need-Related Differences in Education
Costs
              Education costs vary by school district in a state (and nationwide)
              because of geographic differences in the cost of educational resources and
              in the number of students with special needs. The cost of educational
              resources may vary across districts for several reasons. For example, a
              district may be able to hire a teacher of a given quality at a lower rate than
              other districts because the district may have a lower cost of living or offer
              certain amenities or working conditions that are more attractive to
              teachers than the other districts. Also, districts with either large or small
              student populations may face higher costs than other districts because of
              the diseconomies of scale that can occur in providing services at these
              levels.56

              The cost of educating students also varies for a number of other reasons.
              Districts with high proportions of students with special needs, such as the
              disabled, the poor, and those with limited English proficiency, generally
              have higher education costs than average because such students require
              additional educational services. Furthermore, districts that largely serve
              high school students tend to have higher per pupil education costs than
              those that largely serve elementary students.57

              As discussed in our previous report on equity measures,58 when estimating
              comparable measures of funding levels or disparities among districts,
              accounting for districts’ differences in educational resource costs and
              student needs is useful. This appendix discusses how we made these
              adjustments in our study.




              56
                 Allan R. Odden and Lawrence O. Picus, School Finance: A Policy Perspective (New York:
              McGraw-Hill, Inc., 1992), pp. 235-238.
              57
                However, one expert reviewer suggested that the cost of educating elementary students in the
              primary grades may have increased compared with educating high school students because of recent
              state efforts to lower the student-teacher ratio in these early elementary years.
              58
               School Finance: Options for Improving Measures of Effort and Equity in Title I (GAO/HEHS-96-142,
              Aug. 30, 1996).



              Page 36                                                GAO/HEHS-97-31 Reducing Funding Gaps
                       Appendix II
                       Adjusting for Geographic and Student
                       Need-Related Differences in Education
                       Costs




                       To adjust for geographic differences in resource costs by district, we used
Adjusting for          a national district-level teacher cost index recently developed for the
Differences in         National Center for Education Statistics (NCES).59 Although an index that
Educational Resource   examines differences in the cost of living is available by district,60 the NCES
                       teacher cost index is better suited to comparing districts by considering
Costs                  the purchasing power of districts in determining personnel-related costs, a
                       major cost to school districts.61 Our focus is on a district’s ability to
                       provide comparable educational services to its students, rather than on
                       whether teachers’ salaries are adequate given the cost of living in their
                       area.

                       Not all costs, however, vary within a state. For example, the cost of books,
                       instructional materials, and other supplies and equipment tends to vary
                       little within a state or, for some items, the nation. Therefore, we used the
                       teacher cost index only to adjust the 84.8 percent of current expenditures
                       estimated to relate to personnel costs, including salaries, fringe benefits,
                       and some purchased services.62

                       Finally, we rescaled the NCES teacher cost index to create district-level
                       indexes for each state that reflect the education resource cost differences
                       in just one state rather than the differences nationwide. To rescale the
                       teacher cost index, we determined the average teacher cost index for the
                       state, then divided each district’s teacher cost index by the state average
                       to obtain the district-level teacher cost index adjusted for within-state
                       differences. A teacher cost index equal to 1.0 indicates a district with
                       average resource costs for the state. Table II.1 provides the average cost
                       index for each of the five income groups of districts in a state. In all states
                       except four (Alaska, Nevada, New York, and North Carolina), the range in
                       the average cost indexes across groups in the table was less than twice the
                       standard deviation of the district-level cost index. This suggests that states


                       59
                        See Jay Chambers and William Fowler, Jr., Public School Teacher Cost Differences Across the United
                       States, Department of Education, NCES, Analysis/Methodology Report, No. 95-758 (Washington, D.C.:
                       Oct. 1995).
                       60
                        McMahon and Chang have developed an estimating equation to predict cost of living in areas for
                       which the actual indexes are not available. See W. McMahon and S. Chang, “Geographical
                       Cost-of-Living Differences: Interstate and Intrastate, Update,” Center for the Study of Educational
                       Finance, MacArthur/Spencer Special Series (Normal, Ill.: 1991).
                       61
                        Because of missing cost index data, we had to impute cost index data for 310 districts, including 18 in
                       Alaska and 72 in New York (mainly Suffolk County).
                       62
                        This estimate was developed for NCES by Stephen M. Barro. See Cost of Education Differentials
                       Across the States, Department of Education, NCES, Working Paper No. 94-05 (Washington D.C.:
                       July 1994). In using this estimate, we assumed that all personnel costs, including noncertified
                       personnel costs, have patterns of cost variation similar to certified personnel.



                       Page 37                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                         Appendix II
                         Adjusting for Geographic and Student
                         Need-Related Differences in Education
                         Costs




                         may have had more variation in cost differences among individual districts
                         than across the income groups shown in the table.


                         To account for the differences in student need by district, we made
Adjusting for            adjustments that weighted poor students and disabled students according
Differences in Student   to their need for additional services.63 Our analysis did not account for
Need                     limited English proficient students, generally recognized as a third group
                         of high-cost students, because we could not obtain accurate district-level
                         data on the number of such students.

                         To account for differences in student needs by district, students with
                         disabilities were given a weight of 2.3 because the cost of educating such
                         children is generally 2.3 times the cost of educating children who do not
                         need special educational services, although the cost of educating children
                         with specific types of disabilities varies widely.64 We also assigned a
                         weight of 1.2 for children from poor families. This additional .2 weighting
                         for poor students stems from an estimate based on the average title I
                         allocation per student divided by average funding per student. We used a
                         set of weights developed for an NCES report.65

                         Using these weights, we developed a district-level need index adjusted for
                         differences within the state. We used the following equation to calculate
                         the need index for each district:


Equation II.1




                         where


                         63
                           However, when we estimated the targeting effort and implicit foundation levels of states, we adjusted
                         for student-need factors by controlling for such factors in our regression analysis.
                         64
                           This cost estimate is based on analysis of data from a nationally representative sample. For more
                         information, see M.T. Moore and others, Patterns in Special Education Service Delivery and Cost,
                         Decision Resources Corp. (Washington, D.C.: 1988). More recent studies have resulted in a similar
                         figure.
                         65
                          Thomas Parrish, Christine Matsumoto, and William Fowler, Jr., Disparities in Public School District
                         Spending: 1989-90, Department of Education, NCES, Report No. 95-300 (Washington D.C.: Feb. 1995).
                         We also used these weights in GAO/HEHS-96-142, Aug. 30, 1996.



                         Page 38                                                  GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix II
                                       Adjusting for Geographic and Student
                                       Need-Related Differences in Education
                                       Costs




                                       AdjMem = adjusted membership; a district’s fall membership + (1.3 x
                                       students with Individual Education Plans) + (.2 x students below the
                                       poverty line)

                                       AdjStMem = adjusted membership in a state; the sum of AdjMem for all
                                       districts in a state

                                       Member = membership; a district’s fall membership

                                       StMem = state membership; the sum of Member for all districts in a state.

                                       Table II.2 provides the average need index for each of the five income
                                       groups of districts in a state. In all states except three (Alaska, Maryland,
                                       and New Mexico), the range in the average need indexes across groups in
                                       the table was less than twice the standard deviation of the district-level
                                       need index. This suggests that states may have had more variation in need
                                       differences among individual districts than across the income groups
                                       shown in the table.

Table II.1: Cost Index to Adjust for
Within-State Differences               State average = 1.00
                                                                  Poorest                                      Wealthiest
                                       State                        Group 1     Group 2   Group 3   Group 4       Group 5
                                       Alabama                            .96       .99      1.00       1.04          1.01
                                       Alaska                           1.07       1.02       .99        .97           .91
                                       Arizona                            .99      1.01      1.01        .96          1.04
                                       Arkansas                           .96       .98       .98       1.03          1.04
                                       California                         .97       .98      1.05       1.00          1.00
                                       Colorado                           .94       .98      1.02       1.02          1.03
                                       Connecticut                      1.00       1.00       .99       1.00          1.00
                                       Delaware                           .96       .96      1.01       1.03          1.03
                                       Florida                            .94      1.05      1.00       1.00          1.00
                                       Georgia                            .93       .97      1.00       1.04          1.06
                                       Idaho                            1.00        .98      1.01        .99          1.01
                                       Illinois                           .90      1.11       .92        .99          1.05
                                       Indiana                            .99       .99       .98       1.02          1.02
                                       Iowa                               .96       .98      1.00       1.00          1.05
                                       Kansas                           1.01        .97       .98        .98          1.06
                                       Kentucky                           .96       .97       .99       1.02          1.05
                                       Louisiana                          .98       .99      1.00       1.01          1.03
                                       Maine                              .99      1.00       .99        .99          1.02
                                                                                                               (continued)


                                       Page 39                                        GAO/HEHS-97-31 Reducing Funding Gaps
Appendix II
Adjusting for Geographic and Student
Need-Related Differences in Education
Costs




State average = 1.00
                               Poorest                                                 Wealthiest
State                             Group 1      Group 2       Group 3       Group 4          Group 5
Maryland                               1.03           .96          .99           .99            1.04
Massachusetts                          1.00         1.00           .99         1.01             1.00
Michigan                                .99           .95          .99         1.01             1.05
Minnesota                               .92           .98          .98         1.03             1.08
Mississippi                             .98           .98          .99         1.01             1.04
Missouri                                .94           .95         1.01         1.02             1.09
Montana                                1.02           .99         1.01           .99                .99
Nebraska                                .97           .98         1.00         1.05             1.00
                                                                                                      a
Nevada                                 1.04         1.01           .95           .95
New Hampshire                           .98           .99         1.03         1.01                 .98
New Jersey                             1.01           .99         1.00         1.01                 .99
New Mexico                             1.00           .98          .98         1.02             1.02
New York                                .89           .91         1.13           .92                .98
North Carolina                          .95           .99         1.00         1.02             1.04
North Dakota                            .98         1.00          1.01           .99            1.03
Ohio                                    .95         1.00          1.00         1.01             1.04
Oklahoma                                .98           .98         1.02           .99            1.03
Oregon                                  .96           .99          .99         1.03             1.03
Pennsylvania                            .94           .97         1.04         1.00             1.04
Rhode Island                           1.03           .99         1.00         1.00                 .98
South Carolina                          .95           .98         1.01         1.03             1.03
South Dakota                            .98           .97         1.02           .97            1.04
Tennessee                               .97           .98         1.01         1.01             1.02
Texas                                   .98           .97          .98         1.03             1.03
Utah                                    .98           .96         1.00         1.02             1.02
Vermont                                1.01           .99          .99         1.00             1.01
Virginia                                .94           .96         1.03           .98            1.09
Washington                              .94         1.00           .99         1.01             1.07
West Virginia                           .98           .99         1.00         1.02             1.01
Wisconsin                               .94         1.02           .99         1.01             1.04
Wyoming                                 .99         1.01          1.00           .98            1.01

a
  Nevada was divided into only four groups because of the distribution of the student population.
The wealthiest group is group 4.




Page 40                                                 GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix II
                                       Adjusting for Geographic and Student
                                       Need-Related Differences in Education
                                       Costs




Table II.2: Need Index to Adjust for
Within-State Differences               State average = 1.00
                                                                  Poorest                                      Wealthiest
                                       State                        Group 1     Group 2   Group 3   Group 4       Group 5
                                       Alabama                          1.01       1.00      1.01        .99           .99
                                       Alaska                           1.04       1.00       .98        .99           .99
                                       Arizona                          1.04       1.00       .99       1.00           .98
                                       Arkansas                         1.03       1.00      1.00        .98           .99
                                       California                       1.01       1.00      1.01       1.00           .99
                                       Colorado                         1.01       1.02       .99        .97          1.01
                                       Connecticut                      1.04       1.00       .99        .99           .98
                                       Delaware                         1.01       1.01      1.00        .99           .98
                                       Florida                          1.01       1.00      1.00        .99          1.01
                                       Georgia                          1.02       1.02       .99        .99           .98
                                       Idaho                              .99      1.01      1.00       1.00          1.00
                                       Illinois                         1.02       1.00      1.00       1.00           .98
                                       Indiana                          1.01        .99      1.00       1.01           .99
                                       Iowa                               .99       .99      1.01       1.00          1.01
                                       Kansas                           1.01        .99      1.00       1.01           .99
                                       Kentucky                         1.03       1.00       .99        .98           .99
                                       Louisiana                        1.01       1.01       .99        .99          1.00
                                       Maine                            1.01        .99      1.00       1.00          1.00
                                       Maryland                         1.06        .99       .98       1.00           .97
                                       Massachusetts                    1.00       1.00       .99       1.02           .99
                                       Michigan                         1.03       1.00       .99       1.00           .98
                                       Minnesota                        1.00        .99      1.00       1.01          1.01
                                       Mississippi                      1.00       1.02      1.00        .99           .99
                                       Missouri                         1.02       1.02       .99       1.01           .96
                                       Montana                          1.02        .99      1.02        .99           .98
                                       Nebraska                           .99      1.00       .99       1.01          1.01
                                                                                                                            a
                                       Nevada                           1.02        .99      1.02       1.01
                                       New Hampshire                      .99      1.00      1.00       1.00          1.01
                                       New Jersey                       1.02       1.01      1.00        .99           .99
                                       New Mexico                       1.01        .99      1.00       1.01           .96
                                       New York                           .99       .99      1.03        .98           .97
                                       North Carolina                   1.01       1.00      1.01       1.00           .99
                                       North Dakota                     1.01       1.01      1.01        .99           .98
                                       Ohio                             1.01       1.01      1.01        .99           .98
                                       Oklahoma                         1.02        .99       .98        .98          1.02
                                       Oregon                           1.01       1.01      1.00        .98          1.00
                                                                                                               (continued)


                                       Page 41                                        GAO/HEHS-97-31 Reducing Funding Gaps
Appendix II
Adjusting for Geographic and Student
Need-Related Differences in Education
Costs




State average = 1.00
                               Poorest                                                 Wealthiest
State                             Group 1      Group 2       Group 3       Group 4          Group 5
Pennsylvania                           1.01         1.00          1.01         1.00                 .98
Rhode Island                           1.01           .98         1.00         1.01                 .99
South Carolina                         1.01         1.01           .98         1.00             1.00
South Dakota                           1.03           .99          .98           .99            1.01
Tennessee                              1.02         1.01           .99         1.00                 .98
Texas                                  1.02         1.00          1.00           .99                .98
Utah                                   1.01         1.00           .98           .99            1.02
Vermont                                1.01         1.00          1.00         1.00                 .99
Virginia                               1.00           .99          .99         1.01             1.00
Washington                             1.02         1.00          1.01           .99                .98
West Virginia                          1.03         1.01           .99           .98                .99
Wisconsin                              1.00         1.03           .99         1.00                 .98
Wyoming                                 .99           .99         1.01         1.01                 .99

a
  Nevada was divided into only four groups because of the distribution of the student population.
The wealthiest group is group 4.




Page 42                                                 GAO/HEHS-97-31 Reducing Funding Gaps
Appendix III

Analysis of Fiscal Neutrality


                     In our study, the goal of fiscal neutrality is achieved in a state when total
                     (state and local) funding per weighted pupil does not depend on
                     differences in districts’ income per weighted pupil. We measured the
                     extent of this dependency using the income elasticity of total funding per
                     weighted pupil and defined this elasticity as a state’s fiscal neutrality
                     score. A positive fiscal neutrality score would indicate that per pupil
                     funding rises with income; a fiscal neutrality score of 0 would indicate that
                     fiscal neutrality has been achieved (that is, no relationship exists between
                     per pupil funding and per pupil income); and a negative score would
                     indicate higher funding in low-income districts.

                     The first section of this appendix presents the method we used to estimate
                     each state’s fiscal neutrality score and the results of our analysis. The
                     second section shows how the variation in fiscal neutrality scores among
                     states is explained by differences in state equalization policies (state share
                     and state targeting) and by differences in the relative local tax effort of
                     wealthy and poor districts.


                     We used a linear regression model to estimate the elasticity of total
Calculating Fiscal   funding in a district relative to district income. Both the dependent and
Neutrality Scores    independent variables were adjusted for differences in geographic cost
                     and student need within the state and expressed as a percent of their
                     respective state averages.66 By expressing each variable as a percent of its
                     state average value, both the dependent and independent variables can be
                     interpreted as index numbers. A value below 1.00 signifies that a district
                     was below the state average for that variable; a value above 1.00 signifies
                     that a district was above the state average. With these adjustments the
                     regression model took the following form:


Equation III.1




                     Because both variables are measured relative to their respective state
                     averages, the regression coefficient (β1) represents the percent difference,
                     from the state average, in total funding relative to a percent difference,

                     66
                       See app. II for more detailed information on the cost and student need adjustments.



                     Page 43                                                  GAO/HEHS-97-31 Reducing Funding Gaps
Appendix III
Analysis of Fiscal Neutrality




from the state average, in district income. This is precisely the elasticity
we wanted to estimate and use as our fiscal neutrality score.67 A positive
coefficient implies that total funding per weighted pupil is higher in
wealthy districts, and a negative coefficient, the opposite. A coefficient
that is not statistically different from 0 implies that fiscal neutrality has
been achieved because no systematic differences exist in per pupil funding
between wealthy and poor districts.

We used a district’s total funding per weighted pupil as the dependent
variable. This variable included state and local funding for all purposes,
including maintenance and operations, transportation, and capital
expenditures and debt service.68 We divided the district’s total funding by
its fall membership to put the variable in per pupil form.

We used district income per weighted pupil as the independent variable,
our measure of a district’s ability to raise revenue for education. Because
we could not develop income per pupil data from the Common Core of
Data (CCD), we used district-level per capita income from the 1990 census
to construct the variable. We multiplied per capita income in a district by
district population, resulting in the total income in the district. We then
divided this amount by the total number of students in the district,
resulting in income per pupil.

Most school finance studies measure a district’s ability to raise revenue for
education as district wealth defined as property value per pupil. However,
we chose to use district income defined as resident income per pupil
because we could not construct a property-value-per-pupil measure at the
district level from the national databases that were available. Furthermore,
beyond the field of school finance, income—as opposed to wealth—is the
most commonly accepted measure of the ability to raise revenue.

A good income measure of a district’s ability to raise revenue for
education should be as comprehensive as possible. For example, the
Department of Treasury defines and compiles the total taxable resources
(TTR) for each state. TTR takes into account all income either received by
state residents or produced in a state. Either income measure, by itself, is

67
  An elasticity is, by definition, the percent change in a dependent variable associated with a 1-percent
change in an independent variable. In our model a unit change in the income index from the state
average is a percent change from the state average and the coefficient measures the associated
percentage change in per pupil funding. Because we have measured each variable as a percent of its
respective state averages, our elasticity measure is an elasticity evaluated at the state averages.
68
 Because the CCD does not report separate data on local funding at the district level devoted to
capital expenditures and debt service, we could not exclude these funding categories from our revenue
variable.



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                   Appendix III
                   Analysis of Fiscal Neutrality




                   incomplete. Income received by state residents does not include business
                   income earned by nonresidents (undistributed corporate profits, for
                   example). Alternatively, income produced does not include income earned
                   by residents from out-of-state sources (residents who work out of state,
                   for example). Consequently, TTR includes both income received and
                   income produced to gauge a state’s total taxable resources. Unfortunately,
                   a comprehensive income measure such as the TTR is not available at the
                   school district level.

                   Our income measure is money income reported in the 1990 census. Its
                   major weakness is that it does not include commercial or nonresident
                   income that local school districts may be able to tax. It may therefore
                   understate the ability of districts with high concentrations of this type of
                   income to raise revenues for education. However, our measure does
                   include the largest income category—resident income—represented in
                   TTR. Although we would expect some differences in the results of our
                   analyses if all income from commercial and industrial property had been
                   included in the income variable, the general trends from our analyses
                   would still have held true.

                   Finally, the regression model in equation III.1 was estimated by weighting
                   each observation for membership size to better reflect the distribution of
                   state funding to students rather than to districts;69 thus, school districts
                   with larger enrollments had a greater effect in determining the estimated
                   coefficients of the model.


Analysis Results   In most states, total funding per weighted pupil increased as district
                   income increased (the elasticity was positive). On average, wealthy
                   districts had about 24 percent more total funding per weighted pupil than
                   poor districts.

                   In 37 states, the income elasticity of total funding per weighted pupil was
                   positive. This means that as the districts’ income increased, the level of
                   total funding increased. However, the range in elasticity varied among the
                   states, with a high of .469 in Maryland and a low of .055 in Washington.

                   In three states—Alaska, Nevada, and Oklahoma—the elasticity was
                   negative, that is, total funding decreased as district income increased.
                   Elasticities for these three states ranged from –.556 in Nevada to –.053 in

                   69
                    Without weighting, each district would carry the same weight in the analysis, regardless of size.
                   Weighting by students is a generally accepted practice in school finance analysis.



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                                           Appendix III
                                           Analysis of Fiscal Neutrality




                                           Oklahoma. The elasticity was not statistically different from 0 in the
                                           remaining nine states. Table III.1 shows the elasticities of total funding to
                                           district income and the R square for each state.70

Table III.1: State Elasticities of Total
Funding to District Income (Fiscal                                                                            Elasticity of total Adjusted R
Neutrality Scores) Adjusted for            State                                                            funding to income         square
Statewide Differences in Cost and          Alabama                                                                          +.290             .308
Need
                                           Alaska                                                                           –.272             .072
                                           Arizona                                                                          +.141             .310
                                           Arkansas                                                                         +.220             .202
                                           California                                                                       +.073             .125
                                           Colorado                                                                         +.154             .051
                                           Connecticut                                                                      +.241             .460
                                           Delawarea                                                                        +.072             .014
                                           Florida                                                                          +.239             .432
                                           Georgia                                                                          +.323             .282
                                           Idaho                                                                            +.247             .256
                                           Illinois                                                                         +.338             .736
                                           Indiana                                                                          +.153             .120
                                           Iowaa                                                                            +.031             .000
                                                      a
                                           Kansas                                                                           +.014           –.003
                                           Kentucky                                                                         +.126             .301
                                           Louisiana                                                                        +.216             .245
                                           Maine                                                                            +.176             .155
                                           Maryland                                                                         +.469             .702
                                           Massachusetts                                                                    +.447             .512
                                           Michigan                                                                         +.290             .416
                                           Minnesota                                                                        +.113             .080
                                                          a
                                           Mississippi                                                                      +.007           –.006
                                           Missouri                                                                         +.362             .170
                                           Montana                                                                          +.393             .337
                                           Nebraska                                                                         +.154             .045
                                           Nevada                                                                           –.556             .227
                                           New Hampshire                                                                    +.238             .226
                                           New Jersey                                                                       +.168             .380
                                           New Mexicoa                                                                      +.004           –.012
                                           New York                                                                         +.370             .248
                                                                                                                                     (continued)

                                           70
                                             The adjusted R square is the proportion in the variation of the dependent variable explained by the
                                           independent variable(s).



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Analysis of Fiscal Neutrality




                                                             Elasticity of total Adjusted R
State                                                      funding to income         square
North Carolina                                                          +.250         .307
North Dakota                                                            +.236         .055
Ohio                                                                    +.315         .272
Oklahoma                                                                –.053         .009
Oregon                                                                  +.166         .141
Pennsylvania                                                            +.300         .557
Rhode Island                                                            +.274         .193
South Carolina                                                          +.150         .101
South Dakota                                                            +.367         .171
Tennessee                                                               +.242         .149
          a
Texas                                                                   +.003        –.001
Utaha                                                                   +.036        –.022
Vermont                                                                 +.176         .087
Virginia                                                                +.377         .608
Washington                                                              +.055         .021
West Virginiaa                                                          +.071         .037
Wisconsin                                                               +.129         .240
Wyominga                                                                –.196         .003

a
    Elasticity not statistically different from 0.



In most states, the amount of total funding (state and local funding
combined) per weighted pupil available to wealthy districts exceeded such
funding available to poor districts. However, states varied widely in the
degree to which funding available for wealthy districts exceeded that of
poor districts. Table III.2 summarizes the gaps in total funding per
weighted pupil between wealthy and poor districts.

Tables III.3 and III.4 show the state averages for total funding per weighted
pupil and income per weighted pupil as well as the average index numbers
of these two variables for each of the five income groups of districts in a
state.




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                                     Analysis of Fiscal Neutrality




Table III.2: Total Funding Gaps
Between Poor and Wealthy Districts                                   Total funding per weighted
                                                                                pupila
                                                                               For the    For the   Wealthy group funding
                                                                       State     poor     wealthy     compared with poor
                                     State                           average    group      group           group fundingb
                                     Alabama                          $3,277    $3,213     $3,795                    1.18
                                     Alaska                            8,030     8,912      8,877                    1.00
                                     Arizona                           4,507     4,146      5,473                    1.32
                                     Arkansas                          3,784     3,747      4,282                    1.14
                                     California                        4,543     4,407      4,965                    1.13
                                     Colorado                          5,047     5,109      5,501                    1.08
                                     Connecticut                       8,221     7,426      9,985                    1.34
                                     Delaware                          5,576     5,316      5,817                    1.09
                                     Florida                           5,555     5,286      6,264                    1.18
                                     Georgia                           4,324     3,867      5,029                    1.30
                                     Idaho                             3,504     3,246      4,075                    1.26
                                     Illinois                          4,970     4,330      7,249                    1.67
                                     Indiana                           4,993     4,804      5,299                    1.10
                                     Iowa                              4,849     5,051      4,855                      .96
                                     Kansas                            4,973     4,648      5,089                    1.09
                                     Kentucky                          3,728     3,601      4,143                    1.15
                                     Louisiana                         3,912     3,507      4,238                    1.21
                                     Maine                             5,681     5,469      6,399                    1.17
                                     Maryland                          6,039     4,686      7,728                    1.65
                                     Massachusetts                     6,264     5,227      8,037                    1.54
                                     Michigan                          5,851     5,275      7,198                    1.36
                                     Minnesota                         5,646     5,613      6,212                    1.11
                                     Mississippi                       2,831     3,034      2,974                      .98
                                     Missouri                          3,972     2,912      4,937                    1.70
                                     Montana                           4,835     4,006      6,942                    1.73
                                     Nebraska                          5,148     5,367      5,614                    1.05
                                     Nevada                            3,597     4,518      3,117                      .69
                                     New Hampshire                     5,850     5,592      7,284                    1.30
                                     New Jersey                        9,239     8,434     11,087                    1.31
                                     New Mexico                        3,830     3,891      4,094                    1.05
                                     New York                          7,787     8,309     10,950                    1.32
                                     North Carolina                    4,424     4,183      4,919                    1.18
                                     North Dakota                      4,079     4,006      4,709                    1.18
                                     Ohio                              4,709     4,305      5,688                    1.32
                                     Oklahoma                          3,623     3,735      3,528                      .94
                                                                                                               (continued)


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                                                                              Total funding per weighted
                                                                                         pupila
                                                                                             For the      For the      Wealthy group funding
                                                                               State           poor       wealthy        compared with poor
                                          State                              average          group        group              group fundingb
                                          Oregon                                 5,087         4,860         5,910                               1.22
                                          Pennsylvania                           6,406         5,812         7,674                               1.32
                                          Rhode Island                           5,939         5,507         6,553                               1.19
                                          South Carolina                         4,112         3,840         4,151                               1.08
                                          South Dakota                           3,756         3,297         4,228                               1.28
                                          Tennessee                              3,329         3,038         3,671                               1.21
                                          Texas                                  4,603         4,689         4,691                               1.00
                                          Utah                                   3,177         3,333         3,301                                .99
                                          Vermont                                7,722         6,478         8,454                               1.31
                                          Virginia                               4,713         4,138         5,702                               1.38
                                          Washington                             5,302         5,252         5,481                               1.04
                                          West Virginia                          4,927         4,859         5,044                               1.04
                                          Wisconsin                              5,865         5,974         6,455                               1.08
                                          Wyoming                                5,920         6,573         5,514                                .84

                                          a
                                            All funding figures have been adjusted for statewide differences in cost and need. We assigned
                                          weights of 1.2 to poor students and 2.3 to disabled students.
                                          b
                                           We calculated this ratio by dividing the wealthy districts’ funding by the poor districts’ funding,
                                          for example, $3,795/$3,213 in Alabama.



Table III.3: Total Funding per Weighted
Pupil Index Adjusted for Statewide        State average = 1.00
Differences in Cost and Need                                                                  Average total funding per weighted pupil
                                                                                                               index

                                                                        Average total Poorest                 Wealthiest
                                                                          funding per Group Group Group Group    Group
                                          State                        weighted pupila     1    2     3     4         5
                                          Alabama                                  $3,277         .98        .94       .93      1.00             1.16
                                          Alaska                                    8,030       1.11       1.11        .95        .85            1.11
                                          Arizona                                   4,507         .92        .91      1.00        .98            1.21
                                          Arkansas                                  3,784         .99        .95       .95        .98            1.13
                                          California                                4,543         .96        .96       .98      1.00             1.09
                                          Colorado                                  5,047       1.01         .94       .97      1.00             1.08
                                          Connecticut                               8,221         .90        .90       .97      1.02             1.21
                                          Delaware                                  5,576         .95        .93       .99      1.06             1.04
                                          Florida                                   5,555         .95        .94       .98      1.02             1.13
                                          Georgia                                   4,324         .90        .91      1.00      1.03             1.17
                                                                                                                                        (continued)


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State average = 1.00
                                          Average total funding per weighted pupil
                                                           index

                           Average total Poorest                 Wealthiest
                             funding per Group Group Group Group    Group
State                     weighted pupila     1    2     3     4         5
Idaho                             3,504     .92      .97     .96    1.00         1.16
Illinois                          4,970     .87      .85     .88     .93         1.46
Indiana                           4,993     .96      .97    1.00    1.01         1.06
Iowa                              4,849    1.03    1.00      .95    1.02           .99
Kansas                            4,973     .92    1.05     1.04     .99         1.01
Kentucky                          3,728     .97      .98     .97     .98         1.11
Louisiana                         3,912     .90      .94    1.02    1.07         1.08
Maine                             5,681     .96      .91     .96    1.04         1.12
Maryland                          6,039     .77      .98     .97    1.05         1.27
Massachusetts                     6,264     .83      .90     .93    1.05         1.28
Michigan                          5,851     .91      .92     .96     .99         1.23
Minnesota                         5,646     .99      .97     .94    1.00         1.10
Mississippi                       2,831    1.07      .93     .93    1.02         1.05
Missouri                          3,972     .74      .78     .90    1.34         1.25
Montana                           4,835     .81      .86     .83    1.10         1.41
Nebraska                          5,148    1.03    1.01      .97     .92         1.07
                                                                                     b
Nevada                            3,597    1.26      .96    1.21     .87
New Hampshire                     5,850     .95      .96     .88     .96         1.24
New Jersey                        9,239     .91      .94     .94    1.01         1.20
New Mexico                        3,830    1.01    1.02      .99     .98         1.06
New York                          7,787    1.04    1.11      .70    1.14         1.37
North Carolina                    4,424     .95      .94     .94    1.05         1.11
North Dakota                      4,079     .97      .93     .99     .99         1.14
Ohio                              4,709     .92      .93     .97     .98         1.21
Oklahoma                          3,623    1.02    1.03      .96    1.02           .97
Oregon                            5,087     .95      .92     .96    1.03         1.16
Pennsylvania                      6,406     .91      .93     .91    1.05         1.20
Rhode Island                      5,939     .92    1.05      .94    1.03         1.10
South Carolina                    4,112     .93    1.01     1.00    1.06         1.01
South Dakota                      3,756     .87    1.06      .96    1.02         1.11
Tennessee                         3,329     .91      .86    1.05    1.07         1.10
Texas                             4,603    1.01    1.03     1.00     .94         1.01
Utah                              3,177    1.05    1.08      .97     .88         1.04
Vermont                           7,722     .83      .93    1.06    1.09         1.09
                                                                           (continued)


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                                         State average = 1.00
                                                                                           Average total funding per weighted pupil
                                                                                                            index

                                                                      Average total Poorest                 Wealthiest
                                                                        funding per Group Group Group Group    Group
                                         State                       weighted pupila     1    2     3     4         5
                                         Virginia                                4,713        .89       .90       .91      1.11         1.22
                                         Washington                              5,302        .99       .98       .99      1.01         1.03
                                         West Virginia                           4,927        .99       .98       .98      1.04         1.02
                                         Wisconsin                               5,865       1.02       .94       .99       .96         1.10
                                         Wyoming                                 5,920       1.11      1.04      1.03       .89             .93

                                         a
                                           All funding figures have been adjusted for statewide differences in cost and need. We assigned
                                         weights of 1.2 to poor students and 2.3 to disabled students.
                                         b
                                          Nevada was divided into only four groups because of the distribution of the student population.
                                         The wealthiest group is group 4.



Table III.4: Income per Weighted Pupil
Index Adjusted for Statewide             State average = 1.00
Differences in Cost and Need                                                              Average income per weighted pupil index

                                                                    Average income Poorest                  Wealthiest
                                                                       per weighted Group Group Group Group    Group
                                         State                                pupila    1     2     3     4         5
                                         Alabama                              $63,313         .69       .87       .96      1.06         1.44
                                         Alaska                                 83,220        .48       .91      1.15      1.24         1.40
                                         Arizona                                98,442        .34       .62       .77      1.07         2.35
                                         Arkansas                               55,895        .63       .80       .92      1.12         1.54
                                         California                           121,872         .40       .63       .78      1.01         2.22
                                         Colorado                               81,879        .62       .79       .97      1.21         1.45
                                         Connecticut                          148,273         .54       .77       .90      1.06         1.76
                                         Delaware                             106,718         .60       .72       .84      1.18         1.71
                                         Florida                                98,373        .69       .83       .92      1.12         1.48
                                         Georgia                                73,340        .61       .81       .94      1.16         1.52
                                         Idaho                                  51,724        .59       .80       .97      1.05         1.60
                                         Illinois                             134,121         .49       .58       .67       .93         2.37
                                         Indiana                                76,049        .68       .87       .98      1.06         1.42
                                         Iowa                                   69,690        .75       .88       .95      1.08         1.34
                                         Kansas                                 74,725        .68       .82       .93      1.08         1.48
                                         Kentucky                               63,691        .56       .78       .96      1.18         1.55
                                         Louisiana                              58,920        .67       .77       .96      1.15         1.54
                                         Maine                                  76,336        .64       .76       .89      1.14         1.57
                                                                                                                                  (continued)


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State average = 1.00
                                                 Average income per weighted pupil index

                           Average income Poorest                  Wealthiest
                              per weighted Group Group Group Group    Group
State                                pupila    1     2     3     4         5
Maryland                             114,832         .63       .79       .98      1.17         1.55
Massachusetts                        133,452         .60       .78       .95      1.09         1.60
Michigan                               80,367        .62       .75       .91      1.09         1.70
Minnesota                              81,234        .62       .78       .89      1.10         1.62
Mississippi                            51,017        .59       .75       .87      1.05         1.79
Missouri                               79,570        .60       .76       .96      1.13         1.64
Montana                              115,518         .42       .65       .78      1.09         2.12
Nebraska                               94,845        .69       .83       .96      1.12         1.42
                                                                                                   b
Nevada                                 86,827        .65      1.00      1.06      1.25
New Hampshire                        106,978         .63       .79       .90      1.07         1.60
New Jersey                           160,761         .39       .63       .86      1.11         2.06
New Mexico                             54,999        .47       .81       .92      1.32         1.97
New York                             114,397         .63       .85       .94      1.05         1.62
North Carolina                         76,415        .67       .84       .92      1.14         1.42
North Dakota                           58,094        .68       .88       .98      1.12         1.41
Ohio                                   80,781        .64       .79       .91      1.11         1.57
Oklahoma                               64,014        .62       .81       .92      1.18         1.48
Oregon                                 85,350        .64       .78       .92      1.13         1.57
Pennsylvania                           99,378        .63       .82       .91      1.08         1.58
Rhode Island                         108,151         .73       .90      1.01      1.09         1.35
South Carolina                         65,707        .67       .85      1.02      1.13         1.32
South Dakota                           57,440        .64       .88      1.02      1.12         1.36
Tennessee                              70,681        .64       .82       .93      1.14         1.46
Texas                                  62,842        .47       .81      1.01      1.18         1.55
Utah                                   41,385        .69       .87       .98      1.06         1.36
Vermont                              112,652         .50       .74       .91      1.18         1.68
Virginia                               93,199        .67       .81       .87      1.08         1.60
Washington                             82,373        .61       .78       .89      1.07         1.70
West Virginia                          58,725        .65       .82       .99      1.15         1.39
Wisconsin                              82,555        .68       .81       .93      1.04         1.57
Wyoming                                55,152        .69       .89      1.00      1.11         1.31

a
  All income figures have been adjusted for statewide differences in cost and need. We assigned
weights of 1.2 to poor students and 2.3 to disabled students.
b
 Nevada was divided into only four groups because of the distribution of the student population.
The wealthiest group is group 4.




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                       We identified state share, state targeting, and relative local tax effort as the
Relationship Between   three key factors affecting the size of school funding gaps between poor
Funding Gaps and       and wealthy districts using the following rationale. First, we set aside the
State Share, State     effects of state share and state targeting by assuming that states do not
                       fund schools and that funding per pupil depends entirely on the revenue
Targeting, and         from local tax bases. Under this assumption, the funding gap occurs
Relative Local Tax     because wealthy districts can generate more local funding than poor
                       districts when the tax effort for all districts is equal. However, the gap in
Effort                 funding between wealthy and poor districts would grow smaller as poor
                       districts increase their local tax effort relative to wealthy districts.
                       Therefore, in the absence of any state funding for education, the funding
                       gap between poor and wealthy districts would be completely determined
                       by the relative local tax effort of poor and wealthy districts.

                       A state can help offset the funding gap by providing a portion of the total
                       funding and targeting more state funds to poor districts. Consequently, the
                       size of the funding gap between wealthy and poor districts should depend
                       on both state equalization policies (state share and state targeting) and the
                       relative local tax effort of poor districts and wealthy districts.

                       To measure a state’s relative local tax effort, we estimated the income
                       elasticity of local tax effort. For each state, this elasticity measures the
                       percent change in local tax effort associated with a 1-percent increase in
                       district income per weighted pupil. As measured this way, the greater the
                       elasticity, the greater the tax effort in wealthy districts as compared with
                       poor districts. This elasticity is represented by the regression coefficient
                       (β1) in the following equation:


Equation III.2




                       where

                       local tax effort index = the ratio of a district’s local funding to its income
                       expressed as a percent of the average tax effort of all districts, represented
                       by the dependent variable above




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                 elasticity of local tax effort = a state’s elasticity of local tax effort to
                 income per weighted pupil, represented by β1 in equation III.2

                 ∈ = an error term that reflects the variation in the local tax effort that
                 cannot be accounted for by the other variables in the model.

                 To estimate the extent to which the three factors—elasticity of local tax
                 effort, state share, and state targeting (see table III.6)—accounted for the
                 variation in the funding gap between wealthy and poor districts, we
                 constructed a regression model that used these three factors to explain
                 cross-state differences in fiscal neutrality scores:


Equation III.3




                 where

                 fiscal neutrality score = a state’s elasticity of total funding per weighted
                 pupil relative to income per weighted pupil

                 state funding percentage = state funding as a percentage of total (state and
                 local) funding

                 state targeting effort = a state’s elasticity of state funding per weighted
                 pupil relative to income per weighted pupil

                 elasticity of local tax effort = a state’s elasticity of local tax effort relative
                 to income per weighted pupil

                 ∈ = an error term that reflects the variation in funding gaps that cannot be
                 accounted for by the other variables in the model.

                 The results of this analysis showed that the three factors accounted for
                 about 61 percent of the variation in the income-related funding gaps.71
                 Although increases in both state targeting and state share led to decreases

                 71
                   The adjusted R square for the analysis was .6054.



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                                         in states’ fiscal neutrality scores, state share had a relatively greater
                                         impact on reducing income-related funding gaps than did states’ targeting
                                         efforts. Increases in the elasticity of local tax effort were associated with
                                         increases in the funding gap, meaning that as the wealthy districts’ tax
                                         effort increased relative to the poor districts’ tax effort, the income-related
                                         funding gap also increased. The elasticity of local tax effort factor of the
                                         three factors in this equation accounted for most of the variation in the
                                         fiscal neutrality scores (see table III.5). Table III.6 shows the state data
                                         used in the regression analysis.

Table III.5: Regression Results (N=49)
                                                                                             Regression         Beta
                                         Factor                                               coefficient coefficient     t statistic
                                         State targeting                                            –.2265      –.3280       –3.278
                                         State share                                                –.4854      –.4064       –4.065
                                         Elasticity of local tax effort                              .5583       .6578        6.849

Table III.6: State Results for Factors
Affecting Fiscal Neutrality                                                  Fiscal        State    State share of
                                                                          neutrality   targeting     total funding    Elasticity of
                                         State                               score        efforta        (percent) local tax effortb
                                         Alabama                              +.290       +.020               69.8              .027
                                         Alaska                               –.272       +.068               76.4            –.808
                                         Arizona                              +.141        –.232              46.8            –.468
                                         Arkansas                             +.220        –.328              65.4            –.243
                                         California                           +.073        –.119              68.9           –1.028
                                         Colorado                             +.154        –.753              43.5            –.381
                                         Connecticut                          +.241        –.430              38.8            –.066
                                         Delaware                             +.072        –.070              70.2            –.235
                                         Florida                              +.239        –.615              53.0              .234
                                         Georgia                              +.323        –.242              54.6              .007
                                         Idaho                                +.247        –.130              67.1              .011
                                         Illinois                             +.338        –.230              33.2            –.179
                                         Indiana                              +.153        –.099              54.1            –.511
                                         Iowa                                 +.031        –.104              49.0            –.772
                                         Kansas                               +.014        –.241              43.8            –.448
                                         Kentucky                             +.126        –.239              70.0              .274
                                         Louisiana                            +.216       +.150               62.2            –.237
                                         Maine                                +.176        –.287              49.4            –.172
                                         Maryland                             +.469        –.566              40.4              .164
                                         Massachusetts                        +.447        –.316              30.8              .077
                                         Michigan                             +.290        –.475              32.9            –.031
                                                                                                                         (continued)


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                                     Fiscal              State     State share of
                                  neutrality         targeting      total funding    Elasticity of
State                                score              efforta         (percent) local tax effortb
Minnesota                               +.113            –.499                 53.5                –.104
Mississippi                             +.007            –.020                 64.4                –.267
Missouri                                +.362            –.017                 44.6                –.018
Montana                                 +.393            –.126                 44.2                –.469
Nebraska                                +.154            –.246                 34.3                –.430
Nevada                                  –.556          –1.007                  56.9              –1.252
New Hampshire                           +.238            –.571                  8.3                –.370
New Jersey                              +.168            –.104                 43.1                –.203
New Mexico                              +.004           +.024                  85.0              –1.776
New York                                +.370            –.578                 42.6                 .076
North Carolina                          +.250            –.016                 67.7                 .052
North Dakota                            +.236           +.173                  48.0                –.451
Ohio                                    +.315            –.180                 41.9                –.276
Oklahoma                                –.053            –.102                 71.1                –.473
Oregon                                  +.166            –.043                 31.1                –.393
Pennsylvania                            +.300            –.255                 43.0                –.023
Rhode Island                            +.274            –.694                 39.3                 .045
South Carolina                          +.150            –.505                 52.4                –.194
South Dakota                            +.367           +.116                  29.5                –.164
Tennessee                               +.242           +.017                  47.0                –.709
Texas                                   +.003            –.522                 47.4                –.234
Utah                                    +.036            –.172                 60.2                –.734
Vermont                                 +.176            –.539                 29.0                –.333
Virginia                                +.377            –.499                 36.0                 .096
Washington                              +.055            –.009                 75.2                –.277
West Virginia                           +.071            –.127                 72.5                –.230
Wisconsin                               +.129            –.270                 46.2                –.160
Wyoming                                 –.196           +.296                  52.5              –1.645

a
  This is the elasticity of state funding to district income. App. V describes how we calculated this
elasticity.
b
This is the income elasticity of local tax effort.



Another way to illustrate that state equalization policies (state share and
state targeting) reduced but did not eliminate the funding gap between
wealthy and poor districts is shown in table III.7. In most cases, the
addition of state funding to local funding caused total funding to be less



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                                        Analysis of Fiscal Neutrality




                                        sensitive to district income than local funding. This is illustrated by the
                                        fact that states’ income elasticities of total funding are usually less than
                                        those of local funding. The elasticity of local tax effort accounted for most
                                        of the variation in the fiscal neutrality scores. We compared the local tax
                                        efforts of poor and wealthy districts in table III.8. In 35 states, poor
                                        districts made a higher tax effort than wealthy districts.

Table III.7: Income Elasticities
Adjusted for Statewide Differences in                                                      Income elasticity of
Cost and Need                                                                            Local       State           Total
                                        State                                         fundinga    fundingb        fundingc
                                        Alabama                                         +1.301       +.020          +.290
                                        Alaska                                           –.420       +.068           –.272
                                        Arizona                                          +.486       –.232          +.141
                                        Arkansas                                        +1.503       –.328          +.220
                                        California                                       +.684       –.119          +.073
                                        Colorado                                         +.985       –.753          +.154
                                        Connecticut                                      +.889       –.430          +.241
                                        Delaware                                         +.429       –.070          +.072
                                        Florida                                         +1.239       –.615          +.239
                                        Georgia                                         +1.235       –.242          +.323
                                        Idaho                                           +1.240       –.130          +.247
                                        Illinois                                         +.687       –.230          +.338
                                        Indiana                                          +.533       –.099          +.153
                                        Iowa                                             +.408       –.104          +.031
                                        Kansas                                           +.344       –.241          +.014
                                        Kentucky                                        +1.473       –.239          +.126
                                        Louisiana                                        +.473       +.150          +.216
                                        Maine                                           +1.072       –.287          +.176
                                        Maryland                                        +1.271       –.566          +.469
                                        Massachusetts                                   +1.190       –.316          +.447
                                        Michigan                                        +1.171       –.475          +.290
                                        Minnesota                                       +1.105       –.499          +.113
                                        Mississippi                                      –.125       –.020          +.007
                                        Missouri                                         +.510       –.017          +.362
                                        Montana                                          +.549       –.126          +.393
                                        Nebraska                                         +.364       –.246          +.154
                                        Nevada                                           +.025      –1.007           –.556
                                        New Hampshire                                    +.319       –.571          +.238
                                        New Jersey                                       +.692       –.104          +.168
                                                                                                             (continued)



                                        Page 57                                    GAO/HEHS-97-31 Reducing Funding Gaps
Appendix III
Analysis of Fiscal Neutrality




                                                                       Income elasticity of
                                                                   Local          State          Total
State                                                           fundinga       fundingb       fundingc
New Mexico                                                          –.265          +.024        +.004
New York                                                          +1.152           –.578        +.370
North Carolina                                                    +1.096           –.016        +.250
North Dakota                                                        +.626          +.173        +.236
Ohio                                                                +.670          –.180        +.315
Oklahoma                                                            +.585          –.102         –.053
Oregon                                                              +.710          –.043        +.166
Pennsylvania                                                      +1.080           –.255        +.300
Rhode Island                                                      +1.104           –.694        +.274
South Carolina                                                      +.620          –.505        +.150
South Dakota                                                        +.793          +.116        +.367
Tennessee                                                           +.208          +.017        +.242
Texas                                                               +.934          –.522        +.003
Utah                                                                +.797          –.172        +.036
Vermont                                                             +.376          –.539        +.176
Virginia                                                          +1.247           –.499        +.377
Washington                                                          +.488          –.009        +.055
West Virginia                                                       +.738          –.127        +.071
Wisconsin                                                         +1.083           –.270        +.129
Wyoming                                                            –1.836          +.296         –.196

a
  We calculated the elasticity of local funding to district income the same way we calculated the
total funding elasticity.
b
    App. V describes how we calculated the elasticity of state funding to district income.
c
    This is the fiscal neutrality score.




Page 58                                                     GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix III
                                            Analysis of Fiscal Neutrality




Table III.8: Local Tax Effort Disparities
Between Poor and Wealthy Districts                                                    Tax efforta                 Poor group tax
                                                                                         For the      For the    effort compared
                                                                              State        poor       wealthy        with wealthy
                                            State                           average       group        group     group tax effortb
                                            Alabama                          $15.52       $17.41       $16.76                1.04
                                            Alaska                            22.99        30.25         19.47               1.55
                                            Arizona                           24.35        47.63         18.56               2.57
                                            Arkansas                          23.40        26.81         25.04               1.07
                                            California                        11.79        18.65          9.35               1.99
                                            Colorado                          34.97        47.93         33.29               1.44
                                            Connecticut                       34.29        29.69         33.59               0.88
                                            Delaware                          15.44        12.92         12.21               1.06
                                            Florida                           26.48        22.60         29.37               0.77
                                            Georgia                           26.23        23.12         28.83               0.80
                                            Idaho                             22.34        24.35         24.86               0.98
                                            Illinois                          24.39        29.09         20.38               1.43
                                            Indiana                           30.13        37.13         26.22               1.42
                                            Iowa                              35.87        51.39         27.22               1.89
                                            Kansas                            37.62        40.78         32.90               1.24
                                            Kentucky                          17.42        14.04         20.80               0.68
                                            Louisiana                         25.11        23.86         19.12               1.25
                                            Maine                             37.61        46.46         38.04               1.22
                                            Maryland                          31.59        23.79         36.41               0.65
                                            Massachusetts                     32.62        25.58         32.36               0.79
                                            Michigan                          48.78        40.01         49.38               0.81
                                            Minnesota                         31.75        36.66         32.08               1.14
                                            Mississippi                       19.78        39.02         13.74               2.84
                                            Missouri                          27.41        22.71         27.10               0.84
                                            Montana                           23.94        42.44         18.64               2.28
                                            Nebraska                          36.38        51.44         30.73               1.67
                                            Nevada                            17.84        28.42         13.73               2.07
                                            New Hampshire                     50.35        70.96         40.24               1.76
                                            New Jersey                        32.93        34.85         24.58               1.42
                                            New Mexico                        10.51        27.48          9.67               2.84
                                            New York                          39.87        42.35         49.75               0.85
                                            North Carolina                    18.58        18.77         19.54               0.96
                                            North Dakota                      37.11        47.60         35.24               1.35
                                            Ohio                              33.75        37.27         33.55               1.11
                                            Oklahoma                          16.45        19.55         13.67               1.43
                                                                                                                      (continued)



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Appendix III
Analysis of Fiscal Neutrality




                                                    Tax efforta                          Poor group tax
                                                        For the           For the       effort compared
                                       State              poor            wealthy           with wealthy
State                                average             group             group        group tax effortb
Oregon                                  41.09              53.06             32.74                      1.62
Pennsylvania                            36.63              36.67             38.27                      0.96
Rhode Island                            33.60              31.54             32.86                      0.96
South Carolina                          29.70              30.40             26.48                      1.15
South Dakota                            46.52              50.90             41.36                      1.23
Tennessee                               24.82              29.77             22.13                      1.35
Texas                                   38.73              44.82             37.74                      1.19
Utah                                    30.43              45.72             26.86                      1.70
Vermont                                 48.97              66.35             39.30                      1.69
Virginia                                31.55              28.65             32.15                      0.89
Washington                              15.84              17.72             13.44                      1.32
West Virginia                           23.03              25.84             22.05                      1.17
Wisconsin                               38.31              47.27             37.63                      1.26
Wyoming                                 51.22              90.83             21.79                      4.17

a
  Local tax effort is the local funding per weighted pupil raised for $1,000 of income per weighted
pupil.
b
 We calculated this ratio by dividing the poor districts’ tax effort by the wealthy districts’ tax effort,
for example, $17.41/$16.76 in Alabama.




Page 60                                                      GAO/HEHS-97-31 Reducing Funding Gaps
Appendix IV

Estimating States’ Targeting Efforts, Implicit
Foundation Levels, and Equalization Efforts

                     In this study, we developed a new equity measure to assess a state’s
                     equalization policies (state share and state targeting) that excludes the
                     effects of the local tax effort. To accomplish this, we viewed each state as
                     if it were distributing state funds according to a foundation program in
                     which the state ensures a foundation or minimum amount of funding per
                     pupil for a minimum local tax effort.72 Using a foundation formula and
                     assuming all districts made an equal minimum tax effort, we determined
                     each state’s implicit foundation level given the state’s equalization policies
                     in school year 1991-92. This implicit foundation level is an estimate of the
                     minimum amount of total funds (including both state and local funds) that
                     districts could spend per student given the state’s equalization policies and
                     provided all districts made an equal tax effort. The implicit foundation
                     level identifies a funding level per pupil at which an equal local tax effort
                     would produce equal funding per pupil among all districts in a state. This
                     appendix describes how foundation formulas work and how we calculated
                     three important summary measures for each state: targeting effort, implicit
                     foundation level,73 and equalization effort.


                     As mentioned, to calculate these three summary measures, we assumed
Equalizing School    states behaved as if they used a foundation formula to distribute state
Funding With a       funds to districts.74 As will be shown in this appendix, foundation
Foundation Program   equalization policy can result in states targeting more funds to districts
                     with lower tax bases. Because nearly all states do target more funds to
                     districts with low tax bases, it is reasonable to evaluate school finance
                     policies as if they followed an implicit foundation equalization policy.75 To

                     72
                       We used a foundation equalization equation to model state school finance systems because it
                     accounts for most states’ equalization practices. For example, in school year 1990-91, the year
                     preceding the school year of the Common Core of Data (CCD) we used, the American Education
                     Finance Association reported that 38 of the 49 states in our study used a foundation program to
                     distribute at least part of their school funding. In addition, foundation equations can also explain the
                     funding distribution of the two states that provided flat grants to their pupils and the one state that
                     provided full funding. Finally, foundation programs share at least one important feature with the
                     district power equalization programs of the remaining eight states. Under district power equalization
                     programs, states guarantee districts the same dollar yield for the same tax effort. Although district
                     power equalization programs do not guarantee the same amount per pupil to each district as
                     foundation programs, both programs effectively target additional state funds to districts with low
                     (property) tax bases.
                     73
                      In principle, the implicit foundation level could be adjusted for geographic or student need-related
                     differences in cost. We explain how such adjustments were made in app. V.
                     74
                       A foundation program sets an expenditure per pupil—the minimum foundation—and usually requires
                     a minimum local tax effort as a condition of receiving state aid. State aid makes up for the difference
                     between what localities can raise with the required local tax effort and the foundation amount.
                     75
                       States that do not target more funds to low tax base districts generally provide flat per pupil grants.
                     Even this policy can be interpreted as a special foundation equalization policy: all districts can finance
                     the foundation funding level with an equal tax effort of 0.



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                Appendix IV
                Estimating States’ Targeting Efforts, Implicit
                Foundation Levels, and Equalization Efforts




                model the state targeting needed to enable districts to spend the implicit
                foundation amount on each student with a minimum tax effort, we used a
                derivation of the following foundation formula:76


Equation IV.1




                where

                gi = state funding per pupil in a school district

                e* = the implicit foundation level (including both state and local funds)
                that results when all districts make an equal minimum tax effort given the
                state’s equalization policies

                t* = the minimum tax effort, a ratio of district’s local revenue to district’s
                tax base value

                vi = the tax base per pupil in a school district. In our study, we used
                income per pupil.

                One implication from the above equation is that if a state chose not to
                target additional funding to poor districts and instead provided the same
                funding per pupil to all students with no minimum required local tax effort
                (t*= 0), then the implicit foundation level for the state (e*) would equal the
                average state funding per pupil. That is, each district’s state funding per
                pupil (gi) would equal the average state funding per pupil (g).77

                Another implication of the equation is that if states require a minimum tax
                effort (t*) greater than 0, states will have to target more funding to poor
                districts than to wealthy districts to achieve the same implicit foundation
                level (e*) for all districts. The implicit foundation level in this instance
                would be greater than the average state funding per pupil (g) where,
                without a required local tax effort, no extra state funding is targeted to
                poor districts. From our analysis of school year 1991-92 school finance

                76
                 For the notation used in equations in this appendix, we used subscripts to represent district-level
                data and superscripts to represent state-level data.
                77
                 This situation occurs with flat grant programs. Thus, states with flat grant policies can be interpreted
                as providing foundation programs as well.



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                       Appendix IV
                       Estimating States’ Targeting Efforts, Implicit
                       Foundation Levels, and Equalization Efforts




                       data, we know that states do, in fact, vary in the extent to which they
                       target additional funding to poor districts. Consequently, our purpose was
                       to estimate the implicit foundation level that was possible in each state
                       given the degree to which a state targets more funds to poor districts.

                       We have divided the explanation into two parts. First, we explain how
                       state funding would have to be targeted to ensure that all students
                       received the state’s average total funding per pupil, provided that all local
                       districts made an average tax effort. Second, we modify our explanation to
                       allow for state targeting that results in an implicit foundation level that is
                       below the state average with districts making a minimum local tax effort.78
                        On the basis of equations developed in this second part, we then describe
                       how we estimated state targeting efforts, implicit foundation levels, and
                       equalization efforts.


                       Given the total amount of funding for education in a state, the maximum
State Targeting        foundation level possible in a state is the state’s average total funding per
Necessary to Achieve   pupil.79 This means that, in principle, if all districts were to make the
the Maximum            average tax effort to finance their local school programs, the state could
                       target its funds to ensure that all districts could fund the average total
Foundation Level       funding per pupil. To demonstrate this, we began with an equation in
                       which the implicit foundation level equals the state’s average total funding
                       per pupil, and then we modified this equation to show how state funds
                       would have to be distributed.


Equation IV.2




                       where

                       78
                         In this instance, the implicit foundation level (e*), which includes both local and state funds, would
                       be below the average total funding per pupil (e) but would exceed the average state funding per pupil
                       (g). If a state does not target additional funding to poor districts, then the implicit foundation level (e*)
                       is the average state funding per pupil (g).
                       79
                        The highest implicit foundation level is the state’s average total funding per pupil provided that
                       districts all use the average tax effort. However, if states target more funding to poor districts than is
                       necessary to finance the average total funding level with average local tax rates, the effect is to allow
                       poor districts to finance the state average funding level with a tax effort that is less than the state
                       average, while wealthy districts finance the state average funding level with an above average effort.
                       Nevada is the one state in our study that fell in this category.



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                Appendix IV
                Estimating States’ Targeting Efforts, Implicit
                Foundation Levels, and Equalization Efforts




                gi = state funding per pupil in a school district

                e = the state’s average total funding per pupil, which is also the implicit
                foundation level in the state

                t = the average tax effort of local school districts

                vi = the tax base per pupil in a school district.

                The local share of total funding per pupil, by definition, is local funding
                expressed as a percent of total funding. This is expressed by the following
                equation:


Equation IV.3




                where

                α = the local share of the total funding for education in the state

                v = the average tax base per pupil in the state.

                Rearranging terms in equation IV.3, we found that the equation for average
                tax effort of local districts is t=(αe/v). Substituting this equation for t in
                equation IV.2 and rearranging terms results in the following equation:


Equation IV.4




                Equation IV.4 represents how state funding would have to be distributed if
                all school districts were to finance the state average funding level,
                provided that districts made an average tax effort to finance their local
                schools.



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                Appendix IV
                Estimating States’ Targeting Efforts, Implicit
                Foundation Levels, and Equalization Efforts




                We chose to measure state targeting by the income elasticity of state
                funding, where district income represents the tax base per pupil. The
                income elasticity is the percent difference in state funding that results
                from a 1-percent difference in district income. We can use the relationship
                in equation IV.4 to measure this elasticity by dividing both sides of the
                equation by the average state funding, that is, g=e(1-(αv/v))=(1-α)e. This
                yields the following equation:


Equation IV.5




                where

                g = the average state funding per pupil, (1-α)e.

                We note that a school district’s relative state funding per pupil (gi/g)
                depends on (1) the relative size of its tax base per pupil (measured as vi/v)
                and (2) the share of education funding financed at the local level (α) and
                by implication the share of education funding financed with state funds
                (1-α).

                The slope parameter of equation IV.5 (α/1-α) can be interpreted as the
                income elasticity of state funding and represents the state’s targeting effort
                to achieve the maximum foundation level (providing all districts the
                capacity to fund the state average funding level with an average tax
                effort).80 The relationship also implies that the greater the local share of
                total funding, and therefore the smaller the state share, the greater the
                state’s targeting effort must be if it is to achieve the maximum foundation
                level for all students.

                Other important implications derive from this relationship:



                80
                  By definition, the income elasticity of state funding is the percent change in state funding associated
                with a 1-percent difference in district income. Because both the independent and dependent variables
                in equation IV.5 are measured relative to their respective state averages, they represent percent
                differences from the state averages. Consequently, the slope represents the percent difference in
                funding per pupil associated with a 1-percent difference in district income compared with the state
                average. That is, the slope is the income elasticity of state funding evaluated at the state average.



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                           Appendix IV
                           Estimating States’ Targeting Efforts, Implicit
                           Foundation Levels, and Equalization Efforts




                       •   A linear relationship must exist between a school district’s relative state
                           funding per pupil and the relative tax base per pupil.
                       •   The intercept is the inverse of the state funding percentage (that is,
                           1/(1-α)).
                       •   The slope and intercept will always sum to 1 (that is, (1/(1-α) + (-α/(1-α)))
                           = 1).81


                           Although the state average represents the maximum foundation level
State Targeting That       possible in a state if all districts were to make an average tax effort, most
Produces an Implicit       states’ implicit foundation levels are likely less than the maximum. In this
Foundation Level           section we develop the state targeting implications that produce an
                           implicit foundation level that is less than the maximum. We assume that all
Below the State            districts make the same minimum tax effort and that the state still funds
Average                    the same share of total education funding.

                           If the implicit foundation level is less than the state average, it is because
                           the state targets its funds to low tax base districts to a lesser degree than
                           is required to achieve the maximum foundation level. To model this
                           condition, we introduced a new term—the equalizing factor (β)—into
                           equation IV.2. The value of the equalizing factor ranges from 0 to 1. When
                           the equalizing factor equals 1, the state’s targeting effort is at its maximum
                           level. When the equalizing factor equals 0, the state is not targeting funds
                           to poor districts, and every district receives the same state funding per
                           pupil. In this instance, the implicit foundation level is simply the average
                           state funding per pupil. An equalizing factor between 0 and 1 means the
                           state’s effort to target funds to poor districts is less than the maximum.

                           Introducing just the equalizing factor to the equation increases the size of
                           state funding to each district.82 However, since the total amount of state
                           funding has not changed, we had to introduce a scalar (γ) to ensure that
                           the sum of the state funding is still the same percentage of total funding.
                           The result of introducing these two new variables is shown in equation
                           IV.6:




                           81
                            These equations were developed by J.C. Fastrup for “Fiscal Equalization and Access to Educational
                           Resources in the New England States,” Journal of Educational Finance (forthcoming in spring 1997).
                           82
                              This would happen because the difference between the state average funding level (e) and the local
                           revenues that could be raised with an average tax effort (tvi) would become larger if the equalizing
                           factor (β) is less than 1.0 (see equation IV.6).



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                Appendix IV
                Estimating States’ Targeting Efforts, Implicit
                Foundation Levels, and Equalization Efforts




Equation IV.6




                where

                β = the equalizing factor, that is, the fraction of the maximum targeting
                effort that the state undertakes

                γ = a scalar that ensures that the total sum of state funding equals the total
                amount of state funds available for distribution.

                The next few equations show that the scalar (γ) depends on the state share
                of education funding (1-α) and the equalizing factor (β).

                As stated earlier, the total amount of state funding equals the sum of all
                the districts’ state funding. By multiplying both sides of equation IV.2 by
                the total number of pupils in a district (Pi) and summing both sides, we
                created an equation for the total amount of state funding (Gs).


Equation IV.7




                where

                Gs = the total sum of state funding available for distribution

                Pi = the number of pupils in a district.

                Because the total amount of state funding (Gs) available has not changed,
                it must be true that the sum of total state funding under maximum
                targeting efforts is the same as when targeting efforts are less than the
                maximum. This is represented in the following equation:




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                   Appendix IV
                   Estimating States’ Targeting Efforts, Implicit
                   Foundation Levels, and Equalization Efforts




Equation IV.8




                   Solving for the scalar (γ) yields equation IV.9:


Equation IV.9




                   By definition, the sum of (Pie) equals total funding and the sum of (Pitvi)
                   equals the total amount of local funding from all school districts. Dividing
                   both numerator and denominator by total funding yields the following
                   equation for the scalar (γ):


Equation IV.10




                   When the state’s targeting is at its maximum level, then the equalizing
                   factor (β) equals 1, and the scalar (γ) equals 1. If the state were to provide
                   flat funding per pupil to all districts, no targeting to poor districts would
                   occur, and the equalizing factor (β) would equal 0 and the scalar (γ) would
                   equal (1-α), the state’s share of total funding.


Targeting Effort   As discussed earlier, we used the slope of equation IV.5 to determine how
                   much the state would have to target state funding to low tax base districts
                   to achieve an implicit foundation level equal to the state average. Revising
                   equation IV.6 produced a similar equation that shows how much state
                   funding would have to be targeted to low tax base districts to achieve an



                   Page 68                                          GAO/HEHS-97-31 Reducing Funding Gaps
                            Appendix IV
                            Estimating States’ Targeting Efforts, Implicit
                            Foundation Levels, and Equalization Efforts




                            implicit foundation level below the state average. We modified equation
                            IV.6 by substituting (1-α)/(1-βα) for the scalar (γ) and substituting (αe/v)
                            for the average tax effort (t). Making these substitutions in equation IV.6
                            and rearranging terms yielded the following equation analogous to
                            equation IV.5:


Equation IV.11




                            This equation is the basis for running regressions, using actual district data
                            for state funding per pupil (gi) and the tax base per pupil (vi). The slope
                            (βα/(1-βα)) represents the state’s targeting effort. When estimating this
                            equation, the slope and the intercept (1/(1-βα)) must be constrained so
                            that they sum to 1. After obtaining the regression coefficient for the tax
                            base per pupil, we can solve for the equalizing factor (β) because the local
                            share of funding (α) is known. When the state’s implicit foundation level is
                            less than the state average, the state’s equalizing factor (β) is less than 1
                            and the state’s targeting effort ((βα)/(1-βα)) is less than it would be at its
                            maximum value (α/(1-α)).


Implicit Foundation Level   The term representing the implicit foundation level in equation IV.6 equals
                            the scalar (γ) times the state’s average total funding per pupil (e) or the
                            maximum foundation level. Substituting the expression in equation IV.10
                            for the scalar (γ) in equation IV.6, we expressed the implicit foundation
                            level in terms of the state’s average total funding per pupil, the local share
                            of school funding, and the equalizing factor as follows:


Equation IV.12




                            Page 69                                          GAO/HEHS-97-31 Reducing Funding Gaps
                      Appendix IV
                      Estimating States’ Targeting Efforts, Implicit
                      Foundation Levels, and Equalization Efforts




                      Using equation IV.12 and knowing the local funding percentage (α), the
                      equalizing factor (β), and the state average funding level (e), we solved for
                      the state’s implicit foundation level.


Equalization Effort   A state’s equalization effort is a ratio of the state’s implicit foundation level
                      to the maximum or average funding level. By rearranging terms in
                      equation IV.12, we showed that a state’s equalization effort, the ratio of the
                      implicit foundation level (e*) to the average funding level (e), equals the
                      scalar (γ) or (1-α)/(1-βα). Therefore, a state’s equalization effort reflects
                      the state’s share of education funding and a state’s targeting effort.

                      Appendix V describes how we used these equations to estimate each
                      state’s targeting effort, implicit foundation level, and equalization effort.




                      Page 70                                          GAO/HEHS-97-31 Reducing Funding Gaps
Appendix V

Estimating Equity Measures


                    This appendix describes the statistical models we used to estimate each
                    state’s targeting effort, implicit foundation level, and equalization effort. It
                    also presents the model results and the index data for some of the model
                    variables. In addition, it explains how the implicit foundation level for
                    each state can be adjusted to facilitate cross-state comparisons. Finally, it
                    describes how states’ estimated equalization efforts and relative local tax
                    efforts can explain the variation in state fiscal neutrality scores.


                    In appendix IV, we developed a model to calculate a state’s implicit
Calculating State   foundation level that required knowing a state’s targeting effort, share of
Targeting Efforts   education funding, and average total funding per pupil. To determine a
                    state’s targeting effort, we estimated the elasticity of state funding with
                    respect to district income (that is, districts’ tax bases) as measured by
                    income per pupil. The basic equation representing this relationship is
                    equation IV.11 from appendix IV, reproduced in this appendix as equation
                    V.1. The coefficient of the local tax base variable in this equation provided
                    an estimate of the elasticity of state funding relative to district income.83


Equation V.1




                    where

                    gi = state funding per pupil in a school district

                    g = the average state funding per pupil

                    α = the local share of the total funding for education in the state




                    83
                      A regression coefficient measures the change in the dependent variable per unit change in the
                    independent variable. An elasticity is, by definition, the percent change in a dependent variable
                    associated with a 1-percent change in an independent variable. Because the dependent and
                    independent variables in this model are measured as percents of their respective state averages, the
                    regression coefficient (β1) can be interpreted as the percent difference in state funding per pupil
                    associated with a 1-percent difference in district income from the state average per pupil income. This,
                    by definition, is the elasticity of total per pupil funding relative to a district’s per pupil income,
                    evaluated at the mean of these variables.



                    Page 71                                                   GAO/HEHS-97-31 Reducing Funding Gaps
    Appendix V
    Estimating Equity Measures




    β = the equalizing factor, that is, the fraction of the maximum targeting
    effort that the state undertakes

    vi = the tax base per pupil in a school district (in our study, we used
    income per pupil)

    v = the average per pupil tax base in the state.

    In the regression, both the dependent and independent variables were
    adjusted for differences in geographic cost within the state by applying a
    district-level teacher cost index to the dollar figures (see app. II). The
    dependent variable was a district’s state funding per pupil, and the key
    independent variable was a district’s income per pupil.

    Our analyses included four other independent variables that controlled for
    student-need factors that contribute to the cost of education. The first
    three of these variables relate to the presence of high-cost student groups
    in a district,84 and the fourth variable relates to cost differences due to
    economies of scale. The four variables are

•   the percent of district students who are poor (based on the percentage of
    children who live in households that were below the poverty level in
    1989);85
•   the percent of district students who are disabled designated as special
    education students under the Individuals With Disabilities Education Act
    (part B) who have an Individual Education Plan;
•   the percent of district students who are high school students (grades 9 to
    12); and
•   the total square of district enrollment (membership) on October 1, 1991.

    We included these control variables in our model rather than use the
    student need index developed in appendix II because we wanted to
    account for actual state targeting policies to the extent possible rather
    than use a uniform measure of student need that may not reflect actual
    state policy.

    All variables in the analysis were put into index form. Including all four
    control variables yielded the following model of state targeting policies:

    84
     Although students with limited English proficiency are considered to be a high-cost student group,
    we did not include them in our analysis because we could not obtain accurate district-level data on the
    number of such students.
    85
      The average poverty threshold for a family of four was $12,674 in 1989.



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Equation V.2




               where

               ci = a district’s teacher cost index adjusted for statewide differences

               MEMSQI86=a district’s student membership squared as a percent of the
               district student membership (as a percent of the state average)

               PovI = the percent of district students below the poverty level (as a
               percent of the state average)

               SNI = the percent of district students with an Individual Education Plan (a
               measure of pupils with special education needs) also measured as a
               percent of the state average

               HSI = the percent of district students who are high school students (as a
               percent of the state average)

               ∈ = error term measuring all other factors affecting the distribution of
               state funding.

               Each of the regression coefficients in the model depends on the
               equalization factor and the local share of education funding (βα). An
               additional coefficient (β1, β2, β3, and β4), unique to each variable, was
               added so that the regression coefficients added to 1.0, as required by the
               equalization model (see app. IV). The regression coefficients in the model
               range from (β1/(1-βα)) to (β4/(1-βα)). The constant term (β0/(1-βα)) in the
               model, in effect, serves as a control for the membership size of the




               86
                The “I” at the end of each variable is to emphasize that each variable is measured as a percent of its
               corresponding state average (that is, as an index).



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          district.87

          The model in equation V.2 was estimated by weighting each observation
          for membership size to allow school districts with larger enrollments to
          have a greater effect on determining the coefficients of the equation. This
          prevents one or a few small school districts from unduly influencing the
          estimated coefficients. The results are then more representative of the
          effect that state funding targeting policies had on students in the state.

          Because we were estimating the extent to which each state’s funding
          targeting policy was consistent with providing an implicit foundation level
          with a minimum tax effort, we also imposed the restriction that the three
          student-need variables would have non-negative coefficients. We did not
          specify the direction of the coefficient for the membership squared
          variable because we did not have an expectation of how a state’s funding
          targeting policy might reflect economies or diseconomies of size. Because
          we wanted to determine the actual targeting efforts of states compared
          with district income, we did not restrict the coefficient for the income per
          pupil variable, allowing the coefficient to be any sign. We reported state
          targeting efforts using the income per pupil coefficient obtained from this
          effort.88


Results   Table V.1 shows the targeting effort for state funds compared with district
          income per pupil, the sampling error, and the overall R square.89 Negative
          targeting efforts represent more targeting to poor than to wealthy districts;
          positive targeting efforts represent more targeting to wealthy than to poor
          districts. A targeting effort of 0 signifies no targeting of state funds to
          either poor or wealthy districts.

          Our analysis shows that 33 states targeted more state funds to districts as
          district income declined. However, the degree of the targeting varied
          widely, ranging from a high of –1.007 in Nevada to a low of –.099 in
          Indiana. Fourteen states did not target state funds on the basis of district

          87
            This can be seen by first multiplying both sides of equation V.2 by the average state funding per pupil
          (g). This adjusts each coefficient in the equation by a constant. The dependent variable would then be
          the funding per pupil of the district (gi). Multiplying this resulting equation by membership size would
          make the intercept shown in equation V.2 the coefficient of district membership. Thus, the intercept
          can be interpreted as the coefficient for membership.
          88
            Because all variables are expressed in an index form, that is, they are a ratio of the variable’s district
          rate to the corresponding state average, the regression coefficients of the variables automatically
          represent elasticities.
          89
            The adjusted R square is the proportion of the variation of the dependent variable explained by the
          independent variable(s).



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                                    income—the targeting effort was not statistically different from 0. Two
                                    states—Louisiana and North Dakota—provided more state funding to
                                    districts as district income increased.

                                    The degree to which states targeted state funds on the basis of differences
                                    in district income and student need also varied widely. In only 19 states,
                                    district income and student need accounted for more than 50 percent of
                                    the variation in state funding per pupil as noted by the R squared results.
                                    In 3 of the 19 states—Kentucky, Maryland, and Virginia—more than
                                    80 percent of the variation in state funding was explained. In the remaining
                                    30 states, less than half of the variation in state funding per pupil was due
                                    to differences in district income and student need.

                                    Tables V.2 and V.3 provide the average income per pupil and average state
                                    funding per pupil as well as the average index numbers of these two
                                    variables according to groups of increasing district income. Tables V.4 to
                                    V.7 provide the average index numbers for the four control variables
                                    associated with student poverty, disabled students, high school students,
                                    and district size according to groups of increasing district income.

Table V.1: Regression Results for
State Targeting                     State                        Targeting efforta     Sampling error Overall R squared
                                                   b
                                    Alabama                                 +.020                 .045               .179
                                               b
                                    Alaska                                  +.068                 .175               .487
                                    Arizona                                 –.232                 .035               .410
                                    Arkansas                                –.328                 .031               .432
                                    California                              –.119                 .010               .331
                                    Colorado                                –.753                 .068               .512
                                    Connecticut                             –.430                 .055               .680
                                                   b
                                    Delaware                                –.070                 .133               .424
                                    Florida                                 –.615                 .077               .698
                                    Georgia                                 –.242                 .065               .492
                                    Idaho                                   –.130                 .051               .293
                                    Illinois                                –.230                 .015               .649
                                    Indiana                                 –.099                 .030               .294
                                    Iowa                                    –.104                 .028               .335
                                    Kansas                                  –.241                 .095               .326
                                    Kentucky                                –.239                 .031               .845
                                    Louisiana                               +.150                 .068               .270
                                    Maine                                   –.287                 .060               .329
                                    Maryland                                –.566                 .104               .873
                                                                                                              (continued)



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State                                Targeting efforta           Sampling error Overall R squared
Massachusetts                                       –.316                      .057                      .664
Michigan                                            –.475                      .052                      .573
Minnesota                                           –.499                      .031                      .574
                b
Mississippi                                         –.020                      .011                      .285
Missourib                                           –.017                      .048                      .577
Montana                                             –.126                      .047                      .207
Nebraska                                            –.245                      .029                      .142
Nevada                                            –1.007                       .329                      .667
New Hampshire                                       –.571                      .132                      .384
New Jersey                                          –.104                      .027                      .534
New Mexicob                                         +.024                      .101                      .066
New York                                            –.578                      .024                      .686
North Carolinab                                     –.016                      .036                      .479
North Dakota                                        +.173                      .043                      .556
Ohio                                                –.180                      .025                      .578
Oklahoma                                            –.102                      .029                      .471
Oregonb                                             –.043                      .063                      .122
Pennsylvania                                        –.255                      .019                      .686
Rhode Island                                        –.693                      .184                      .494
South Carolina                                      –.505                      .064                      .625
South Dakotab                                       +.116                      .121                      .440
                b
Tennessee                                           +.017                      .032                      .496
Texas                                               –.522                      .035                      .595
       b
Utah                                                –.172                      .107                      .405
Vermont                                             –.539                      .107                      .280
Virginia                                            –.499                      .039                      .835
Washingtonb                                         –.009                      .032                      .226
                    b
West Virginia                                       –.127                      .105                      .357
Wisconsin                                           –.270                      .029                      .445
            b
Wyoming                                             +.296                      .391                      .242

a
  This is the elasticity of state funding in a district relative to district income adjusted for statewide
differences in cost and need. An elasticity of 0 signifies no targeting of state funds to either poor
or wealthy districts; a negative effort indicates that more state funding is provided to poor
districts; a positive effort indicates that more state funding is provided to wealthy districts.
b
Statistically, the targeting effort is not significantly different from 0.




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Table V.2: Income per Pupil Index Adjusted for Statewide Differences in Cost
State average = 1.00
                                                                     Average income per pupil index numbers

                             Average income          Poorest                                                    Wealthiest
State                              per pupil             Group 1         Group 2      Group 3      Group 4            Group 5
Alabama                               $63,313                  .69             .87         .97         1.05               1.42
Alaska                                 83,220                  .49             .91        1.12         1.23               1.38
Arizona                                98,442                  .35             .62         .76         1.07               2.30
Arkansas                               55,895                  .64             .81         .93         1.10               1.52
California                            121,872                  .40             .63         .79         1.01               2.18
Colorado                               81,879                  .63             .81         .96         1.17               1.46
Connecticut                           148,273                  .56             .77         .88         1.05               1.73
Delaware                              106,718                  .61             .73         .84         1.17               1.68
Florida                                98,373                  .69             .83         .92         1.11               1.49
Georgia                                73,340                  .62             .82         .94         1.15               1.49
Idaho                                  51,724                  .59             .81         .97         1.05               1.59
Illinois                              134,121                  .49             .59         .68          .93               2.30
Indiana                                76,049                  .69             .87         .98         1.07               1.40
Iowa                                   69,690                  .74             .87         .95         1.08               1.35
Kansas                                 74,725                  .69             .82         .93         1.10               1.46
Kentucky                               63,691                  .57             .78         .95         1.16               1.53
Louisiana                              58,920                  .67             .78         .95         1.14               1.53
Maine                                  76,336                  .64             .76         .89         1.14               1.57
Maryland                              114,832                  .66             .78         .95         1.17               1.50
Massachusetts                         133,452                  .60             .77         .94         1.11               1.58
Michigan                               80,367                  .63             .75         .90         1.08               1.66
Minnesota                              81,234                  .61             .77         .89         1.11               1.62
Mississippi                            51,017                  .59             .76         .87         1.04               1.79
Missouri                               79,570                  .61             .77         .95         1.13               1.54
Montana                               115,518                  .43             .64         .79         1.07               2.07
Nebraska                               94,845                  .69             .83         .95         1.13               1.43
                                                                                                                             a
Nevada                                 86,827                  .66             .99        1.07         1.27
New Hampshire                         106,978                  .63             .78         .90         1.07               1.61
New Jersey                            160,761                  .40             .63         .86         1.09               2.02
New Mexico                             54,999                  .48             .80         .91         1.34               1.90
New York                              114,397                  .63             .84         .96         1.02               1.57
North Carolina                         76,415                  .68             .84         .93         1.14               1.40
North Dakota                           58,094                  .68             .88         .99         1.11               1.39
Ohio                                   80,781                  .65             .80         .91         1.09               1.55
                                                                                                                   (continued)


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State average = 1.00
                                                                        Average income per pupil index numbers

                             Average income           Poorest                                                                  Wealthiest
State                              per pupil                Group 1          Group 2          Group 3          Group 4                 Group 5
Oklahoma                               64,014                     .62              .80              .90             1.16                   1.51
Oregon                                 85,350                     .65              .79              .92             1.12                   1.56
Pennsylvania                           99,378                     .64              .82              .92             1.07                   1.55
Rhode Island                          108,151                     .74              .88             1.01             1.10                   1.34
South Carolina                         65,707                     .68              .86             1.00             1.13                   1.33
South Dakota                           57,440                     .66              .87             1.01             1.10                   1.37
Tennessee                              70,681                     .65              .83              .93             1.13                   1.43
Texas                                  62,842                     .48              .82             1.01             1.18                   1.53
Utah                                   41,385                     .69              .87              .96             1.05                   1.39
Vermont                               112,652                     .50              .74              .91             1.17                   1.66
Virginia                               93,199                     .67              .80              .86             1.09                   1.61
Washington                             82,373                     .62              .78              .90             1.06                   1.67
West Virginia                          58,725                     .66              .83              .98             1.13                   1.37
Wisconsin                              82,555                     .68              .84              .92             1.04                   1.53
Wyoming                               $55,152                     .68              .89             1.01             1.12                   1.30

                                           a
                                             Nevada was divided into only four groups because of the distribution of the student population.
                                           The wealthiest group is group 4.




Table V.3: State Funding per Pupil Index Adjusted for Statewide Differences in Cost
State average = 1.00
                                                                   Average state funding per pupil index numbers

                               Average state          Poorest                                                                  Wealthiest
State                       funding per pupil               Group 1          Group 2          Group 3          Group 4                 Group 5
Alabama                                $2,287                    1.07             1.01              .96              .96                       .99
Alaska                                  6,137                    1.29             1.03              .84              .84                   1.08
Arizona                                 2,109                    1.20             1.08             1.02             1.04                       .62
Arkansas                                2,476                    1.14             1.05             1.02              .93                       .87
California                              3,131                    1.12             1.03             1.14              .92                       .79
Colorado                                2,194                    1.20             1.24              .95              .94                       .67
Connecticut                             3,186                    1.59             1.17             1.04              .74                       .46
Delaware                                3,916                    1.15             1.04              .96              .94                       .92
Florida                                 2,946                    1.27             1.07             1.01              .96                       .66
Georgia                                 2,361                    1.19             1.13              .99              .90                       .79
Idaho                                   2,350                    1.05             1.06              .99             1.04                       .86
                                                                                                                                   (continued)


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State average = 1.00
                                                           Average state funding per pupil index numbers

                          Average state        Poorest                                                     Wealthiest
State                  funding per pupil           Group 1        Group 2      Group 3       Group 4             Group 5
Illinois                          1,652                  1.42         1.10         1.11           .79                   .63
Indiana                           2,703                  1.06         1.01          .97          1.03                   .93
Iowa                              2,375                  1.01         1.02         1.01           .99                   .97
Kansas                            2,181                  1.14         1.17         1.06           .95                   .68
Kentucky                          2,609                  1.21         1.09         1.00           .91                   .80
Louisiana                         2,433                  1.06         1.00         1.01           .93               1.03
Maine                             2,807                  1.14         1.12         1.08          1.02                   .66
Maryland                          2,438                  1.19         1.16         1.05           .90                   .65
Massachusetts                     1,932                  1.65         1.04          .79           .86                   .66
Michigan                          1,925                  1.70         1.19          .94           .69                   .38
Minnesota                         3,019                  1.23         1.09         1.05           .98                   .65
Mississippi                       1,823                  1.02         1.04         1.03           .98                   .94
Missouri                          1,773                  1.02          .94          .83          1.25                   .98
Montana                           2,137                   .88          .93          .95          1.07               1.17
Nebraska                          1,768                  1.15         1.12          .96           .95                   .81
                                                                                                                          a
Nevada                            2,049                  1.43          .94         1.28           .79
New Hampshire                       486                  1.77         1.07          .86           .67                   .63
New Jersey                        3,985                  1.57         1.20          .80           .65                   .79
New Mexico                        3,254                   .98         1.01          .98          1.03                   .92
New York                          3,320                  1.55         1.20          .81           .97                   .64
North Carolina                    2,995                  1.08         1.01         1.00           .97                   .94
North Dakota                      1,957                  1.08          .98         1.02           .97                   .95
Ohio                              1,971                  1.19         1.11         1.04           .88                   .78
Oklahoma                          2,575                  1.15         1.06          .97           .96                   .86
Oregon                            1,584                  1.20         1.01         1.04           .79                   .97
Pennsylvania                      2,753                  1.26         1.05         1.09           .93                   .68
Rhode Island                      2,333                  1.29          .98         1.02           .82                   .78
South Carolina                    2,153                  1.16         1.09         1.01           .90                   .85
South Dakota                      1,109                  1.21         1.16          .87           .94                   .85
Tennessee                         1,566                  1.07         1.01          .99          1.02                   .92
Texas                             2,180                  1.53         1.13         1.01           .83                   .50
Utah                              1,911                  1.06         1.10         1.03           .93                   .92
Vermont                           2,243                  1.19         1.33         1.17           .80                   .51
Virginia                          1,695                  1.35         1.21          .98           .94                   .50
Washington                        3,988                  1.10         1.01         1.00           .98                   .89
West Virginia                     3,574                  1.10         1.05         1.00           .95                   .91
                                                                                                              (continued)


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State average = 1.00
                                                                 Average state funding per pupil index numbers

                              Average state         Poorest                                                                  Wealthiest
State                      funding per pupil              Group 1          Group 2          Group 3          Group 4                 Group 5
Wisconsin                             2,707                    1.21             1.22             1.01              .90                       .65
Wyoming                              $3,111                    1.01              .69              .90             1.13                   1.26

                                         a
                                           Nevada was divided into only four groups because of the distribution of the student population.
                                         The wealthiest group is group 4.




Table V.4: Poverty Index
State average = 1.00
                                                                        Average poverty rate index numbers

                           Average poverty          Poorest                                                                  Wealthiest
State                        rate (percent)               Group 1          Group 2          Group 3          Group 4                 Group 5
Alabama                                23.8                    1.43              .87             1.15              .64                       .83
Alaska                                 11.2                    1.90              .82              .64              .82                       .53
Arizona                                21.0                    1.74              .91              .75              .84                       .74
Arkansas                               24.6                    1.37             1.06              .99              .72                       .86
California                             18.4                    1.41              .93             1.28              .76                       .61
Colorado                               14.8                    1.40             1.17              .76              .45                   1.26
Connecticut                            10.4                    2.67              .75              .73              .38                       .48
Delaware                               12.2                    1.35             1.24              .85              .82                       .75
Florida                                18.6                    1.17             1.22              .99              .79                       .80
Georgia                                19.6                    1.40             1.11              .82             1.07                       .57
Idaho                                  15.8                    1.02             1.21             1.02              .90                       .85
Illinois                               16.4                    1.14             2.00              .79              .56                       .37
Indiana                                13.5                    1.32              .83              .83             1.20                       .81
Iowa                                   13.8                    1.03              .96             1.19              .86                       .95
Kansas                                 13.8                    1.36              .89              .92             1.01                       .83
Kentucky                               25.1                    1.63             1.06              .84              .71                       .77
Louisiana                              31.8                    1.17             1.08              .93             1.04                       .72
Maine                                  13.7                    1.31              .96              .97              .92                       .83
Maryland                               11.3                    2.38              .79              .72              .59                       .51
Massachusetts                          13.3                    1.91              .85              .54             1.20                       .49
Michigan                               17.4                    1.94             1.14              .72              .63                       .42
Minnesota                              12.1                    1.29              .80              .82             1.04                   1.05
Mississippi                            32.9                    1.36             1.12              .91              .80                       .82
Missouri                               17.0                    1.39              .98              .80             1.01                       .84
                                                                                                                                 (continued)


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State average = 1.00
                                                                   Average poverty rate index numbers

                       Average poverty         Poorest                                                                  Wealthiest
State                    rate (percent)              Group 1          Group 2          Group 3          Group 4                 Group 5
Montana                            19.5                   1.36              .95              .93              .92                       .85
Nebraska                           12.9                   1.16              .94              .67             1.37                       .83
                                                                                                                                          a
Nevada                             13.3                    .93             1.09              .67              .88
New Hampshire                       7.6                   1.35              .87             1.07             1.05                       .67
New Jersey                         11.3                   2.57             1.07              .53              .39                       .45
New Mexico                         27.5                   1.57             1.01             1.06              .70                       .47
New York                           18.5                    .91              .72             1.65              .41                       .31
North Carolina                     17.1                   1.56              .97              .93              .82                       .74
North Dakota                       16.4                   1.42             1.06              .87              .82                       .82
Ohio                               16.9                   1.32             1.22             1.13              .76                       .57
Oklahoma                           20.9                   1.27             1.08              .82              .76                   1.07
Oregon                             15.2                   1.28             1.10              .97              .65                   1.02
Pennsylvania                       15.2                   1.33              .92             1.47              .90                       .39
Rhode Island                       12.8                   2.10              .39              .78              .60                       .57
South Carolina                     20.8                   1.43             1.07              .71              .79                       .97
South Dakota                       18.2                   1.60             1.13              .88              .78                       .62
Tennessee                          20.4                   1.11              .95             1.31              .86                       .76
Texas                              24.4                   1.73              .98              .70              .87                       .72
Utah                               12.1                   1.10             1.08              .64             1.01                   1.29
Vermont                            11.8                   1.21              .96              .90              .89                   1.03
Virginia                           13.4                   1.52             1.15              .78             1.12                       .45
Washington                         14.3                   1.45              .86             1.01              .93                       .73
West Virginia                      25.6                   1.47             1.08              .89              .73                       .82
Wisconsin                          14.1                   1.14             1.84              .74              .77                       .51
Wyoming                            13.8                   1.06              .94             1.01             1.04                       .96

                                    a
                                      Nevada was divided into only four groups because of the distribution of the student population.
                                    The wealthiest group is group 4.




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Table V.5: Disabled Index
State average = 1.00
                                                                     Average disabled rate index numbers

                            Average disabled        Poorest                                                    Wealthiest
State                          rate (percent)           Group 1        Group 2       Group 3      Group 4            Group 5
Alabama                                  13.5                  .92         1.04         1.04          1.06                  .95
Alaska                                   13.5                 1.14         1.00          .90           .95                  .99
Arizona                                   8.9                 1.11         1.00          .94          1.06                  .88
Arkansas                                  9.7                 1.09         1.01         1.04           .94                  .92
California                                8.8                  .93         1.00         1.02          1.05                  .99
Colorado                                  9.6                 1.01         1.15          .93           .89               1.05
Connecticut                              12.8                 1.07         1.05          .94          1.00                  .94
Delaware                                 10.6                  .98         1.08         1.03           .98                  .90
Florida                                  11.9                 1.01          .92         1.01           .99               1.10
Georgia                                   9.0                 1.05         1.12          .96           .89                  .99
Idaho                                    10.4                  .94         1.05         1.01           .98               1.03
Illinois                                 13.0                 1.08          .84         1.06          1.08                  .97
Indiana                                  11.6                 1.03          .98         1.00          1.05                  .94
Iowa                                     12.6                  .92          .96         1.02          1.05               1.05
Kansas                                   10.2                 1.00          .94         1.01          1.12                  .95
Kentucky                                 12.4                 1.03         1.00          .97           .97               1.02
Louisiana                                10.7                  .99         1.08          .94           .92               1.09
Maine                                    11.9                  .99          .95         1.00          1.04               1.03
Maryland                                 12.0                 1.23          .98          .88          1.02                  .84
Massachusetts                            15.9                  .90         1.01          .99          1.09               1.00
Michigan                                  9.9                  .98          .99         1.00          1.08                  .95
Minnesota                                10.7                  .94          .95         1.02          1.05               1.05
Mississippi                              12.0                  .83         1.12         1.03          1.02                  .99
Missouri                                 10.0                 1.12         1.15          .98          1.08                  .68
Montana                                   9.8                 1.05          .96         1.18           .95                  .85
Nebraska                                 12.3                  .92          .99          .97          1.03               1.09
                                                                                                                              a
Nevada                                    9.4                 1.17          .90         1.23          1.13
New Hampshire                            11.4                  .92          .99          .99          1.01               1.09
New Jersey                               16.1                  .94         1.06         1.04           .99                  .98
New Mexico                               12.2                  .89          .90          .95          1.17                  .90
New York                                 11.0                  .98          .99         1.05           .95                  .95
North Carolina                           11.4                  .98          .97         1.08          1.01                  .96
North Dakota                             10.4                  .97         1.06         1.08           .97                  .90
Ohio                                     11.3                  .99         1.06         1.03           .95                  .98
                                                                                                                  (continued)


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State average = 1.00
                                                                       Average disabled rate index numbers

                           Average disabled           Poorest                                                                Wealthiest
State                         rate (percent)              Group 1          Group 2          Group 3          Group 4                 Group 5
Oklahoma                                11.4                    1.07             .91              .92              .95                   1.16
Oregon                                   9.3                    1.07            1.02             1.01              .93                       .97
Pennsylvania                            10.8                    1.05            1.01             1.00             1.00                       .93
Rhode Island                            14.7                     .92             .94             1.05             1.09                   1.00
South Carolina                          10.9                     .98            1.05              .89             1.04                   1.04
South Dakota                             9.8                    1.10             .88              .90              .97                   1.16
Tennessee                               11.9                    1.10            1.08              .87             1.02                       .94
Texas                                    9.9                     .91            1.05             1.08             1.00                       .96
Utah                                    10.6                    1.05             .98              .92              .89                   1.14
Vermont                                 10.4                    1.05             .98             1.05              .99                       .92
Virginia                                11.3                     .94             .92              .96             1.07                   1.13
Washington                               9.6                    1.07             .99             1.09              .92                       .92
West Virginia                           13.4                    1.05            1.06              .96              .97                       .97
Wisconsin                               11.0                     .99            1.05             1.00             1.03                       .93
Wyoming                                 10.3                     .93             .95             1.09             1.08                       .95

                                         a
                                           Nevada was divided into only four groups because of the distribution of the student population.
                                         The wealthiest group is group 4.



Table V.6: High School Index
                                         State average = 1.00
                                                                               Average high school student index numbers
                                                                        Poorest                                                 Wealthiest
                                         State                             Group 1      Group 2         Group 3     Group 4          Group 5
                                         Alabama                                1.02         1.02          1.00          1.01                .96
                                         Alaska                                  .93           .99         1.03          1.02            1.08
                                         Arizona                                 .77           .67          .76           .81            2.08
                                         Arkansas                                .99         1.00          1.01           .99            1.01
                                         California                              .80           .79          .92           .85            1.64
                                         Colorado                                .97         1.00          1.01          1.03                .99
                                         Connecticut                             .89           .99          .99          1.02            1.11
                                         Delaware                               1.03           .99          .99          1.02                .94
                                         Florida                                1.00         1.01           .99           .99            1.02
                                         Georgia                                1.01           .99         1.01           .96            1.03
                                         Idaho                                  1.02         1.01          1.02           .98                .97
                                         Illinois                                .87           .87          .84           .46            1.97
                                                                                                                                 (continued)


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State average = 1.00
                                 Average high school student index numbers
                             Poorest                                    Wealthiest
State                         Group 1    Group 2   Group 3   Group 4         Group 5
Indiana                           1.02      1.01      1.02        .96            .99
Iowa                               .99      1.01      1.01       1.03            .96
Kansas                             .96      1.06      1.02       1.01            .96
Kentucky                          1.00      1.01      1.02        .98            .99
Louisiana                          .98       .97      1.03       1.01           1.01
Maine                             1.15      1.10       .98        .88            .88
Maryland                           .86      1.03      1.06       1.03           1.02
Massachusetts                      .97       .99      1.04       1.07            .91
Michigan                           .94      1.00      1.03        .99           1.05
Minnesota                         1.05      1.04      1.01        .96            .93
Mississippi                        .97       .98      1.02       1.03           1.00
Missouri                          1.04      1.03       .98        .95            .99
Montana                            .02       .04       .04       1.42           3.55
Nebraska                          1.05      1.02       .99        .90           1.05
                                                                                     a
Nevada                            1.00      1.00      1.04       1.00
New Hampshire                     1.16      1.18      1.22        .88            .57
New Jersey                         .87       .91       .94        .86           1.42
New Mexico                        1.02       .98      1.01       1.00           1.00
New York                           .97       .98       .98       1.02           1.07
North Carolina                    1.01      1.02      1.00       1.01            .96
North Dakota                      1.02      1.06      1.00        .98            .93
Ohio                              1.02      1.00       .96       1.01           1.02
Oklahoma                          1.09      1.03      1.04        .98            .85
Oregon                            1.00       .96       .95        .83           1.29
Pennsylvania                      1.00      1.01       .98       1.00           1.02
Rhode Island                       .95      1.07       .97       1.04           1.00
South Carolina                     .99      1.02      1.03       1.03            .95
South Dakota                       .93       .97       .99        .99           1.12
Tennessee                         1.11      1.05       .97        .96            .92
Texas                             1.02      1.01      1.01        .97            .99
Utah                              1.04      1.02       .99       1.00            .97
Vermont                           1.11       .60       .55        .97           1.75
Virginia                          1.03      1.02       .94        .95           1.06
                                                                        (continued)




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                                      State average = 1.00
                                                                            Average high school student index numbers
                                                                     Poorest                                                 Wealthiest
                                      State                             Group 1      Group 2       Group 3       Group 4          Group 5
                                      Washington                             1.03         1.00           .96         1.00             1.01
                                      West Virginia                          1.01           .99          .99         1.00             1.01
                                      Wisconsin                              1.00           .88         1.04         1.02             1.06
                                      Wyoming                                 .95           .99         1.05         1.01                 .99

                                      a
                                        Nevada was divided into only four groups because of the distribution of the student population.
                                      The wealthiest group is group 4.



Table V.7: Membership Squared Index
                                      State average = 1.00
                                                                           Average membership squared index numbers
                                                                     Poorest                                                 Wealthiest
                                      State                             Group 1      Group 2       Group 3       Group 4          Group 5
                                      Alabama                                 .20           .37         2.19         1.15                 .95
                                      Alaska                                  .26           .51          .16         2.09                 .08
                                      Arizona                                 .26           .52         1.77         1.73                 .58
                                      Arkansas                                .30           .42          .50         1.53             2.23
                                      California                              .21           .17         4.16           .33                .13
                                      Colorado                                .13           .51          .72         2.23             1.46
                                      Connecticut                            2.24           .85          .61           .56                .75
                                      Delaware                                .43           .51          .79         1.58             1.45
                                      Florida                                 .25         2.23           .80           .86                .66
                                      Georgia                                 .16           .26          .79         1.57             2.26
                                      Idaho                                   .38           .44         1.12         1.01             2.05
                                      Illinois                                .04         4.08           .07           .07                .04
                                      Indiana                                 .60           .51          .47         1.84             1.52
                                      Iowa                                    .17           .41         1.18           .61            2.54
                                      Kansas                                  .67           .16          .39           .50            3.23
                                      Kentucky                                .26           .21          .29           .31            3.90
                                      Louisiana                               .32           .34          .87         1.71             1.80
                                      Maine                                   .61         1.25           .93         1.00             1.21
                                      Maryland                               1.16           .31         1.25           .97            1.42
                                      Massachusetts                          1.13           .60          .33         2.53                 .38
                                      Michigan                               3.23           .24          .22           .40                .36
                                      Minnesota                               .16         1.07           .87         1.28             1.61
                                      Mississippi                            1.93           .58          .63           .91                .94
                                                                                                                              (continued)


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                      State average = 1.00
                                                           Average membership squared index numbers
                                                     Poorest                                                 Wealthiest
                      State                             Group 1      Group 2       Group 3       Group 4          Group 5
                      Missouri                                .20           .28          .79         1.83             1.93
                      Montana                                 .28           .32         1.89         1.69                 .75
                      Nebraska                                .18           .23          .55         2.58             1.38
                                                                                                                            a
                      Nevada                                  .05         1.48           .07           .45
                      New Hampshire                           .43           .68         2.08         1.42                 .40
                      New Jersey                             2.51         1.14           .60           .48                .27
                      New Mexico                              .20           .17          .34         2.49                 .33
                      New York                                .02           .02         2.68           .01                .01
                      North Carolina                          .40           .77          .60           .61            2.53
                      North Dakota                            .30           .81         1.15         1.23             1.57
                      Ohio                                    .29         1.41          1.07         1.27                 .97
                      Oklahoma                                .13           .45          .84           .56            2.98
                      Oregon                                  .19           .40          .94         1.02             2.53
                      Pennsylvania                            .12           .14         4.20           .36                .19
                      Rhode Island                           1.85           .49          .73         1.13                 .31
                      South Carolina                          .57           .42          .74           .80            2.30
                      South Dakota                            .19           .21         1.53           .42            2.35
                      Tennessee                               .22           .24         2.25           .39            1.66
                      Texas                                   .57           .40          .39         2.24             1.41
                      Utah                                    .50           .22         1.53         1.99                 .45
                      Vermont                                1.04         1.20           .63           .95            1.20
                      Virginia                                .30           .33         1.34           .31            2.63
                      Washington                              .43           .66         1.03         1.20             1.71
                      West Virginia                           .53           .48          .86           .94            2.07
                      Wisconsin                               .10         3.47           .33           .65                .42
                      Wyoming                                 .40           .74          .51         1.66             1.72

                      a
                        Nevada was divided into only four groups because of the distribution of the student population.
                      The wealthiest group is group 4.




                      In appendix IV we demonstrated that to calculate the implicit foundation
Calculating State     level we must know the state’s targeting effort, the local share of total
Implicit Foundation   funding, the state’s average total funding per weighted pupil, and the
Levels and            equalizing factor. Because the equalization theory underlying the implicit
                      foundation level implies state funding is targeted to poor districts, when
Equalization Effort

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               we determined the targeting effort for calculating the implicit foundation
               level, we constrained the coefficient of the tax base variable to be less
               than or equal to 0. Then, having calculated the state’s targeting effort (that
               is, the coefficient of the tax base variable, βα/(1-βα)) and knowing the
               local share of education funding (α) and average total funding per
               weighted pupil (e), we can solve for the equalizing factor (β). Finally,
               knowing the equalizing factor, we can calculate the state’s implicit
               foundation level using equation IV.12 from appendix IV (reproduced here
               as equation V.3). The results for each state are reported in table V.8.


Equation V.3




               where

               e = the state’s average total funding per weighted pupil.

               The implicit foundation level available to all students in a state depends
               upon the state’s average total funding per weighted pupil, targeting effort,
               and share of total funding. Two states with the same average total funding
               per weighted pupil can have very different implicit foundation levels
               depending on their state equalization policies. For example, Alaska and
               Connecticut had about the same average funding level. However, Alaska’s
               state share was about twice that of Connecticut’s. Consequently, Alaska’s
               implicit foundation level ($6,137) was much more than Connecticut’s
               ($4,556), even though Connecticut’s targeting effort was greater than
               Alaska’s effort.

               Once we know the implicit foundation level, we can calculate the state’s
               equalization effort. This is a measure of the implicit foundation level as a
               percent of the state average. Since the state average is the maximum
               foundation level that is possible in a state given the total funding devoted
               to education, the equalization effort is a measure of how close a state
               comes to reaching the maximum level.




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Results                                     States’ implicit foundation levels varied widely. The average implicit
                                            foundation level was $3,090 per weighted pupil in school year 1991-92,
                                            with levels ranging as low as $764 in New Hampshire to as high as $6,137
                                            in Alaska.90

                                            States’ equalization efforts also varied widely. Only one state—Nevada—
                                            reached the state average for each student.91 The equalization effort in the
                                            other 48 states was less than the state average, ranging from 87 percent
                                            (Arkansas and Kentucky) to 13 percent (New Hampshire) of their state
                                            average. In 14 states, districts could finance less than half the state average
                                            with a minimum local tax effort.

                                            Table V.8 summarizes the critical data used to determine the implicit
                                            foundation level and equalization effort for all states.


Table V.8: State Targeting, State Share, and Funding Levels
                                                     State’s share as a                                          Implicit
                                   State targeting     percent of total           State average          foundation level              Equalization
State                            efforta (βα/(1-βα))      funding (1-α)        funding levelb (e)                     (e*)             effortc (e*/e)
Alabama                                          .000                 69.8                   $3,277                   $2,287                      69.8
Alaska                                           .000                 76.4                    8,030                    6,137                      76.4
Arizona                                      –.232                    46.8                    4,507                    2,598                      57.7
Arkansas                                     –.328                    65.4                    3,784                    3,289                      86.9
California                                   –.119                    68.9                    4,543                    3,504                      77.1
Colorado                                     –.753                    43.5                    5,047                    3,847                      76.2
Connecticut                                  –.430                    38.8                    8,221                    4,556                      55.4
Delaware                                     –.070                    70.2                    5,576                    4,190                      75.1
Florida                                      –.615                    53.0                    5,555                    4,759                      85.7
Georgia                                      –.242                    54.6                    4,324                    2,932                      67.8
Idaho                                        –.130                    67.1                    3,504                    2,654                      75.7
Illinois                                     –.230                    33.2                    4,970                    2,031                      40.9
Indiana                                      –.099                    54.1                    4,993                    2,970                      59.5
Iowa                                         –.104                    49.0                    4,849                    2,622                      54.1
Kansas                                       –.241                    43.8                    4,973                    2,706                      54.4
Kentucky                                     –.239                    70.0                    3,728                    3,232                      86.7
Louisiana                                        .000                 62.2                    3,912                    2,433                      62.2
                                                                                                                                         (continued)
                                            90
                                             These figures have not been adjusted for national differences in geographic and student need-related
                                            costs. See table V.10 for the nationally adjusted figures.
                                            91
                                              In fact, Nevada targeted more state funds to poor districts than was necessary for districts to finance
                                            the state average with all districts making an equal tax effort. As a result, poor districts in Nevada were
                                            able to finance the state average funding level with a lower tax effort than wealthy districts.



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                                       State’s share as a                                 Implicit
                   State targeting       percent of total      State average      foundation level        Equalization
State            efforta (βα/(1-βα))        funding (1-α)   funding levelb (e)                 (e*)       effortc (e*/e)
Maine                         –.287                 49.4                5,681                3,612                  63.6
Maryland                      –.566                 40.4                6,039                3,819                  63.2
Massachusetts                 –.316                 30.8                6,264                2,542                  40.6
Michigan                      –.475                 32.9                5,851                2,839                  48.5
Minnesota                     –.499                 53.5                5,646                4,524                  80.1
Mississippi                   –.020                 64.4                2,831                1,860                  65.7
Missouri                      –.017                 44.6                3,972                1,802                  45.4
Montana                       –.126                 44.2                4,835                2,407                  49.8
Nebraska                      –.246                 34.3                5,148                2,203                  42.8
           d
Nevada                      –1.007                  56.9                3,597                3,597                100.0
New Hampshire                 –.571                   8.3               5,850                  764                  13.1
New Jersey                    –.104                 43.1                9,239                4,399                  47.6
New Mexico                     .000                 85.0                3,830                3,254                  85.0
New York                      –.578                 42.6                7,787                5,240                  67.3
North Carolina                –.016                 67.7                4,424                3,043                  68.8
North Dakota                   .000                 48.0                4,079                1,957                  48.0
Ohio                          –.180                 41.9                4,709                2,325                  49.4
Oklahoma                      –.102                 71.1                3,623                2,838                  78.3
Oregon                        –.043                 31.1                5,087                1,652                  32.5
Pennsylvania                  –.255                 43.0                6,406                3,455                  53.9
Rhode Island                  –.694                 39.3                5,939                3,953                  66.6
South Carolina                –.505                 52.4                4,112                3,239                  78.8
South Dakota                   .000                 29.5                3,756                1,109                  29.5
Tennessee                      .000                 47.0                3,329                1,566                  47.0
Texas                         –.522                 47.4                4,603                3,318                  72.1
Utah                          –.172                 60.2                3,177                2,240                  70.5
Vermont                       –.539                 29.0                7,722                3,453                  44.7
Virginia                      –.499                 36.0                4,713                2,541                  53.9
Washington                    –.009                 75.2                5,302                4,025                  75.9
West Virginia                 –.127                 72.5                4,927                4,028                  81.8
Wisconsin                     –.270                 46.2                5,865                3,439                  58.6
Wyoming                        .000                 52.5                5,920                3,111                  52.5

                                                                                               (Table notes on next page)




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                                            a
                                              This is the elasticity of state funding relative to district income adjusted for statewide differences
                                            in cost and need. An elasticity of 0 signifies no targeting. States with a .000 have had their income
                                            coefficient constrained.
                                            b
                                             The state average is the average total (state and local) funding per weighted pupil in the state
                                            and represents the state’s maximum possible foundation level given the total funding devoted to
                                            education in the state.
                                            c
                                                This is equal to the implicit foundation level as a percent of the state average.
                                            d
                                             Nevada targeted more state funds to poor districts than was necessary for districts to finance the
                                            state average with all districts making the same tax effort. As a result, poor districts in Nevada
                                            were able to finance the state average funding level with a lower tax effort than wealthy districts.




Sensitivity Analysis                        In addition to targeting additional funds to poor districts, some states
                                            provided the same minimum amount of state funding to all districts,
                                            regardless of district income. Unlike funding for lower income districts,
                                            such funding for wealthy districts in some states was not part of the state’s
                                            targeting effort because it was not sensitive to district income.
                                            Consequently, we also estimated the state implicit foundation level and
                                            equalization effort, assuming the goal was to have all students except for
                                            the 15 percent of students in the wealthiest districts receive the implicit
                                            foundation level. Using this analysis, we found that 16 states had a net
                                            increase of 10 percentage points or more in their equalization effort, that
                                            is, in the extent to which they achieved the state average. Table V.9
                                            provides the results of this analysis.


Table V.9: Implicit Foundation Level and Equalization Effort for 85 Percent of Students in Each State
                              State average funding        Implicit foundation    Equalization effort for
                              level for 85 percent of  level for 85 percent of        85 percent of the                      Equalization effort for
State                                       studentsa                 students                studentsb                               all studentsc
Alabama                                          $3,237                          $2,286                            70.6                          69.8
Alaska                                             8,001                          6,893                            86.1                          76.4
Arizona                                            4,284                          2,468                            57.6                          57.7
Arkansas                                           3,783                          3,296                            87.1                          86.9
California                                         4,456                          4,002                            89.8                          77.1
Colorado                                           5,016                          4,251                            84.8                          76.2
Connecticut                                        7,614                          5,354                            70.3                          55.4
Delaware                                           5,499                          4,154                            75.5                          75.1
Florida                                            5,418                          4,252                            78.5d                         85.7
                                                                                                                         d
Georgia                                            4,241                          2,659                            62.7                          67.8
Idaho                                              3,504                          2,654                            75.7                          75.7
Illinois                                           4,275                          2,701                            63.2                          40.9
                                                                                                                                         (continued)


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                 State average funding        Implicit foundation    Equalization effort for
                 level for 85 percent of   level for 85 percent of       85 percent of the     Equalization effort for
State                          studentsa                 students                studentsb              all studentsc
Indiana                           4,960                     3,054                      61.6                         59.5
                                                                                           d
Iowa                              4,833                     2,610                      54.0                         54.1
Kansas                            4,955                     3,098                      62.5                         54.4
Kentucky                          3,727                     3,294                      88.4                         86.7
Louisiana                         3,912                     2,433                      62.2                         62.2
Maine                             5,631                     4,109                      73.0                         63.6
Maryland                          5,526                     4,464                      80.8                         63.2
Massachusetts                     5,451                     3,657                      67.1                         40.6
Michigan                          5,636                     4,028                      71.5                         48.5
Minnesota                         5,539                     4,478                      80.8                         80.1
Mississippi                       2,828                     2,141                      75.7                         65.7
Missouri                          3,887                     2,311                      59.4                         45.4
Montana                           4,141                     1,993                      48.1d                        49.8
Nebraska                          5,076                     3,092                      60.9                         42.8
Nevada                            3,597                     3,597                     100.0                       100.0
New Hampshire                     5,474                     1,175                      21.5                         13.1
New Jersey                        8,683                     7,897                      91.0                         47.6
New Mexico                        3,826                     3,255                      85.1                         85.0
New York                          7,111                     7,111                     100.0                         67.3
                                                                                           d
North Carolina                    4,418                     3,014                      68.2                         68.8
North Dakota                      4,074                     1,957                      48.0                         48.0
Ohio                              4,550                     2,673                      58.7                         49.4
Oklahoma                          3,621                     2,885                      79.7                         78.3
Oregon                            5,043                     2,432                      48.2                         32.5
Pennsylvania                      6,084                     4,119                      67.7                         53.9
Rhode Island                      5,846                     5,439                      93.0                         66.6
South Carolina                    4,112                     3,239                      78.8                         78.8
South Dakota                      3,756                     1,108                      29.5                         29.5
Tennessee                         3,329                     1,567                      47.1                         47.0
Texas                             4,588                     3,600                      78.5                         72.1
Utah                              3,177                     2,240                      70.5                         70.5
                                                                                           d
Vermont                           7,367                     3,036                      41.2                         44.7
Virginia                          4,342                     2,994                      69.0                         53.9
Washington                        5,228                     4,350                      83.2                         75.9
West Virginia                     4,927                     4,028                      81.8                         81.8
Wisconsin                         5,764                     4,987                      86.5                         58.6
Wyoming                          $5,920                     3,111                      52.5                         52.5

                                                                                               (Table notes on next page)


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                                  a
                                    The state average is the average total (state and local) funding per weighted pupil in the state
                                  and represents the state’s maximum possible foundation level given the total funding devoted to
                                  education in the state.
                                  b
                                   This is equal to the implicit foundation level as a percent of the state average for 85 percent of
                                  the students.
                                  c
                                      From table V.8.
                                  d
                                   The state achieved a higher percentage when all students were included, indicating that state
                                  funding was sensitive to district income across the entire range of district income.




Cross-State Comparisons           To facilitate cross-state comparisons of the implicit foundation levels, we
of Implicit Foundation            adjusted the implicit foundation levels reported in table V.8 for interstate
Levels                            differences in costs and student needs. We used a teacher cost index
                                  available from the National Center for Education Statistics (NCES) for the
                                  states to adjust funding data for national differences in cost, and we
                                  created a nationwide need index for the states in the same way we created
                                  other indexes (see app. II). To compare states, we divided the funding data
                                  from a state by the product of the nationwide cost and need indexes of
                                  that state. Using this method, we calculated the nationally adjusted
                                  implicit foundation level for each state (see table V.10 and fig. V.1). Table
                                  V.11 lists the original nationwide teacher cost index we obtained from
                                  NCES, an adjusted nationwide index that applies only to teacher costs, and
                                  the nationwide need index for each state.

Table V.10: Nationally Adjusted
Implicit Foundation Levels                                                                                            Adjusted implicit
                                  State                                                                               foundation levela
                                  Alabama                                                                                          $2,447
                                  Alaska                                                                                            5,415
                                  Arizona                                                                                           2,712
                                  Arkansas                                                                                          3,698
                                  California                                                                                        3,324
                                  Colorado                                                                                          3,953
                                  Connecticut                                                                                       4,051
                                  Delaware                                                                                          4,175
                                  Florida                                                                                           4,917
                                  Georgia                                                                                           3,215
                                  Idaho                                                                                             2,827
                                  Illinois                                                                                          1,883
                                  Indiana                                                                                           3,029
                                  Iowa                                                                                              2,827
                                                                                                                             (continued)



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Appendix V
Estimating Equity Measures




                                                                               Adjusted implicit
State                                                                          foundation levela
Kansas                                                                                    3,067
Kentucky                                                                                  3,460
Louisiana                                                                                 2,744
Maine                                                                                     3,485
Maryland                                                                                  3,698
Massachusetts                                                                             2,170
Michigan                                                                                  2,751
Minnesota                                                                                 4,626
Mississippi                                                                               2,078
Missouri                                                                                  1,913
Montana                                                                                  $2,564
Nebraska                                                                                 $2,397
Nevada                                                                                    4,409
New Hampshire                                                                               721
New Jersey                                                                                3,789
New Mexico                                                                                3,441
New York                                                                                  4,648
North Carolina                                                                            3,227
North Dakota                                                                              2,175
Ohio                                                                                      2,281
Oklahoma                                                                                  3,171
Oregon                                                                                    1,685
Pennsylvania                                                                              3,311
Rhode Island                                                                              3,509
South Carolina                                                                            3,524
South Dakota                                                                              1,260
Tennessee                                                                                 1,683
Texas                                                                                     3,542
Utah                                                                                      2,339
Vermont                                                                                   3,469
Virginia                                                                                  2,642
Washington                                                                                3,919
West Virginia                                                                             4,398
Wisconsin                                                                                 3,497
Wyoming                                                                                   3,517
National average                                                                          3,134

a
    Adjusted for differences in cost and need nationwide.




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                                                     Appendix V
                                                     Estimating Equity Measures




Figure V.1: Nationally Adjusted Implicit Foundation Levels (Ranked)


          Alaska
          Florida
      New York
      Minnesota
         Nevada
   West Virginia
       Delaware
    Connecticut
       Colorado
    Washington
    New Jersey
       Arkansas
       Maryland
           Texas
  South Carolina
       Wyoming
   Rhode Island
      Wisconsin
           Maine
        Vermont
       Kentucky
    New Mexico
       California
   Pennsylvania
  North Carolina
         Georgia
      Oklahoma
NATIONAL AVE.
         Kansas
         Indiana
              Iowa
            Idaho
       Michigan
       Louisiana
         Arizona
         Virginia
        Montana
        Alabama
      Nebraska
              Utah
              Ohio
   North Dakota
  Massachusetts
     Mississippi
        Missouri
           Illinois
         Oregon
     Tennessee
   South Dakota
 New Hampshire

                      0               1,000             2,000           3,000     4,000       5,000          6,000
                      Funding per Weighted Pupil (Dollars)

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                                        Appendix V
                                        Estimating Equity Measures




Table V.11: Nationwide State Cost and
Need Indexes                                                                                 Adjusted state
                                                                     State teacher cost       teacher cost
                                        State                                    indexa             indexb    State need index
                                        Alabama                                  88.27                .9005            1.0381
                                        Alaska                                  113.56              1.1150             1.0164
                                        Arizona                                  97.07                .9752             .9823
                                        Arkansas                                 87.22                .8916             .9974
                                        California                              109.39              1.0796              .9765
                                        Colorado                                 99.26                .9937             .9791
                                        Connecticut                             113.80              1.1170             1.0069
                                        Delaware                                102.08              1.0176              .9863
                                        Florida                                  94.91                .9568            1.0115
                                        Georgia                                  91.70                .9296             .9811
                                        Idaho                                    93.86                .9480             .9903
                                        Illinois                                106.76              1.0573             1.0201
                                        Indiana                                  97.74                .9808             .9995
                                        Iowa                                     90.28                .9176            1.0104
                                        Kansas                                   87.77                .8963             .9843
                                        Kentucky                                 89.22                .9086            1.0282
                                        Louisiana                                84.57                .8691            1.0201
                                        Maine                                   103.94              1.0334             1.0029
                                        Maryland                                103.84              1.0326             1.0002
                                        Massachusetts                           114.06              1.1192             1.0466
                                        Michigan                                105.34              1.0453              .9873
                                        Minnesota                                98.89                .9906             .9872
                                        Mississippi                              83.86                .8631            1.0371
                                        Missouri                                 94.59                .9541             .9871
                                        Montana                                  93.92                .9484             .9895
                                        Nebraska                                 89.87                .9141            1.0054
                                        Nevada                                   94.90                .9567             .9748
                                        New Hampshire                           108.71              1.0739              .9874
                                        New Jersey                              113.02              1.1104             1.0454
                                        New Mexico                               90.34                .9181            1.0300
                                        New York                                114.82              1.1257             1.0014
                                        North Carolina                           92.91                9399             1.0033
                                        North Dakota                             89.19                .9084             .9907
                                        Ohio                                    102.06              1.0174             1.0015
                                        Oklahoma                                 86.60                .8864            1.0098
                                        Oregon                                  100.42              1.0036              .9772
                                                                                                                   (continued)



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                       Appendix V
                       Estimating Equity Measures




                                                                                  Adjusted state
                                                      State teacher cost           teacher cost
                       State                                      indexa                 indexb        State need index
                       Pennsylvania                                 105.97                 1.0506                   .9931
                       Rhode Island                                 110.76                 1.0912                  1.0324
                       South Carolina                                 90.00                  .9152                 1.0043
                       South Dakota                                   87.08                  .8904                  .9879
                       Tennessee                                      90.29                  .9176                 1.0140
                       Texas                                          92.66                  .9377                  .9992
                       Utah                                           96.58                  .9710                  .9862
                       Vermont                                      101.42                 1.0120                   .9836
                       Virginia                                       95.96                  .9658                  .9960
                       Washington                                   105.84                 1.0496                   .9786
                       West Virginia                                  86.01                  .8813                 1.0393
                       Wisconsin                                      98.76                  .9895                  .9937
                       Wyoming                                        87.99                  .8981                  .9848

                       a
                         This state index has been rounded to two decimal places. See Jay Chambers and William
                       Fowler, Public School Teacher Cost Differences Across the United States, Department of
                       Education, NCES, Analysis/Methodology Report, No. 95-758 (Washington, D.C.: Oct. 1995).
                       b
                        We have adjusted the state index to make 1.00 the average for the nation rather than 100 and to
                       reflect differences in teacher costs that represent only 84.8 percent of current education
                       expenditures.




                       After calculating the state equalization effort, a measure that accounts for
Funding Gaps, State    the combined effects of state targeting and state share in state equalization
Equalization Effort,   policies, we used it together with relative local tax effort to explain
and Relative Local     cross-state variation in funding gaps. In equation V.4, the dependent
                       variable was the state fiscal neutrality scores reported in table III.1; the
Tax Effort             two independent variables were the state equalization efforts, reported in
                       table V.8 and the elasticity of local tax effort reported in table III.6.


Equation V.4




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                                 Appendix V
                                 Estimating Equity Measures




                                 The results of this analysis showed that the two factors accounted for
                                 63 percent of the variation in the funding gaps.92 The elasticity of local tax
                                 effort accounted for more of the variation in funding gaps than did state
                                 equalization efforts (see table V.12).

Table V.12: Regression Results
(N = 49)                                                                  Regression
                                 Factor                                    coefficient     Beta coefficient          t statistic
                                 State equalization effort                      –.4457              –.4340              –4.890
                                 Elasticity of local tax effort                   .2687               .6178              6.962




                                 92
                                   The adjusted R square for the analysis was .6293.



                                 Page 97                                                  GAO/HEHS-97-31 Reducing Funding Gaps
Appendix VI

Guide to State Profiles


                Appendixes VII through LV contain profiles for 49 states. Each profile
                provides the critical data resulting from our analysis of state school
                finance policies. In addition, each profile provides information in tabular
                and graphic form on (1) the actual distribution of state and local funding
                to regular school districts in school year 1991-92 and (2) how the funding
                would have been distributed if the state share of total funding had
                remained the same and the targeting of state funding had been changed so
                that districts could spend the state average of total funding on each
                student with an average tax effort. All funding data in the profiles were
                adjusted for differences in geographic cost and student need within the
                state. The profiles show averages for districts within the state in five
                groups according to increasing income per pupil based on student
                population.93 For example, the poorest group of districts typically contains
                about 20 percent of a state’s student population and has the lowest
                incomes per pupil.

                In the stacked bar graphs (the first two figures in each profile), the height
                of the bars shows how state funding that has been adjusted for cost and
                need is equalized among districts. If the state fully equalized funding, all
                the bars are the same height. To assess the targeting of state funds,
                examine the shaded area within each bar, which represents the state’s
                share of total funding. Where state funding was targeted to poor districts,
                the shaded portion is highest for the poorest districts and becomes smaller
                as the per pupil income of a district increases.

                The first figure in each profile shows how total funding per weighted pupil
                changed as district income per pupil increased. Typically, the local funding
                increased with increasing per pupil income, often at a faster rate than the
                decline in state funding. Thus, total funding typically was greatest for the
                wealthiest districts.

                The second figure in each profile shows how state and local funding would
                have been distributed if all districts could have spent the average total
                funding per weighted pupil (the total funding level is the same across all
                groups) with an average tax effort. This figure assumes that the state
                optimized its targeting effort without changing the state share or the total
                funding for education.



                93
                  Each of the five groups typically had about the same student population. In some states, however, the
                groups may have had large differences in the number of students because districts cannot be divided
                into smaller units. Nevada’s districts were divided into four groups because of the distribution of the
                student population.



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Appendix VI
Guide to State Profiles




The third figure in each profile compares the state funding in the first
figure with the state funding in the second figure. The third figure
illustrates which groups of districts would have received more or less than
what they needed if the state had targeted its funds so that each district
could have spent the state average of total funding on each student with an
average tax effort.

The data used in each of the figures appear in tables in each profile. The
numbers in the tables may not add due to rounding.

Data used in the profiles were based mainly on the Department of
Education’s Common Core of Data (CCD) for school districts for the
1991-92 school year. In some cases, we obtained data directly from state
education offices, and we imputed income and cost data for a district
when the data were missing from the source. Income per pupil data were
adjusted for differences in cost within a state. Funding per pupil data were
adjusted for differences in student need and geographic costs within a
state. Funding data included all state and local revenue for all purposes,
including maintenance and operations, transportation, and capital
expenditures and debt service.94




94
 Because the CCD does not report separate data on local funding at the district level devoted to
capital expenditures and debt service, we could not exclude these funding categories from our
analysis.



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Appendix VII

State Profile: Alabama


                                        As table VII.1 shows, in school year 1991-92, the state provided about
Actual Education                        70 percent of the total funding to Alabama’s school districts. Total funding
Funding Distribution                    (state and local funds combined) per weighted pupil in Alabama averaged
in School Year 1991-92                  $3,277 with an implicit foundation level of $2,287 for each student, which
                                        is about 70 percent of the average and represents the state’s equalization
                                        effort. (To compare this effort with those of other states, see fig. 5.) The
                                        targeting score for state funding was .000, indicating that state education
                                        funds were not targeted to poor or wealthy districts.95 (To compare this
                                        score with those of other states, see table V.1 in app. V.) The fiscal
                                        neutrality score was .290, indicating that total funding increased as district
                                        income increased. (To compare this score with those of other states, see
                                        fig. 1.) An Alabama education official reported that the state had changed
                                        its school finance system since school year 1991-92 to increase funding to
                                        poor districts compared with wealthy districts (see app. LVI). To put the
                                        state’s school finance system in perspective, table VII.2 presents
                                        demographic data for school year 1991-92 for five groups of districts of
                                        increasing district income.

Table VII.1: Summary Data for Alabama
in School Year 1991-92
                                        Average total funding per weighted pupila                                                          $3,277
                                        State share of total funding (percent)                                                                   69.8
                                                                               b
                                        Targeting score (state funds)                                                                            .000
                                        Implicit foundation levelc                                                                         $2,287
                                        Equalization effortd                                                                                     69.8
                                        Fiscal neutrality scoree                                                                                 .290
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                         This is the constrained score (elasticity of state funding relative to district income) used to
                                        calculate the state’s implicit foundation level. The actual targeting elasticity is .020, which is not
                                        statistically different from 0.
                                        c
                                          This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




                                        95
                                         This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                        differs from the actual targeting score found in table V.1 in app. V.



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                                            Appendix VII
                                            State Profile: Alabama




Table VII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            128                         48               30                  16             15                       19
Total pupils                            719,789                  140,612          149,556          165,837          115,330                     148,454
Poverty rate (percent)                     23.8                      34.1             20.7             27.5             15.2                       19.8
Disabled rate (percent)                    13.5                      12.4             14.1             14.1             14.3                       12.8
Per pupil income                        $63,313                  $43,762          $54,973          $61,497          $66,632                     $89,685
Tax efforta                              $15.52                   $17.41           $13.56            $13.94          $16.25                      $16.76
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table VII.3 presents data on how state and local funding was distributed
                                            among the five groups of Alabama districts. Alabama’s equalization
                                            policies reduced the funding disparity between the poor and wealthy
                                            groups from about 93 percent to about 18 percent. Figure VII.1 provides
                                            table information in graphic form.


Table VII.3: State and Local Funding Distribution in Alabama, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source            State mean        Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                           $989               $766             $746              $868           $1,077          $1,482                        1.93
State                           2,287              2,447            2,326            2,185            2,208            2,313                       0.95
Total                          $3,277            $3,213           $3,072           $3,053            $3,285          $3,795                        1.18
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix VII
                                          State Profile: Alabama




Figure VII.1: State and Local Funding
Distribution in Alabama, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          4,000


                                          3,000


                                          2,000


                                          1,000


                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table VII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure VII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure VII.3.


Table VII.4: How State and Local Funding Would Have Been Distributed If Each District in Alabama Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                         Poorest                                               Wealthiest    compared with
Funding source             State mean      Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                           $993            $682                $860           $950         $1,048            $1,428                     2.09
State                           2,284           2,594                2,417         2,327           2,229             1,849                    0.71
Totalc                         $3,277          $3,277            $3,277           $3,277         $3,277            $3,277                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                         Appendix VII
                                         State Profile: Alabama




Figure VII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Alabama Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year           4,000
1991-92

                                         3,000


                                         2,000


                                         1,000


                                            0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure VII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Alabama        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     3,000
Year 1991-92
                                         2,500

                                         2,000

                                         1,500

                                         1,000

                                          500

                                            0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




                                         Page 103                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix VIII

State Profile: Alaska


                                        As table VIII.1 shows, in school year 1991-92, the state provided about
Actual Education                        76 percent of the total funding to Alaska’s school districts. Total funding
Funding Distribution                    (state and local funds combined) per weighted pupil in Alaska averaged
in School Year 1991-92                  $8,030 with an implicit foundation level of $6,137 for each student, which
                                        is about 76 percent of the average and represents the state’s equalization
                                        effort. (To compare this effort with those of other states, see fig. 5.) The
                                        targeting score for state funding was .000, indicating that state education
                                        funds were not targeted to poor or wealthy districts.96 (To compare this
                                        score with those of other states, see table V.1 in app. V.) The fiscal
                                        neutrality score was –.272, indicating that total funding increased as
                                        district income decreased. (To compare this score with those of other
                                        states, see fig. 1.) To put the state’s school finance system in perspective,
                                        table VIII.2 presents demographic data for school year 1991-92 for five
                                        groups of districts of increasing district income.

Table VIII.1: Summary Data for Alaska
in School Year 1991-92
                                        Average total funding per weighted pupila                                                          $8,030
                                        State share of total funding (percent)                                                                   76.4
                                                                               b
                                        Targeting score (state funds)                                                                            .000
                                        Implicit foundation levelc                                                                         $6,137
                                        Equalization effortd                                                                                     76.4
                                        Fiscal neutrality scoree                                                                             –.272
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                         This is the constrained score (elasticity of state funding relative to district income) used to
                                        calculate the state’s implicit foundation level. The actual targeting elasticity is .068, which is not
                                        statistically different from 0.
                                        c
                                          This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




                                        96
                                         This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                        differs from the actual targeting score found in table V.1 in app. V.



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                                            Appendix VIII
                                            State Profile: Alaska




Table VIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                             52                         20               12                   8              1a                     11
Total pupils                            117,331                   23,505           30,666             8,889           44,749                     9,522
Poverty rate (percent)                     11.2                      21.4               9.2                 7.2           9.2                      6.0
Disabled rate (percent)                    13.5                      15.4             13.5             12.2              12.9                     13.3
Per pupil income                        $83,220                  $40,791          $75,327          $93,327          $102,123               $115,112
Tax effortb                              $22.99                   $30.25           $34.75            $25.80           $16.00                    $19.47
                                            a
                                                Anchorage was the only district in this group.
                                            b
                                                Local funding raised for every $1,000 of district income.



                                            Table VIII.3 presents data on how state and local funding was distributed
                                            among the five groups of Alaska districts. Alaska’s equalization policies
                                            essentially eliminated the funding disparity between the poor and wealthy
                                            groups. Figure VIII.1 provides table information in graphic form.


Table VIII.3: State and Local Funding Distribution in Alaska, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $1,893            $1,279           $2,608           $2,358            $1,617           $2,217                      1.73
State                           6,137              7,633            6,307            5,239            5,210             6,660                     0.87
Total                          $8,030            $8,912           $8,915           $7,598            $6,828           $8,877                      1.00
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix VIII
                                          State Profile: Alaska




Figure VIII.1: State and Local Funding
Distribution in Alaska, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          10,000


                                              8,000


                                              6,000


                                              4,000


                                              2,000


                                                  0
                                                       Poorest                                   Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding



                                          Table VIII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure VIII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure VIII.3.


Table VIII.4: How State and Local Funding Would Have Been Distributed If Each District in Alaska Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                              Funding of
                                                                                                             wealthiest group
                                         Poorest                                               Wealthiest     compared with
Funding source                   State     Group 1     Group 2       Group 3         Group 4       Group 5    poorest groupa
Localb                         $1,906            $907            $1,721         $2,171             2,347           $2,652                     2.92
State                           6,123           7,123              6,309          5,859            5,683             5,378                    0.76
Totalc                         $8,030          $8,030            $8,030         $8,030           $8,030            $8,030                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 106                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                        Appendix VIII
                                        State Profile: Alaska




Figure VIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Alaska Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year          10,000
1991-92
                                         8,000


                                         6,000


                                         4,000


                                         2,000


                                             0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                Local Funding
                                                State Funding




Figure VIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Alaska        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    8,000
Year 1991-92

                                        6,000


                                        4,000


                                        2,000


                                            0
                                                  Poorest                                   Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 107                                                GAO/HEHS-97-31 Reducing Funding Gaps
Appendix IX

State Profile: Arizona


                                       As table IX.1 shows, in school year 1991-92, the state provided about
Actual Education                       47 percent of the total funding to Arizona’s school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Arizona averaged
in School Year 1991-92                 $4,507 with an implicit foundation level of $2,598 for each student, which
                                       is about 58 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.232, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .141,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) To put the state’s
                                       school finance system in perspective, table IX.2 presents demographic
                                       data for school year 1991-92 for five groups of districts of increasing
                                       district income.

Table IX.1: Summary Data for Arizona
in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $4,507
                                       State share of total funding (percent)                                                          46.8
                                                                              b
                                       Targeting score (state funds)                                                                 –.232
                                       Implicit foundation levelc                                                                   $2,598
                                       Equalization effortd                                                                            57.7
                                       Fiscal neutrality scoree                                                                        .141
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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Table IX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            193                         78               32                  27             17                       39
Total pupils                            647,354                  130,672          122,347          134,103           140,306                    119,926
Poverty rate (percent)                     21.0                      36.6             19.1             15.7              17.7                      15.6
Disabled rate (percent)                     8.9                        9.9              8.9                 8.4           9.4                       7.9
Per pupil income                        $98,442                  $34,011          $60,599          $74,605          $105,171               $226,036
Tax efforta                              $24.35                   $47.63           $29.86            $31.49           $20.89                     $18.56
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table IX.3 presents data on how state and local funding was distributed
                                            among the five groups of Arizona districts. Arizona’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 144 percent to about 32 percent. Figure IX.1 provides table
                                            information in graphic form.


Table IX.3: State and Local Funding Distribution in Arizona, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $2,398            $1,681           $1,803           $2,314            $2,197           $4,108                       2.44
State                           2,109              2,465            2,312            2,205            2,216             1,365                      0.55
Total                          $4,507            $4,146           $4,115           $4,520            $4,413           $5,473                       1.32
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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Figure IX.1: State and Local Funding
Distribution in Arizona, School Year
1991-92                                Funding per Weighted Pupil (Dollars)
                                       6,000

                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                          0
                                                 Poorest                              Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding



                                       Table IX.4 provides data on the distribution of state and local funding if all
How Funding Would                      districts could have spent the average total funding per weighted pupil
Have Been                              with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts               effort without changing the state share or the total funding for education.
                                       Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                   possible foundation level (the state average). Figure IX.2 provides
Average on Each                        information in graphic form. The difference between how state funding
                                       was actually distributed and how it would have been distributed if districts
Student                                could have financed the average is shown in figure IX.3.




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Table IX.4: How State and Local Funding Would Have Been Distributed If Each District in Arizona Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                              Funding of
                                                                                                            wealthiest group
                                        Poorest                                                Wealthiest     compared with
Funding source                  State     Group 1     Group 2        Group 3        Group 4       Group 5    poorest groupa
Localb                         $2,424            $805             $1,484        $1,843           $2,561            $5,634                      7.00
                                                                                                                           c
State                           2,083           3,702              3,023          2,664            1,946           –1,127                     –0.30
Totald                         $4,507          $4,507             $4,507        $4,507           $4,507            $4,507                      1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                            The state would have had to recapture this amount of local funding from these districts for
                                          distribution to other districts.
                                          d
                                              The average is the maximum foundation level possible in a state.




Figure IX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Arizona Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year             6,000
1991-92
                                              5,000
                                              4,000
                                              3,000
                                              2,000
                                              1,000
                                                  0
                                          (1,000)
                                          (2,000)
                                                        Poorest                                  Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding




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                                       State Profile: Arizona




Figure IX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Arizona      Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    4,000
Year 1991-92
                                        3,000

                                        2,000

                                        1,000

                                            0

                                       (1,000)

                                       (2,000)
                                                  Poorest                               Wealthiest
                                                                Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




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Appendix X

State Profile: Arkansas


                                       As table X.1 shows, in school year 1991-92, the state provided about
Actual Education                       65 percent of the total funding to Arkansas’s school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Arkansas averaged
in School Year 1991-92                 $3,784 with an implicit foundation level of $3,289 for each student, which
                                       is about 87 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.328, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .220,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) To put the state’s
                                       school finance system in perspective, table X.2 presents demographic data
                                       for school year 1991-92 for five groups of districts of increasing district
                                       income.

Table X.1: Summary Data for Arkansas
in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $3,784
                                       State share of total funding (percent)                                                          65.4
                                                                              b
                                       Targeting score (state funds)                                                                 –.328
                                       Implicit foundation levelc                                                                   $3,289
                                       Equalization effortd                                                                            86.9
                                       Fiscal neutrality scoree                                                                        .220
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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Table X.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            316                        105               69                  75             39                       28
Total pupils                            430,420                   86,533           84,141            86,293          86,708                      86,745
Poverty rate (percent)                     24.6                      33.8               26             24.3             17.8                       21.1
Disabled rate (percent)                     9.7                      10.6               9.8            10.1               9.2                       9.0
Per pupil income                        $55,895                  $36,020          $45,048          $51,705          $61,445                     $84,862
Tax efforta                              $23.40                   $26.81           $22.31            $20.85          $22.45                      $25.04
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table X.3 presents data on how state and local funding was distributed
                                            among the five groups of Arkansas districts. Arkansas’ equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 111 percent to about 14 percent. Figure X.1 provides
                                            table information in graphic form.


Table X.3: State and Local Funding Distribution in Arkansas, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $1,308               $990           $1,008           $1,082            $1,355          $2,094                        2.11
State                           2,476              2,756            2,594            2,531            2,362            2,188                       0.79
Total                         $3,784             $3,747           $3,602           $3,613            $3,717          $4,282                        1.14
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         State Profile: Arkansas




Figure X.1: State and Local Funding
Distribution in Arkansas, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         5,000


                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table X.4 provides data on the distribution of state and local funding if all
How Funding Would                        districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure X.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure X.3.


Table X.4: How State and Local Funding Would Have Been Distributed If Each District in Arkansas Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                  State     Group 1     Group 2        Group 3        Group 4      Group 5    poorest groupa
Localb                        $1,315            $824            $1,052           $1,207         $1,465            $2,020                     2.45
State                           2,469          2,960                2,732         2,577           2,319             1,764                    0.60
Totalc                        $3,784          $3,784            $3,784           $3,784         $3,784            $3,784                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                         State Profile: Arkansas




Figure X.2: How State and Local
Funding Would Have Been Distributed
If Each District in Arkansas Could       Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      5,000
1991-92
                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                            0
                                                   Poorest                                   Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure X.3: Comparison of Actual State
Funding With State Funding Assuming
Each District in Arkansas Could Have     Funding per Weighted Pupil (Dollars)
Spent the Average, School Year           3,500
1991-92
                                         3,000

                                         2,500

                                         2,000

                                         1,500

                                         1,000

                                          500

                                            0
                                                   Poorest                                   Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




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Appendix XI

State Profile: California


                                    As table XI.1 shows, in school year 1991-92, the state provided about
Actual Education                    69 percent of the total funding to California’s school districts. Total
Funding Distribution                funding (state and local funds combined) per weighted pupil in California
in School Year 1991-92              averaged $4,543 with an implicit foundation level of $3,504 for each
                                    student, which is about 77 percent of the average and represents the
                                    state’s equalization effort. (To compare this effort with those of other
                                    states, see fig. 5.) The targeting score for state funding was –.119,
                                    indicating that state education funds were targeted to poor districts. (To
                                    compare this score with those of other states, see table V.1 in app. V.) The
                                    fiscal neutrality score was .073, indicating that total funding increased as
                                    district income increased. (To compare this score with those of other
                                    states, see fig. 1.) To put the state’s school finance system in perspective,
                                    table XI.2 presents demographic data for school year 1991-92 for five
                                    groups of districts of increasing district income.

Table XI.1: Summary Data for
California in School Year 1991-92
                                    Average total funding per weighted pupila                                                    $4,543
                                    State share of total funding (percent)                                                          68.9
                                                                           b
                                    Targeting score (state funds)                                                                 –.119
                                    Implicit foundation levelc                                                                   $3,504
                                    Equalization effortd                                                                            77.1
                                    Fiscal neutrality scoree                                                                        .073
                                    a
                                        The average is the maximum foundation level possible in a state.
                                    b
                                        This is the elasticity of state funding relative to district income.
                                    c
                                     This is the minimum amount of total funding the state’s equalization policies would enable
                                    districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                    d
                                        This is the implicit foundation as a percent of the average.
                                    e
                                        This is the elasticity of total (state and local) funding relative to district income.




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Table XI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            971                        263              192                  69           144                       303
Total pupils                         4,978,164                   995,837          996,457          996,425           996,127                    993,318
Poverty rate (percent)                     18.4                      26.1             17.1             23.7              14.0                      11.2
Disabled rate (percent)                     8.8                        8.2              8.8                 9.0           9.2                       8.7
Per pupil income                     $121,872                    $49,081          $76,553          $95,830          $122,991               $265,332
Tax efforta                              $11.79                   $18.65           $15.48             $9.97           $13.60                      $9.35
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XI.3 presents data on how state and local funding was distributed
                                            among the five groups of California districts. California’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 166 percent to about 13 percent. Figure XI.1 provides
                                            table information in graphic form.


Table XI.3: State and Local Funding Distribution in California, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                   State      Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $1,411              $921           $1,182              $967           $1,668           $2,448                       2.66
State                           3,131              3,486            3,221            3,525            2,906             2,518                      0.72
Total                          $4,543            $4,407           $4,404           $4,492            $4,574           $4,965                       1.13
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XI
                                          State Profile: California




Figure XI.1: State and Local Funding
Distribution in California, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XI.4 provides data on the distribution of state and local funding if all
How Funding Would                         districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XI.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XI.3.


Table XI.4: How State and Local Funding Would Have Been Distributed If Each District in California Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                              Funding of
                                                                                                             wealthiest group
                                        Poorest                                                 Wealthiest     compared with
Funding source                  State     Group 1     Group 2        Group 3        Group 4        Group 5     poorest groupa
Localb                          $1,421           $564                $889         $1,098         $1,430            $3,312                     5.56
State                            3,121          3,979                3,654         3,445           3,113             1,411                    0.35
Totalc                          $4,543         $4,543            $4,543           $4,543         $4,543            $4,543                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                       State Profile: California




Figure XI.2: How State and Local
Funding Would Have Been Distributed
If Each District in California Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    6,000
1991-92
                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in California   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   5,000
Year 1991-92
                                       4,000

                                       3,000


                                       2,000


                                       1,000


                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 120                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XII

State Profile: Colorado


                                  As table XII.1 shows, in school year 1991-92, the state provided about
Actual Education                  44 percent of the total funding to Colorado’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Colorado averaged
in School Year 1991-92            $5,047 with an implicit foundation level of $3,847 for each student, which
                                  is about 76 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.753, indicating that state education
                                  funds were targeted to poor districts. (To compare this score with those of
                                  other states, see table V.1 in app. V.) The fiscal neutrality score was .154,
                                  indicating that total funding increased as district income increased. (To
                                  compare this score with those of other states, see fig. 1.) A Colorado
                                  education official reported that the state had changed its school finance
                                  system since school year 1991-92 to increase funding to poor districts
                                  compared with wealthy districts (see app. LVI). To put the state’s school
                                  finance system in perspective, table XII.2 presents demographic data for
                                  school year 1991-92 for five groups of districts of increasing district
                                  income.

Table XII.1: Summary Data for
Colorado in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $5,047
                                  State share of total funding (percent)                                                          43.5
                                                                         b
                                  Targeting score (state funds)                                                                 –.753
                                  Implicit foundation levelc                                                                   $3,847
                                  Equalization effortd                                                                            76.2
                                  Fiscal neutrality scoree                                                                        .154
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XII
                                            State Profile: Colorado




Table XII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            174                        101               31                  23              8                       11
Total pupils                            592,435                  118,643          111,334          134,003           118,013                    110,442
Poverty rate (percent)                     14.8                      20.8             17.4             11.3               6.7                      18.7
Disabled rate (percent)                     9.6                        9.7            11.0                  8.9           8.5                      10.1
Per pupil income                        $81,879                  $51,188          $65,989          $78,606           $96,107               $119,635
Tax efforta                              $34.97                   $47.93           $31.11            $36.25           $31.40                     $33.29
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XII.3 presents data on how state and local funding was distributed
                                            among the five groups of Colorado districts. Colorado’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 63 percent to about 8 percent. Figure XII.1 provides
                                            table information in graphic form.


Table XII.3: State and Local Funding Distribution in Colorado, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $2,853            $2,481           $2,095           $2,810            $2,939           $4,031                       1.63
State                           2,194              2,629            2,700            2,120            2,127             1,470                      0.56
Total                          $5,047            $5,109           $4,794           $4,930            $5,066           $5,501                       1.08
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XII
                                          State Profile: Colorado




Figure XII.1: State and Local Funding
Distribution in Colorado, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XII.3.


Table XII.4: How State and Local Funding Would Have Been Distributed If Each District in Colorado Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                         Poorest                                               Wealthiest     compared with
Funding source                   State     Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                         $2,861          $1,768            $2,260           $2,776         $3,439            $4,127                     2.33
State                           2,186           3,279                2,787         2,271           1,608               921                    0.28
Totalc                         $5,047          $5,047            $5,047           $5,047         $5,047            $5,047                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                          Appendix XII
                                          State Profile: Colorado




Figure XII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Colorado Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            6,000
1991-92
                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Local Funding
                                                  State Funding




Figure XII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Colorado        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School      3,500
Year 1991-92
                                          3,000

                                          2,500

                                          2,000

                                          1,500

                                          1,000

                                           500

                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Actual State Funding
                                                  State Funding if Each Student Received the Average




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Appendix XIII

State Profile: Connecticut


                                     As table XIII.1 shows, in school year 1991-92, the state provided about
Actual Education                     39 percent of the total funding to Connecticut’s school districts. Total
Funding Distribution                 funding (state and local funds combined) per weighted pupil in
in School Year 1991-92               Connecticut averaged $8,221 with an implicit foundation level of $4,556 for
                                     each student, which is about 55 percent of the average and represents the
                                     state’s equalization effort. (To compare this effort with those of other
                                     states, see fig. 5.) The targeting score for state funding was –.430,
                                     indicating that state education funds were targeted to poor districts. (To
                                     compare this score with those of other states, see table V.1 in app. V.) The
                                     fiscal neutrality score was .241, indicating that total funding increased as
                                     district income increased. (To compare this score with those of other
                                     states, see fig. 1.) A Connecticut education official reported that the state
                                     had changed its school finance system since school year 1991-92 to
                                     increase funding to poor districts compared with wealthy districts (see
                                     app. LVI). To put the state’s school finance system in perspective, table
                                     XIII.2 presents demographic data for school year 1991-92 for five groups of
                                     districts of increasing district income.

Table XIII.1: Summary Data for
Connecticut in School Year 1991-92
                                     Average total funding per weighted pupila                                                    $8,221
                                     State share of total funding (percent)                                                          38.8
                                                                            b
                                     Targeting score (state funds)                                                                 –.430
                                     Implicit foundation levelc                                                                   $4,556
                                     Equalization effortd                                                                            55.4
                                     Fiscal neutrality scoree                                                                        .241
                                     a
                                         The average is the maximum foundation level possible in a state.
                                     b
                                         This is the elasticity of state funding relative to district income.
                                     c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                     districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                     d
                                         This is the implicit foundation as a percent of the average.
                                     e
                                         This is the elasticity of total (state and local) funding relative to district income.




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                                            State Profile: Connecticut




Table XIII.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                            Wealthiest
                                         State               Group 1                Group 2          Group 3           Group 4              Group 5
Total districts                           159                       16                     27                28             42                     46
Total pupils                         462,403                   92,149                 92,783           91,748           92,447                  93,276
Poverty rate (percent)                    10.4                    27.7                     7.8               7.6            4.0                    5.0
Disabled rate (percent)                   12.8                    13.7                   13.4               12.0           12.8                   12.0
Per pupil income                    $148,273                  $82,380              $114,150         $130,956          $155,668             $257,018
Tax efforta                             $34.29                 $29.69                 $32.40           $35.61           $39.26                  $33.59
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XIII.3 presents data on how state and local funding was distributed
                                            among the five groups of Connecticut districts. Connecticut’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from 234 percent to about 34 percent. Figure XIII.1 provides table
                                            information in graphic form.


Table XIII.3: State and Local Funding Distribution in Connecticut, School Year 1991-92
                                                               Mean funding per weighted pupil                                         Funding of
                                                                                                                                  wealthiest group
                                          Poorest                                                                  Wealthiest      compared with
Funding source                  State        Group 1            Group 2          Group 3           Group 4            Group 5      poorest groupa
Local                          $5,035            $2,540           $3,707           $4,602            $6,047            $8,486                     3.34
State                           3,186              4,885            3,739            3,367            2,388              1,500                    0.31
Total                          $8,221            $7,426           $7,446           $7,969            $8,435            $9,985                     1.34
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XIII
                                         State Profile: Connecticut




Figure XIII.1: State and Local Funding
Distribution in Connecticut, School
Year 1991-92                             Funding per Weighted Pupil (Dollars)
                                         12,000

                                         10,000

                                          8,000

                                          6,000

                                          4,000

                                          2,000

                                              0
                                                    Poorest                           Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding



                                         Table XIII.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XIII.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XIII.3.




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                                          Appendix XIII
                                          State Profile: Connecticut




Table XIII.4: How State and Local Funding Would Have Been Distributed If Each District in Connecticut Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                             Funding of
                                                                                                             wealthiest group
                                         Poorest                                               Wealthiest      compared with
Funding source                   State     Group 1     Group 2       Group 3         Group 4       Group 5    poorest groupa
Localb                        $5,072           $2,710             $3,870        $4,510           $5,347            $8,880                      3.28
                                                                                                                           c
State                          3,149            5,511              4,351          3,711            2,874              –659                    –0.12
Totald                        $8,221           $8,221             $8,221        $8,221           $8,221            $8,221                      1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                            The state would have had to recapture this amount of local funding from these districts for
                                          distribution to other districts.
                                          d
                                              The average is the maximum foundation level possible in a state.




Figure XIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Connecticut Could     Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year       10,000
1991-92
                                              8,000

                                              6,000

                                              4,000

                                              2,000

                                                  0

                                          (2,000)
                                                        Poorest                                  Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding




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                                        Appendix XIII
                                        State Profile: Connecticut




Figure XIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Connecticut   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     6,000
Year 1991-92
                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                             0

                                        (1,000)
                                                   Poorest                               Wealthiest
                                                                Groups of Districts
                                              Actual State Funding
                                              State Funding if Each Student Received the Average




                                        Page 129                                             GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XIV

State Profile: Delaware


                                  As table XIV.1 shows, in school year 1991-92, the state provided about
Actual Education                  70 percent of the total funding to Delaware’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Delaware averaged
in School Year 1991-92            $5,576 with an implicit foundation level of $4,190 for each student, which
                                  is about 75 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.070, indicating that state education
                                  funds were targeted to poor districts.97 (To compare this score with those
                                  of other states, see table V.1 in app. V.) The fiscal neutrality score was
                                  .072, indicating that total funding increased as district income increased.98
                                  (To compare this score with those of other states, see fig. 1.) To put the
                                  state’s school finance system in perspective, table XIV.2 presents
                                  demographic data for school year 1991-92 for five groups of districts of
                                  increasing district income.

Table XIV.1: Summary Data for
Delaware in School Year 1991-92
                                  Average total funding per weighted pupila                                                              $5,576
                                  State share of total funding (percent)                                                                      70.2
                                                                       b
                                  Targeting score (state funds)                                                                           –.070
                                  Implicit foundation levelc                                                                             $4,190
                                  Equalization effortd                                                                                        75.1
                                  Fiscal neutrality scoree                                                                                    .072
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                   This is the elasticity of state funding relative to district income. The score is not significantly
                                  different from 0.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as percent of the average.
                                  e
                                    This is the elasticity of total (state and local) funding relative to district income. The score is not
                                  significantly different from 0.




                                  97
                                      However, this score is not significantly different from 0.
                                  98
                                      See footnote 97.



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                                           Appendix XIV
                                           State Profile: Delaware




Table XIV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                  Group 1          Group 2          Group 3         Group 4                  Group 5
Total districts                            16                           5                 5                3               2                       1a
Total pupils                            97,986                    17,221           22,073           14,423          29,809                     14,460
Poverty rate (percent)                    12.2                       16.5             15.2            10.4             10.0                       9.2
Disabled rate (percent)                   10.6                       10.5             11.5            11.0             10.4                       9.6
Per pupil income                    $106,718                    $64,681           $77,905         $89,875        $125,350                 $179,156
Tax effortb                             $15.44                    $12.92           $14.95           $19.33          $17.42                     $12.21
                                           a
                                               Wilmington was the only district in this group.
                                           b
                                               Local funding raised for every $1,000 of district income.



                                           Table XIV.3 presents data on how state and local funding was distributed
                                           among the five groups of Delaware districts. Delaware’s equalization
                                           policies reduced the funding disparity between the wealthy and poor
                                           groups from about 156 percent to about 9 percent. Figure XIV.1 provides
                                           table information in graphic form.


Table XIV.3: State and Local Funding Distribution in Delaware, School Year 1991-92
                                                               Mean funding per weighted pupil                                       Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                               Wealthiest        compared with
Funding source                  State      Group 1              Group 2          Group 3          Group 4         Group 5        poorest groupa
Local                         $1,660              $840            $1,182           $1,739           $2,170          $2,149                       2.56
State                           3,916             4,476            4,022             3,773           3,732            3,668                      0.82
Total                         $5,576            $5,316            $5,204           $5,512           $5,903          $5,817                       1.09
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                         Appendix XIV
                                         State Profile: Delaware




Figure XIV.1: State and Local Funding
Distribution in Delaware, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         7,000

                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XIV.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XIV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XIV.3.


Table XIV.4: How State and Local Funding Would Have Been Distributed If Each District in Delaware Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4        Group 5    poorest groupa
Localb                        $1,668          $1,001            $1,197           $1,397         $1,966            $2,835                     2.83
State                          3,908           4,575                4,379         4,179           3,610             2,741                    0.60
Totalc                        $5,576          $5,576            $5,576           $5,576         $5,576            $5,576                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                          Appendix XIV
                                          State Profile: Delaware




Figure XIV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Delaware Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            7,000
1991-92
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Local Funding
                                                  State Funding




Figure XIV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Delaware        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School      5,000
Year 1991-92
                                          4,000

                                          3,000


                                          2,000


                                          1,000


                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Actual State Funding
                                                  State Funding if Each Student Received the Average




                                          Page 133                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XV

State Profile: Florida


                                       As table XV.1 shows, in school year 1991-92, the state provided 53 percent
Actual Education                       of the total funding to Florida’s school districts. Total funding (state and
Funding Distribution                   local funds combined) per weighted pupil in Florida averaged $5,555 with
in School Year 1991-92                 an implicit foundation level of $4,759 for each student, which is about
                                       86 percent of the average and represents the state’s equalization effort. (To
                                       compare this effort with those of other states, see fig. 5.) The targeting
                                       score for state funding was –.615, indicating that state education funds
                                       were targeted to poor districts. (To compare this score with those of other
                                       states, see table V.1 in app. V.) The fiscal neutrality score was .239,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) To put the state’s
                                       school finance system in perspective, table XV.2 presents demographic
                                       data for school year 1991-92 for five groups of districts of increasing
                                       district income.

Table XV.1: Summary Data for Florida
in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $5,555
                                       State share of total funding (percent)                                                          53.0
                                                                              b
                                       Targeting score (state funds)                                                                 –.615
                                       Implicit foundation levelc                                                                   $4,759
                                       Equalization effortd                                                                            85.7
                                       Fiscal neutrality scoree                                                                        .239
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XV
                                            State Profile: Florida




Table XV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3         Group 4                  Group 5
Total districts                             67                         38                 3                 7              10                        9
Total pupils                        1,929,239                    380,985          433,922          350,723          415,513                     348,096
Poverty rate (percent)                     18.6                      21.9             22.6             18.5             14.7                       14.9
Disabled rate (percent)                    11.9                      12.1             10.9             12.0             11.8                       13.2
Per pupil income                        $98,373                  $67,959          $81,583          $90,995        $109,511                 $146,728
Tax efforta                              $26.48                   $22.60           $25.31            $27.03          $25.93                      $29.37
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XV.3 presents data on how state and local funding was distributed
                                            among the five groups of Florida districts. Florida’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 181 percent to about 18 percent. Figure XV.1 provides table
                                            information in graphic form.


Table XV.3: State and Local Funding Distribution in Florida, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                               Wealthiest        compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4         Group 5        poorest groupa
Local                          $2,609            $1,546           $2,057           $2,461            $2,815          $4,341                        2.81
State                           2,946              3,740            3,183            2,979            2,849            1,922                        .51
Total                          $5,555            $5,286           $5,239           $5,440            $5,664          $6,264                        1.18
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XV
                                          State Profile: Florida




Figure XV.1: State and Local Funding
Distribution in Florida, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          7,000

                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XV.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XV.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XV.3.


Table XV.4: How State and Local Funding Would Have Been Distributed If Each District in Florida Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                              Funding of
                                                                                                            wealthiest group
                                       Poorest                                                 Wealthiest    compared with
Funding source                 State     Group 1     Group 2        Group 3        Group 4        Group 5    poorest groupa
Localb                        $2,610           $1,793            $2,174           $2,413         $2,931            $3,861                     2.15
State                          2,946            3,762                3,382         3,143           2,624             1,694                    0.45
Totalc                        $5,555           $5,556            $5,556           $5,556         $5,556            $5,556                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                         Appendix XV
                                         State Profile: Florida




Figure XV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Florida Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year           7,000
1991-92
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                             0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Florida        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     4,000
Year 1991-92

                                         3,000


                                         2,000


                                         1,000


                                             0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




                                         Page 137                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XVI

State Profile: Georgia


                                        As table XVI.1 shows, in school year 1991-92, the state provided about
Actual Education                        55 percent of the total funding to Georgia’s school districts. Total funding
Funding Distribution                    (state and local funds combined) per weighted pupil in Georgia averaged
in School Year 1991-92                  $4,324 with an implicit foundation level of $2,932 for each student, which
                                        is about 68 percent of the average and represents the state’s equalization
                                        effort. (To compare this effort with those of other states, see fig. 5.) The
                                        targeting score for state funding was –.242, indicating that state education
                                        funds were targeted to poor districts. (To compare this score with those of
                                        other states, see table V.1 in app. V.) The fiscal neutrality score was .323,
                                        indicating that total funding increased as district income increased. (To
                                        compare this score with those of other states, see fig. 1.) To put the state’s
                                        school finance system in perspective, table XVI.2 presents demographic
                                        data for school year 1991-92 for five groups of districts of increasing
                                        district income.

Table XVI.1: Summary Data for Georgia
in School Year 1991-92
                                        Average total funding per weighted pupila                                                    $4,324
                                        State share of total funding (percent)                                                          54.6
                                                                               b
                                        Targeting score (state funds)                                                                 –.242
                                        Implicit foundation levelc                                                                   $2,932
                                        Equalization effortd                                                                            67.8
                                        Fiscal neutrality scoree                                                                        .323
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                            This is the elasticity of state funding relative to district income.
                                        c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XVI
                                            State Profile: Georgia




Table XVI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            183                         75               56                  20             19                       13
Total pupils                        1,177,358                    234,753          227,823          244,138           252,333                    218,311
Poverty rate (percent)                     19.6                      27.5             21.8             16.1              21.1                      11.3
Disabled rate (percent)                     9.0                        9.4            10.1                  8.7           8.1                       8.9
Per pupil income                        $73,340                  $45,588          $60,087          $68,588           $84,522               $109,402
Tax efforta                              $26.23                   $23.12           $20.65            $28.29           $27.39                     $28.83
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XVI.3 presents data on how state and local funding was distributed
                                            among the five groups of Georgia districts. Georgia’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 189 percent to about 30 percent. Figure XVI.1 provides table
                                            information in graphic form.


Table XVI.3: State and Local Funding Distribution in Georgia, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $1,962            $1,073           $1,261           $1,921            $2,296           $3,104                       2.89
State                           2,361              2,794            2,664            2,391            2,166             1,924                      0.69
Total                          $4,324            $3,867           $3,924           $4,312            $4,462           $5,029                       1.30
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XVI
                                          State Profile: Georgia




Figure XVI.1: State and Local Funding
Distribution in Georgia, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XVI.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XVI.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XVI.3.


Table XVI.4: How State and Local Funding Would Have Been Distributed If Each District in Georgia Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                            wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4        Group 5    poorest groupa
Localb                        $1,970           $1,198            $1,584           $1,854         $2,280            $2,974                     2.48
State                          2,354            3,126                2,740         2,469           2,044             1,350                    0.43
Totalc                        $4,324           $4,324            $4,324           $4,324         $4,324            $4,324                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                         Appendix XVI
                                         State Profile: Georgia




Figure XVI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Georgia Could Have   Funding Per Weighted Pupil (Dollars)
Spent the Average, School Year           6,000
1991-92
                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                             0
                                                    Poorest                                   Wealthiest
                                                                   Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XVI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Georgia        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     3,500
Year 1991-92
                                         3,000

                                         2,500

                                         2,000

                                         1,500

                                         1,000

                                          500

                                            0
                                                  Poorest                                   Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




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Appendix XVII

State Profile: Idaho


                                       As table XVII.1 shows, in school year 1991-92, the state provided about
Actual Education                       67 percent of the total funding to Idaho’s school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Idaho averaged
in School Year 1991-92                 $3,504 with an implicit foundation level of $2,654 for each student, which
                                       is about 76 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.130, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .247,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) An Idaho
                                       education official reported that the state had changed its school finance
                                       system since school year 1991-92 to increase funding to poor districts
                                       compared with wealthy districts (see app. LVI). To put the state’s school
                                       finance system in perspective, table XVII.2 presents demographic data for
                                       school year 1991-92 for five groups of districts of increasing district
                                       income.

Table XVII.1: Summary Data for Idaho
in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $3,504
                                       State share of total funding (percent)                                                          67.1
                                                                              b
                                       Targeting score (state funds)                                                                 –.130
                                       Implicit foundation levelc                                                                   $2,654
                                       Equalization effortd                                                                            75.7
                                       Fiscal neutrality scoree                                                                        .247
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XVII
                                            State Profile: Idaho




Table XVII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            108                         30               29                  11             26                       12
Total pupils                            216,503                   45,299           41,300            44,163          42,438                      43,303
Poverty rate (percent)                     15.8                      16.1             19.1             16.0             14.2                       13.5
Disabled rate (percent)                    10.4                        9.8            10.9             10.5             10.3                       10.7
Per pupil income                        $51,724                  $30,589          $41,813          $50,172          $54,189                     $82,453
Tax efforta                              $22.34                   $24.35           $21.51            $20.98          $19.18                      $24.86
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XVII.3 presents data on how state and local funding was distributed
                                            among the five groups of Idaho districts. Idaho’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 177 percent to about 26 percent. Figure XVII.1 provides table
                                            information in graphic form.


Table XVII.3: State and Local Funding Distribution in Idaho, School Year 1991-92
                                                          Mean funding per weighted pupil
                                                                                                                                   Wealth funding
                                          Poorest                                                                Wealthiest        compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5         poor fundinga
Local                          $1,155              $740             $910           $1,054            $1,034          $2,048                        2.77
State                           2,350              2,506            2,485            2,327            2,467            2,027                       0.81
Total                          $3,504            $3,246           $3,395           $3,381            $3,501          $4,075                        1.26
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XVII
                                          State Profile: Idaho




Figure XVII.1: State and Local Funding
Distribution in Idaho, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          4,000


                                          3,000


                                          2,000


                                          1,000


                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XVII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XVII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XVII.3.


Table XVII.4: How State and Local Funding Would Have Been Distributed If Each District in Idaho Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                             Funding of
                                                                                                            wealthiest group
                                        Poorest                                                Wealthiest     compared with
Funding source                  State     Group 1     Group 2       Group 3         Group 4       Group 5     poorest groupa
Localb                         $1,155            $687                $923         $1,119         $1,215            $1,842                     2.68
State                           2,349           2,817                2,581         2,385           2,289             1,662                    0.59
Totalc                         $3,504          $3,504            $3,504           $3,504         $3,504            $3,504                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                        Appendix XVII
                                        State Profile: Idaho




Figure XVII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Idaho Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year          4,000
1991-92

                                        3,000


                                        2,000


                                        1,000


                                            0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Local Funding
                                                State Funding




Figure XVII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Idaho Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year     3,000
1991-92
                                        2,500

                                        2,000

                                        1,500

                                        1,000

                                         500

                                            0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 145                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XVIII

State Profile: Illinois


                                           As table XVIII.1 shows, in school year 1991-92, the state provided about
Actual Education                           33 percent of the total funding to Illinois’ school districts. Total funding
Funding Distribution                       (state and local funds combined) per weighted pupil in Illinois averaged
in School Year 1991-92                     $4,970 with an implicit foundation level of $2,031 for each student, which
                                           is about 41 percent of the average and represents the state’s equalization
                                           effort. (To compare this effort with those of other states, see fig. 5.) The
                                           targeting score for state funding was –.230, indicating that state education
                                           funds were targeted to poor districts. (To compare this score with those of
                                           other states, see table V.1 in app. V.) The fiscal neutrality score was .338,
                                           indicating that total funding increased as district income increased. (To
                                           compare this score with those of other states, see fig. 1.) To put the state’s
                                           school finance system in perspective, table XVIII.2 presents demographic
                                           data for school year 1991-92 for five groups of districts of increasing
                                           district income.

Table XVIII.1: Summary Data for Illinois
in School Year 1991-92
                                           Average total funding per weighted pupila                                                    $4,970
                                           State share of total funding (percent)                                                          33.2
                                                                                  b
                                           Targeting score (state funds)                                                                 –.230
                                           Implicit foundation levelc                                                                   $2,031
                                           Equalization effortd                                                                            40.9
                                           Fiscal neutrality scoree                                                                        .338
                                           a
                                               The average is the maximum foundation level possible in a state.
                                           b
                                               This is the elasticity of state funding relative to district income.
                                           c
                                            This is the minimum amount of total funding the state’s equalization policies would enable
                                           districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                           d
                                               This is the implicit foundation as a percent of the average.
                                           e
                                               This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XVIII
                                            State Profile: Illinois




Table XVIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3         Group 4                  Group 5
Total districts                            934                        256               16              219              211                       232
Total pupils                         1,821,061                   301,035          426,836          361,247          367,907                     364,036
Poverty rate (percent)                     16.4                      18.8             32.9             13.0               9.2                       6.0
Disabled rate (percent)                    13.0                      14.1             11.0             13.8             14.1                       12.7
Per pupil income                      $134,121                   $66,174          $78,601          $90,547        $124,521                 $308,349
Tax efforta                              $24.39                   $29.09           $29.91            $27.57          $26.55                      $20.38
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XVIII.3 presents data on how state and local funding was distributed
                                            among the five groups of Illinois districts. Illinois’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 215 percent to about 67 percent. Figure XVIII.1 provides table
                                            information in graphic form.


Table XVIII.3: State and Local Funding Distribution in Illinois, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                              Wealthiest         compared with
Funding source                   State      Group 1             Group 2          Group 3           Group 4         Group 5        poorest groupa
Local                           $3,318           $1,955           $2,363           $2,504            $3,304          $6,153                        3.15
State                            1,652             2,375            1,867            1,881            1,331            1,097                       0.46
Total                           $4,970           $4,330           $4,230           $4,384            $4,635          $7,249                        1.67
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XVIII
                                          State Profile: Illinois




Figure XVIII.1: State and Local Funding
Distribution in Illinois, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          8,000


                                          6,000


                                          4,000


                                          2,000


                                              0
                                                    Poorest                               Wealthiest
                                                                    Groups of Districts
                                                  Local Funding
                                                  State Funding



                                          Table XVIII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XVIII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XVIII.3.




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                                           Appendix XVIII
                                           State Profile: Illinois




Table XVIII.4: How State and Local Funding Would Have Been Distributed If Each District in Illinois Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                               Funding of
                                                                                                               wealthiest group
                                         Poorest                                                 Wealthiest     compared with
Funding source                  State      Group 1     Group 2       Group 3        Group 4          Group 5    poorest groupa
Localb                         $3,358           $1,616             $1,935        $2,236           $3,088            $7,852                      4.86
                                                                                                                            c
State                            1,612           3,354              3,035          2,734            1,882           –2,882                     –0.86
Totald                         $4,970           $4,970             $4,970        $4,970           $4,970            $4,970                      1.00
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.
                                           b
                                            This is the local funding that could have been raised assuming all districts had made the same
                                           average tax effort.
                                           c
                                             The state would have had to recapture this amount of local funding from these districts for
                                           distribution to other districts.
                                           d
                                               The average is the maximum foundation level possible in a state.




Figure XVIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Illinois Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year              8,000
1991-92
                                               6,000

                                               4,000

                                               2,000

                                                   0

                                           (2,000)

                                           (4,000)
                                                         Poorest                                  Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding




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                                       Appendix XVIII
                                       State Profile: Illinois




Figure XVIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Illinois     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    4,000
Year 1991-92
                                        3,000

                                        2,000

                                        1,000

                                            0

                                       (1,000)

                                       (2,000)

                                       (3,000)
                                                  Poorest                                Wealthiest
                                                                 Groups of Districts
                                              Actual State Funding
                                              State Funding if Each Student Received the Average




                                       Page 150                                              GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XIX

State Profile: Indiana


                                        As table XIX.1 shows, in school year 1991-92, the state provided about
Actual Education                        54 percent of the total funding to Indiana’s school districts. Total funding
Funding Distribution                    (state and local funds combined) per weighted pupil in Indiana averaged
in School Year 1991-92                  $4,993 with an implicit foundation level of $2,970 for each student, which
                                        is about 60 percent of the average and represents the state’s equalization
                                        effort. (To compare this effort with those of other states, see fig. 5.) The
                                        targeting score for state funding was –.099, indicating that state education
                                        funds were targeted to poor districts. (To compare this score with those of
                                        other states, see table V.1 in app. V.) The fiscal neutrality score was .153,
                                        indicating that total funding increased as district income increased. (To
                                        compare this score with those of other states, see fig. 1.) An Indiana
                                        education official reported that the state had changed its school finance
                                        system since school year 1991-92 to increase funding to poor districts
                                        compared with wealthy districts (see app. LVI). To put the state’s school
                                        finance system in perspective, table XIX.2 presents demographic data for
                                        school year 1991-92 for five groups of districts of increasing district
                                        income.

Table XIX.1: Summary Data for Indiana
in School Year 1991-92
                                        Average total funding per weighted pupila                                                    $4,993
                                        State share of total funding (percent)                                                          54.1
                                                                               b
                                        Targeting score (state funds)                                                                 –.099
                                        Implicit foundation levelc                                                                   $2,970
                                        Equalization effortd                                                                            59.5
                                        Fiscal neutrality scoree                                                                        .153
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                            This is the elasticity of state funding relative to district income.
                                        c
                                          This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XIX
                                            State Profile: Indiana




Table XIX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            294                         90               74                  66             33                       31
Total pupils                            952,639                  191,981          190,297          182,032          196,761                     191,568
Poverty rate (percent)                     13.5                      17.8             11.1             11.2             16.1                       10.8
Disabled rate (percent)                    11.6                      11.9             11.4             11.6             12.2                       11.0
Per pupil income                        $76,049                  $52,389          $65,870          $74,174          $81,358                $106,199
Tax efforta                              $30.13                   $37.13           $31.81            $32.04          $27.87                      $26.22
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XIX.3 presents data on how state and local funding was distributed
                                            among the five groups of Indiana districts. Indiana’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 40 percent to about 10 percent. Figure XIX.1 provides table
                                            information in graphic form.


Table XIX.3: State and Local Funding Distribution in Indiana, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $2,290            $1,966           $2,082           $2,367            $2,293          $2,751                        1.40
State                           2,703              2,838            2,740            2,649            2,749            2,548                       0.90
Total                          $4,993            $4,804           $4,822           $5,015            $5,042          $5,299                        1.10
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XIX
                                          State Profile: Indiana




Figure XIX.1: State and Local Funding
Distribution in Indiana, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XIX.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XIX.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XIX.3.


Table XIX.4: How State and Local Funding Would Have Been Distributed If Each District in Indiana Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                              Funding of
                                                                                                            wealthiest group
                                        Poorest                                                Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4        Group 5     poorest groupa
Localb                        $2,297           $1,565            $1,998           $2,244         $2,427            $3,247                     2.07
State                          2,695            3,428                2,995         2,748           2,565             1,746                    0.51
Totalc                        $4,993           $4,993            $4,993           $4,993         $4,993            $4,993                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                         Appendix XIX
                                         State Profile: Indiana




Figure XIX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Indiana Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year           6,000
1991-92
                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                             0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XIX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Indiana        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     4,000
Year 1991-92
                                         3,500
                                         3,000
                                         2,500
                                         2,000
                                         1,500
                                         1,000
                                          500
                                             0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




                                         Page 154                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XX

State Profile: Iowa


                                       As table XX.1 shows, in school year 1991-92, the state provided 49 percent
Actual Education                       of the total funding to Iowa’s school districts. Total funding (state and
Funding Distribution                   local funds combined) per weighted pupil in Iowa averaged $4,849 with an
in School Year 1991-92                 implicit foundation level of $2,622 for each student, which is about
                                       54 percent of the average and represents the state’s equalization effort. (To
                                       compare this effort with those of other states, see fig. 5.) The targeting
                                       score for state funding was –.104, indicating that state education funds
                                       were targeted to poor districts. (To compare this score with those of other
                                       states, see table V.1 in app. V.) The fiscal neutrality score was .031,
                                       indicating that total funding increased as district income increased.99 (To
                                       compare this score with those of other states, see fig. 1.) To put the state’s
                                       school finance system in perspective, table XX.2 presents demographic
                                       data for school year 1991-92 for five groups of districts of increasing
                                       district income.

Table XX.1: Summary Data for Iowa in
School Year 1991-92
                                       Average total funding per weighted pupila                                                             $4,849
                                       State share of total funding (percent)                                                                      49.0
                                                                             b
                                       Targeting score (state funds)                                                                          –.104
                                       Implicit foundation levelc                                                                            $2,622
                                       Equalization effortd                                                                                        54.1
                                       Fiscal neutrality scoree                                                                                    .031
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                         This is the elasticity of total (state and local) funding relative to district income. The score is not
                                       significantly different from 0.




                                       99
                                           However, this score is not significantly different from 0.



                                       Page 155                                                         GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XX
                                            State Profile: Iowa




Table XX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            419                        144               95                  59             75                       46
Total pupils                            487,004                   96,685           98,192            96,775          92,677                     102,675
Poverty rate (percent)                     13.8                      14.2             13.3             16.3             11.9                       13.1
Disabled rate (percent)                    12.6                      11.5             12.1             12.8             13.2                       13.3
Per pupil income                        $69,690                  $51,544          $60,642          $66,301          $75,108                     $93,734
Tax efforta                              $35.87                   $51.39           $40.36            $33.60          $35.00                      $27.22
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XX.3 presents data on how state and local funding was distributed
                                            among the five groups of Iowa districts. Iowa’s equalization policies
                                            increased the funding that poor districts had compared with wealthy
                                            districts from 2 percent to about 4 percent. Figure XX.1 provides table
                                            information in graphic form.


Table XX.3: State and Local Funding Distribution in Iowa, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,474             $2,621           $2,432           $2,244            $2,637          $2,568                        0.98
State                           2,375              2,431            2,435            2,399            2,357            2,287                       0.94
Total                         $4,849             $5,051           $4,867           $4,643            $4,994          $4,855                        0.96
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XX
                                         State Profile: Iowa




Figure XX.1: State and Local Funding
Distribution in Iowa, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XX.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XX.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XX.3.


Table XX.4: How State and Local Funding Would Have Been Distributed If Each District in Iowa Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                       Poorest                                                Wealthiest     compared with
Funding source                 State     Group 1     Group 2        Group 3        Group 4       Group 5    poorest groupa
Localb                        $2,476          $1,851            $2,168           $2,338         $2,663            $3,319                     1.79
State                          2,373           2,998                2,681         2,511           2,186             1,530                    0.51
Totalc                        $4,849          $4,849            $4,849           $4,849         $4,849            $4,849                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                       Appendix XX
                                       State Profile: Iowa




Figure XX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Iowa Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year         6,000
1991-92
                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Iowa Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    3,500
1991-92
                                       3,000

                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 158                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXI

State Profile: Kansas


                                       As table XXI.1 shows, in school year 1991-92, the state provided about
Actual Education                       44 percent of the total funding to Kansas’ school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Kansas averaged
in School Year 1991-92                 $4,973 with an implicit foundation level of $2,706 for each student, which
                                       is about 54 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.241, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .014,
                                       indicating that total funding increased as district income increased.100 (To
                                       compare this score with those of other states, see fig. 1.) A Kansas
                                       education official reported that the state had changed its school finance
                                       system since school year 1991-92 to increase funding to poor districts
                                       compared with wealthy districts (see app. LVI). To put the state’s school
                                       finance system in perspective, table XXI.2 presents demographic data for
                                       school year 1991-92 for five groups of districts of increasing district
                                       income.

Table XXI.1: Summary Data for Kansas
in School Year 1991-92
                                       Average total funding per weighted pupila                                                            $4,973
                                       State share of total funding (percent)                                                                     43.8
                                                                             b
                                       Targeting score (state funds)                                                                         –.241
                                       Implicit foundation levelc                                                                           $2,706
                                       Equalization effortd                                                                                       54.4
                                       Fiscal neutrality scoree                                                                                   .014
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                        This is the elasticity of total (state and local) funding relative to district income. The score is not
                                       significantly different from 0.




                                       100
                                            However, this score is not significantly different from 0.



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                                            Appendix XXI
                                            State Profile: Kansas




Table XXI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                              Wealthiest
                                          State                 Group 1              Group 2          Group 3          Group 4              Group 5
Total districts                            304                         69                 100                 70               57                   8
Total pupils                            437,033                   87,100               86,292           89,096           85,852                 88,693
Poverty rate (percent)                     13.8                      18.7                 12.3              12.6            13.8                  11.5
Disabled rate (percent)                    10.2                      10.2                  9.6              10.3            11.4                   9.7
Per pupil income                        $74,725                  $51,423             $60,923           $69,640         $81,926             $109,173
Tax efforta                              $37.62                   $40.78               $43.96           $41.04           $34.52                 $32.90
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXI.3 presents data on how state and local funding was distributed
                                            among the five groups of Kansas districts. Kansas’ equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 68 percent to about 9 percent. Figure XXI.1 provides table
                                            information in graphic form.


Table XXI.3: State and Local Funding Distribution in Kansas, School Year 1991-92
                                                               Mean funding per weighted pupil                                           Funding of
                                                                                                                                    wealthiest group
                                          Poorest                                                              Wealthiest            compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4         Group 5           poorest groupa
Local                         $2,793             $2,113           $2,652           $2,855            $2,867          $3,555                       1.68
State                           2,181              2,534            2,630            2,375            2,103            1,534                      0.61
Total                         $4,973             $4,648           $5,282           $5,230            $4,969          $5,089                       1.09
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XXI
                                         State Profile: Kansas




Figure XXI.1: State and Local Funding
Distribution in Kansas, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XXI.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XXI.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XXI.3.


Table XXI.4: How State and Local Funding Would Have Been Distributed If Each District in Kansas Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                        $2,798           $1907            $2,302           $2,607         $3,023            $4,129                     2.17
State                          2,176           3,066                2,672         2,366           1,951               845                    0.28
Totalc                        $4,973          $4,973            $4,973           $4,973         $4,973            $4,973                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                        Appendix XXI
                                        State Profile: Kansas




Figure XXI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Kansas Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year          6,000
1991-92
                                        5,000

                                        4,000

                                        3,000

                                        2,000

                                        1,000

                                           0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Local Funding
                                                State Funding




Figure XXI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Kansas        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    3,500
Year 1991-92
                                        3,000

                                        2,500

                                        2,000

                                        1,500

                                        1,000

                                         500

                                           0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 162                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXII

State Profile: Kentucky


                                  As table XXII.1 shows, in school year 1991-92, the state provided
Actual Education                  70 percent of the total funding to Kentucky’s school districts. Total
Funding Distribution              funding (state and local funds combined) per weighted pupil in Kentucky
in School Year 1991-92            averaged $3,728 with an implicit foundation level of $3,232 for each
                                  student, which is about 87 percent of the average and represents the
                                  state’s equalization effort. (To compare this effort with those of other
                                  states, see fig. 5.) The targeting score for state funding was –.239,
                                  indicating that state education funds were targeted to poor districts. (To
                                  compare this score with those of other states, see table V.1 in app. V.) The
                                  fiscal neutrality score was .126, indicating that total funding increased as
                                  district income increased. (To compare this score with those of other
                                  states, see fig. 1.) To put the state’s school finance system in perspective,
                                  table XXII.2 presents demographic data for school year 1991-92 for five
                                  groups of districts of increasing district income.

Table XXII.1: Summary Data for
Kentucky in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $3,728
                                  State share of total funding (percent)                                                          70.0
                                                                         b
                                  Targeting score (state funds)                                                                 –.239
                                  Implicit foundation levelc                                                                   $3,232
                                  Equalization effortd                                                                            86.7
                                  Fiscal neutrality scoree                                                                        .126
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                   This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




                                  Page 163                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XXII
                                            State Profile: Kentucky




Table XXII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            175                         43               52                  38             37                        5
Total pupils                            633,901                  126,077          127,755          124,667          127,649                     127,753
Poverty rate (percent)                     25.1                      40.9             26.5             21.2             17.7                       19.4
Disabled rate (percent)                    12.4                      12.9             12.4             12.1             12.1                       12.7
Per pupil income                        $63,691                  $36,511          $49,602          $60,505          $73,669                     $97,742
Tax efforta                              $17.42                   $14.04           $16.06            $16.01          $16.95                      $20.80
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXII.3 presents data on how state and local funding was distributed
                                            among the five groups of Kentucky districts. Kentucky’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 283 percent to about 15 percent. Figure XXII.1 provides
                                            table information in graphic form.


Table XXII.3: State and Local Funding Distribution in Kentucky, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $1,119              $528             $798              $959           $1,229          $2,020                        3.83
State                           2,609              3,072            2,846            2,660            2,414            2,123                       0.69
Total                          $3,728            $3,601           $3,644           $3,618            $3,644          $4,143                        1.15
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




                                            Page 164                                                    GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XXII
                                          State Profile: Kentucky




Figure XXII.1: State and Local Funding
Distribution in Kentucky, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          5,000


                                          4,000


                                          3,000


                                          2,000


                                          1,000


                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XXII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XXII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XXII.3.


Table XXII.4: How State and Local Funding Would Have Been Distributed If Each District in Kentucky Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                        Poorest                                                Wealthiest    compared with
Funding source                  State     Group 1     Group 2       Group 3         Group 4       Group 5    poorest groupa
Localb                         $1,126            $626                $871         $1,076         $1,318            $1,730                     2.76
State                           2,603           3,103                2,858         2,653           2,410             1,999                    0.64
Totalc                         $3,728          $3,728            $3,728           $3,728         $3,728            $3,728                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 165                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix XXII
                                       State Profile: Kentucky




Figure XXII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Kentucky Could     Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    5,000
1991-92
                                       4,000


                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XXII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Kentucky     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   3,500
Year 1991-92
                                       3,000

                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 166                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXIII

State Profile: Louisiana


                                   As table XXIII.1 shows, in school year 1991-92, the state provided about
Actual Education                   62 percent of the total funding to Louisiana’s school districts. Total
Funding Distribution               funding (state and local funds combined) per weighted pupil in Louisiana
in School Year 1991-92             averaged $3,912 with an implicit foundation level of $2,433 for each
                                   student, which is about 62 percent of the average and represents the
                                   state’s equalization effort. (To compare this effort with those of other
                                   states, see fig. 5.) The targeting score for state funding was .000, indicating
                                   that state education funds were not targeted to poor or wealthy districts.101
                                    (To compare this score with those of other states, see table V.1 in app. V.)
                                   The fiscal neutrality score was .216, indicating that total funding increased
                                   as district income increased. (To compare this score with those of other
                                   states, see fig. 1.) A Louisiana education official reported that the state had
                                   changed its school finance system since school year 1991-92 to increase
                                   funding to poor districts compared with wealthy districts (see app. LVI).
                                   To put the state’s school finance system in perspective, table XXIII.2
                                   presents demographic data for school year 1991-92 for five groups of
                                   districts of increasing district income.

Table XXIII.1: Summary Data for
Louisiana in School Year 1991-92
                                   Average total funding per weighted pupila                                                          $3,912
                                   State share of total funding (percent)                                                               62.2
                                                                          b
                                   Targeting score (state funds)                                                                        .000
                                   Implicit foundation levelc                                                                         $2,433
                                   Equalization effortd                                                                                 62.2
                                   Fiscal neutrality scoree                                                                             .216
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                    This is the constrained score (elasticity of state funding relative to district income) used to
                                   calculate the state’s implicit foundation level. The actual targeting elasticity is .150.
                                   c
                                     This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                       This is the elasticity of total (state and local) funding relative to district income.




                                   101
                                     This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                   differs from the actual targeting score found in table V.1 in app. V.



                                   Page 167                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XXIII
                                            State Profile: Louisiana




Table XXIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                             65                         24               23                  10              5                        3
Total pupils                            753,188                  149,900          153,216          150,781          175,284                     124,007
Poverty rate (percent)                     31.8                      37.3             34.4             29.4             33.0                       22.9
Disabled rate (percent)                    10.7                      10.6             11.5             10.0               9.9                      11.6
Per pupil income                        $58,920                  $39,718          $45,820          $55,695          $67,411                     $90,238
Tax efforta                              $25.11                   $23.86           $27.49            $27.21          $28.66                      $19.12
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXIII.3 presents data on how state and local funding was distributed
                                            among the five groups Louisiana districts. Louisiana’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 80 percent to about 21 percent. Figure XXIII.1 provides table
                                            information in graphic form.


Table XXIII.3: State and Local Funding Distribution in Louisiana, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $1,480              $956           $1,277           $1,499            $1,919          $1,717                        1.80
State                           2,433              2,551            2,395            2,489            2,271            2,521                        .99
Total                          $3,912            $3,507           $3,672           $3,988            $4,190          $4,238                        1.21
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




                                            Page 168                                                    GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XXIII
                                          State Profile: Louisiana




Figure XXIII.1: State and Local Funding
Distribution in Louisiana, School Year
1991-92                                   Funding per Weighted Pupil (Dollars)
                                          5,000


                                          4,000


                                          3,000


                                          2,000


                                          1,000


                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XXIII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XXIII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XXIII.3.


Table XXIII.4: How State and Local Funding Would Have Been Distributed If Each District in Louisiana Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                             Funding of
                                                                                                             wealthiest group
                                         Poorest                                               Wealthiest     compared with
Funding source                  State      Group 1     Group 2       Group 3        Group 4        Group 5    poorest groupa
Localb                         $1,483            $991            $1,137           $1,415         $1,704            $2,276                     2.30
State                           2,429           2,922                2,775         2,497           2,208             1,637                    0.56
Totalc                         $3,912          $3,912            $3,912           $3,912         $3,912            $3,912                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 169                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix XXIII
                                       State Profile: Louisiana




Figure XXIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Louisiana Could    Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    5,000
1991-92
                                       4,000


                                       3,000


                                       2,000


                                       1,000


                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XXIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Louisiana    Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   3,000
Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 170                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXIV

State Profile: Maine


                                       As table XXIV.1 shows, in school year 1991-92, the state provided about
Actual Education                       50 percent of the total funding to Maine’s school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Maine averaged
in School Year 1991-92                 $5,681 with an implicit foundation level of $3,612 for each student, which
                                       is about 64 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.287, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .176,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) To put the state’s
                                       school finance system in perspective, table XXIV.2 presents demographic
                                       data for school year 1991-92 for five groups of districts of increasing
                                       district income.

Table XXIV.1: Summary Data for Maine
in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $5,681
                                       State share of total funding (percent)                                                          49.4
                                                                              b
                                       Targeting score (state funds)                                                                 –.287
                                       Implicit foundation levelc                                                                   $3,612
                                       Equalization effortd                                                                            63.6
                                       Fiscal neutrality scoree                                                                        .176
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XXIV
                                            State Profile: Maine




Table XXIV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            227                         53               23                  38             48                      65
Total pupils                            211,295                   43,274           43,198            40,379          40,807                     43,637
Poverty rate (percent)                     13.7                      17.9             13.1             13.3             12.6                      11.4
Disabled rate (percent)                    11.9                      11.8             11.3             11.9             12.4                      12.3
Per pupil income                        $76,336                  $48,731          $57,869          $67,998          $87,059                $119,681
Tax efforta                              $37.61                   $46.46           $35.13            $35.84          $34.79                     $38.04
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXIV.3 presents data on how state and local funding was distributed
                                            among the five groups of Maine districts. Maine’s equalization policies
                                            reduced the total funding disparity between the wealthy and poor groups
                                            from about 100 percent to about 17 percent. Figure XXIV.1 provides table
                                            information in graphic form.


Table XXIV.3: State and Local Funding Distribution in Maine, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,875             $2,276           $2,017           $2,434            $3,038          $4,554                       2.00
State                           2,807              3,193            3,192            3,056            2,862            1,845                      0.58
Total                         $5,681             $5,469           $5,210           $5,490            $5,901          $6,399                       1.17
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         State Profile: Maine




Figure XXIV.1: State and Local
Funding Distribution in Maine, School
Year 1991-92                             Funding per Weighted Pupil (Dollars)
                                         7,000

                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XXIV.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XXIV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XXIV.3.


Table XXIV.4: How State and Local Funding Would Have Been Distributed If Each District in Maine Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $2,878          $1,828            $2,197           $2,567         $3,273            $4,513                     2.47
State                          2,803           3,853                3,484         3,115           2,409             1,168                    0.30
Totalc                        $5,681          $5,681            $5,681           $5,681         $5,681            $5,681                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                        State Profile: Maine




Figure XXIV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Maine Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year          7,000
1991-92
                                        6,000

                                        5,000

                                        4,000

                                        3,000

                                        2,000

                                        1,000

                                           0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Local Funding
                                                State Funding




Figure XXIV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Maine Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year     4,000
1991-92

                                        3,000


                                        2,000


                                        1,000


                                           0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




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Appendix XXV

State Profile: Maryland


                                  As table XXV.1 shows, in school year 1991-92, the state provided about
Actual Education                  40 percent of the total funding to Maryland’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Maryland averaged
in School Year 1991-92            $6,039 with an implicit foundation level of $3,819 for each student, which
                                  is about 63 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.566, indicating that state education
                                  funds were targeted to poor districts. (To compare this score with those of
                                  other states, see table V.1 in app. V.) The fiscal neutrality score was .469,
                                  indicating that total funding increased as district income increased. (To
                                  compare this score with those of other states, see fig. 1.) A Maryland
                                  education official reported that the state had changed its school finance
                                  system since school year 1991-92 to increase funding to poor districts
                                  compared with wealthy districts (see app. LVI). To put the state’s school
                                  finance system in perspective, table XXV.2 presents demographic data for
                                  school year 1991-92 for five groups of districts of increasing district
                                  income.

Table XXV.1: Summary Data for
Maryland in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $6,039
                                  State share of total funding (percent)                                                          40.4
                                                                         b
                                  Targeting score (state funds)                                                                 –.566
                                  Implicit foundation levelc                                                                   $3,819
                                  Equalization effortd                                                                            63.2
                                  Fiscal neutrality scoree                                                                        .469
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




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                                           State Profile: Maryland




Table XXV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            24                           6                8                  4              4                        2
Total pupils                           736,238                  147,982          144,665          141,124           190,872                    111,595
Poverty rate (percent)                    11.3                      26.9               9.0                 8.1           6.6                       5.7
Disabled rate (percent)                   12.0                      14.8             11.8             10.5              12.3                      10.2
Per pupil income                    $114,832                    $76,344          $89,714         $109,357          $134,053               $172,482
Tax efforta                             $31.59                   $23.79           $34.67            $30.58           $31.37                     $36.41
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXV.3 presents data on how state and local funding was distributed
                                           among the five groups of Maryland districts. Maryland’s equalization
                                           policies reduced the funding disparity between the wealthy and poor
                                           groups from about 217 percent to about 65 percent. Figure XXV.1 provides
                                           table information in graphic form.


Table XXV.3: State and Local Funding Distribution in Maryland, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                 Wealthiest      compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $3,601            $1,919           $3,089           $3,271            $4,185           $6,091                       3.17
State                          2,438              2,767            2,843            2,630            2,208             1,636                      0.59
Total                         $6,039            $4,686           $5,931           $5,901            $6,393           $7,728                       1.65
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                         Appendix XXV
                                         State Profile: Maryland




Figure XXV.1: State and Local Funding
Distribution in Maryland, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         8,000


                                         6,000


                                         4,000


                                         2,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XXV.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XXV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XXV.3.


Table XXV.4: How State and Local Funding Would Have Been Distributed If Each District in Maryland Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                       Poorest                                               Wealthiest     compared with
Funding source                State      Group 1     Group 2       Group 3        Group 4        Group 5    poorest groupa
Localb                        $3,627          $2,269            $2,835           $3,511         $4,225            $5,577                     2.46
State                          2,413           3,771                3,205         2,528           1,814               462                    0.12
Totalc                        $6,039          $6,039            $6,039           $6,039         $6,039            $6,039                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                          State Profile: Maryland




Figure XXV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Maryland Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            8,000
1991-92

                                          6,000


                                          4,000


                                          2,000


                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Local Funding
                                                  State Funding




Figure XXV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Maryland        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School      4,000
Year 1991-92

                                          3,000


                                          2,000


                                          1,000


                                             0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Actual State Funding
                                                  State Funding if Each Student Received the Average




                                          Page 178                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXVI

State Profile: Massachusetts


                                       As table XXVI.1 shows, in school year 1991-92, the state provided about
Actual Education                       31 percent of the total funding to Massachusetts’ school districts. Total
Funding Distribution                   funding (state and local funds combined) per weighted pupil in
in School Year 1991-92                 Massachusetts averaged $6,264 with an implicit foundation level of $2,542
                                       for each student, which is about 41 percent of the average and represents
                                       the state’s equalization effort. (To compare this effort with those of other
                                       states, see fig. 5.) The targeting score for state funding was –.316,
                                       indicating that state education funds were targeted to poor districts. (To
                                       compare this score with those of other states, see table V.1 in app. V.) The
                                       fiscal neutrality score was .447, indicating that total funding increased as
                                       district income increased. (To compare this score with those of other
                                       states, see fig. 1.) A Massachusetts education official reported that the
                                       state had changed its school finance system since school year 1991-92 to
                                       increase funding to poor districts compared with wealthy districts (see
                                       app. LVI). To put the state’s school finance system in perspective, table
                                       XXVI.2 presents demographic data for school year 1991-92 for five groups
                                       of districts of increasing district income.

Table XXVI.1: Summary Data for
Massachusetts in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $6,264
                                       State share of total funding (percent)                                                          30.8
                                                                              b
                                       Targeting score (state funds)                                                                 –.316
                                       Implicit foundation levelc                                                                   $2,542
                                       Equalization effortd                                                                            40.6
                                       Fiscal neutrality scoree                                                                        .447
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                           Appendix XXVI
                                           State Profile: Massachusetts




Table XXVI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                           265                         25               46                  63             38                       93
Total pupils                           738,672                  148,207          148,084          144,468           150,204                    147,709
Poverty rate (percent)                    13.3                      25.3             11.2                  7.2          15.9                       6.5
Disabled rate (percent)                   15.9                      14.3             16.1             15.8              17.4                      16.0
Per pupil income                    $133,452                    $80,285         $103,188         $124,984          $147,482               $211,155
Tax efforta                             $32.62                   $25.58           $35.56            $34.70           $33.18                     $32.36
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXVI.3 presents data on how state and local funding was distributed
                                           among the five groups of Massachusetts districts. Massachusetts’
                                           equalization policies reduced the funding disparity between the wealthy
                                           and poor groups from about 228 percent to about 54 percent. Figure
                                           XXVI.1 provides table information in graphic form.


Table XXVI.3: State and Local Funding Distribution in Massachusetts, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                 Wealthiest      compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $4,332            $2,059           $3,664           $4,290            $4,992           $6,761                       3.28
State                         $1,932              3,169            2,003            1,543            1,618             1,276                      0.40
Total                         $6,264            $5,227           $5,667           $5,833            $6,610           $8,037                       1.54
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                     Appendix XXVI
                                     State Profile: Massachusetts




Figure XXVI.1: State and Local
Funding Distribution in
Massachusetts, School Year 1991-92   Funding per Weighted Pupil (Dollars)
                                     10,000


                                      8,000


                                      6,000


                                      4,000


                                      2,000


                                          0
                                                Poorest                          Wealthiest
                                                           Groups of Districts
                                          Local Funding
                                          State Funding



                                     Table XXVI.4 provides data on the distribution of state and local funding if
How Funding Would                    all districts could have spent the average total funding per weighted pupil
Have Been                            with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts             effort without changing the state share or the total funding for education.
                                     Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                 possible foundation level (the state average). Figure XXVI.2 provides this
Average on Each                      information in graphic form. The difference between how state funding
                                     was actually distributed and how it would have been distributed if districts
Student                              could have financed the average is shown in figure XXVI.3.




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                                         Appendix XXVI
                                         State Profile: Massachusetts




Table XXVI.4: How State and Local Funding Would Have Been Distributed If Each District in Massachusetts Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                              Wealthiest      compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4      Group 5     poorest groupa
Localb                        $4,342          $2,607             $3,359        $4,106           $4,703            $6,935                      2.66
                                                                                                                          c
State                         $1,921           3,657              2,905          2,158            1,561              –671                    –0.18
Totald                        $6,264          $6,264             $6,264        $6,264           $6,264            $6,264                      1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                           The state would have had to recapture this amount of local funding from these districts for
                                         distribution to other districts.
                                         d
                                             The average is the maximum foundation level possible in a state.




Figure XXVI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Massachusetts        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School      8,000
Year 1991-92
                                             6,000

                                             4,000


                                             2,000


                                                 0


                                         (2,000)
                                                       Poorest                                  Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                      Appendix XXVI
                                      State Profile: Massachusetts




Figure XXVI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in             Funding per Weighted Pupil (Dollars)
Massachusetts Could Have Spent the     4,000
Average, School Year 1991-92
                                       3,000


                                       2,000


                                       1,000


                                           0


                                      (1,000)
                                                 Poorest                               Wealthiest
                                                              Groups of Districts
                                            Actual State Funding
                                            State Funding if Each Student Received the Average




                                      Page 183                                             GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXVII

State Profile: Michigan


                                  As table XXVII.1 shows, in school year 1991-92, the state provided about
Actual Education                  33 percent of the total funding to Michigan’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Michigan averaged
in School Year 1991-92            $5,851 with an implicit foundation level of $2,839 for each student, which
                                  is about 49 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.475, indicating that state education
                                  funds were targeted to poor districts. (To compare this score with those of
                                  other states, see table V.1 in app. V.) The fiscal neutrality score was .290,
                                  indicating that total funding increased as district income increased. (To
                                  compare this score with those of other states, see fig. 1.) A Michigan
                                  education official reported that the state had changed its school finance
                                  system since school year 1991-92 to increase funding to poor districts
                                  compared with wealthy districts (see app. LVI). To put the state’s school
                                  finance system in perspective, table XXVII.2 presents demographic data
                                  for school year 1991-92 for five groups of districts of increasing district
                                  income.

Table XXVII.1: Summary Data for
Michigan in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $5,851
                                  State share of total funding (percent)                                                          32.9
                                                                         b
                                  Targeting score (state funds)                                                                 –.475
                                  Implicit foundation levelc                                                                   $2,839
                                  Equalization effortd                                                                            48.5
                                  Fiscal neutrality scoree                                                                        .290
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XXVII
                                            State Profile: Michigan




Table XXVII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3         Group 4                  Group 5
Total districts                            558                        131              134              131                87                       75
Total pupils                        1,619,705                    383,231          263,756          320,904          331,100                     320,714
Poverty rate (percent)                     17.4                      33.8             19.8             12.5             10.9                        7.4
Disabled rate (percent)                     9.9                        9.7              9.8            10.0             10.7                        9.4
Per pupil income                        $80,367                  $50,990          $60,070          $72,329          $86,839                $133,525
Tax efforta                              $48.78                   $40.01           $50.86            $52.09          $51.37                      $49.38
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXVII.3 presents data on how state and local funding was
                                            distributed among the five groups of Michigan districts. Michigan’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 208 percent to about 36 percent. Figure
                                            XXVII.1 provides table information in graphic form.


Table XXVII.3: State and Local Funding Distribution in Michigan, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                              Wealthiest         compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4         Group 5        poorest groupa
Local                          $3,926            $2,093           $3,063           $3,738            $4,449          $6,444                        3.08
State                           1,925              3,182            2,288            1,832            1,325              754                       0.24
Total                          $5,851            $5,275           $5,351           $5,570            $5,774          $7,198                        1.36
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                    Appendix XXVII
                                    State Profile: Michigan




Figure XXVII.1: State and Local
Funding Distribution in Michigan,
School Year 1991-92                 Funding per Weighted Pupil (Dollars)
                                    8,000


                                    6,000


                                    4,000


                                    2,000


                                       0
                                              Poorest                             Wealthiest
                                                            Groups of Districts
                                            Local Funding
                                            State Funding



                                    Table XXVII.4 provides data on the distribution of state and local funding
How Funding Would                   if all districts could have spent the average total funding per weighted
Have Been                           pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts            targeting effort without changing the state share or the total funding for
                                    education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                maximum possible foundation level (the state average). Figure XXVII.2
Average on Each                     provides this information in graphic form. The difference between how
                                    state funding was actually distributed and how it would have been
Student                             distributed if districts could have financed the average is shown in figure
                                    XXVII.3.




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                                          Appendix XXVII
                                          State Profile: Michigan




Table XXVII.4: How State and Local Funding Would Have Been Distributed If Each District in Michigan Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4        Group 5    poorest groupa
Localb                         $3,954          $2,430             $2,932        $3,565           $4,268            $6,681                      2.75
                                                                                                                           c
State                           1,897           3,421              2,919          2,286            1,583              –830                    –0.24
Totald                         $5,851          $5,851             $5,851        $5,851           $5,851            $5,851                      1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                            The state would have had to recapture this amount of local funding from these districts for
                                          distribution to other districts.
                                          d
                                              The average is the maximum foundation level possible in a state.




Figure XXVII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Michigan Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year             8,000
1991-92
                                              6,000

                                              4,000


                                              2,000


                                                  0


                                          (2,000)
                                                        Poorest                                  Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding




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                                       Appendix XXVII
                                       State Profile: Michigan




Figure XXVII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Michigan     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    4,000
Year 1991-92
                                        3,000


                                        2,000


                                        1,000


                                            0


                                       (1,000)
                                                  Poorest                               Wealthiest
                                                                 Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




                                       Page 188                                             GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXVIII

State Profile: Minnesota


                                   As table XXVIII.1 shows, in school year 1991-92, the state provided about
Actual Education                   54 percent of the total funding to Minnesota’s school districts. Total
Funding Distribution               funding (state and local funds combined) per weighted pupil in Minnesota
in School Year 1991-92             averaged $5,646 with an implicit foundation level of $4,524 for each
                                   student, which is about 80 percent of the average and represents the
                                   state’s equalization effort. (To compare this effort with those of other
                                   states, see fig. 5.) The targeting score for state funding was –.499,
                                   indicating that state education funds were targeted to poor districts. (To
                                   compare this score with those of other states, see table V.1 in app. V.) The
                                   fiscal neutrality score was .113, indicating that total funding increased as
                                   district income increased. (To compare this score with those of other
                                   states, see fig. 1.) A Minnesota education official reported that the state
                                   had changed its school finance system since school year 1991-92 to
                                   increase funding to poor districts compared with wealthy districts (see
                                   app. LVI). To put the state’s school finance system in perspective, table
                                   XXVIII.2 presents demographic data for school year 1991-92 for five
                                   groups of districts of increasing district income.

Table XXVIII.1: Summary Data for
Minnesota in School Year 1991-92
                                   Average total funding per weighted pupila                                                    $5,646
                                   State share of total funding (percent)                                                          53.5
                                                                          b
                                   Targeting score (state funds)                                                                 –.499
                                   Implicit foundation levelc                                                                   $4,524
                                   Equalization effortd                                                                            80.1
                                   Fiscal neutrality scoree                                                                        .113
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                       This is the elasticity of state funding relative to district income.
                                   c
                                     This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                       This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XXVIII
                                            State Profile: Minnesota




Table XXVIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            404                        166               79                  71             47                       41
Total pupils                            741,835                  148,475          147,144          149,452          149,247                     147,517
Poverty rate (percent)                     12.1                      15.7               9.7            10.0             12.6                       12.8
Disabled rate (percent)                    10.7                      10.0             10.2             10.9             11.2                       11.3
Per pupil income                        $81,234                  $49,929          $62,803          $71,975          $89,893                $131,745
Tax efforta                              $31.75                   $36.66           $33.36            $29.23          $29.25                      $32.08
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXVIII.3 presents data on how state and local funding was
                                            distributed among the five groups of Minnesota districts. Minnesota’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from 133 percent to about 11 percent. Figure XXVIII.1
                                            provides table information in graphic form.


Table XXVIII.3: State and Local Funding Distribution in Minnesota, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $2,627            $1,827           $2,074           $2,101            $2,646          $4,256                        2.33
State                           3,019              3,785            3,383            3,230            3,003            1,956                       0.52
Total                          $5,646            $5,613           $5,457           $5,331            $5,649          $6,212                        1.11
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                     Appendix XXVIII
                                     State Profile: Minnesota




Figure XXVIII.1: State and Local
Funding Distribution in Minnesota,
School Year 1991-92                  Funding per Weighted Pupil (Dollars)
                                     7,000

                                     6,000

                                     5,000

                                     4,000

                                     3,000

                                     2,000

                                     1,000

                                        0
                                               Poorest                             Wealthiest
                                                             Groups of Districts
                                             Local Funding
                                             State Funding



                                     Table XXVIII.4 provides data on the distribution of state and local funding
How Funding Would                    if all districts could have spent the average total funding per weighted
Have Been                            pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts             targeting effort without changing the state share or the total funding for
                                     education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                 maximum possible foundation level (the state average). Figure XXVIII.2
Average on Each                      provides this information in graphic form. The difference between how
                                     state funding was actually distributed and how it would have been
Student                              distributed if districts could have financed the average is shown in figure
                                     XXVIII.3.




                                     Page 191                                         GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XXVIII
                                          State Profile: Minnesota




Table XXVIII.4: How State and Local Funding Would Have Been Distributed If Each District in Minnesota Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                        Poorest                                                Wealthiest     compared with
Funding source                  State     Group 1      Group 2       Group 3       Group 4        Group 5     poorest groupa
Localb                        $2,627           $1,622            $2,053           $2,333         $2,889            $4,243                     2.62
State                          3,019            4,024                3,593         3,313           2,757             1,403                    0.35
Totalc                        $5,646           $5,646            $5,646           $5,646         $5,646            $5,646                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




Figure XXVIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Minnesota Could       Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year       7,000
1991-92
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding




                                          Page 192                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                        Appendix XXVIII
                                        State Profile: Minnesota




Figure XXVIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Minnesota     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    5,000
Year 1991-92
                                        4,000


                                        3,000


                                        2,000


                                        1,000


                                           0
                                                 Poorest                                   Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 193                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXIX

State Profile: Mississippi


                                     As table XXIX.1 shows, in school year 1991-92, the state provided about
Actual Education                     64 percent of the total funding to Mississippi’s school districts. Total
Funding Distribution                 funding (state and local funds combined) per weighted pupil in Mississippi
in School Year 1991-92               averaged $2,831 with an implicit foundation level of $1,860 for each
                                     student, which is about 66 percent of the average and represents the
                                     state’s equalization effort. (To compare this effort with those of other
                                     states, see fig. 5.) The targeting score for state funding was –.020,
                                     indicating that state education funds were targeted to poor districts.102 (To
                                     compare this score with those of other states, see table V.1 in app. V.) The
                                     fiscal neutrality score was .007, indicating that total funding increased as
                                     district income increased.103 (To compare this score with those of other
                                     states, see fig. 1.) A Mississippi education official reported that the state
                                     had changed its school finance system since school year 1991-92 to
                                     increase funding to poor districts compared with wealthy districts (see
                                     app. LVI). To put the state’s school finance system in perspective, table
                                     XXIX.2 presents demographic data for school year 1991-92 for five groups
                                     of districts of increasing district income.

Table XXIX.1: Summary Data for
Mississippi in School Year 1991-92
                                     Average total funding per weighted pupila                                                              $2,831
                                     State share of total funding (percent)                                                                      64.4
                                                                          b
                                     Targeting score (state funds)                                                                           –.020
                                     Implicit foundation levelc                                                                             $1,860
                                     Equalization effortd                                                                                        65.7
                                     Fiscal neutrality scoree                                                                                    .007
                                     a
                                         The average is the maximum foundation level possible in a state.
                                     b
                                      This is the elasticity of state funding relative to district income. The score is not significantly
                                     different from 0.
                                     c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                     districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                     d
                                         This is the implicit foundation as a percent of the average.
                                     e
                                       This is the elasticity of total (state and local) funding relative to district income. The score is not
                                     significantly different from 0.




                                     102
                                          However, this score is not significantly different from 0.
                                     103
                                          See footnote 102.



                                     Page 194                                                      GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XXIX
                                            State Profile: Mississippi




Table XXIX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            148                         31               37                  32             28                       20
Total pupils                            496,277                   99,428           97,200          100,261          107,073                      92,315
Poverty rate (percent)                     32.9                      44.8             36.9             29.9             26.2                       27.0
Disabled rate (percent)                    12.0                      10.0             13.5             12.4             12.3                       12.0
Per pupil income                        $51,017                  $30,029          $38,911          $44,232          $52,892                     $91,561
Tax efforta                              $19.78                   $39.02           $19.60            $17.25          $20.92                      $13.74
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXIX.3 presents data on how state and local funding was distributed
                                            among the five groups of Mississippi districts. Mississippi’s equalization
                                            policies eliminated the funding disparity between the wealthy and poor
                                            groups, with poor districts receiving about 2 percent more total funding
                                            than wealthy districts. Figure XXIX.1 provides table information in graphic
                                            form.


Table XXIX.3: State and Local Funding Distribution in Mississippi, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $1,008            $1,169             $779              $763           $1,098          $1,245                        1.07
State                           1,823              1,866            1,862            1,887            1,800            1,729                       0.93
Total                          $2,831            $3,034           $2,642           $2,650            $2,898          $2,974                        0.98
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




                                            Page 195                                                    GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XXIX
                                          State Profile: Mississippi




Figure XXIX.1: State and Local
Funding Distribution in Mississippi,
School Year 1991-92                       Funding per Weighted Pupil (Dollars)
                                          3,500

                                          3,000

                                          2,500

                                          2,000

                                          1,500

                                          1,000

                                              500

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XXIX.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XXIX.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XXIX.3.


Table XXIX.4: How State and Local Funding Would Have Been Distributed If Each District in Mississippi Could Have Spent
the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                              Funding of
                                                                                                            wealthiest group
                                        Poorest                                               Wealthiest      compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4        Group 5     poorest groupa
Localb                         $1,008            $595                $753           $875         $1,056            $1,809                     3.04
State                           1,823           2,236                2,078         1,956           1,775             1,022                    0.46
Totalc                         $2,831          $2,831            $2,831           $2,831         $2,831            $2,831                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 196                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                        Appendix XXIX
                                        State Profile: Mississippi




Figure XXIX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Mississippi Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year     3,500
1991-92
                                        3,000

                                        2,500

                                        2,000

                                        1,500

                                        1,000

                                         500

                                            0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Local Funding
                                                State Funding




Figure XXIX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Mississippi   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    2,500
Year 1991-92
                                        2,000

                                        1,500


                                        1,000


                                         500


                                            0
                                                  Poorest                                  Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 197                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXX

State Profile: Missouri


                                  As table XXX.1 shows, in school year 1991-92, the state provided about
Actual Education                  45 percent of the total funding to Missouri’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Missouri averaged
in School Year 1991-92            $3,972 with an implicit foundation level of $1,802 for each student, which
                                  is about 45 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.017, indicating that state education
                                  funds were targeted to poor districts.104 (To compare this score with those
                                  of other states, see table V.1 in app. V.) The fiscal neutrality score was
                                  .362, indicating that total funding increased as district income increased.
                                  (To compare this score with those of other states, see fig. 1.) A Missouri
                                  education official reported that the state had changed its school finance
                                  system since school year 1991-92 to increase funding to poor districts
                                  compared with wealthy districts (see app. LVI). To put the state’s school
                                  finance system in perspective, table XXX.2 presents demographic data for
                                  school year 1991-92 for five groups of districts of increasing district
                                  income.

Table XXX.1: Summary Data for
Missouri in School Year 1991-92
                                  Average total funding per weighted pupila                                                              $3,972
                                  State share of total funding (percent)                                                                   44.6
                                                                         b
                                  Targeting score (state funds)                                                                           –.017
                                  Implicit foundation levelc                                                                             $1,802
                                  Equalization effortd                                                                                     45.4
                                  Fiscal neutrality scoree                                                                                 .362
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                   This is the elasticity of state funding relative to district income. The score is not significantly
                                  different from 0.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




                                  104
                                       However, this score is not significantly different from 0.



                                  Page 198                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XXX
                                            State Profile: Missouri




Table XXX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            538                        173              164              105                45                       51
Total pupils                            822,099                  165,035          164,035          169,117           155,397                    168,515
Poverty rate (percent)                     17.0                      23.6             16.6             13.7              17.1                      14.2
Disabled rate (percent)                    10.0                      11.2             11.5                  9.8          10.7                       6.8
Per pupil income                        $79,570                  $48,589          $61,069          $75,587           $90,076               $122,231
Tax efforta                              $27.41                   $22.71           $23.31            $27.78           $34.09                     $27.10
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXX.3 presents data on how state and local funding was distributed
                                            among the five groups of Missouri districts. Missouri’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from 181 percent to about 70 percent. Figure XXX.1 provides table
                                            information in graphic form.


Table XXX.3: State and Local Funding Distribution in Missouri, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $2,200             $1,131           $1,446           $2,083            $3,097           $3,179                       2.81
State                           1,773              1,781            1,644            1,485            2,175             1,758                      0.99
Total                         $3,972             $2,912           $3,090           $3,568            $5,272           $4,937                       1.70
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XXX
                                         State Profile: Missouri




Figure XXX.1: State and Local Funding
Distribution in Missouri, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XXX.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XXX.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XXX.3.


Table XXX.4: How State and Local Funding Would Have Been Distributed If Each District in Missouri Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                       Poorest                                               Wealthiest      compared with
Funding source                State      Group 1     Group 2       Group 3        Group 4        Group 5     poorest groupa
Localb                        $2,240          $1,313            $1,664           $2,118         $2,477            $3,610                     2.75
State                          1,733           2,660                2,308         1,854           1,495               363                    0.14
Totalc                        $3,972          $3,972            $3,972           $3,972         $3,972            $3,972                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 200                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XXX
                                          State Profile: Missouri




Figure XXX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Missouri Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            6,000
1991-92
                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                              0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Local Funding
                                                  State Funding




Figure XXX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Missouri        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School      3,000
Year 1991-92
                                          2,500

                                          2,000

                                          1,500

                                          1,000

                                           500

                                              0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Actual State Funding
                                                  State Funding if Each Student Received the Average




                                          Page 201                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXXI

State Profile: Montana


                                 As table XXXI.1 shows, in school year 1991-92, the state provided about
Actual Education                 44 percent of the total funding to Montana’s school districts. Total funding
Funding Distribution             (state and local funds combined) per weighted pupil in Montana averaged
in School Year 1991-92           $4,835 with an implicit foundation level of $2,406 for each student, which
                                 is about 50 percent of the average and represents the state’s equalization
                                 effort. (To compare this effort with those of other states, see fig. 5.) The
                                 targeting score for state funding was –.126, indicating that state education
                                 funds were targeted to poor districts. (To compare this score with those of
                                 other states, see table V.1 in app. V.) The fiscal neutrality score was .393,
                                 indicating that total funding increased as district income increased. (To
                                 compare this score with those of other states, see fig. 1.) A Montana
                                 education official reported that the state had changed its school finance
                                 system since school year 1991-92 to increase funding to poor districts
                                 compared with wealthy districts (see app. LVI). To put the state’s school
                                 finance system in perspective, table XXXI.2 presents demographic data for
                                 school year 1991-92 for five groups of districts of increasing district
                                 income.

Table XXXI.1: Summary Data for
Montana in School Year 1991-92
                                 Average total funding per weighted pupila                                                    $4,835
                                 State share of total funding (percent)                                                          44.2
                                                                        b
                                 Targeting score (state funds)                                                                 –.126
                                 Implicit foundation levelc                                                                   $2,406
                                 Equalization effortd                                                                            49.8
                                 Fiscal neutrality scoree                                                                        .393
                                 a
                                     The average is the maximum foundation level possible in a state.
                                 b
                                     This is the elasticity of state funding relative to district income.
                                 c
                                   This is the minimum amount of total funding the state’s equalization policies would enable
                                 districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                 d
                                     This is the implicit foundation as a percent of the average.
                                 e
                                     This is the elasticity of total (state and local) funding relative to district income.




                                 Page 202                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                           Appendix XXXI
                                           State Profile: Montana




Table XXXI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                           480                        114               87                  45           135                       99
Total pupils                           154,488                   30,656           30,001            33,496          29,426                     30,909
Poverty rate (percent)                    19.5                      26.5             18.6             18.1             17.9                      16.6
Disabled rate (percent)                    9.8                      10.2               9.4            11.6               9.3                      8.3
Per pupil income                    $115,518                    $49,344          $74,493          $91,295         $123,824                $239,311
Tax efforta                             $23.94                   $42.44           $30.36            $22.14          $25.07                     $18.64
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXXI.3 presents data on how state and local funding was distributed
                                           among the five groups of Montana districts. Although Montana provided
                                           more state funding to wealthy districts than to poor districts, Montana’s
                                           equalization policies moderated the funding disparity between the wealthy
                                           and poor groups from about 104 percent to about 73 percent. Figure
                                           XXXI.1 provides table information in graphic form.


Table XXXI.3: State and Local Funding Distribution in Montana, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,698            $2,136           $2,248           $2,056            $3,077          $4,365                       2.04
State                          2,137              1,870            2,010            2,019            2,353            2,577                      1.38
Total                         $4,835            $4,006           $4,258           $4,075            $5,430          $6,942                       1.73
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                   Appendix XXXI
                                   State Profile: Montana




Figure XXXI.1: State and Local
Funding Distribution in Montana,
School Year 1991-92                Funding per Weighted Pupil (Dollars)
                                   7,000

                                   6,000

                                   5,000

                                   4,000

                                   3,000

                                   2,000

                                   1,000

                                      0
                                             Poorest                             Wealthiest
                                                           Groups of Districts
                                           Local Funding
                                           State Funding



                                   Table XXXI.4 provides data on the distribution of state and local funding if
How Funding Would                  all districts could have spent the average total funding per weighted pupil
Have Been                          with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts           effort without changing the state share or the total funding for education.
                                   Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the               possible foundation level (the state average). Figure XXXI.2 provides this
Average on Each                    information in graphic form. The difference between how state funding
                                   was actually distributed and how it would have been distributed if districts
Student                            could have financed the average is shown in figure XXXI.3.




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                                         State Profile: Montana




Table XXXI.4: How State and Local Funding Would Have Been Distributed If Each District in Montana Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                              Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                        $2,730          $1,145             $1,754        $2,098           $2,948            $5,726                      5.00
                                                                                                                          c
State                           2,105          3,690              3,081          2,737            1,886              –891                    –0.24
Totald                        $4,835          $4,835             $4,835        $4,835           $4,835            $4,835                      1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                           The state would have had to recapture this amount of local funding from these districts for
                                         distribution to other districts.
                                         d
                                             The average is the maximum foundation level possible in a state.




Figure XXXI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Montana Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            6,000
1991-92
                                             5,000

                                             4,000

                                             3,000

                                             2,000

                                             1,000

                                                 0

                                         (1,000)
                                                       Poorest                                  Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                       Appendix XXXI
                                       State Profile: Montana




Figure XXXI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Montana      Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    4,000
Year 1991-92
                                        3,000


                                        2,000


                                        1,000


                                            0


                                       (1,000)
                                                  Poorest                               Wealthiest
                                                                Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




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Appendix XXXII

State Profile: Nebraska


                                  As table XXXII.1 shows, in school year 1991-92, the state provided about
Actual Education                  34 percent of the total funding to Nebraska’s school districts. Total funding
Funding Distribution              (state and local funds combined) per weighted pupil in Nebraska averaged
in School Year 1991-92            $5,148 with an implicit foundation level of $2,203 for each student, which
                                  is about 43 percent of the average and represents the state’s equalization
                                  effort. (To compare this effort with those of other states, see fig. 5.) The
                                  targeting score for state funding was –.246, indicating that state education
                                  funds were targeted to poor districts. (To compare this score with those of
                                  other states, see table V.1 in app. V.) The fiscal neutrality score was .154,
                                  indicating that total funding increased as district income increased. (To
                                  compare this score with those of other states, see fig. 1.) A Nebraska
                                  education official reported that the state had changed its school finance
                                  system since school year 1991-92 to increase funding to poor districts
                                  compared with wealthy districts (see app. LVI). To put the state’s school
                                  finance system in perspective, table XXXII.2 presents demographic data
                                  for school year 1991-92 for five groups of districts of increasing district
                                  income.

Table XXXII.1: Summary Data for
Nebraska in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $5,148
                                  State share of total funding (percent)                                                          34.3
                                                                         b
                                  Targeting score (state funds)                                                                 –.246
                                  Implicit foundation levelc                                                                   $2,203
                                  Equalization effortd                                                                            42.8
                                  Fiscal neutrality scoree                                                                        .154
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




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                                            State Profile: Nebraska




Table XXXII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            678                        150               96                  87             51                     294
Total pupils                            276,085                   55,219           55,181            55,320           58,772                    51,593
Poverty rate (percent)                     12.9                      15.0             12.1                  8.6          17.7                     10.7
Disabled rate (percent)                    12.3                      11.2             12.1             11.9              12.6                     13.4
Per pupil income                        $94,845                  $64,972          $78,825          $90,020          $107,093               $135,169
Tax efforta                              $36.38                   $51.44           $41.86            $37.79           $29.19                    $30.73
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXXII.3 presents data on how state and local funding was
                                            distributed among the five groups of Nebraska districts. Nebraska’s
                                            equalization policies reduced the total funding disparity between the
                                            wealthy and poor groups from about 27 percent to about 5 percent. Figure
                                            XXXII.1 provides table information in graphic form.


Table XXXII.3: State and Local Funding Distribution in Nebraska, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $3,380             $3,309           $3,291           $3,364            $3,164           $4,191                      1.27
State                           1,768              2,058            1,993            1,723            1,668             1,422                     0.69
Total                         $5,148             $5,367           $5,284           $5,087            $4,832           $5,614                      1.05
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                    Appendix XXXII
                                    State Profile: Nebraska




Figure XXXII.1: State and Local
Funding Distribution in Nebraska,
School Year 1991-92                 Funding per Weighted Pupil (Dollars)
                                    6,000

                                    5,000

                                    4,000

                                    3,000

                                    2,000

                                    1,000

                                       0
                                              Poorest                             Wealthiest
                                                            Groups of Districts
                                            Local Funding
                                            State Funding



                                    Table XXXII.4 provides data on the distribution of state and local funding
How Funding Would                   if all districts could have spent the average total funding per weighted
Have Been                           pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts            targeting effort without changing the state share or the total funding for
                                    education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                maximum possible foundation level (the state average). Figure XXXII.2
Average on Each                     provides this information in graphic form. The difference between how
                                    state funding was actually distributed and how it would have been
Student                             distributed if districts could have financed the average is shown in figure
                                    XXXII.3.




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                                         Appendix XXXII
                                         State Profile: Nebraska




Table XXXII.4: How State and Local Funding Would Have Been Distributed If Each District in Nebraska Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $3,384          $2,342            $2,819           $3,247         $3,772            $4,809                     2.05
State                          1,764           2,806                2,329         1,901           1,376               339                    0.12
Totalc                        $5,148          $5,148            $5,148           $5,148         $5,148            $5,148                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




Figure XXXII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Nebraska Could       Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      6,000
1991-92
                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding




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                                       Appendix XXXII
                                       State Profile: Nebraska




Figure XXXII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Nebraska     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   3,000
Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                          0
                                                Poorest                                   Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 211                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXXIII

State Profile: Nevada


                                   As table XXXIII.1 shows, in school year 1991-92, the state provided about
Actual Education                   57 percent of the total funding to Nevada’s school districts. Total funding
Funding Distribution               (state and local funds combined) per weighted pupil in Nevada averaged
in School Year 1991-92             $3,597 with the same implicit foundation level, achieving an equalization
                                   effort of 100 percent.105 (To compare this effort with those of other states,
                                   see fig. 5.) The targeting score for state funding was –1.007, indicating that
                                   state education funds were targeted to poor districts. (To compare this
                                   score with those of other states, see table V.1 in app. V.) The fiscal
                                   neutrality score was –.556, indicating that total funding increased as
                                   district income decreased. (To compare this score with those of other
                                   states, see fig. 1.) To put the state’s school finance system in perspective,
                                   table XXXIII.2 presents demographic data for 1991-92 for four groups of
                                   districts of increasing district income. Nevada was divided into four
                                   groups rather than five because of its student population distribution.

Table XXXIII.1: Summary Data for
Nevada in School Year 1991-92
                                   Average total funding per weighted pupila                                                     $3,597
                                   State share of total funding (percent)                                                             56.9
                                                                          b
                                   Targeting score (state funds)                                                                 –1.007
                                   Implicit foundation levelc                                                                    $3,597
                                                            d
                                   Equalization effort                                                                               100.0
                                   Fiscal neutrality scoree                                                                          –.556
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                       This is the elasticity of state funding relative to district income.
                                   c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                       This is the elasticity of total (state and local) funding relative to district income.




                                   105
                                     Nevada actually targeted more state funds to poor districts than was necessary to achieve the
                                   average as an implicit foundation level.



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                                          Appendix XXXIII
                                          State Profile: Nevada




Table XXXIII.2: Demographic Context in School Year 1991-92
                                                    Poorest                                                                     Wealthiest
                                          State                 Group 1                 Group 2                  Group 3                Group 4
Total districts                                17                      11                        1b                     2                       3
Total pupils                           211,810                    29,577                 129,233                  12,402                  40,598
Poverty rate (percent)                     13.3                      12.4                      14.4                   8.9                     11.7
Disabled rate (percent)                       9.4                    11.1                       8.5                  11.6                     10.6
Mean income per pupil                  $86,827                   $57,218                 $85,716                 $93,306                $109,952
Tax efforta                             $17.84                    $28.42                   $17.81                 $18.51                  $13.73
                                          a
                                              Local funding raised for every $1,000 of district income.
                                          b
                                              Las Vegas was the only district in this group.



                                          Table XXXIII.3 presents data on how state and local funding was
                                          distributed among the four groups of districts. Nevada’s equalization
                                          policies increased the funding that poor districts had compared with
                                          wealthy districts, resulting in wealthy districts having 31 percent less
                                          funding than poor districts. Figure XXXIII.1 provides table information in
                                          graphic form.


Table XXXIII.3: State and Local Funding Distribution in Nevada, School Year 1991-92
                                                                   Mean funding per weighted pupil                                  Funding of
                                                                                                                               wealthiest group
                                                        Poorest                                                Wealthiest       compared with
Funding source                          State                 Group 1           Group 2          Group 3          Group 4       poorest groupa
Local                                  $1,549                   $1,654            $1,513              $1,756       $1,526                      0.92
State                                   2,049                     2,865            1,943               2,579         1,591                     0.56
Total                                  $3,597                   $4,518            $3,455              $4,335       $3,117                      0.69
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.




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                                   Appendix XXXIII
                                   State Profile: Nevada




Figure XXXIII.1: State and Local
Funding Distribution in Nevada,
School Year 1991-92                Funding per Weighted Pupil (Dollars)
                                   5,000


                                   4,000


                                   3,000


                                   2,000


                                   1,000


                                      0
                                              Poorest                            Wealthiest
                                                           Groups of Districts
                                           Local Funding
                                           State Funding



                                   Table XXXIII.4 provides data on the distribution of state and local funding
How Funding Would                  if all districts could have spent the average total funding per weighted
Have Been                          pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts           targeting effort without changing the state share or the total funding for
                                   education. Under this scenario, the implicit foundation level equals the
Could Have Spent the               maximum possible foundation level (the state average). Figure XXXIII.2
Average on Each                    provides this information in graphic form. The difference between how
                                   state funding was actually distributed and how it would have been
Student                            distributed if districts could have financed the average is shown in figure
                                   XXXIII.3.




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                                           Appendix XXXIII
                                           State Profile: Nevada




Table XXXIII.4: How State and Local Funding Would Have Been Distributed If Each District in Nevada Could Have Spent the
Average, School Year 1991-92
                                                          Mean funding per weighted pupil                        Funding of
                                                                                                            wealthiest group
                                                  Poorest                                      Wealthiest    compared with
Funding source                          State          Group 1       Group 2       Group 3        Group 4    poorest groupa
Localb                                  $1,549                     $1,003          $1,543         $1,635            $1,940                     1.93
State                                    2,048                        2,594         2,055           1,962             1,657                    0.64
Totalc                                  $3,597                     $3,597          $3,597         $3,597            $3,597                     1.00
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.
                                           b
                                            This is the local funding that could have been raised assuming all districts had made the same
                                           average tax effort.
                                           c
                                               The average is the maximum foundation level possible in a state.




Figure XXXIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Nevada Could Have      Funding per Weighted Pupil (Dollars)
Spent the Average, School Year             5,000
1991-92
                                           4,000

                                           3,000


                                           2,000


                                           1,000


                                                  0
                                                         Poorest                                Wealthiest
                                                                         Groups of Districts
                                                      Local Funding
                                                      State Funding




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                                        Appendix XXXIII
                                        State Profile: Nevada




Figure XXXIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Nevada        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    3,000
Year 1991-92
                                        2,500

                                        2,000

                                        1,500

                                        1,000

                                         500

                                           0
                                                   Poorest                                Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




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Appendix XXXIV

State Profile: New Hampshire


                                      As table XXXIV.1 shows, in school year 1991-92, the state provided about
Actual Education                      8 percent of the total funding to New Hampshire’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in New
in School Year 1991-92                Hampshire averaged $5,850 with an implicit foundation level of $764 for
                                      each student, which is about 13 percent of the average and represents the
                                      state’s equalization effort. (To compare this effort with those of other
                                      states, see fig. 5.) The targeting score for state funding was –.571,
                                      indicating that state education funds were targeted to poor districts. (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .238, indicating that total funding increased as
                                      district income increased. (To compare this score with those of other
                                      states, see fig. 1.) To put the state’s school finance system in perspective,
                                      table XXXIV.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table XXXIV.1: Summary Data for New
Hampshire in School Year 1991-92
                                      Average total funding per weighted pupila                                                    $5,850
                                      State share of total funding (percent)                                                              8.3
                                                                             b
                                      Targeting score (state funds)                                                                 –.571
                                      Implicit foundation levelc                                                                     $764
                                                               d
                                      Equalization effort                                                                             13.1
                                      Fiscal neutrality scoree                                                                        .238
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                          This is the elasticity of state funding relative to district income.
                                      c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                          This is the elasticity of total (state and local) funding relative to district income.




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                                           Appendix XXXIV
                                           State Profile: New Hampshire




Table XXXIV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                           158                         29               19                  13             26                      71
Total pupils                           173,044                   34,720           34,262            35,559           32,753                    32,750
Poverty rate (percent)                     7.6                      10.3               6.6                 8.1           7.9                      5.0
Disabled rate (percent)                   11.4                      10.5             11.4             11.3              11.6                     12.5
Per pupil income                    $106,978                    $66,877          $83,834          $96,242          $114,078               $172,277
Tax efforta                             $50.35                   $70.96           $61.21            $49.30           $46.67                    $40.24
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXXIV.3 presents data on how state and local funding was
                                           distributed among the five groups of New Hampshire districts. New
                                           Hampshire’s equalization policies reduced the funding disparity between
                                           the wealthy and poor groups from 48 percent to about 30 percent. Figure
                                           XXXIV.1 provides table information in graphic form.


Table XXXIV.3: State and Local Funding Distribution in New Hampshire, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                 Wealthiest      compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $5,364            $4,718           $5,117           $4,741            $5,337           $6,981                      1.48
State                            486                874              526              425              324              303                      0.35
Total                         $5,850            $5,592           $5,643           $5,166            $5,661           $7,284                      1.30
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                  Appendix XXXIV
                                  State Profile: New Hampshire




Figure XXXIV.1: State and Local
Funding Distribution in New
Hampshire, School Year 1991-92    Funding per Weighted Pupil (Dollars)
                                  10,000


                                   8,000


                                   6,000


                                   4,000


                                   2,000


                                       0
                                             Poorest                          Wealthiest
                                                        Groups of Districts
                                       Local Funding
                                       State Funding



                                  Table XXXIV.4 provides data on the distribution of state and local funding
How Funding Would                 if all districts could have spent the average total funding per weighted
Have Been                         pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts          targeting effort without changing the state share or the total funding for
                                  education. Under this scenario, the implicit foundation level equals the
Could Have Spent the              maximum possible foundation level (the state average). Figure XXXIV.2
Average on Each                   provides this information in graphic form. The difference between how
                                  state funding was actually distributed and how it would have been
Student                           distributed if districts could have financed the average is shown in figure
                                  XXXIV.3.




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                                         Appendix XXXIV
                                         State Profile: New Hampshire




Table XXXIV.4: How State and Local Funding Would Have Been Distributed If Each District in New Hampshire Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                           Funding of
                                                                                                          wealthiest group
                                       Poorest                                               Wealthiest    compared with
Funding source                 State     Group 1      Group 2      Group 3        Group 4       Group 5    poorest groupa
Localb                        $5,362          $3,380             $4,222        $4,833           $5,714            $8,586                      2.54
                                                                                                                          c
State                           486            2,470              1,628          1,017              136           –2,736                     –1.11
Totald                        $5,850          $5,850             $5,850        $5,850           $5,850            $5,850                      1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                           The state would have had to recapture this amount of local funding from these districts for
                                         distribution to other districts.
                                         d
                                             The average is the maximum foundation level possible in a state.




Figure XXXIV.2: How State and Local
Funding Would Have Been Distributed
If Each District in New Hampshire        Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School     10,000
Year 1991-92
                                             8,000

                                             6,000

                                             4,000

                                             2,000

                                                 0

                                         (2,000)

                                         (4,000)
                                                       Poorest                                  Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                       Appendix XXXIV
                                       State Profile: New Hampshire




Figure XXXIV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in New          Funding per Weighted Pupil (Dollars)
Hampshire Could Have Spent the          3,000
Average, School Year 1991-92
                                        2,000

                                        1,000

                                            0

                                       (1,000)

                                       (2,000)

                                       (3,000)
                                                  Poorest                                Wealthiest
                                                               Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




                                       Page 221                                              GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XXXV

State Profile: New Jersey


                                     As table XXXV.1 shows, in school year 1991-92, the state provided about
Actual Education                     43 percent of the total funding to New Jersey’s school districts. Total
Funding Distribution                 funding (state and local funds combined) per weighted pupil in New
in School Year 1991-92               Jersey averaged $9,239 with an implicit foundation level of $4,399 for each
                                     student, which is about 48 percent of the average and represents the
                                     state’s equalization effort. (To compare this effort with those of other
                                     states, see fig. 5.) The targeting score for state funding was –.104,
                                     indicating that state education funds were targeted to poor districts. (To
                                     compare this score with those of other states, see table V.1 in app. V.) The
                                     fiscal neutrality score was .168, indicating that total funding increased as
                                     district income increased. (To compare this score with those of other
                                     states, see fig. 1.) A New Jersey education official reported that the state
                                     had changed its school finance system since school year 1991-92 to
                                     increase funding to poor districts compared with wealthy districts (see
                                     app. LVI). To put the state’s school finance system in perspective, table
                                     XXXV.2 presents demographic data for school year 1991-92 for five groups
                                     of districts of increasing district income.

Table XXXV.1: Summary Data for New
Jersey in School Year 1991-92
                                     Average total funding per weighted pupila                                                    $9,239
                                     State share of total funding (percent)                                                          43.1
                                                                            b
                                     Targeting score (state funds)                                                                 –.104
                                     Implicit foundation levelc                                                                   $4,399
                                     Equalization effortd                                                                            47.6
                                     Fiscal neutrality scoree                                                                        .168
                                     a
                                         The average is the maximum foundation level possible in a state.
                                     b
                                         This is the elasticity of state funding relative to district income.
                                     c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                     districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                     d
                                         This is the implicit foundation as a percent of the average.
                                     e
                                         This is the elasticity of total (state and local) funding relative to district income.




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                                          Appendix XXXV
                                          State Profile: New Jersey




Table XXXV.2: Demographic Context in School Year 1991-92
                                                 Poorest                                                                          Wealthiest
                                        State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                          550                         35               64                  98           139                       214
Total pupils                       1,085,033                   216,539          215,008          219,560           216,787                    217,139
Poverty rate (percent)                   11.3                      29.0             12.1                  6.0           4.4                       5.0
Disabled rate (percent)                  16.1                      15.2             17.0             16.7              15.9                      15.8
Per pupil income                    $160,761                   $63,855         $101,685         $137,619          $175,659               $324,425
Tax efforta                            $32.93                   $34.85           $38.74            $40.47           $39.11                     $24.58
                                          a
                                              Local funding raised for every $1,000 of district income.



                                          Table XXXV.3 presents data on how state and local funding was
                                          distributed among the five groups of New Jersey districts. New Jersey’s
                                          equalization policies reduced the funding disparity between the wealthy
                                          and poor groups from 247 percent to about 31 percent. Figure XXXV.1
                                          provides table information in graphic form.


Table XXXV.3: State and Local Funding Distribution in New Jersey, School Year 1991-92
                                                             Mean funding per weighted pupil                                        Funding of
                                                                                                                               wealthiest group
                                        Poorest                                                                 Wealthiest      compared with
Funding source                 State      Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $5,255           $2,267           $3,982           $5,555            $6,777           $7,867                       3.47
State                          3,985             6,167            4,733            3,189            2,601             3,220                      0.52
Total                         $9,239           $8,434           $8,715           $8,744            $9,377          $11,087                       1.31
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.




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                                      State Profile: New Jersey




Figure XXXV.1: State and Local
Funding Distribution in New Jersey,
School Year 1991-92                   Funding per Weighted Pupil (Dollars)
                                      12,000

                                      10,000

                                       8,000

                                       6,000

                                       4,000

                                       2,000

                                           0
                                                 Poorest                          Wealthiest
                                                            Groups of Districts
                                           Local Funding
                                           State Funding



                                      Table XXXV.4 provides data on the distribution of state and local funding
How Funding Would                     if all districts could have spent the average total funding per weighted
Have Been                             pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts              targeting effort without changing the state share or the total funding for
                                      education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                  maximum possible foundation level (the state average). Figure XXXV.2
Average on Each                       provides this information in graphic form. The difference between how
                                      state funding was actually distributed and how it would have been
Student                               distributed if districts could have financed the average is shown in figure
                                      XXXV.3.




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                                         State Profile: New Jersey




Table XXXV.4: How State and Local Funding Would Have Been Distributed If Each District in New Jersey Could Have Spent
the Average, School Year 1991-92
                                                    Mean funding per weighted pupil                             Funding of
                                                                                                          wealthiest group
                                       Poorest                                               Wealthiest     compared with
Funding source                 State     Group 1     Group 2       Group 3       Group 4        Group 5     poorest groupa
Localb                        $5,314          $2,056             $3,293        $4,522           $5,831           $10,849                      5.28
                                                                                                                          c
State                          3,925           7,183              5,947          4,718            3,408           –1,609                     –0.22
Totald                        $9,239          $9,239             $9,239        $9,239           $9,239            $9,239                      1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                           The state would have had to recapture this amount of local funding from these districts for
                                         distribution to other districts.
                                         d
                                             The average is the maximum foundation level possible in a state.




Figure XXXV.2: How State and Local
Funding Would Have Been Distributed
If Each District in New Jersey Could     Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      12,000
1991-92
                                         10,000

                                             8,000

                                             6,000

                                             4,000

                                             2,000

                                                 0

                                         (2,000)
                                                       Poorest                                  Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                       State Profile: New Jersey




Figure XXXV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in New Jersey   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    8,000
Year 1991-92
                                        6,000


                                        4,000


                                        2,000


                                            0


                                       (2,000)
                                                  Poorest                               Wealthiest
                                                               Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




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Appendix XXXVI

State Profile: New Mexico


                                      As table XXXVI.1 shows, in school year 1991-92, the state provided
Actual Education                      85 percent of the total funding to New Mexico’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in New
in School Year 1991-92                Mexico averaged $3,830 with an implicit foundation level of $3,254 for
                                      each student, which is 85 percent of the average and represents the state’s
                                      equalization effort. (To compare this effort with those of other states, see
                                      fig. 5.) The targeting score for state funding was .000, indicating that state
                                      education funds were not targeted to poor or wealthy districts.106 (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .004, indicating that total funding increased as
                                      district income increased.107 (To compare this score with those of other
                                      states, see fig. 1.) To put the state’s school finance system in perspective,
                                      table XXXVI.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table XXXVI.1: Summary Data for New
Mexico in School Year 1991-92
                                      Average total funding per weighted pupila                                                             $3,830
                                      State share of total funding (percent)                                                                      85.0
                                                                           b
                                      Targeting score (state funds)                                                                               .000
                                      Implicit foundation levelc                                                                            $3,254
                                      Equalization effortd                                                                                        85.0
                                      Fiscal neutrality scoree                                                                                    .004
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                       This is the constrained score (elasticity of state funding relative to district income) used to
                                      calculate the state’s implicit foundation level. The actual targeting elasticity is .024, which is not
                                      statistically different from 0.
                                      c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                        This is the elasticity of total (state and local) funding relative to district income. The score is not
                                      significantly different from 0.




                                      106
                                        This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                      differs from the actual targeting score found in table V.1 in app. V.
                                      107
                                           However, this score is not significantly different from 0.



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                                           State Profile: New Mexico




Table XXXVI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            88                         31               26                  16             12                       3
Total pupils                           308,772                   61,705           61,908            64,577         103,740                     16,842
Poverty rate (percent)                    27.6                      43.4             27.8             29.3             19.3                      13.1
Disabled rate (percent)                   12.2                      10.9             11.0             11.6             14.4                      11.1
Per pupil income                       $54,999                  $26,342          $44,108          $50,207          $73,453                $104,736
Tax efforta                             $10.51                   $27.48           $13.46            $11.36            $5.72                     $9.67
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXXVI.3 presents data on how state and local funding was
                                           distributed among the five groups of New Mexico districts. New Mexico’s
                                           equalization policies reduced the funding disparity between the wealthy
                                           and poor groups from about 33 percent to about 5 percent. Figure XXXVI.1
                                           provides table information in graphic form.


Table XXXVI.3: State and Local Funding Distribution in New Mexico, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                           $576              $733             $586              $568             $424             $976                      1.33
State                          3,254              3,159            3,328            3,227            3,353            3,118                      0.99
Total                         $3,830            $3,891           $3,914           $3,795            $3,776          $4,094                       1.05
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                      State Profile: New Mexico




Figure XXXVI.1: State and Local
Funding Distribution in New Mexico,
School Year 1991-92                   Funding per Weighted Pupil (Dollars)
                                      5,000


                                      4,000


                                      3,000


                                      2,000


                                      1,000


                                         0
                                                Poorest                             Wealthiest
                                                              Groups of Districts
                                              Local Funding
                                              State Funding



                                      Table XXXVI.4 provides data on the distribution of state and local funding
How Funding Would                     if all districts could have spent the average total funding per weighted
Have Been                             pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts              targeting effort without changing the state share or the total funding for
                                      education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                  maximum possible foundation level (the state average). Figure XXXVI.2
Average on Each                       provides this information in graphic form. The difference between how
                                      state funding was actually distributed and how it would have been
Student                               distributed if districts could have financed the average is shown in figure
                                      XXXVI.3.




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                                         State Profile: New Mexico




Table XXXVI.4: How State and Local Funding Would Have Been Distributed If Each District in New Mexico Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                           Funding of
                                                                                                          wealthiest group
                                       Poorest                                               Wealthiest     compared with
Funding source                 State     Group 1      Group 2      Group 3        Group 4       Group 5     poorest groupa
Localb                         $577             $273                $469           $528            $762           $1,138                     4.17
State                          3,253           3,557                3,362         3,302           3,068             2,693                    0.76
Totalc                        $3,830          $3,830            $3,830           $3,830         $3,830            $3,830                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




Figure XXXVI.2: How State and Local
Funding Would Have Been Distributed
If Each District in New Mexico Could     Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      5,000
1991-92
                                         4,000

                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding




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                                       Appendix XXXVI
                                       State Profile: New Mexico




Figure XXXVI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in New Mexico   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   4,000
Year 1991-92

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                Poorest                                   Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




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Appendix XXXVII

State Profile: New York


                                       As table XXXVII.1 shows, in school year 1991-92, the state provided about
Actual Education                       43 percent of the total funding to New York’s school districts. Total
Funding Distribution                   funding (state and local funds combined) per weighted pupil in New York
in School Year 1991-92                 averaged $7,787 with an implicit foundation level of $5,240 for each
                                       student, which is about 67 percent of the average and represents the
                                       state’s equalization effort. (To compare this effort with those of other
                                       states, see fig. 5.) The targeting score for state funding was –.578,
                                       indicating that state education funds were targeted to poor districts. (To
                                       compare this score with those of other states, see table V.1 in app. V.) The
                                       fiscal neutrality score was .370, indicating that total funding increased as
                                       district income increased. (To compare this score with those of other
                                       states, see fig. 1.) To put the state’s school finance system in perspective,
                                       table XXXVII.2 presents demographic data for school year 1991-92 for five
                                       groups of districts of increasing district income.

Table XXXVII.1: Summary Data for New
York in School Year 1991-92
                                       Average total funding per weighted pupila                                                    $7,787
                                       State share of total funding (percent)                                                          42.6
                                                                              b
                                       Targeting score (state funds)                                                                 –.578
                                       Implicit foundation levelc                                                                   $5,240
                                       Equalization effortd                                                                            67.3
                                       Fiscal neutrality scoree                                                                        .370
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                          State Profile: New York




Table XXXVII.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                         Wealthiest
                                        State                  Group 1          Group 2            Group 3        Group 4                 Group 5
Total districts                          693                        302               144                 1a             46                      200
Total pupils                        2,608,699                  520,956           447,934            962,269       156,803                     520,737
Poverty rate (percent)                   18.5                      16.7              13.3              30.5             7.6                       5.8
Disabled rate (percent)                  11.0                      10.8              11.0              11.6           10.5                       10.5
Mean income per pupil               $114,397                   $71,624           $96,585           $109,889      $116,663                $180,157
Tax effortb                            $39.87                    $42.35           $49.54             $25.53        $50.04                      $49.75
                                          a
                                              New York City was the only district in this group.
                                          b
                                              Local funding raised for every $1,000 of district income.



                                          Table XXXVII.3 presents data on how state and local funding was
                                          distributed among the five groups of New York districts. New York’s
                                          equalization policies reduced the funding disparity between the wealthy
                                          and poor groups from about 189 percent to 32 percent. Figure XXXVII.1
                                          provides table information in graphic form.


Table XXXVII.3: State and Local Funding Distribution in New York, School Year 1991-92
                                                              Mean funding per weighted pupil                                       Funding of
                                                                                                                               wealthiest group
                                        Poorest                                                                Wealthiest       compared with
Funding source                 State      Group 1              Group 2          Group 3            Group 4        Group 5       poorest groupa
Local                         $4,467           $3,017            $4,738           $2,879             $5,692        $8,719                        2.89
State                          3,320             5,292            4,116            2,688              3,376          2,231                       0.42
Total                         $7,787           $8,309            $8,853           $5,567             $9,068       $10,950                        1.32
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.




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                                    State Profile: New York




Figure XXXVII.1: State and Local
Funding Distribution in New York,
School Year 1991-92                 Funding per Weighted Pupil (Dollars)
                                    12,000

                                    10,000

                                     8,000

                                     6,000

                                     4,000

                                     2,000

                                         0
                                               Poorest                          Wealthiest
                                                          Groups of Districts
                                         Local Funding
                                         State Funding



                                    Table XXXVII.4 provides data on the distribution of state and local funding
How Funding Would                   if all districts could have spent the average total funding per weighted
Have Been                           pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts            targeting effort without changing the state share or the total funding for
                                    education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                maximum possible foundation level (the state average). Figure XXXVII.2
Average on Each                     provides this information in graphic form. The difference between how
                                    state funding was actually distributed and how it would have been
Student                             distributed if districts could have financed the average is shown in figure
                                    XXXVII.3.




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                                         Appendix XXXVII
                                         State Profile: New York




Table XXXVII.4: How State and Local Funding Would Have Been Distributed If Each District in New York Could Have Spent
the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3       Group 4        Group 5     poorest groupa
Localb                        $4,489          $2,816            $3,819         $4,181           $4,676            $7,250                     2.58
State                          3,298           4,971              3,968          3,606            3,111               537                    0.11
Totalc                        $7,787          $7,787            $7,787         $7,787           $7,787            $7,787                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




Figure XXXVII.2: How State and Local
Funding Would Have Been Distributed
If Each District in New York Could       Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      12,000
1991-92
                                         10,000

                                             8,000

                                             6,000

                                             4,000

                                             2,000

                                                 0
                                                      Poorest                                   Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                        Appendix XXXVII
                                        State Profile: New York




Figure XXXVII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in New York      Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    6,000
Year 1991-92
                                        5,000

                                        4,000

                                        3,000

                                        2,000

                                        1,000

                                           0
                                                 Poorest                                   Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




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Appendix XXXVIII

State Profile: North Carolina


                                        As table XXXVIII.1 shows, in school year 1991-92, the state provided about
Actual Education                        68 percent of the total funding to North Carolina’s school districts. Total
Funding Distribution                    funding (state and local funds combined) per weighted pupil in North
in School Year 1991-92                  Carolina averaged $4,424 with an implicit foundation level of $3,043 for
                                        each student, which is about 69 percent of the average and represents the
                                        state’s equalization effort. (To compare this effort with those of other
                                        states, see fig. 5.) The targeting score for state funding was –.016,
                                        indicating that state education funds were targeted to poor districts.108 (To
                                        compare this score with those of other states, see table V.1 in app. V.) A
                                        North Carolina education official reported that the state had changed its
                                        school finance system since school year 1991-92 to increase funding to
                                        poor districts compared with wealthy districts (see app. LVI). The fiscal
                                        neutrality score was .250, indicating that total funding increased as district
                                        income increased. (To compare this score with those of other states, see
                                        fig. 1.) To put the state’s school finance system in perspective, table
                                        XXXVIII.2 presents demographic data for school year 1991-92 for five
                                        groups of districts of increasing district income.

Table XXXVIII.1: Summary Data for
North Carolina in School Year 1991-92
                                        Average total funding per weighted pupila                                                              $4,424
                                        State share of total funding (percent)                                                                   67.7
                                                                               b
                                        Targeting score (state funds)                                                                           –.016
                                        Implicit foundation levelc                                                                             $3,043
                                        Equalization effortd                                                                                     68.8
                                        Fiscal neutrality scoree                                                                                 .250
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                         This is the elasticity of state funding relative to district income. The score is not significantly
                                        different from 0.
                                        c
                                          This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




                                        108
                                             However, this score is not significantly different from 0.



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                                            Appendix XXXVIII
                                            State Profile: North Carolina




Table XXXVIII.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            132                         42               29                  27             24                       10
Total pupils                        1,082,899                    210,835          221,949          215,571          209,004                     225,540
Poverty rate (percent)                     17.1                      26.6             16.6             15.8             13.9                       12.6
Disabled rate (percent)                    11.4                      11.2             11.1             12.3             11.6                       11.0
Per pupil income                        $76,415                  $51,667          $64,236          $70,911          $86,835                $107,140
Tax efforta                              $18.58                   $18.77           $17.51            $16.62          $19.88                      $19.54
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XXXVIII.3 presents data on how state and local funding was
                                            distributed among the five groups of North Carolina districts. North
                                            Carolina’s equalization policies reduced the funding disparity between the
                                            wealthy and poor groups from about 110 percent to about 18 percent.
                                            Figure XXXVIII.1 provides table information in graphic form.


Table XXXVIII.3: State and Local Funding Distribution in North Carolina, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $1,429              $983           $1,120           $1,188            $1,719          $2,068                        2.10
State                           2,995              3,200            3,047            2,984            2,935            2,851                       0.89
Total                          $4,424            $4,183           $4,167           $4,171            $4,654          $4,919                        1.18
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XXXVIII
                                          State Profile: North Carolina




Figure XXXVIII.1: State and Local
Funding Distribution in North Carolina,
School Year 1991-92                       Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                             0
                                                    Poorest                             Wealthiest
                                                                  Groups of Districts
                                                  Local Funding
                                                  State Funding



                                          Table XXXVIII.4 provides data on the distribution of state and local
How Funding Would                         funding if all districts could have spent the average total funding per
Have Been                                 weighted pupil with an average tax effort. This assumes the state
Distributed If Districts                  optimized its targeting effort without changing the state share or the total
                                          funding for education. Under this scenario, the implicit foundation level
Could Have Spent the                      equals the maximum possible foundation level (the state average). Figure
Average on Each                           XXXVIII.2 provides this information in graphic form. The difference
                                          between how state funding was actually distributed and how it would have
Student                                   been distributed if districts could have financed the average is shown in
                                          figure XXXVIII.3.




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                                           Appendix XXXVIII
                                           State Profile: North Carolina




Table XXXVIII.4: How State and Local Funding Would Have Been Distributed If Each District in North Carolina Could Have
Spent the Average, School Year 1991-92
                                                                                                                  Funding of
                                                      Mean funding per weighted pupil                        wealthiest group
                                                                                                              compared with
                                        Poorest                                               Wealthiest      poorest groupa
Funding source                  State     Group 1     Group 2       Group 3        Group 4        Group 5           (percent)
Localb                          $1,433            $955             $1,207        $1,316           $1,632            $2,029                     2.13
State                            2,991           3,469              3,217          3,107            2,791             2,395                    0.69
        c
Total                           $4,424          $4,424             $4,424        $4,242           $4,424            $4,424                     1.00
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.
                                           b
                                            This is the local funding that could have been raised assuming all districts had made the same
                                           average tax effort.
                                           c
                                               The average is the maximum foundation level possible in a state.




Figure XXXVIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in North Carolina Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year        5,000
1991-92
                                           4,000

                                           3,000

                                           2,000

                                           1,000

                                                   0
                                                         Poorest                                    Wealthiest
                                                                       Groups of Districts
                                                       Local Funding
                                                       State Funding




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                                      Appendix XXXVIII
                                      State Profile: North Carolina




Figure XXXVIII.3: Comparison of
Actual State Funding With State
Funding Assuming Each District in     Funding per Weighted Pupil (Dollars)
North Carolina Could Have Spent the   4,000
Average, School Year 1991-92
                                      3,500
                                      3,000
                                      2,500
                                      2,000
                                      1,500
                                      1,000
                                       500
                                         0
                                               Poorest                                   Wealthiest
                                                               Groups of Districts
                                              Actual State Funding
                                              State Funding if Each Student Received the Average




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Appendix XXXIX

State Profile: North Dakota


                                      As table XXXIX.1 shows, in school year 1991-92, the state provided
Actual Education                      48 percent of the total funding to North Dakota’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in North
in School Year 1991-92                Dakota averaged $4,079 with an implicit foundation level of $1,957 for
                                      each student, which is 48 percent of the average and represents the state’s
                                      equalization effort. (To compare this effort with those of other states, see
                                      fig. 5.) The targeting score for state funding was .000, indicating that state
                                      education funds were not targeted to poor or wealthy districts.109 (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .236, indicating that total funding increased as
                                      district income increased. (To compare this score with those of other
                                      states, see fig. 1.) A North Dakota education official reported that the state
                                      had changed its school finance system since school year 1991-92 to
                                      increase funding to poor districts compared with wealthy districts (see
                                      app. LVI). To put the state’s school finance system in perspective, table
                                      XXXIX.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table XXXIX.1: Summary Data for
North Dakota in School Year 1991-92
                                      Average total funding per weighted pupila                                                          $4,079
                                      State share of total funding (percent)                                                               48.0
                                                                             b
                                      Targeting score (state funds)                                                                        .000
                                      Implicit foundation levelc                                                                         $1,957
                                      Equalization effortd                                                                                 48.0
                                      Fiscal neutrality scoree                                                                             .236
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                       This is the constrained score (elasticity of state funding relative to district income) used to
                                      calculate the state’s implicit foundation level. The actual targeting elasticity is .173.
                                      c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                          This is the elasticity of total (state and local) funding relative to district income.




                                      109
                                        This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                      differs from the actual targeting score found in table V.1 in app. V.



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                                           Appendix XXXIX
                                           State Profile: North Dakota




Table XXXIX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                           251                         72               42                  37             39                       61
Total pupils                           117,927                   23,694           23,535            23,412          27,694                      19,592
Poverty rate (percent)                    16.4                      23.3             17.3             14.3             13.4                       13.5
Disabled rate (percent)                   10.4                      10.1             11.0             11.3             10.1                        9.4
Per pupil income                       $58,094                  $39,424          $51,292          $57,268          $64,658                     $80,555
Tax efforta                             $37.11                   $47.60           $37.25            $36.34          $33.97                      $35.24
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XXXIX.3 presents data on how state and local funding was
                                           distributed among the five groups of North Dakota districts. North
                                           Dakota’s equalization policies reduced the funding disparity between the
                                           wealthy and poor groups from about 48 percent to about 18 percent.
                                           Figure XXXIX.1 provides table information in graphic form.


Table XXXIX.3: State and Local Funding Distribution in North Dakota, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,122            $1,893           $1,927           $2,094            $2,178          $2,793                        1.48
State                          1,957              2,112            1,924            2,006            1,935            1,916                       0.91
Total                         $4,079            $4,006           $3,851           $4,100            $4,113          $4,709                        1.18
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                        Appendix XXXIX
                                        State Profile: North Dakota




Figure XXXIX.1: State and Local
Funding Distribution in North Dakota,
School Year 1991-92                     Funding per Weighted Pupil (Dollars)
                                        5,000


                                        4,000


                                        3,000


                                        2,000


                                        1,000


                                           0
                                                  Poorest                             Wealthiest
                                                                Groups of Districts
                                                Local Funding
                                                State Funding



                                        Table XXXIX.4 provides data on the distribution of state and local funding
How Funding Would                       if all districts could have spent the average total funding per weighted
Have Been                               pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts                targeting effort without changing the state share or the total funding for
                                        education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                    maximum possible foundation level (the state average). Figure XXXIX.2
Average on Each                         provides this information in graphic form. The difference between how
                                        state funding was actually distributed and how it would have been
Student                                 distributed if districts could have financed the average is shown in figure
                                        XXXIX.3.




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                                         Appendix XXXIX
                                         State Profile: North Dakota




Table XXXIX.4: How State and Local Funding Would Have Been Distributed If Each District in North Dakota Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                       Poorest                                               Wealthiest      compared with
Funding source                 State     Group 1      Group 2      Group 3        Group 4        Group 5     poorest groupa
Localb                         $2,131         $1,439            $1,859           $2,080         $2,385            $2,997                     2.08
State                           1,948          2,641                2,220         1,999           1,694             1,082                    0.41
Totalc                         $4,079         $4,079            $4,079           $4,079         $4,079            $4,079                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




Figure XXXIX.2: How State and Local
Funding Would Have Been Distributed
If Each District in North Dakota Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      5,000
1991-92
                                         4,000

                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding




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                                       Appendix XXXIX
                                       State Profile: North Dakota




Figure XXXIX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in North        Funding per Weighted Pupil (Dollars)
Dakota Could Have Spent the Average,   3,000
School Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                          0
                                                Poorest                                   Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




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Appendix XL

State Profile: Ohio


                                       As table XL.1 shows, in school year 1991-92, the state provided about
Actual Education                       42 percent of the total funding to Ohio’s school districts. Total funding
Funding Distribution                   (state and local funds combined) per weighted pupil in Ohio averaged
in School Year 1991-92                 $4,709 with an implicit foundation level of $2,325 for each student, which
                                       is about 49 percent of the average and represents the state’s equalization
                                       effort. (To compare this effort with those of other states, see fig. 5.) The
                                       targeting score for state funding was –.180, indicating that state education
                                       funds were targeted to poor districts. (To compare this score with those of
                                       other states, see table V.1 in app. V.) The fiscal neutrality score was .315,
                                       indicating that total funding increased as district income increased. (To
                                       compare this score with those of other states, see fig. 1.) An Ohio
                                       education official reported that the state had changed its school finance
                                       system since school year 1991-92 to increase funding to poor districts
                                       compared with wealthy districts (see app. LVI). To put the state’s school
                                       finance system in perspective, table XL.2 presents demographic data for
                                       school year 1991-92 for five groups of districts of increasing district
                                       income.

Table XL.1: Summary Data for Ohio in
School Year 1991-92
                                       Average total funding per weighted pupila                                                    $4,709
                                       State share of total funding (percent)                                                          41.9
                                                                              b
                                       Targeting score (state funds)                                                                 –.180
                                       Implicit foundation levelc                                                                   $2,325
                                       Equalization effortd                                                                            49.4
                                       Fiscal neutrality scoree                                                                        .315
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XL
                                            State Profile: Ohio




Table XL.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            607                        194              130                  97             94                       92
Total pupils                        1,774,710                    354,716          357,256          355,695          352,452                     354,591
Poverty rate (percent)                     16.9                      22.4             20.6             19.1             12.9                        9.6
Disabled rate (percent)                    11.3                      11.1             12.0             11.6             10.7                       11.0
Per pupil income                        $80,781                  $52,436          $64,691          $73,820          $88,110                $125,043
Tax efforta                              $33.75                   $37.27           $33.27            $34.01          $32.51                      $33.55
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XL.3 presents data on how state and local funding was distributed
                                            among the five groups of Ohio districts. Ohio’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 110 to 32 percent. Figure XL.1 provides table information in graphic
                                            form.


Table XL.3: State and Local Funding Distribution in Ohio, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,738             $1,969           $2,182           $2,529            $2,826          $4,132                        2.10
State                           1,971              2,336            2,164            2,030            1,766            1,556                       0.67
Total                         $4,709             $4,305           $4,346           $4,559            $4,592          $5,688                        1.32
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XL
                                         State Profile: Ohio




Figure XL.1: State and Local Funding
Distribution in Ohio, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XL.4 provides data on the distribution of state and local funding if all
How Funding Would                        districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XL.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XL.3.


Table XL.4: How State and Local Funding Would Have Been Distributed If Each District in Ohio Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                  State     Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                        $2,751          $1,765            $2,168           $2,487         $3,031            $4,311                     2.44
State                          1,958           2,944                2,541         2,222           1,678               398                    0.14
Totalc                        $4,709          $4,709            $4,709           $4,709         $4,709            $4,709                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                       Appendix XL
                                       State Profile: Ohio




Figure XL.2: How State and Local
Funding Would Have Been Distributed
If Each District in Ohio Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year         6,000
1991-92
                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XL.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Ohio Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    3,500
1991-92
                                       3,000

                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




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Appendix XLI

State Profile: Oklahoma


                                  As table XLI.1 shows, in school year 1991-92, the state provided about
Actual Education                  71 percent of the total funding to Oklahoma’s school districts. Total
Funding Distribution              funding (state and local funds combined) per weighted pupil in Oklahoma
in School Year 1991-92            averaged $3,623 with an implicit foundation level of $2,838 for each
                                  student, which is about 78 percent of the average and represents the
                                  state’s equalization effort. (To compare this effort with those of other
                                  states, see fig. 5.) The targeting score for state funding was –.102,
                                  indicating that state education funds were targeted to poor districts. (To
                                  compare this score with those of other states, see table V.1 in app. V.) The
                                  fiscal neutrality score was –.053, indicating that total funding increased as
                                  district income decreased. (To compare this score with those of other
                                  states, see fig. 1.) To put the state’s school finance system in perspective,
                                  table XLI.2 presents demographic data for school year 1991-92 for five
                                  groups of districts of increasing district income.

Table XLI.1: Summary Data for
Oklahoma in School Year 1991-92
                                  Average total funding per weighted pupila                                                    $3,623
                                  State share of total funding (percent)                                                          71.1
                                                                         b
                                  Targeting score (state funds)                                                                 –.102
                                  Implicit foundation levelc                                                                   $2,838
                                  Equalization effortd                                                                            78.3
                                  Fiscal neutrality scoree                                                                      –.053
                                  a
                                      The average is the maximum foundation level possible in a state.
                                  b
                                      This is the elasticity of state funding relative to district income.
                                  c
                                   This is the minimum amount of total funding the state’s equalization policies would enable
                                  districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                  d
                                      This is the implicit foundation as a percent of the average.
                                  e
                                      This is the elasticity of total (state and local) funding relative to district income.




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                                           Appendix XLI
                                           State Profile: Oklahoma




Table XLI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                           565                        184              124                  77           122                        58
Total pupils                           583,670                  116,050          117,306          114,866          116,972                     118,476
Poverty rate (percent)                    20.9                      26.6             22.6             17.1             15.9                       22.4
Disabled rate (percent)                   11.4                      12.2             10.4             10.5             10.8                       13.2
Per pupil income                       $64,014                  $39,994          $51,158          $57,806          $73,948                     $96,483
Tax efforta                             $16.45                   $19.55           $19.51            $16.19          $16.53                      $13.67
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table XLI.3 presents data on how state and local funding was distributed
                                           among the five groups of Oklahoma districts. Oklahoma’s equalization
                                           policies eliminated the 69 percent funding disparity between the wealthy
                                           and poor groups, resulting in poor districts having about 6 percent more
                                           funding than wealthy districts. Figure XLI.1 provides table information in
                                           graphic form.


Table XLI.3: State and Local Funding Distribution in Oklahoma, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $1,047              $796             $989              $920           $1,204          $1,349                        1.69
State                          2,575              2,939            2,769            2,569            2,529            2,179                       0.74
Total                         $3,623            $3,735           $3,758           $3,489            $3,732          $3,528                        0.94
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                         Appendix XLI
                                         State Profile: Oklahoma




Figure XLI.1: State and Local Funding
Distribution in Oklahoma, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XLI.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLI.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLI.3.


Table XLI.4: How State and Local Funding Would Have Been Distributed If Each District in Oklahoma Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest    compared with
Funding source                  State     Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                        $1,048            $644                $846           $963         $1,232            $1,547                     2.40
State                          2,574           2,979                2,777         2,660           2,391             2,076                    0.70
Totalc                        $3,623          $3,623            $3,623           $3,623         $3,623            $3,623                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                       Appendix XLI
                                       State Profile: Oklahoma




Figure XLI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Oklahoma Could     Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    4,000
1991-92

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                 Wealthiest
                                                               Groups of Districts
                                               Local Funding
                                               State Funding




Figure XLI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Oklahoma     Funding Per Weighted Pupil (Dollars)
Could Have Spent the Average, School   3,000
Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                           0
                                                  Poorest                                  Wealthiest
                                                                Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                       Page 254                                              GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLII

State Profile: Oregon


                                        As table XLII.1 shows, in school year 1991-92, the state provided about
Actual Education                        31 percent of the total funding to Oregon’s school districts. Total funding
Funding Distribution                    (state and local funds combined) per weighted pupil in Oregon averaged
in School Year 1991-92                  $5,087 with an implicit foundation level of $1,652 for each student, which
                                        is about 33 percent of the average and represents the state’s equalization
                                        effort. (To compare this effort with those of other states, see fig. 5.) The
                                        targeting score for state funding was –.043, indicating that state education
                                        funds were targeted to poor districts.110 (To compare this score with those
                                        of other states, see table V.1 in app. V.) The fiscal neutrality score was
                                        .166, indicating that total funding increased as district income increased.
                                        (To compare this score with those of other states, see fig. 1.) An Oregon
                                        education official reported that the state had changed its school finance
                                        system since school year 1991-92 to increase funding to poor districts
                                        compared with wealthy districts (see app. LVI). To put the state’s school
                                        finance system in perspective, table XLII.2 presents demographic data for
                                        school year 1991-92 for five groups of districts of increasing district
                                        income.

Table XLII.1: Summary Data for Oregon
in School Year 1991-92
                                        Average total funding per weighted pupila                                                              $5,087
                                        State share of total funding (percent)                                                                   31.1
                                                                               b
                                        Targeting score (state funds)                                                                           –.043
                                        Implicit foundation levelc                                                                             $1,652
                                        Equalization effortd                                                                                     32.5
                                        Fiscal neutrality scoree                                                                                 .166
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                         This is the elasticity of state funding relative to district income. The score is not significantly
                                        different from 0.
                                        c
                                          This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




                                        110
                                             However, this score is not significantly different from 0.



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                                            Appendix XLII
                                            State Profile: Oregon




Table XLII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            286                         91               51                  31             37                      76
Total pupils                            497,341                  100,064           98,967          100,194           104,705                    93,411
Poverty rate (percent)                     15.2                      19.4             16.7             14.7               9.9                     15.5
Disabled rate (percent)                     9.3                      10.0               9.6                 9.5           8.7                      9.0
Per pupil income                        $85,350                  $55,212          $67,246          $78,331           $95,185               $133,320
Tax efforta                              $41.09                   $53.06           $45.46            $40.97           $42.27                    $32.74
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLII.3 presents data on how state and local funding was distributed
                                            among the five groups of Oregon districts. Oregon’s equalization policies
                                            reduced the funding disparity between the wealthy and poor groups from
                                            about 46 to 22 percent. Figure XLII.1 provides table information in graphic
                                            form.


Table XLII.3: State and Local Funding Distribution in Oregon, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                          $3,503            $2,972           $3,073           $3,211            $3,957           $4,351                      1.46
State                           1,584              1,888            1,602            1,664            1,285             1,559                     0.83
Total                          $5,087            $4,860           $4,675           $4,875            $5,242           $5,910                      1.22
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XLII
                                         State Profile: Oregon




Figure XLII.1: State and Local Funding
Distribution in Oregon, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         7,000

                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                            0
                                                   Poorest                             Wealthiest
                                                                 Groups of Districts
                                                 Local Funding
                                                 State Funding



                                         Table XLII.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLII.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLII.3.




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                                          Appendix XLII
                                          State Profile: Oregon




Table XLII.4: How State and Local Funding Would Have Been Distributed If Each District in Oregon Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                  State     Group 1      Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                        $3,515           $2,236             $2,748        $3,216           $3,975            $5,505                      2.46
                                                                                                                           c
State                          1,571            2,850              2,339          1,871            1,112              –418                    –0.15
Totald                        $5,087           $5,087             $5,087        $5,087           $5,087            $5,087                      1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                            The state would have had to recapture this amount of local funding from these districts for
                                          distribution to other districts.
                                          d
                                              The average is the maximum foundation level possible in a state.




Figure XLII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Oregon Could Have     Funding per Weighted Pupil (Dollars)
Spent the Average, School Year             6,000
1991-92
                                              5,000

                                              4,000

                                              3,000

                                              2,000

                                              1,000

                                                  0

                                          (1,000)
                                                        Poorest                                  Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding




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                                       Appendix XLII
                                       State Profile: Oregon




Figure XLII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Oregon       Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School    4,000
Year 1991-92
                                        3,000


                                        2,000


                                        1,000


                                            0


                                       (1,000)
                                                  Poorest                                Wealthiest
                                                               Groups of Districts
                                             Actual State Funding
                                             State Funding if Each Student Received the Average




                                       Page 259                                              GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLIII

State Profile: Pennsylvania


                                      As table XLIII.1 shows, in school year 1991-92, the state provided
Actual Education                      43 percent of the total funding to Pennsylvania’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in
in School Year 1991-92                Pennsylvania averaged $6,406 with an implicit foundation level of $3,455
                                      for each student, which is about 54 percent of the average and represents
                                      the state’s equalization effort. (To compare this effort with those of other
                                      states, see fig. 5.) The targeting score for state funding was –.255,
                                      indicating that state education funds were targeted to poor districts. (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .300, indicating that total funding increased as
                                      district income increased. (To compare this score with those of other
                                      states, see fig. 1.) To put the state’s school finance system in perspective,
                                      table XLIII.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table XLIII.1: Summary Data for
Pennsylvania in School Year 1991-92
                                      Average total funding per weighted pupila                                                    $6,406
                                      State share of total funding (percent)                                                          43.0
                                                                             b
                                      Targeting score (state funds)                                                                 –.255
                                      Implicit foundation levelc                                                                   $3,455
                                      Equalization effortd                                                                            53.9
                                      Fiscal neutrality scoree                                                                        .300
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                          This is the elasticity of state funding relative to district income.
                                      c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                          This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XLIII
                                            State Profile: Pennsylvania




Table XLIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            500                        158              118                  51             77                       96
Total pupils                        1,663,264                    332,301          332,621          331,441          333,339                     333,562
Poverty rate (percent)                     15.2                      20.3             14.0             22.4             13.8                        5.9
Disabled rate (percent)                    10.8                      11.4             10.9             10.8             10.8                       10.0
Per pupil income                        $99,378                  $63,705          $81,640          $91,116         $106,597                $153,601
Tax efforta                              $36.63                   $36.67           $37.64            $30.99          $39.05                      $38.27
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLIII.3 presents data on how state and local funding was distributed
                                            among the five groups of Pennsylvania districts. Pennsylvania’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 142 to 32 percent. Figure XLIII.1 provides
                                            table information in graphic form.


Table XLIII.3: State and Local Funding Distribution in Pennsylvania, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $3,653            $2,371           $3,071           $2,859            $4,154          $5,733                        2.42
State                           2,753              3,441            2,907            2,975            2,576            1,941                       0.56
Total                          $6,406            $5,812           $5,978           $5,833            $6,730          $7,674                        1.32
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XLIII
                                          State Profile: Pennsylvania




Figure XLIII.1: State and Local Funding
Distribution in Pennsylvania, School
Year 1991-92                              Funding per Weighted Pupil (Dollars)
                                          8,000


                                          6,000


                                          4,000


                                          2,000


                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XLIII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XLIII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XLIII.3.


Table XLIII.4: How State and Local Funding Would Have Been Distributed If Each District in Pennsylvania Could Have
Spent the Average, School Year 1991-92
                                                       Mean funding per weighted pupil                            Funding of
                                                                                                             wealthiest group
                                         Poorest                                               Wealthiest      compared with
Funding source                  State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                         $3,672          $2,311            $3,007           $3,312         $3,935            $5,788                     2.50
State                          $2,734           4,095                3,399         3,094           2,471               618                    0.15
Totalc                         $6,406          $6,406            $6,406           $6,406         $6,406            $6,406                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                         Appendix XLIII
                                         State Profile: Pennsylvania




Figure XLIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Pennsylvania Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      8,000
1991-92

                                         6,000


                                         4,000


                                         2,000


                                            0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XLIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in                Funding per Weighted Pupil (Dollars)
Pennsylvania Could Have Spent the        5,000
Average, School Year 1991-92
                                         4,000

                                         3,000


                                         2,000


                                         1,000


                                            0
                                                   Poorest                                  Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Each Student Received the Average




                                         Page 263                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLIV

State Profile: Rhode Island


                                       As table XLIV.1 shows, in school year 1991-92, the state provided about
Actual Education                       39 percent of the total funding to Rhode Island’s school districts. Total
Funding Distribution                   funding (state and local funds combined) per weighted pupil in Rhode
in School Year 1991-92                 Island averaged $5,939 with an implicit foundation level of $3,953 for each
                                       student, which is about 67 percent of the average and represents the
                                       state’s equalization effort. (To compare this effort with those of other
                                       states, see fig. 5.) The targeting score for state funding was –.694,
                                       indicating that state education funds were targeted to poor districts. (To
                                       compare this score with those of other states, see table V.1 in app. V.) The
                                       fiscal neutrality score was .274, indicating that total funding increased as
                                       district income increased. (To compare this score with those of other
                                       states, see fig. 1.) A Rhode Island education official reported that the state
                                       had changed its school finance system since school year 1991-92 to
                                       increase funding to poor districts compared with wealthy districts (see
                                       app. LVI). To put the state’s school finance system in perspective, table
                                       XLIV.2 presents demographic data for school year 1991-92 for five groups
                                       of districts of increasing district income.

Table XLIV.1: Summary Data for Rhode
Island in 1991-92
                                       Average total funding per weighted pupila                                                    $5,939
                                       State share of total funding (percent)                                                          39.3
                                                                              b
                                       Targeting score (state funds)                                                                 –.694
                                       Implicit foundation levelc                                                                   $3,953
                                       Equalization effortd                                                                            66.6
                                       Fiscal neutrality scoree                                                                        .274
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                           This is the elasticity of state funding relative to district income.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XLIV
                                            State Profile: Rhode Island




Table XLIV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                             37                           5                6                  6              5                      15
Total pupils                            141,364                   37,661           19,662            28,335           29,743                    25,963
Poverty rate (percent)                     12.8                      26.7               5.0                 9.9           7.7                      7.3
Disabled rate (percent)                    14.7                      13.6             13.9             15.4              16.0                     14.8
Per pupil income                    $108,151                     $79,842          $95,443         $109,764          $118,827               $144,847
Tax efforta                              $33.60                   $31.54           $41.78            $29.66           $35.48                    $32.86
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLIV.3 presents data on how state and local funding was distributed
                                            among the five groups of Rhode Island districts. Rhode Island’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 85 to 19 percent. Figure XLIV.1 provides table
                                            information in graphic form.


Table XLIV.3: State and Local Funding Distribution in Rhode Island, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $3,606             $2,546           $3,901           $3,264            $4,239           $4,719                      1.85
State                           2,333              2,961            2,325            2,365            1,904             1,834                     0.62
Total                         $5,939             $5,507           $6,226           $5,629            $6,144           $6,553                      1.19
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix XLIV
                                          State Profile: Rhode Island




Figure XLIV.1: State and Local Funding
Distribution in Rhode Island, School
Year 1991-92                              Funding per Weighted Pupil (Dollars)
                                          7,000

                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table XLIV.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure XLIV.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure XLIV.3.


Table XLIV.4: How State and Local Funding Would Have Been Distributed If Each District in Rhode Island Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                            wealthiest group
                                        Poorest                                              Wealthiest       compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $3,610           $2,639            $3,253           $3,653         $3,940            $4,865                     1.84
State                          2,329            3,300                2,686         2,286           1,998             1,074                    0.33
Totalc                        $5,939           $5,939            $5,939           $5,939         $5,939            $5,939                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 266                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix XLIV
                                         State Profile: Rhode Island




Figure XLIV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Rhode Island Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      7,000
1991-92
                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                            0
                                                   Poorest                                   Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XLIV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Rhode          Funding per Weighted Pupil (Dollars)
Island Could Have Spent the Average,     3,500
School Year 1991-92
                                         3,000

                                         2,500

                                         2,000

                                         1,500

                                         1,000

                                          500

                                            0
                                                   Poorest                                   Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State Funding if Student Received the Average




                                         Page 267                                                GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLV

State Profile: South Carolina


                                      As table XLV.1 shows, in school year 1991-92, the state provided about
Actual Education                      52 percent of the total funding to South Carolina’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in South
in School Year 1991-92                Carolina averaged $4,112 with an implicit foundation level of $3,239 for
                                      each student, which is about 79 percent of the average and represents the
                                      state’s equalization effort. (To compare this effort with those of other
                                      states, see fig. 5.) The targeting score for state funding was –.505,
                                      indicating that state education funds were targeted to poor districts. (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .150, indicating that total funding increased as
                                      district income increased. (To compare this score with those of other
                                      states, see fig. 1.) To put the state’s school finance system in perspective,
                                      table XLV.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table XLV.1: Summary Data for South
Carolina in School Year 1991-92
                                      Average total funding per weighted pupila                                                    $4,112
                                      State share of total funding (percent)                                                          52.4
                                                                             b
                                      Targeting score (state funds)                                                                 –.505
                                      Implicit foundation levelc                                                                   $3,239
                                      Equalization effortd                                                                            78.8
                                      Fiscal neutrality scoree                                                                        .150
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                          This is the elasticity of state funding relative to district income.
                                      c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                          This is the elasticity of total (state and local) funding relative to district income.




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                                            Appendix XLV
                                            State Profile: South Carolina




Table XLV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                             91                         36               24                  15             11                        5
Total pupils                            625,839                  127,515          125,497          122,407           110,791                    139,629
Poverty rate (percent)                     20.8                      29.8             22.2             14.7              16.4                      20.2
Disabled rate (percent)                    10.9                      10.7             11.5                  9.7          11.4                      11.4
Per pupil income                        $65,707                  $44,530          $56,351          $65,417           $73,981                    $87,143
Tax efforta                              $29.70                   $30.40           $31.82            $29.03           $32.92                     $26.48
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLV.3 presents data on how state and local funding was distributed
                                            among the five groups of South Carolina districts. South Carolina’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 69 to 8 percent. Figure XLV.1 provides table
                                            information in graphic form.


Table XLV.3: State and Local Funding Distribution in South Carolina, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $1,959             $1,371           $1,807           $1,854            $2,429           $2,317                       1.69
State                          2,153               2,470            2,328            2,242            1,949             1,834                      0.74
Total                         $4,112             $3,840           $4,136           $4,096            $4,378           $4,151                       1.08
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XLV
                                         State Profile: South Carolina




Figure XLV.1: State and Local Funding
Distribution in South Carolina, School
Year 1991-92                             Funding per Weighted Pupil (Dollars)
                                         5,000


                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XLV.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLV.3.


Table XLV.4: How State and Local Funding Would Have Been Distributed If Each District in South Carolina Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                       Poorest                                               Wealthiest      compared with
Funding source                 State     Group 1     Group 2       Group 3         Group 4       Group 5     poorest groupa
Localb                        $1,964          $1,319            $1,669           $1,998         $2,216            $2,589                     1.96
State                           2,148          2,793                2,444         2,115           1,897             1,523                    0.55
Totalc                        $4,112          $4,112            $4,112           $4,112         $4,112            $4,112                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 270                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix XLV
                                       State Profile: South Carolina




Figure XLV.2: How State and Local
Funding Would Have Been Distributed
If Each District in South Carolina     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   5,000
Year 1991-92
                                       4,000


                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XLV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in South        Funding per Weighted Pupil (Dollars)
Carolina Could Have Spent the          3,000
Average, School Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 271                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLVI

State Profile: South Dakota


                                       As table XLVI.1 shows, in school year 1991-92, the state provided about
Actual Education                       30 percent of the total funding to South Dakota’s school districts. Total
Funding Distribution                   funding (state and local funds combined) per weighted pupil in South
in School Year 1991-92                 Dakota averaged $3,756 with an implicit foundation level of $1,109 for
                                       each student, which is about 30 percent of the average and represents the
                                       state’s equalization effort. (To compare this effort with those of other
                                       states, see fig. 5.) The targeting score for state funding was .000, indicating
                                       that state education funds were not targeted to poor or wealthy districts.111
                                        (To compare this score with those of other states, see table V.1 in app. V.)
                                       The fiscal neutrality score was .367, indicating that total funding increased
                                       as district income increased. (To compare this score with those of other
                                       states, see fig. 1.) To put the state’s school finance system in perspective,
                                       table XLVI.2 presents demographic data for school year 1991-92 for five
                                       groups of districts of increasing district income.

Table XLVI.1: Summary Data for South
Dakota in School Year 1991-92
                                       Average total funding per weighted pupila                                                          $3,756
                                       State share of total funding (percent)                                                                   29.5
                                                                              b
                                       Targeting score (state funds)                                                                            .000
                                       Implicit foundation levelc                                                                         $1,109
                                       Equalization effortd                                                                                     29.5
                                       Fiscal neutrality scoree                                                                                 .367
                                       a
                                           The average is the maximum foundation level possible in a state.
                                       b
                                        This is the constrained score (elasticity of state funding relative to district income) used to
                                       calculate the state’s implicit foundation level. The actual targeting elasticity is .116, which is not
                                       statistically different from 0.
                                       c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                       districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                       d
                                           This is the implicit foundation as a percent of the average.
                                       e
                                           This is the elasticity of total (state and local) funding relative to district income.




                                       111
                                         This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                       differs from the actual targeting score found in table V.1 in app. V.



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                                            Appendix XLVI
                                            State Profile: South Dakota




Table XLVI.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3           Group 4                Group 5
Total districts                            161                         55               47                  24             20                       15
Total pupils                            124,665                   25,208           22,748            31,388           20,232                     25,089
Poverty rate (percent)                     18.2                      29.1             20.6             16.0              14.3                      11.2
Disabled rate (percent)                     9.8                      10.8               8.7                 8.8           9.5                      11.5
Per pupil income                        $57,440                  $37,717          $50,120          $57,730           $63,374                    $78,745
Tax efforta                              $46.52                   $50.90           $54.34            $46.47           $44.77                     $41.36
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLVI.3 presents data on how state and local funding was distributed
                                            among the five groups of South Dakota districts. South Dakota’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 66 to 28 percent. Figure XLVI.1 provides table
                                            information in graphic form.


Table XLVI.3: State and Local Funding Distribution in South Dakota, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4           Group 5      poorest groupa
Local                         $2,648             $1,977           $2,698           $2,642            $2,807           $3,276                       1.66
State                          1,109               1,320            1,305              994            1,069              952                       0.72
Total                         $3,756             $3,297           $4,003           $3,636            $3,876           $4,228                       1.28
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XLVI
                                         State Profile: South Dakota




Figure XLVI.1: State and Local Funding
Distribution in South Dakota, School
Year 1991-92                             Funding per Weighted Pupil (Dollars)
                                         5,000


                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XLVI.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLVI.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLVI.3.


Table XLVI.4: How State and Local Funding Would Have Been Distributed If Each District in South Dakota Could Have
Spent the Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $2,658          $1,705            $2,339           $2,703         $2,954            $3,608                     2.12
State                          1,099           2,052                1,418         1,053             802               148                    0.07
Totalc                        $3,756          $3,756            $3,756           $3,756         $3,756            $3,756                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 274                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix XLVI
                                         State Profile: South Dakota




Figure XLVI.2: How State and Local
Funding Would Have Been Distributed
If Each District in South Dakota Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year      5,000
1991-92
                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                            0
                                                   Poorest                                    Wealthiest
                                                                  Groups of Districts
                                                 Local Funding
                                                 State Funding




Figure XLVI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in South          Funding per Weighted Pupil (Dollars)
Dakota Could Have Spent the Average,     2,500
School Year 1991-92
                                         2,000

                                         1,500


                                         1,000


                                          500


                                            0
                                                   Poorest                                    Wealthiest
                                                                  Groups of Districts
                                                 Actual State Funding
                                                 State if Each Student Received the Average




                                         Page 275                                                GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLVII

State Profile: Tennessee


                                   As table XLVII.1 shows, in school year 1991-92, the state provided
Actual Education                   47 percent of the total funding to Tennessee’s school districts. Total
Funding Distribution               funding (state and local funds combined) per weighted pupil in Tennessee
in School Year 1991-92             averaged $3,329 with an implicit foundation level of $1,566 for each
                                   student, which is 47 percent of the average and represents the state’s
                                   equalization effort. (To compare this effort with those of other states, see
                                   fig. 5.) The targeting score for state funding was .000, indicating that state
                                   education funds were not targeted to poor or wealthy districts.112 (To
                                   compare this score with those of other states, see table V.1 in app. V.) The
                                   fiscal neutrality score was .242, indicating that total funding increased as
                                   district income increased. (To compare this score with those of other
                                   states, see fig. 1.) A Tennessee education official reported that the state
                                   had changed its school finance system since school year 1991-92 to
                                   increase funding to poor districts compared with wealthy districts (see
                                   app. LVI). To put the state’s school finance system in perspective, table
                                   XLVII.2 presents demographic data for school year 1991-92 for five groups
                                   of districts of increasing district income.

Table XLVII.1: Summary Data for
Tennessee in School Year 1991-92
                                   Average total funding per weighted pupila                                                          $3,329
                                   State share of total funding (percent)                                                                   47.0
                                                                          b
                                   Targeting score (state funds)                                                                            .000
                                   Implicit foundation levelc                                                                         $1,566
                                   Equalization effortd                                                                                     47.0
                                   Fiscal neutrality scoree                                                                                 .242
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                    This is the constrained score (elasticity of state funding relative to district income) used to
                                   calculate the state’s implicit foundation level. The actual targeting elasticity is .017, which is not
                                   statistically different from 0.
                                   c
                                     This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                       This is the elasticity of total (state and local) funding relative to district income.




                                   112
                                     This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                   differs from the actual targeting score found in table V.1 in app. V.



                                   Page 276                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XLVII
                                            State Profile: Tennessee




Table XLVII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            134                         45               38                  16             26                        9
Total pupils                            830,038                  162,495          168,648          175,240          137,994                     185,661
Poverty rate (percent)                     20.4                      22.8             19.4             26.8             17.6                       15.4
Disabled rate (percent)                    11.9                      13.1             12.9             10.4             12.1                       11.2
Per pupil income                        $70,681                  $45,784          $58,753          $65,648          $80,007                $101,123
Tax efforta                              $24.82                   $29.77           $21.53            $29.62          $24.32                      $22.13
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLVII.3 presents data on how state and local funding was
                                            distributed among the five groups of Tennessee districts. Tennessee’s
                                            equalization policies reduced the funding disparity between the wealthy
                                            and poor groups from about 59 to 21 percent. Figure XLVII.1 provides
                                            table information in graphic form.


Table XLVII.3: State and Local Funding Distribution in Tennessee, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $1,763             $1,386           $1,276           $1,934            $1,941          $2,202                        1.59
State                          1,566               1,653            1,580            1,567            1,601            1,469                       0.89
Total                         $3,329             $3,038           $2,856           $3,501            $3,541          $3,671                        1.21
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                         Appendix XLVII
                                         State Profile: Tennessee




Figure XLVII.1: State and Local
Funding Distribution in Tennessee,
School Year 1991-92                      Funding per Weighted Pupil (Dollars)
                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XLVII.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLVII.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLVII.3.


Table XLVII.4: How State and Local Funding Would Have Been Distributed If Each District in Tennessee Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                  State     Group 1      Group 2      Group 3        Group 4       Group 5     poorest groupa
Localb                        $1,770          $1,125            $1,452           $1,647         $2,004            $2,566                     2.28
State                          1,559           2,205                1,877         1,682           1,325               763                    0.35
Totalc                        $3,329          $3,329            $3,329           $3,329         $3,329            $3,329                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 278                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix XLVII
                                       State Profile: Tennessee




Figure XLVII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Tennessee Could    Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    4,000
1991-92

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XLVII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Tennessee    Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   2,500
Year 1991-92
                                       2,000

                                       1,500


                                       1,000


                                        500


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 279                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLVIII

State Profile: Texas


                                   As table XLVIII.1 shows, in school year 1991-92, the state provided about
Actual Education                   47 percent of the total funding to Texas’ school districts. Total funding
Funding Distribution               (state and local funds combined) per weighted pupil in Texas averaged
in School Year 1991-92             $4,603 with an implicit foundation level of $3,318 for each student, which
                                   is about 72 percent of the average and represents the state’s equalization
                                   effort. (To compare this effort with those of other states, see fig. 5.) The
                                   targeting score for state funding was –.522, indicating that state education
                                   funds were targeted to poor districts. (To compare this score with those of
                                   other states, see table V.1 in app. V.) The fiscal neutrality score was .003,
                                   indicating that total funding increased as district income increased.113 (To
                                   compare this score with those of other states, see fig. 1.) A Texas
                                   education official reported that the state had changed its school finance
                                   system since school year 1991-92 to increase funding to poor districts
                                   compared with wealthy districts (see app. LVI). To put the state’s school
                                   finance system in perspective, table XLVIII.2 presents demographic data
                                   for school year 1991-92 for five groups of districts of increasing district
                                   income.

Table XLVIII.1: Summary Data for
Texas in School Year 1991-92
                                   Average total funding per weighted pupila                                                            $4,603
                                   State share of total funding (percent)                                                                     47.4
                                                                         b
                                   Targeting score (state funds)                                                                         –.522
                                   Implicit foundation levelc                                                                           $3,318
                                   Equalization effortd                                                                                       72.1
                                   Fiscal neutrality scoree                                                                                   .003
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                       This is the elasticity of state funding relative to district income.
                                   c
                                     This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                    This is the elasticity of total (state and local) funding relative to district income. The score is not
                                   significantly different from 0.




                                   113
                                        However, this score is not significantly different from 0.



                                   Page 280                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XLVIII
                                            State Profile: Texas




Table XLVIII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                          Wealthiest
                                          State                 Group 1          Group 2           Group 3         Group 4                  Group 5
Total districts                           1,046                       222              326              256                80                      162
Total pupils                        3,462,964                    693,672          691,190          700,596          692,550                     684,956
Poverty rate (percent)                     24.4                      42.2             23.8             17.2             21.2                       17.6
Disabled rate (percent)                     9.9                        9.1            10.4             10.7               9.9                       9.5
Per pupil income                        $62,842                  $30,006          $51,336          $63,427          $73,839                     $95,988
Tax efforta                              $38.73                   $44.82           $44.48            $38.37          $34.41                      $37.74
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table XLVIII.3 presents data on how state and local funding was
                                            distributed among the five groups of Texas districts. Texas’ equalization
                                            policies eliminated the funding disparity between the wealthy and poor
                                            groups. Figure XLVIII.1 provides table information in graphic form.


Table XLVIII.3: State and Local Funding Distribution in Texas, School Year 1991-92
                                                        Mean funding per weighted pupilighted pupil                                   Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                              Wealthiest         compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4         Group 5        poorest groupa
Local                          $2,423            $1,373           $2,293           $2,424            $2,527          $3,566                        2.60
State                           2,180              3,316            2,500            2,230            1,851            1,126                       0.34
Total                          $4,603            $4,689           $4,792           $4,654            $4,379          $4,691                        1.00
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                        Appendix XLVIII
                                        State Profile: Texas




Figure XLVIII.1: State and Local
Funding Distribution in Texas, School
Year 1991-92                            Funding per Weighted Pupil (Dollars)
                                        6,000

                                        5,000

                                        4,000

                                        3,000

                                        2,000

                                        1,000

                                           0
                                                  Poorest                             Wealthiest
                                                                Groups of Districts
                                                Local Funding
                                                State Funding



                                        Table XLVIII.4 provides data on the distribution of state and local funding
How Funding Would                       if all districts could have spent the average total funding per weighted
Have Been                               pupil with an average tax effort. This assumes the state optimized its
Distributed If Districts                targeting effort without changing the state share or the total funding for
                                        education. Under this scenario, the implicit foundation level equals the
Could Have Spent the                    maximum possible foundation level (the state average). Figure XLVIII.2
Average on Each                         provides this information in graphic form. The difference between how
                                        state funding was actually distributed and how it would have been
Student                                 distributed if districts could have financed the average is shown in figure
                                        XLVIII.3.




                                        Page 282                                         GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix XLVIII
                                          State Profile: Texas




Table XLVIII.4: How State and Local Funding Would Have Been Distributed If Each District in Texas Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                         Poorest                                               Wealthiest     compared with
Funding source                  State      Group 1     Group 2       Group 3       Group 4        Group 5     poorest groupa
Localb                        $2,437           $1,136            $1,975           $2,459         $2,864            $3,765                     3.31
State                          2,166            3,467                2,628         2,144           1,739               837                    0.24
Totalc                        $4,603           $4,603            $4,603           $4,603         $4,603            $4,603                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




Figure XLVIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Texas Could Have      Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            6,000
1991-92
                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding




                                          Page 283                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                        Appendix XLVIII
                                        State Profile: Texas




Figure XLVIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Texas Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year     4,000
1991-92

                                        3,000


                                        2,000


                                        1,000


                                           0
                                                 Poorest                                   Wealthiest
                                                                 Groups of Districts
                                                Actual State Funding
                                                State Funding if Each Student Received the Average




                                        Page 284                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix XLIX

State Profile: Utah


                                      As table XLIX.1 shows, in school year 1991-92, the state provided about
Actual Education                      60 percent of the total funding to Utah’s school districts. Total funding
Funding Distribution                  (state and local funds combined) per weighted pupil in Utah averaged
in School Year 1991-92                $3,177 with an implicit foundation level of $2,240 for each student, which
                                      is about 71 percent of the average and represents the state’s equalization
                                      effort. (To compare this effort with those of other states, see fig. 5.) The
                                      targeting score for state funding was –.172, indicating that state education
                                      funds were targeted to poor districts.114 (To compare this score with those
                                      of other states, see table V.1 in app. V.) The fiscal neutrality score was
                                      .036, indicating that total funding increased as district income increased.115
                                       (To compare this score with those of other states, see fig. 1.) A Utah
                                      education official reported that the state had changed its school finance
                                      system since school year 1991-92 to increase funding to poor districts
                                      compared with wealthy districts (see app. LVI). To put the state’s school
                                      finance system in perspective, table XLIX.2 presents demographic data for
                                      school year 1991-92 for five groups of districts of increasing district
                                      income.

Table XLIX.1: Summary Data for Utah
in School Year 1991-92
                                      Average total funding per weighted pupila                                                              $3,177
                                      State share of total funding (percent)                                                                      60.2
                                                                           b
                                      Targeting score (state funds)                                                                           –.172
                                      Implicit foundation levelc                                                                             $2,240
                                      Equalization effortd                                                                                        70.5
                                      Fiscal neutrality scoree                                                                                    .036
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                       This is the elasticity of state funding relative to district income. The score is not significantly
                                      different from 0.
                                      c
                                        This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                        This is the elasticity of total (state and local) funding relative to district income. The score is not
                                      significantly different from 0.




                                      114
                                           However, this score is not significantly different from 0.
                                      115
                                           See footnote 114.



                                      Page 285                                                      GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix XLIX
                                            State Profile: Utah




Table XLIX.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                  Group 1           Group 2            Group 3        Group 4                Group 5
Total districts                             40                          16                12                 2              1a                       9
Total pupils                            456,552                   105,334            47,601           123,040         80,330                    100,247
Poverty rate (percent)                     12.1                       13.3              13.1                7.8          12.2                      15.6
Disabled rate (percent)                    10.6                       11.2              10.4                9.8           9.5                      12.2
Per pupil income                        $41,385                   $28,599           $35,986           $39,903        $43,367                    $57,616
Tax effortb                              $30.43                    $45.72            $37.21            $27.55         $23.50                     $26.86
                                            a
                                                Salt Lake City was the only district in this group.
                                            b
                                                Local funding raised for every $1,000 of district income.



                                            Table XLIX.3 presents data on how state and local funding was distributed
                                            among the five groups of Utah districts. Utah’s equalization policies
                                            eliminated the funding disparity between the wealthy and poor groups,
                                            resulting in poor districts having 1 percent more funding than wealthy
                                            districts. Figure XLIX.1 provides table information in graphic form.


Table XLIX.3: State and Local Funding Distribution in Utah, School Year 1991-92
                                                                Mean funding per weighted pupil                                       Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                 Wealthiest      compared with
Funding source                  State       Group 1              Group 2           Group 3            Group 4        Group 5      poorest groupa
Local                          $1,266            $1,318            $1,338            $1,081            $1,006         $1,583                       1.20
State                           1,911            $2,015            $2,103            $2,001            $1,804         $1,718                       0.85
Total                          $3,177            $3,333            $3,441            $3,082            $2,809         $3,301                       0.99
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




                                            Page 286                                                     GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix XLIX
                                         State Profile: Utah




Figure XLIX.1: State and Local Funding
Distribution in Utah, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         4,000


                                         3,000


                                         2,000


                                         1,000


                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table XLIX.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure XLIX.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure XLIX.3.


Table XLIX.4: How State and Local Funding Would Have Been Distributed If Each District in Utah Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                 State      Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $1,265            $870            $1,102           $1,242         $1,344            $1,724                     1.98
State                          1,911           2,307                2,075         1,935           1,833             1,453                    0.63
Totalc                        $3,177          $3,177            $3,177           $3,177         $3,177            $3,177                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




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                                       Appendix XLIX
                                       State Profile: Utah




Figure XLIX.2: How State and Local
Funding Would Have Been Distributed
If Each District in Utah Could Have    Funding per Weighted Pupil (Dollars)
Spent the Average, School Year         4,000
1991-92

                                       3,000


                                       2,000


                                       1,000


                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure XLIX.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Utah Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    2,500
1991-92
                                       2,000

                                       1,500


                                       1,000


                                        500


                                           0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 288                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix L

State Profile: Vermont


                                      As table L.1 shows, in school year 1991-92, the state provided 29 percent of
Actual Education                      the total funding to Vermont’s school districts. Total funding (state and
Funding Distribution                  local funds combined) per weighted pupil in Vermont averaged $7,722 with
in School Year 1991-92                an implicit foundation level of $3,453 for each student, which is about
                                      45 percent of the average and represents the state’s equalization effort. (To
                                      compare this effort with those of other states, see fig. 5.) The targeting
                                      score for state funding was –.539, indicating that state education funds
                                      were targeted to poor districts. (To compare this score with those of other
                                      states, see table V.1 in app. V.) The fiscal neutrality score was .176,
                                      indicating that total funding increased as district income increased. (To
                                      compare this score with those of other states, see fig. 1.) To put the state’s
                                      school finance system in perspective, table L.2 presents demographic data
                                      for school year 1991-92 for five groups of districts of increasing district
                                      income.

Table L.1: Summary Data for Vermont
in School Year 1991-92
                                      Average total funding per weighted pupila                                                    $7,722
                                      State share of total funding (percent)                                                          29.0
                                                                             b
                                      Targeting score (state funds)                                                                 –.539
                                      Implicit foundation levelc                                                                   $3,453
                                      Equalization effortd                                                                            44.7
                                      Fiscal neutrality scoree                                                                        .176
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                          This is the elasticity of state funding relative to district income.
                                      c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                          This is the elasticity of total (state and local) funding relative to district income.




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                                           Appendix L
                                           State Profile: Vermont




Table L.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                           236                         39               44                  56             52                      45
Total pupils                            92,491                   18,516           17,861            19,128          17,890                     19,096
Poverty rate (percent)                    11.8                      14.2             11.4             10.6             10.5                      12.2
Disabled rate (percent)                   10.4                      11.0             10.3             11.0             10.4                       9.6
Per pupil income                    $112,652                    $56,715          $83,165         $102,725         $131,592                $186,672
Tax efforta                             $48.97                   $66.35           $50.78            $54.05          $50.74                     $39.30
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table L.3 presents data on how state and local funding was distributed
                                           among the five groups of Vermont districts. Vermont’s equalization
                                           policies reduced the funding disparity between the wealthy and poor
                                           groups from about 91 to 31 percent. Figure L.1 provides table information
                                           in graphic form.


Table L.3: State and Local Funding Distribution in Vermont, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                  State      Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $5,479            $3,800           $4,212           $5,577            $6,656          $7,273                       1.91
State                           2,243             2,677            3,019            2,657            1,825            1,180                      0.44
Total                         $7,722            $6,478           $7,231           $8,233            $8,481          $8,454                       1.31
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




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                                       Appendix L
                                       State Profile: Vermont




Figure L.1: State and Local Funding
Distribution in Vermont, School Year
1991-92                                Funding per Weighted Pupil (Dollars)
                                       10,000


                                        8,000


                                        6,000


                                        4,000


                                        2,000


                                            0
                                                  Poorest                             Wealthiest
                                                                Groups of Districts
                                            Local Funding
                                            State Funding



                                       Table L.4 provides data on the distribution of state and local funding if all
How Funding Would                      districts could have spent the average total funding per weighted pupil
Have Been                              with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts               effort without changing the state share or the total funding for education.
                                       Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                   possible foundation level (the state average). Figure L.2 provides this
Average on Each                        information in graphic form. The difference between how state funding
                                       was actually distributed and how it would have been distributed if districts
Student                                could have financed the average is shown in figure L.3.




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                                         Appendix L
                                         State Profile: Vermont




Table L.4: How State and Local Funding Would Have Been Distributed If Each District in Vermont Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                             Funding of
                                                                                                           wealthiest group
                                        Poorest                                              Wealthiest     compared with
Funding source                  State     Group 1     Group 2        Group 3        Group 4      Group 5    poorest groupa
Localb                         $5,507         $2,736             $4,063        $4,983           $6,439            $9,198                      3.36
                                                                                                                          c
State                           2,214          4,986              3,659          2,739            1,283           –1,476                     –0.30
Totald                         $7,722         $7,722             $7,722        $7,722           $7,722            $7,722                      1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                           The state would have had to recapture this amount of local funding from these districts for
                                         distribution to other districts.
                                         d
                                             The average is the maximum foundation level possible in a state.




Figure L.2: How State and Local
Funding Would Have Been Distributed
If Each District in Vermont Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year           10,000
1991-92
                                             8,000

                                             6,000

                                             4,000

                                             2,000

                                                 0

                                         (2,000)
                                                       Poorest                                  Wealthiest
                                                                     Groups of Districts
                                                  Local Funding
                                                  State Funding




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                                         Appendix L
                                         State Profile: Vermont




Figure L.3: Comparison of Actual State
Funding With State Funding Assuming
Each District in Vermont Could Have      Funding per Weighted Pupil (Dollars)
Spent the Average, School Year            6,000
1991-92

                                          4,000


                                          2,000


                                              0


                                         (2,000)
                                                    Poorest                                Wealthiest
                                                                  Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                         Page 293                                             GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LI

State Profile: Virginia


                                        As table LI.1 shows, in school year 1991-92, the state provided 36 percent
Actual Education                        of the total funding to Virginia’s school districts. Total funding (state and
Funding Distribution                    local funds combined) per weighted pupil in Virginia averaged $4,713 with
in School Year 1991-92                  an implicit foundation level of $2,541 for each student, which is about
                                        54 percent of the average and represents the state’s equalization effort. (To
                                        compare this effort with those of other states, see fig. 5.) The targeting
                                        score for state funding was –.499, indicating that state education funds
                                        were targeted to poor districts. (To compare this score with those of other
                                        states, see table V.1 in app. V.) The fiscal neutrality score was .377,
                                        indicating that total funding increased as district income increased. (To
                                        compare this score with those of other states, see fig. 1.) To put the state’s
                                        school finance system in perspective, table LI.2 presents demographic data
                                        for school year 1991-92 for five groups of districts of increasing district
                                        income.

Table LI.1: Summary Data for Virginia
in School Year 1991-92
                                        Average total funding per weighted pupila                                                    $4,713
                                        State share of total funding (percent)                                                          36.0
                                                                               b
                                        Targeting score (state funds)                                                                 –.499
                                        Implicit foundation levelc                                                                   $2,541
                                        Equalization effortd                                                                            53.9
                                        Fiscal neutrality scoree                                                                        .377
                                        a
                                            The average is the maximum foundation level possible in a state.
                                        b
                                            This is the elasticity of state funding relative to district income.
                                        c
                                         This is the minimum amount of total funding the state’s equalization policies would enable
                                        districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                        d
                                            This is the implicit foundation as a percent of the average.
                                        e
                                            This is the elasticity of total (state and local) funding relative to district income.




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                                             Appendix LI
                                             State Profile: Virginia




Table LI.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                           Wealthiest
                                           State                 Group 1          Group 2           Group 3         Group 4                  Group 5
Total districts                             133                         40               37                  9              34                       13
Total pupils                         1,017,948                    205,812          201,384          223,676          185,625                     201,451
Poverty rate (percent)                      13.4                      20.3             15.4             10.5             14.9                        6.0
Disabled rate (percent)                     11.3                      10.6             10.4             10.8             12.1                       12.8
Per pupil income                         $93,199                  $62,643          $74,607          $80,465        $101,389                 $149,596
Tax efforta                               $31.55                   $28.65           $28.34            $31.86          $34.66                      $32.15
                                             a
                                                 Local funding raised for every $1,000 of district income.



                                             Table LI.3 presents data on how state and local funding was distributed
                                             among the five groups of Virginia districts. Virginia’s equalization policies
                                             reduced the funding disparity between the wealthy and poor groups from
                                             about 168 to 38 percent. Figure LI.1 provides table information in graphic
                                             form.


Table LI.3: State and Local Funding Distribution in Virginia, School Year 1991-92
                                                                Mean funding per weighted pupil                                        Funding of
                                                                                                                                  wealthiest group
                                           Poorest                                                               Wealthiest        compared with
Funding source                   State       Group 1             Group 2          Group 3           Group 4         Group 5        poorest groupa
Local                          $3,018             $1,802           $2,100           $2,537            $3,555          $4,828                        2.68
State                           1,695               2,336            2,110            1,718            1,612              874                       0.37
Total                          $4,713             $4,138           $4,210           $4,255            $5,167          $5,701                        1.38
                                             a
                                              This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                             funding.




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                                        Appendix LI
                                        State Profile: Virginia




Figure LI.1: State and Local Funding
Distribution in Virginia, School Year
1991-92                                 Funding per Weighted Pupil (Dollars)
                                        6,000

                                        5,000

                                        4,000

                                        3,000

                                        2,000

                                        1,000

                                            0
                                                  Poorest                               Wealthiest
                                                                  Groups of Districts
                                                Local Funding
                                                State Funding



                                        Table LI.4 provides data on the distribution of state and local funding if all
How Funding Would                       districts could have spent the average total funding per weighted pupil
Have Been                               with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                effort without changing the state share or the total funding for education.
                                        Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                    possible foundation level (the state average). Figure LI.2 provides this
Average on Each                         information in graphic form. The difference between how state funding
                                        was actually distributed and how it would have been distributed if districts
Student                                 could have financed the average is shown in figure LI.3.




                                        Page 296                                           GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix LI
                                          State Profile: Virginia




Table LI.4: How State and Local Funding Would Have Been Distributed If Each District in Virginia Could Have Spent the
Average, School Year 1991-92
                                                      Mean funding per weighted pupil                              Funding of
                                                                                                             wealthiest group
                                        Poorest                                                 Wealthiest     compared with
Funding source                  State     Group 1     Group 2        Group 3        Group 4        Group 5     poorest groupa
Localb                         $3,014          $2,026             $2,434        $2,634           $3,248            $4,813                      2.38
                                                                                                                           c
State                            1,699          2,687              2,279          2,079            1,465            –$100                     –0.04
Totald                         $4,713          $4,713             $4,713        $4,713           $4,713            $4,713                      1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                            The state would have had to recapture this amount of local funding from these districts for
                                          distribution to other districts.
                                          d
                                              The average is the maximum foundation level possible in a state.




Figure LI.2: How State and Local
Funding Would Have Been Distributed
If Each District in Virginia Could Have   Funding per Weighted Pupil (Dollars)
Spent the Average, School Year             5,000
1991-92
                                              4,000

                                              3,000

                                              2,000

                                              1,000

                                                  0

                                          (1,000)
                                                        Poorest                                  Wealthiest
                                                                      Groups of Districts
                                                   Local Funding
                                                   State Funding




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                                       Appendix LI
                                       State Profile: Virginia




Figure LI.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Virginia     Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   3,000
Year 1991-92
                                       2,500

                                       2,000

                                       1,500

                                       1,000

                                        500

                                           0

                                       (500)
                                                Poorest                                   Wealthiest
                                                                 Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 298                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LII

State Profile: Washington


                                    As table LII.1 shows, in school year 1991-92, the state provided about
Actual Education                    75 percent of the total funding to Washington’s school districts. Total
Funding Distribution                funding (state and local funds combined) per weighted pupil in
in School Year 1991-92              Washington averaged $5,302 with an implicit foundation level of $4,025 for
                                    each student, which is about 76 percent of the average and represents the
                                    state’s equalization effort. (To compare this effort with those of other
                                    states, see fig. 5.) The targeting score for state funding was –.009,
                                    indicating that state education funds were targeted to poor districts.116 (To
                                    compare this score with those of other states, see table V.1 in app. V.) The
                                    fiscal neutrality score was .055, indicating that total funding increased as
                                    district income increased. (To compare this score with those of other
                                    states, see fig. 1.) To put the state’s school finance system in perspective,
                                    table LII.2 presents demographic data for school year 1991-92 for five
                                    groups of districts of increasing district income.

Table LII.1: Summary Data for
Washington in School Year 1991-92
                                    Average total funding per weighted pupila                                                              $5,302
                                    State share of total funding (percent)                                                                   75.2
                                                                           b
                                    Targeting score (state funds)                                                                           –.009
                                    Implicit foundation levelc                                                                             $4,025
                                    Equalization effortd                                                                                     75.9
                                    Fiscal neutrality scoree                                                                                 .055
                                    a
                                        The average is the maximum foundation level possible in a state.
                                    b
                                     This is the elasticity of state funding relative to district income. The score is not significantly
                                    different from 0.
                                    c
                                      This is the minimum amount of total funding the state’s equalization policies would enable
                                    districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                    d
                                        This is the implicit foundation as a percent of the average.
                                    e
                                        This is the elasticity of total (state and local) funding relative to district income.




                                    116
                                         However, this score is not significantly different from 0.



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                                            Appendix LII
                                            State Profile: Washington




Table LII.2: Demographic Context in School Year 1991-92
                                                   Poorest                                                                             Wealthiest
                                          State                 Group 1          Group 2           Group 3             Group 4              Group 5
Total districts                            290                        104               50                  45                 43                   48
Total pupils                            860,198                  176,414          166,660          179,429             170,415                  167,280
Poverty rate (percent)                     14.3                      20.8             12.3             14.5                 13.3                   10.4
Disabled rate (percent)                     9.6                      10.3               9.5            10.4                   8.8                   8.8
Per pupil income                        $82,373                  $50,688          $64,265          $73,890             $87,323             $137,883
Tax efforta                              $15.84                   $17.72           $17.93            $17.14              $15.96                  $13.44
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table LII.3 presents data on how state and local funding was distributed
                                            among the five groups of Washington districts. Washington’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 99 to 4 percent. Figure LII.1 provides table information
                                            in graphic form.


Table LII.3: State and Local Funding Distribution in Washington, School Year 1991-92
                                                               Mean funding per weighted pupil                                           Funding of
                                                                                                                                    wealthiest group
                                          Poorest                                                                Wealthiest          compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5          poorest groupa
Local                          $1,314              $915           $1,147           $1,279            $1,379          $1,824                        1.99
State                           3,988              4,337            4,094            4,013            4,003            3,657                       0.84
Total                          $5,302            $5,252           $,5241           $5,292            $5,382          $5,481                        1.04
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




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                                          Appendix LII
                                          State Profile: Washington




Figure LII.1: State and Local Funding
Distribution in Washington, School
Year 1991-92                              Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table LII.4 provides data on the distribution of state and local funding if all
How Funding Would                         districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure LII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure LII.3.


Table LII.4: How State and Local Funding Would Have Been Distributed If Each District in Washington Could Have Spent
the Average, School Year 1991-92
                                                      Mean funding per weighted pupil                            Funding of
                                                                                                            wealthiest group
                                         Poorest                                               Wealthiest    compared with
Funding source                   State     Group 1     Group 2       Group 3        Group 4       Group 5    poorest groupa
Localb                         $1,320            $797            $1,031           $1,169         $1,408            $2,233                     2.80
State                           3,981           4,505                4,271         4,132           3,894             3,069                    0.68
Totalc                         $5,302          $5,302            $5,302           $5,302         $5,302            $5,302                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




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                                       Appendix LII
                                       State Profile: Washington




Figure LII.2: How State and Local
Funding Would Have Been Distributed
If Each District in Washington Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    6,000
1991-92
                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                          0
                                                 Poorest                                   Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure LII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Washington   Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   5,000
Year 1991-92
                                       4,000

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                   Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 302                                                GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LIII

State Profile: West Virginia


                                      As table LIII.1 shows, in school year 1991-92, the state provided about
Actual Education                      73 percent of the total funding to West Virginia’s school districts. Total
Funding Distribution                  funding (state and local funds combined) per weighted pupil in West
in School Year 1991-92                Virginia averaged $4,927 with an implicit foundation level of $4,028 for
                                      each student, which is about 82 percent of the average and represents the
                                      state’s equalization effort. (To compare this effort with those of other
                                      states, see fig. 5.) The targeting score for state funding was –.127,
                                      indicating that state education funds were targeted to poor districts. (To
                                      compare this score with those of other states, see table V.1 in app. V.) The
                                      fiscal neutrality score was .071, indicating that total funding increased as
                                      district income increased.117 (To compare this score with those of other
                                      states, see fig. 1.) To put the state’s school finance system in perspective,
                                      table LIII.2 presents demographic data for school year 1991-92 for five
                                      groups of districts of increasing district income.

Table LIII.1: Summary Data for West
Virginia in School Year 1991-92
                                      Average total funding per weighted pupila                                                             $4,927
                                      State share of total funding (percent)                                                                      72.5
                                                                            b
                                      Targeting score (state funds)                                                                          –.127
                                      Implicit foundation levelc                                                                            $4,028
                                      Equalization effortd                                                                                        81.8
                                      Fiscal neutrality scoree                                                                                    .071
                                      a
                                          The average is the maximum foundation level possible in a state.
                                      b
                                          This is the elasticity of state funding relative to district income.
                                      c
                                       This is the minimum amount of total funding the state’s equalization policies would enable
                                      districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                      d
                                          This is the implicit foundation as a percent of the average.
                                      e
                                        This is the elasticity of total (state and local) funding relative to district income. The score is not
                                      significantly different from 0.




                                      117
                                           However, this score is not significantly different from 0.



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                                             Appendix LIII
                                             State Profile: West Virginia




Table LIII.2: Demographic Context in School Year 1991-92
                                                    Poorest                                                                          Wealthiest
                                           State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                              55                         15               17                  12              6                        5
Total pupils                             320,249                   61,797           66,219            69,242          52,010                      70,981
Poverty rate (percent)                      25.6                      37.7             27.5             22.8             18.6                       21.1
Disabled rate (percent)                     13.4                      14.0             14.2             12.8             12.9                       13.0
Per pupil income                         $58,725                  $38,898          $48,913          $57,314          $66,647                     $80,711
Tax efforta                               $23.03                   $25.84           $22.84            $21.44          $25.09                      $22.05
                                             a
                                                 Local funding raised for every $1,000 of district income.



                                             Table LIII.3 presents data on how state and local funding was distributed
                                             among the five groups of West Virginia districts. West Virginia’s
                                             equalization policies reduced the funding disparity between the wealthy
                                             and poor groups from about 70 to 4 percent. Figure LIII.1 provides table
                                             information in graphic form.


Table LIII.3: State and Local Funding Distribution in West Virginia, School Year 1991-92
                                                                Mean funding per weighted pupil                                        Funding of
                                                                                                                                  wealthiest group
                                           Poorest                                                                Wealthiest       compared with
Funding source                   State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                          $1,353             $1,032           $1,130           $1,216            $1,645          $1,759                        1.70
State                           3,574               3,827            3,698            3,624            3,462            3,284                       0.86
Total                          $4,927             $4,859           $4,828           $4,840            $5,107          $5,044                        1.04
                                             a
                                              This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                             funding.




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                                          Appendix LIII
                                          State Profile: West Virginia




Figure LIII.1: State and Local Funding
Distribution in West Virginia, School
Year 1991-92                              Funding per Weighted Pupil (Dollars)
                                          6,000

                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                                 0
                                                       Poorest                                   Wealthiest
                                                                        Groups of Districts
                                                     Local Funding
                                                     State Funding



                                          Table LIII.4 provides data on the distribution of state and local funding if
How Funding Would                         all districts could have spent the average total funding per weighted pupil
Have Been                                 with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                  effort without changing the state share or the total funding for education.
                                          Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                      possible foundation level (the state average). Figure LIII.2 provides this
Average on Each                           information in graphic form. The difference between how state funding
                                          was actually distributed and how it would have been distributed if districts
Student                                   could have financed the average is shown in figure LIII.3.


Table LIII.4: How State and Local Funding Would Have Been Distributed If Each District in West Virginia Could Have Spent
the Average, School Year 1991-92
                                                       Mean funding per weighted pupil                             Funding of
                                                                                                              wealthiest group
                                         Poorest                                               Wealthiest       compared with
Funding source                   State     Group 1     Group 2       Group 3         Group 4       Group 5      poorest groupa
Localb                         $1,358            $874            $1,114           $1,335         $1,561            $1,882                     2.15
State                            3,569          4,053                3,813         3,592           3,367             3,045                    0.75
Totalc                         $4,927          $4,927            $4,927           $4,927         $4,927            $4,927                     1.00
                                          a
                                           This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                          funding.
                                          b
                                           This is the local funding that could have been raised assuming all districts had made the same
                                          average tax effort.
                                          c
                                              The average is the maximum foundation level possible in a state.




                                          Page 305                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                          Appendix LIII
                                          State Profile: West Virginia




Figure LIII.2: How State and Local
Funding Would Have Been Distributed
If Each District in West Virginia Could   Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year       6,000
1991-92
                                          5,000

                                          4,000

                                          3,000

                                          2,000

                                          1,000

                                              0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Local Funding
                                                  State Funding




Figure LIII.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in West            Funding per Weighted Pupil (Dollars)
Virginia Could Have Spent the             5,000
Average, School Year 1991-92
                                          4,000

                                          3,000


                                          2,000


                                          1,000


                                              0
                                                    Poorest                                  Wealthiest
                                                                   Groups of Districts
                                                  Actual State Funding
                                                  State Funding if Each Student Received the Average




                                          Page 306                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LIV

State Profile: Wisconsin


                                   As table LIV.1 shows, in school year 1991-92, the state provided about
Actual Education                   46 percent of the total funding to Wisconsin’s school districts. Total
Funding Distribution               funding (state and local funds combined) per weighted pupil in Wisconsin
in School Year 1991-92             averaged $5,865 with an implicit foundation level of $3,439 for each
                                   student, which is about 59 percent of the average and represents the
                                   state’s equalization effort. (To compare this effort with those of other
                                   states, see fig. 5.) The targeting score for state funding was –.270,
                                   indicating that state education funds were targeted to poor districts. (To
                                   compare this score with those of other states, see table V.1 in app. V.) The
                                   fiscal neutrality score was .129, indicating that total funding increased as
                                   district income increased. (To compare this score with those of other
                                   states, see fig. 1.) To put the state’s school finance system in perspective,
                                   table LIV.2 presents demographic data for school year 1991-92 for five
                                   groups of districts of increasing district income.

Table LIV.1: Summary Data for
Wisconsin in School Year 1991-92
                                   Average total funding per weighted pupila                                                    $5,865
                                   State share of total funding (percent)                                                          46.2
                                                                          b
                                   Targeting score (state funds)                                                                 –.270
                                   Implicit foundation levelc                                                                   $3,439
                                   Equalization effortd                                                                            58.6
                                   Fiscal neutrality scoree                                                                        .129
                                   a
                                       The average is the maximum foundation level possible in a state.
                                   b
                                       This is the elasticity of state funding relative to district income.
                                   c
                                    This is the minimum amount of total funding the state’s equalization policies would enable
                                   districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                   d
                                       This is the implicit foundation as a percent of the average.
                                   e
                                       This is the elasticity of total (state and local) funding relative to district income.




                                   Page 307                                                        GAO/HEHS-97-31 Reducing Funding Gaps
                                            Appendix LIV
                                            State Profile: Wisconsin




Table LIV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                           Wealthiest
                                          State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            426                        168               47                  79             42                       90
Total pupils                            813,614                  162,519          163,918          160,381          164,659                     162,137
Poverty rate (percent)                     14.1                      16.0             25.8             10.4             10.8                        7.2
Disabled rate (percent)                    11.0                      10.9             11.6             11.0             11.4                       10.2
Per pupil income                        $82,555                  $56,430          $68,951          $75,869          $85,530                $126,089
Tax efforta                              $38.31                   $47.27           $32.46            $40.43          $36.99                      $37.63
                                            a
                                                Local funding raised for every $1,000 of district income.



                                            Table LIV.3 presents data on how state and local funding was distributed
                                            among the five groups of Wisconsin districts. Wisconsin’s equalization
                                            policies reduced the funding disparity between the wealthy and poor
                                            groups from about 74 to about 8 percent. Figure LIV.1 provides table
                                            information in graphic form.


Table LIV.3: State and Local Funding Distribution in Wisconsin, School Year 1991-92
                                                               Mean funding per weighted pupil                                        Funding of
                                                                                                                                 wealthiest group
                                          Poorest                                                                Wealthiest       compared with
Funding source                  State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $3,157             $2,673           $2,297           $3,049            $3,158          $4,647                        1.74
State                           2,707              3,301            3,234            2,777            2,457            1,808                       0.55
Total                         $5,865             $5,974           $5,531           $5,825            $5,615          $6,455                        1.08
                                            a
                                             This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                            funding.




                                            Page 308                                                    GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix LIV
                                         State Profile: Wisconsin




Figure LIV.1: State and Local Funding
Distribution in Wisconsin, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         7,000

                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table LIV.4 provides data on the distribution of state and local funding if
How Funding Would                        all districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure LIV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure LIV.3.


Table LIV.4: How State and Local Funding Would Have Been Distributed If Each District in Wisconsin Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                            Funding of
                                                                                                           wealthiest group
                                        Poorest                                               Wealthiest     compared with
Funding source                  State     Group 1     Group 2       Group 3        Group 4       Group 5     poorest groupa
Localb                        $3,176          $2,158            $2,571           $2,921         $3,278            $4,954                     2.30
State                           2,689          3,707                3,294         2,944           2,586               911                    0.25
Totalc                        $5,865          $5,865            $5,865           $5,865         $5,865            $5,865                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 309                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix LIV
                                       State Profile: Wisconsin




Figure LIV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Wisconsin Could    Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    7,000
1991-92
                                       6,000

                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure LIV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Wisconsin    Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   4,000
Year 1991-92

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 310                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LV

State Profile: Wyoming


                                 As table LV.1 shows, in school year 1991-92, the state provided about
Actual Education                 53 percent of the total funding to Wyoming’s school districts. Total funding
Funding Distribution             (state and local funds combined) per weighted pupil in Wyoming averaged
in School Year 1991-92           $5,920 with an implicit foundation level of $3,111 for each student, which
                                 is about 53 percent of the average and represents the state’s equalization
                                 effort. (To compare this effort with those of other states, see fig. 5.) The
                                 targeting score for state funding was .000, indicating that state education
                                 funds were not targeted to poor or wealthy districts.118 (To compare this
                                 score with those of other states, see table V.1 in app. V.) The fiscal
                                 neutrality score was –.196, indicating that total funding increased as
                                 district income decreased.119 (To compare this score with those of other
                                 states, see fig. 1.) To put the state’s school finance system in perspective,
                                 table LV.2 presents demographic data for school year 1991-92 for five
                                 groups of districts of increasing district income.

Table LV.1: Summary Data for
Wyoming in School Year 1991-92
                                 Average total funding per weighted pupila                                                             $5,920
                                 State share of total funding (percent)                                                                      52.5
                                                                      b
                                 Targeting score (state funds)                                                                               .000
                                 Implicit foundation levelc                                                                            $3,111
                                 Equalization effortd                                                                                        52.5
                                 Fiscal neutrality scoree                                                                               –.196
                                 a
                                     The average is the maximum foundation level possible in a state.
                                 b
                                  This is the constrained score (elasticity of state funding relative to district income) used to
                                 calculate the state’s implicit foundation level. The actual targeting elasticity is .296, which is not
                                 statistically different from 0.
                                 c
                                   This is the minimum amount of total funding the state’s equalization policies would enable
                                 districts to spend for each student, assuming all districts had made the same minimum tax effort.
                                 d
                                     This is the implicit foundation as a percent of the average.
                                 e
                                   This is the elasticity of total (state and local) funding relative to district income. The score is not
                                 significantly different from 0.




                                 118
                                   This is the constrained targeting score used to calculate the state’s implicit foundation level. This
                                 differs from the actual targeting score found in table V.1 in app. V.
                                 119
                                      However, this score is not significantly different from 0.



                                 Page 311                                                      GAO/HEHS-97-31 Reducing Funding Gaps
                                           Appendix LV
                                           State Profile: Wyoming




Table LV.2: Demographic Context in School Year 1991-92
                                                  Poorest                                                                          Wealthiest
                                         State                 Group 1          Group 2           Group 3          Group 4                 Group 5
Total districts                            49                         17               10                  13              5                        4
Total pupils                           101,017                   20,293           19,411            21,327          19,421                      20,565
Poverty rate (percent)                    13.8                      14.5             12.9             13.9             14.3                       13.2
Disabled rate (percent)                   10.3                        9.5              9.7            11.2             11.0                        9.7
Per pupil income                       $55,152                  $37,739          $48,824          $55,741          $61,767                     $71,450
Tax efforta                             $51.22                   $90.83           $82.84            $59.54          $28.88                      $21.79
                                           a
                                               Local funding raised for every $1,000 of district income.



                                           Table LV.3 presents data on how state and local funding was distributed
                                           among the five groups of Wyoming districts. Wyoming’s equalization
                                           policies resulted in wealthy districts having 16 percent less funding than
                                           poor districts. Figure LV.1 provides table information in graphic form.


Table LV.3: State and Local Funding Distribution in Wyoming, School Year 1991-92
                                                              Mean funding per weighted pupil                                        Funding of
                                                                                                                                wealthiest group
                                         Poorest                                                                Wealthiest       compared with
Funding source                 State       Group 1             Group 2          Group 3           Group 4          Group 5       poorest groupa
Local                         $2,810            $3,405           $4,015           $3,355            $1,801          $1,546                        0.45
State                          3,111              3,169            2,148            2,782            3,516            3,968                       1.25
Total                         $5,920            $6,573           $6,163           $6,137            $5,317          $5,514                        0.84
                                           a
                                            This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                           funding.




                                           Page 312                                                    GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix LV
                                         State Profile: Wyoming




Figure LV.1: State and Local Funding
Distribution in Wyoming, School Year
1991-92                                  Funding per Weighted Pupil (Dollars)
                                         7,000

                                         6,000

                                         5,000

                                         4,000

                                         3,000

                                         2,000

                                         1,000

                                                0
                                                      Poorest                                   Wealthiest
                                                                       Groups of Districts
                                                    Local Funding
                                                    State Funding



                                         Table LV.4 provides data on the distribution of state and local funding if all
How Funding Would                        districts could have spent the average total funding per weighted pupil
Have Been                                with an average tax effort. This assumes the state optimized its targeting
Distributed If Districts                 effort without changing the state share or the total funding for education.
                                         Under this scenario, the implicit foundation level equals the maximum
Could Have Spent the                     possible foundation level (the state average). Figure LV.2 provides this
Average on Each                          information in graphic form. The difference between how state funding
                                         was actually distributed and how it would have been distributed if districts
Student                                  could have financed the average is shown in figure LV.3.


Table LV.4: How State and Local Funding Would Have Been Distributed If Each District in Wyoming Could Have Spent the
Average, School Year 1991-92
                                                     Mean funding per weighted pupil                           Funding of
                                                                                                          wealthiest group
                                        Poorest                                              Wealthiest     compared with
Funding source                  State     Group 1     Group 2       Group 3        Group 4      Group 5     poorest groupa
Localb                        $2,811          $1,939            $2,509           $2,811         $3,117            $3,667                     1.89
State                          3,109           3,981                3,411         3,109           2,803             2,253                    0.57
Totalc                        $5,920          $5,920            $5,920           $5,920         $5,920            $5,920                     1.00
                                         a
                                          This ratio is determined by dividing the wealthiest districts’ funding by the poorest districts’
                                         funding.
                                         b
                                          This is the local funding that could have been raised assuming all districts had made the same
                                         average tax effort.
                                         c
                                             The average is the maximum foundation level possible in a state.




                                         Page 313                                                   GAO/HEHS-97-31 Reducing Funding Gaps
                                       Appendix LV
                                       State Profile: Wyoming




Figure LV.2: How State and Local
Funding Would Have Been Distributed
If Each District in Wyoming Could      Funding per Weighted Pupil (Dollars)
Have Spent the Average, School Year    7,000
1991-92
                                       6,000

                                       5,000

                                       4,000

                                       3,000

                                       2,000

                                       1,000

                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Local Funding
                                               State Funding




Figure LV.3: Comparison of Actual
State Funding With State Funding
Assuming Each District in Wyoming      Funding per Weighted Pupil (Dollars)
Could Have Spent the Average, School   5,000
Year 1991-92
                                       4,000

                                       3,000


                                       2,000


                                       1,000


                                          0
                                                 Poorest                                  Wealthiest
                                                                Groups of Districts
                                               Actual State Funding
                                               State Funding if Each Student Received the Average




                                       Page 314                                               GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LVI

State Survey Results


               In this report, we relied on state and local funding data from the 1991-92
               school year. However, many states have made subsequent changes to their
               school finance system in response to legal changes or to concerns about
               equity. We telephoned officials in the 49 states to determine what changes
               had been implemented in the school finance system from school years
               1991-92 through 1995-96. We specifically asked about changes in targeting
               that would affect low-wealth districts and changes in a state’s share of
               total funding.120 These two factors affect the implicit foundation level that
               all districts in a state can finance with the same minimum tax effort—the
               greater the targeting effort to low-wealth districts or the greater the state
               share, or both, the greater the implicit foundation level.

               Education officials in over half the states (25) said their state had not
               increased the targeting of state funds to low-wealth districts since school
               year 1991-92. Officials in the other 24 states reported that their state was
               targeting more or many more state funds to low-wealth districts. We did
               not verify the statements of the state officials.

               Fewer states had increased the state share of total funding significantly.
               Officials in eight states reported an increase of 6 percentage points or
               more in the state share. Officials in 38 states reported that their state’s
               share of total funding had a net increase or decrease of 5 percentage
               points or less, and 3 states reported a decrease of 6 percentage points or
               more.121

               Among the states that had changed their finance system were Missouri and
               Michigan. These states reported using different approaches to raise
               revenue and target more funds to low-wealth districts. Missouri’s state
               share declined slightly, but changes implemented in 1993 resulted in
               increased targeting to low-wealth districts. The state developed a new
               formula that rewards districts for tax effort—the lower the property
               wealth and the higher the tax rate, the more state funding a district
               receives. In Michigan, the state share increased almost 45 percentage
               points between school years 1991-92 and 1994-95 as statewide property
               and sales taxes replaced the local property tax as the principal source of
               funding. Since 1994 (the year the new system was implemented), the
               lowest wealth districts have experienced an increase of about 50 percent
               in state funding; the highest wealth districts, however, have had to raise

               120
                 Not all states had school year 1995-96 data available: seven states reported changes as of school year
               1994-95, and two states reported changes as of school year 1993-94.
               121
                Because not all state officials knew the local contribution for capital expenditures and debt service,
               we asked state officials to estimate their state’s share of total funding exclusive of these categories.



               Page 315                                                  GAO/HEHS-97-31 Reducing Funding Gaps
                                         Appendix LVI
                                         State Survey Results




                                         their local property taxes to maintain former spending levels. Table LVI.1
                                         summarizes our findings of the changes states have made.


Table LVI.1: Summary of Changes to State School Finance Systems, School Years 1991-92 to 1995-96
                              Change in state
                            share (percentage         1995-96 targeting to low-wealth districts compared with 1991-92
State                                   points)       Much more                 More               Same               Less
Alabama                                     3.2                 X
Alaska                                     –0.8                                                       X
Arizona                                     2.0                                                       X
Arkansas                                    6.0                                                       X
                a
California                                 –9.7                                                       X
Colorado                                   11.2                                    X
Connecticutb                               –1.4                                    X
Delaware                                   –1.6                                                       X
Florida                                    –0.3                                                       X
Georgia                                     2.2                                                       X
       b
Idaho                                       0.4                                    X
Illinoisa                                  –1.1                                                       X
            b
Indiana                                     2.2                                    X
Iowa                                        0.8                                                       X
Kansas                                     17.6                                    X
Kentucky                                    2.4                                                       X
Louisiana                                  –6.0                 X
Maine                                      –5.0                                                       X
Maryland                                   –1.1                                    X
Massachusetts                               8.0                 X
Michiganb                                  44.9                 X
Minnesota                                   0.4                                    X
Mississippi                                 2.2                                    X
Missouri                                   –1.3                 X
Montana                                    –4.9                 X
Nebraska                                    0.2                                    X
Nevada                                     –6.9                                                       X
New Hampshire                              –1.0                                                       X
New Jersey                                 –5.0                                    X
New Mexico                                  0.0                                                       X
New York                                   –3.2                                                       X
North Carolina                             –1.0                                    X
North Dakota                               –4.0                                    X
                                                                                                                (continued)

                                         Page 316                                      GAO/HEHS-97-31 Reducing Funding Gaps
                             Appendix LVI
                             State Survey Results




                   Change in state
                 share (percentage             1995-96 targeting to low-wealth districts compared with 1991-92
State                       points)             Much more               More               Same                  Less
Ohiob                            –0.4                                       X
Oklahomab                          3.0                                                          X
Oregon                           30.0                                       X
Pennsylvania                     –1.1                                                           X
Rhode Island                       0.8                                      X
South Carolina                   –1.7                                                           X
South Dakota                     –0.4                                                           X
Tennessee                        10.0                      X
Texas                              1.1                                      X
Utah                             24.0                                       X
Vermont                          –3.4                                                           X
           b
Virginia                           2.1                                                          X
Washington                       –2.7                                                           X
West Virginia                    –4.0                                                           X
Wisconsin                          3.7                                                          X
Wyoming                            0.7                                                          X

                             a
                                 Change as of school year 1993-94.
                             b
                                 Change as of school year 1994-95.




                             Page 317                                           GAO/HEHS-97-31 Reducing Funding Gaps
Appendix LVII

GAO Contacts and Staff Acknowledgments


                  Eleanor L. Johnson, Assistant Director, (202) 512-7209
GAO Contacts      Barbara A. Billinghurst, Senior Evaluator, (206) 287-4867
                  Jerry C. Fastrup, Supervisory Economist, (202) 512-7211


                  Peter J. Bylsma, Evaluator-in-Charge, (206) 287-4881
Staff             Nancy Purvine, Evaluator
Acknowledgments   Virginia Vanderlinde, Evaluator




                  Page 318                                 GAO/HEHS-97-31 Reducing Funding Gaps
Glossary


Elasticity                  The percent change in one variable relative to a 1-percent change in
                            another variable.


Equalization                In the context of this report, a state’s effort to compensate for differences
                            in districts’ abilities to raise education revenues.


Equalization effort         The ratio of a state’s implicit foundation level to the maximum foundation
                            level (the state average).


Equity                      Equity in school finances is concerned with the distribution of education
                            funding or resources. To determine the equity of school finance systems,
                            experts recommend considering the following four issues: (1) who is to
                            benefit (taxpayers or public school students); (2) what objects are to be
                            equally distributed, such as revenues or key resources (for example,
                            curriculum and instruction), or outcomes (for example, student
                            achievement); (3) what principle is to be used for determining whether
                            distribution is equitable (such as vertical equity or fiscal neutrality); and
                            (4) the statistic used to measure the degree of equity.


Fiscal neutrality           A definition of equity that asserts that no relationship should exist
                            between educational spending per pupil and local district income per pupil
                            (or some other measure of fiscal capacity). In this study, a fiscal neutrality
                            score of 0 indicates that no relationship exists between district funding
                            and district income.


Fiscal neutrality score     The elasticity of total (state and local) funding relative to district income.

Implicit foundation level   The minimum amount of total funding per weighted pupil that a state’s
                            equalization policies implicitly enable districts to spend with the same
                            minimum local tax effort.


Maximum foundation level    The average amount of total funding per weighted pupil in a state.

Tax effort                  In this study, the tax effort is a ratio of a district’s local education revenue
                            to its income.




(104846)                    Page 319                                     GAO/HEHS-97-31 Reducing Funding Gaps
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