how much to spend per pupil. Increasingly over the last 30 years, voters in states have placed limits on how much can be spent from local sources and sometimes state sources as well. With this background in mind, we describe distinctions important to analyses of the equity of school finance systems.6

Child Versus Taxpayer Perspectives

When equity is approached out of a concern for opportunity, in many people's minds the child or student perspective is paramount. Thus, school-age children are most often the subject of an equity definition in school finance. Because we are discussing the financing of education with public funds, however, taxpayers are sometimes brought into definitions along with the children. Occasionally, the interests of both groups are served simultaneously in the same definition.

When children are the subject of equity definitions, differences among the children, such as whether they speak English as a second language, are mildly or severely handicapped, have learning disabilities, or are poor or minority, become important. Resources made available to different groups of children are often the principal concern of equity discussions, sometimes with the emphasis on fairness of access, but increasingly with an eye toward how differing resources relate to the costs of bringing each group of children to an acceptable (or adequate) performance level.

The school finance and public finance conceptions of taxpayer equity do not always conform to one another. From a school finance perspective, a system would be judged fair to taxpayers if every taxpayer was assured that a given tax rate would translate into the same amount of spending per pupil regardless of where the taxpayer lived. From a public finance perspective, on the other hand, a system would be judged fair to taxpayers on the basis of either the ability to pay or the benefit principle. The ability to pay principle enables one to judge how fairly tax burdens change as ability to pay changes. 7 Tax burdens are defined as reductions in welfare, usually measured by changes in income, and ability to pay is usually measured by annual or average lifetime income. Thus, while school finance taxpayer equity compares tax rates to spending per child, public finance taxpayer equity compares tax burdens to ability to pay.8

The benefit principle states that, where possible, taxation should relate to the value of the services that the tax provides. This idea can only apply when a direct relationship exists between a particular tax and a service (e.g., tolls and highway maintenance) and when the service does not involve a significant public goods aspects. While some have tried to link local property taxation and K-12 education in this way, it is difficult to do in states that finance large shares of K-12 education through general state taxes.

In general, neither the courts nor advocates nor researchers in school finance have focused on the public finance concepts of equity; rather, they have based taxpayer equity on the idea of fairness of tax rates faced by or effort exerted by

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