Although we present evidence on what the new dollars that flowed to school districts as the result of court-ordered finance reforms enabled districts to purchase, we cannot address the ultimate question of the impact of finance reforms on student performance. None of the studies considered here collected student achievement data. In New Jersey and Kentucky, changes in state testing programs during the study period make pre- and post-study period comparisons impossible.

The chapter begins with a summary of three models of district response to changes in state education aid, followed by a brief description of the methodology used in the three state case studies. The next three sections report on (1) the fiscal response of districts in the three states to their 1990 school finance reform laws, (2) how districts chose to allocate new state aid dollars, and (3) what districts bought with these new dollars. In the concluding section, we examine the implications of our findings for policy and research. Throughout, our focus is on school finance equity as it was defined in court decisions during the early 1990s; we cannot address more recent issues of finance adequacy that are emerging in these and other states. Accordingly, for the most part, we employ theories and measures developed for equity analyses.

Models Of District Response To Changes In State Aid

Researchers have developed three models that are intended to explain how school districts respond to changes in available resources: intergovernmental grant theory, expenditure models, and decision-making models. This chapter relies on intergovernmental grant theory to understand how districts respond to changes in state aid; it makes use of expenditure models and decision-making models to interpret district responses to increases in resources. Clearly, the court cases reviewed here that attempted to change the way states raise and allocate dollars to districts are only one of a number of factors that affected district expenditure patterns during the early 1990s. Although we acknowledge that other factors also affected district actions, we do not review data on how spending might have changed in the absence of court cases, and so we restrict our analyses primarily to the impact of the court cases.

   

school finance reforms in the 1990s? Did the level of revenues available to districts from state and local sources change? By how much and why? Did expenditure patterns change? What did the new dollars buy?

2.  

What factors influenced these changes in revenues and expenditure decisions? What roles did state fiscal and nonfiscal education policies, district context, and district fiscal and administrative capacities play?

3.  

What are the implications of these findings for school finance reform policy and for research on the impact of finance reform policies?



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