slopes, elasticities, and adjusted relationship measures from regressions of objects per child on full value of property wealth per child. Applications of these measures by numerous researchers in the years that followed demonstrated the lack of wealth neutrality in the states, whether or not they had adopted a form of power equalizing.25 Some state legislatures did change their systems to a form of power equalizing, although none moved to a fully implemented system. In 1986-87, six states used some form of this system, although by 1993-94 the number had dropped to two (Gold et al., 1995).

Research using the wealth neutrality concept continues to this day. Using 1991-92 data, the U.S. General Accounting Office recently completed a study that concluded that fiscal neutrality has not been achieved in most states: "Although most states pursued strategies to supplement the local funding of poor school districts, wealthier districts in 37 states had more total (state and local combined) 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" (1997:2).26

Some economists advocate the use of broader tax bases to fund education in order to make it more fiscally neutral and more acceptable to taxpayers (Strauss, 1995). Legal scholars are moving to new arguments in the face of defeats in state courts and perhaps a desire to look at outputs, as described by Minorini and Sugarman in their discussion of adequacy in Chapter 6 of this volume.

Horizontal Equity

Horizontal equity, as a children's concept, specifies that equally situated children should be treated equally.27 A challenge to users of the concept is how to identify students who are "equally situated." When analyzing inputs, researchers have usually defined general education, at-risk (or educationally disadvantaged), and special education students as separate groups. Intra-group equality of inputs is a reasonable criteria to apply to these groups. When the focus moves to outputs, however, horizontal equity is more difficult to apply. Nobody argues that outputs (such as achievement scores or graduation rates) should be the same (perfectly horizontally equitable) for all students. On the other hand, we do not use distinctions such as at-risk or disabled students to justify differences in outputs.28 Perhaps the idea of a sufficiently high level of achievement for all (one possible version of the adequacy idea) is a more meaningful concept for outputs than is horizontal equity.

The concept of horizontal equity has been used both ex ante and ex post, although most school finance research work and evidence submitted in court cases is ex post. Historically, analysts have applied the horizontal equity criterion to states and their districts, but increasingly schools are being compared this way as well. The concept with respect to inputs is well suited to school-level analysis, since funds targeted and students served by general education programs

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