Equity in School Finance: State Aid to Schools in New England Equity in School Finance: State Aid to Schools in New England

March 31, 1993

Perhaps the most widely held view of the Crash of 1987 is the Cascade Theory: the Despite the goal of equal access to comparable public education, spending disparities among school districts persist. All the New England states provide more school aid per pupil to poor districts than to rich districts. Nevertheless, districts with smaller per-pupil tax bases spend less per pupil and levy higher school tax rates than wealthier districts. Even in the two New England states with the smallest spending disparities, the richest one-fifth of the districts spend 20 percent more per pupil than the poorest fifth, on average.

Several difficulties prevent easy solutions to these inequities. While state governments want to reduce disparities in spending and tax rates, state-mandated or state-financed equal schooling runs counter to another tenet of public eduation, local decisionmaking. Thus states design their school aid formulas to encourage poorer local districts to spend more on schools, but no formula can guarantee a specific outcome. Furthermore, equal dollar spending by different districts does not ensure a "uniform" education. A number of state courts nationwide have ruled insufficient their state government's efforts to put rich and poor districts on a more equal footing, leading state legislators to seek better-funded and better-targeted aid plans.

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