Financial Resources

Promising/Transformational Practices for Financial Resources

Many public educational finance programs, strategies, and activities are currently being implemented across the nation. In this section, those practices that have shown promise for potentially transforming the financing of public education are described.

How States Are Addressing Inadequacy and Inequities in Funding

Several state examples were reviewed by the committee. Included are Kansas, Texas, and Georgia. A study conducted in Nevada is also included.

Kansas

Recently, a Kansas court ruled their state’s school funding cuts unconstitutional. In an extensive decision from Gannon vs. State, the district court held that the reductions in state aid adopted by the legislature since the Great Recession were unconstitutional. In 2013, the court held that the state had violated prior orders of the state supreme court and enjoined the state from reducing state aid. Learn more.

Texas

Texas adopted changes to its state school finance system in 2006 (H.B.1) for its 1,000-plus school districts, focused specifically on using state aid for tax relief (to buy down or “compress” local property tax rates). Texas was already operating a system with a need- and cost-adjusted foundation level. That system was retained in the modified formula. The Texas State Supreme Court ruling in 2005 did not pertain to inadequate funding. Instead, the court ruled that by effectively forcing school districts to levy their maximum property tax rate, the school finance system had created a statewide property tax, which is impermissible under the Texas Constitution. The court ruled that the system no longer provided “meaningful discretion” for districts to raise additional revenue for their schools. Thus, the Texas legislature set out to correct those aspects of the formula, which limited meaningful discretion but set aside concerns over the equity or adequacy of funding (Edgewood VI, 2005). Recently, the judge ruled that the Texas school finance system was unconstitutional. Learn more.

Georgia

In 2011, the Georgia legislature passed HB 192, which established the State Education Finance Study Commission and charged the commission to study core student funding, funding equity, state/local funding partnerships, and other issues. The Commission produced and prioritized recommendations. When sorted into categories, the recommendations included: classroom technology and technology infrastructure, school counselors, student support services, professional learning, central and school administration, equalization, capital outlay, formula simplification, as well as changes specific to Georgia laws (Georgia State Department of Education, 2012).

Nevada Study

Nevada used best practices identified by Chambers and Levin (2009) to review their financing of public education for adequacy and equity. The review considered four areas: (a) the overall plan; (b) the development of an inventory of state finance systems; (c) an analysis of how comparable states addressed student needs and district characteristics; and (d) made recommendations for improving the funding model. Learn more.