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Behind the Funding Crisis Facing US Public Schools

NORTH Chicago School District 187 decides to dissolve itself as its tax revenues dry up and its deficit soars. A small district in Michigan (Kalkaska) opts to close its doors three months early for lack of funds rather than provide anything less than a "quality" education to students. The courts rule Alabama's entire education system unconstitutional and Tennessee's system of funding education unconstitutional.

These recent crises raise fundamental concerns about how we pay for education. Political, economic, social, and demographic changes resurface age-old questions and pose new and increasingly complex challenges for providing educational resources. At the very least, the situations faced by these and other troubled districts and states should serve as a warning to officials that now is the time to take a close look at the fiscal stability of their school systems and the funding equity of their states. Now i s the time to explore new ways to meet these demands, before a crisis occurs.

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To fully appreciate how daunting the task of redirecting existing resources or finding new sources of funding can be, it is important to understand the complexities that contribute to the current funding situation for schools. Perhaps the most intimidating aspect of funding schools is that it's only part of a package deal. In other words, we cannot approach school finance in isolation from other education reform efforts. Other issues include:

* Limited resources to tap for education. After years of being first in line, education is increasingly in competition, especially with Medicaid and corrections, for tight state dollars; property values, which produce the primary tax source for local education, are stagnant; government's costs for providing services have been passed from the federal to the state level, and in turn to the local level - the so-called "cascade" effect of fiscal responsibility; and following significant increases during the '80s, state funding of education has leveled off, forcing many districts to exhaust local resources to cover enrollment and inflation growth.

* Increased demands on the education system. Schools are experiencing an enrollment "boomlet" that includes more students with multiple and special needs; and rising poverty and language barriers pile more responsibility on urban, rural, and suburban districts.

* A resurgence of school finance equity lawsuits. More than half of the states have recently been or are now being sued by districts and community members who claim that states do not adequately and equitably fund schools; legal rulings citing unconstitutional funding often dominate legislative sessions, sending lawmakers on a long, frustrating search for additional money or ways to redistribute current resources.

* The cost of a high-quality education. There is a general consensus that students need to be learning at higher levels. But considerable disagreement remains as to whether a better education requires more money, a different allocation of existing funds, or both; the chicken-and-egg question appears as educators claim that improvements can't be achieved without sufficient (additional) funds, and policymakers and the public are reluctant to provide additional resources until student performance improves.

* A lack of community support. As passing property tax increases and bond elections become increasingly difficult, it is clear that educators must do a better job of communicating what is going on in their schools and why they need additional funding; an aging population (only 20 to 25 pecent of the voting population has children in school) means more senior citizens are on fixed or limited incomes with less of an ability to pay more and less of a connection to local schools; growing dissatisfaction with

public education's inability to address diverse needs and values is increasing the demand for tax dollars to support private and alternative schools. Given these and other demands on school funding, some key issues must be addressed, and more importantly, acted on. The central concern is how states and districts can create equitable, stable funding that supports a quality education system for each child.

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New York and Vermont are exploring the use of local income taxes to reduce the demand solely on property taxes. Kansas has implemented a funding system that attempts to spread property wealth more evenly to every child throughout the state, rather than keeping tax revenue within district boundaries. Other states and districts are also beginning to recognize that the name of the game is doing a better job with less money. But the battles within education for tight dollars will likely increase as more peop le are pushed to give up familiar turf for something unknown.

The writing is on the wall. In order to thrive, and in some cases just to survive, school systems must reevaluate how they're doing business. They must understand where their money is going, where they can get by with less, and where they genuinely need more. They must work hard at clear communication with all of the players. They cannot ride out the current economic plight and return to business as usual. State policymakers and the public must be committed to providing system-wide quality education. Ban daid solutions will not fix the finance system or satisfy the courts. No longer can the caliber of a child's education be determined by the property wealth of his or her district, the will and ability of the local tax payers to provide sufficient funds, or the political compromises of state lawmakers.


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