Balancing Conflicting Policy Objectives

The Case of School Finance Reform

Bibliographic Data

ID6362170
AuthorsJocelyn M Johnston, William Duncombe
Year1998
Volume58
Issue2
Pages145-145
Publication date1998-03-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenuePublic Administration Review (JOURNAL)
Journal identifiersISSN: 0033-3352 • E-ISSN: 1540-6210
PublisherWiley (PUBLISHER • GB)
DOI10.2307/976362
OpenAlexW2079235630
LanguageEN
Citations received6
References cited6

Public policy decisions frequently require the establishment of a balance between conflicting objectives. This is especially true for many current state policy efforts, particularly with regard to funding for public education. This policy area, which dominates state-local fiscal relationships, has been subjected to substantial challenges in recent years. While local governments have traditionally exercised significant control over public education policy, that control is increasingly constrained by recent state efforts--often prompted by court action--to alter the distribution of public education resources. As a result, the fiscal relationship between states and local governments is undergoing significant changes, characterized by substantial shifts toward more centralized models of funding public education. The shifts to greater state funding responsibility have generated conflicts associated with diminished local control over local government activities. Underlying the political tensions of shifting responsibilities is a fundamental trade-off between equity and efficiency objectives in the provision of public education. The principal factors driving increased state centralization are court-ordered improvement in interdistrict funding equity and local opposition to the property tax. However, public finance theory suggests that centralization may reduce the level of efficiency normally expected when services are provided closer to the people, where the conformity between citizen preferences and the services provided can be strengthened (Tiebout, 1956; Oates, 1972). Thus, states are striving to balance conflicting equity and efficiency objectives--the benefits associated with enhanced equity of educational opportunity as opposed to the decline in efficiency that may result from erosion of local budget control. A major school finance reform in Kansas in the early 1990s provides an opportunity to broaden our understanding of the dynamics associated with managing such conflicting objectives. In 1992, Kansas adopted a school funding reform that transferred significant public school funding decisions--both taxing and spending--to the state. However, the legislature attempted to balance the mandated equity changes with concessions to the concept of continued local fiscal control. The concessions are important in preserving some local voice in a traditional local function, but, potentially, they could threaten the major objective of the reform--equalized educational opportunity for all students. We begin with an overview of the common equity standards proposed for school finance systems and their compatibility with efficient provision of educational services. Since state courts have often served as the catalyst for finance reform, we briefly review the evolution of court decisions and how court action framed the nature of the Kansas reform. We then describe the Kansas system--both before and after the reform--and show how the legislature balanced competing equity (centralization) and efficiency (local control) goals. Using data from before and after the reform, we evaluate how these changes have affected various equity objectives. Our initial hypothesis was that the most important of the local control concessions--a local option budget provision--would help to provide a continued local role in education, but would lead to significant weakening of the relative equity goals stressed by the court. Our analysis suggests that, in fact, the local option budget has so far generated only moderate reductions in relative equity, and it may provide a fairly successful strategy for states to resolve the state-local conflict, and also to balance the equity and efficiency objectives of education reform. Equity Standards and Court Intervention In 1991, 40 percent of total local (i.e., substate) government spending in the United States was dedicated to elementary and secondary education, by far the largest share of local budgets

Business · Economics · Political science · Public economics · Finance · Housing Market and Economics · Local Government Finance and Decentralization · Public Administration · School Choice and Performance

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