School Finance Court Cases and Disparate Racial Impact

Abstract

Although analyses of state school finance systems rarely focus on the distribution of funds to students of different races, the advent of racial discrimination as an issue in school finance court cases may change that situation. In this article, we describe the background, analyses, and results of plaintiffs' testimony regarding racial discrimination in Campaign for Fiscal Equity Inc. v. State of New York. Plaintiffs employed multiple regression and public finance literature to show that New York State's school finance system had a disparate racial impact on New York City students. We review the legal basis for disparate racial impact claims, with particular emphasis on the role of quantitative statistical work, and then describe the model we developed and estimated for the court case. Finally, we discuss the defendants'rebuttal, the Court's decision, and conclude with observations about the role of analysis in judicial decision making in school finance.In the United States, each state is responsible for public elementary and secondary education services within its boundaries. Almost all states have chosen to set up local school districts to administer and deliver education, with the property tax as the primary local revenue source. These arrangements have created a nation of 50 school finance systems with substantial funding disparities across and within states. Plaintiffs in 45 states have challenged these finance systems in their state courts and, in almost one half the states, AUTHORS' NOTE: We thank Hella Bel Hadj Amor for assistance with some of the quantitative work and anonymous referees for helpful comments. Final responsibility for content lies with the authors. Stiefel, Schwartz, and Berne were consultants for the plaintiffs, and Berne testified for the plaintiffs in Campaign for Fiscal Equity Inc. v. State of New York (2001).

How to Reform Without Reforming: School District Racial Composition and Pennsylvania’s “Fair” Funding Formula

“…K-12 education finance policies in the United States are ostensibly “colorblind”—school funding is a responsibility of state governments, and none of the funding policies adopted by these governments explicitly considers race. However, for decades researchers have documented racial disparities in school funding (Baker & Green, 2005; Baker et al, 2020; Carey, 2004; EdBuild, 2019; Sosina & Weathers, 2019; Stiefel et al, 2005; Weathers & Sosina, 2019). To explain this pattern, scholars often focus on the way racial and economic segregation between school districts can impact inequities in local education funding (e.g., EdBuild, 2019).…”

“…Similarly, researchers have shown that state policies can create or exacerbate existing funding inequities (Alemán, 2007; Baker & Corcoran, 2012). Indeed, a handful of studies have even documented racial disparities in the distribution of state aid that is ostensibly designed to equalize education funding (Baker & Green, 2005; Chellman, 2008; Stiefel et al, 2005). These inequities can be created through what Baker and Green (2005) call “tricks of the trade” (p. 375).…”

“…This does not mean education funding is racially neutral, however. A number of studies have documented disparities in education funding between majority-non-student of color and majority-student of color school districts (Baker & Green, 2005; Baker et al, 2020; Carey, 2004; EdBuild, 2019; Stiefel et al, 2005). According to one estimate, predominately non-student of color, high-poverty school districts received, on average, $23 billion more in education funding than predominately student of color, high-poverty districts during the 2015 to 2016 school year (EdBuild, 2019).…”

“…Yet, not all changes to state education funding policies promote equity. Researchers have shown that policies enacted by state legislatures can actually exacerbate funding inequities, even when these policies are ostensibly designed to equalize resources (Baker & Corcoran, 2012; Baker & Green, 2005; Chellman, 2008; Stiefel et al, 2005). Even with court-mandated school finance reforms, the context of how each state legislature reacts to a court ruling can shape its effects.…”