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Proceedings of National Conference on School Finance(12th, New Orleans, Louisiana, March 23-25, 1969).Fiscal Planning for Schools in Transition.National Education Association, Washington, D.C.70271 p.

National Education Association, 1201 SixteenthStreet, Northwest, Washington, D.C. 20036 ($3.50)

EDRS Price MF-$1.25 HC Not Available from EDRS.Comparative Statistics, Conference Reports, CourtLitigation, Decentralization, *Educational Change,*Educational Finance, *Educational Planning, *EqualEducation, Equalization Aid, *Financial Needs,Financial Support, Lunch Programs, PoliticalInfluences, School Budget Elections, State Aid,Urban Schools

Some of the papers in this collection attempt todefine equality of educational opportunity, while others presentevidence that such equality is not being achieved. Also discussed are(1) the effects of a changing national economy on schools, (2) somepolitical asrects of educational finance, (3) finance problems inurban schools, (4) legislation and litigation in school issues, (5)

planning programing budgeting and management information systems, (6)

school food seLvices financing, (7) State support, (8) longrangeplanning, and (9) local budget problems. (Author/DE)

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Fiscal Planning

for schools inTransition

NEA GRAMME ON EDUCATIONAL HNANCE

Pros c'edings of the Twelfth National Conference on School Finance

March 23, 24 and 25, 1969

Jung Hotel

New Orleans, Louisiana

Sponsored by theU.S. DEPARTMENT OF HEALTH. EDUCAVON

& WELFAREOFFICE OF EDUCATION

THIS DOCUMENT HAS BEEN REPRODUCEDEXACTLY AS RECEIVED FROM THE PERSON ORORGANIZATION ORIGINATING IT. POINTS OFVIEW OR OPINIONS STATED DO NOT NECESSARILY REPRESENT OFFICIAL OFFICE OF EDU-CATION POSITION OR POLICY.

Committee on Educational FinanceNational Education Association1201 Sixteenth Street, Northwest

Washington, D.C. 20036

NEA Committee on Educational Finance

WILLIAM D. FIRMAN, Chairman, 1968-69Assistant Commissioner, State Department of Education,Albany, New York 12201

WILBERT V. EOLLIGER, Chairman, 1969-7DClassroom Teacher, 695 West Phillips Boulevard, Pomona,California 91766

JOHN P. HINDMANClassroom Teacher, 1128 Walnut Drive, Casa Grande, Ari-zona 85222 (Term ended July 1969)

WILLIAM P. McLUREDirector, Bureau of Educational Research, College of Edu-cation, University of Illinois, Urbana, Illinois 61822

JOHN A. MATTHEWSExecutive Secretary, Madison Teachers, Inc., 502 East MainStreet, Madison, Wisconsin 53703

J. CASEY OLDSClassroom Teacher, 19 Loris Road, Danvers, Massachusetts01923

National Education Association

GEORGE D. FISCHER, President

SAM M. LAMBERT, Executive Secretary

GLEN ROBINSON, Assistant Executive Secretary for Re-search and Director of Research Division

JEAN M. FLANIGAN, Assistant Director of Research Divi-sion and Staff Contact for the Committee on EducationalFinance

GAYE B. BECKER, Systems Analyst of Research Divisionand CEF Conference Coordinator

BEATRICE C. LEE, Publications Editor of Research Division

Copyright © 1970 by theNational Education Association

All Rights Reserved$3.50 per copy

ContentsForeword, William D. Firman 5Greetings from the National Education Association,

Glen Robinson 7The Meaning of Commitment, Harold Taylor 9The Changing Economy and Its Implications for Schools:

Education Costs, Tax Bases, and Government Support,John D. Hogan 19

Some Political Aspects of Educational Finance, Farris Bryant . . . 25The Education Gap, Edward J. Steimel 29Financing Public School in the 1970's, Erick L. Lindman 39The Judicial Assault on State School Aid Laws,

August W. SteinhilberDetroit's Fight for Equal Educational Opportunity,

Abraham L. Zwerdling 49Contemporary ChallengesMyths or Models, George J. Collins . 58Decentralization and the Finance of Inner-City Schools,

Henry Al. Levin 66Criteria for Evaluation of Financial Aid to Education: The Need

for Re-examination, Ernest Bartell 73Contemporary Challenges: Monitoring Human Inputs into the

Schools, Austin D. Swanson 80Decentralization in New York City, Lloyd L. Hogan 85Effect of State Aid on Local Taxation: A Case Study of an Oregon

County, Henry Osibov 88Federal Legislation: The NEA Posture, Mary C. Gereau 93Federal Education Programs, Emerson J. Elliott 96The 1967 Census of Governments, Lynden Mannen 102Comparability of Statistics and School Finance, Carol Joy Hobson 110

Comparative Costs of Education Among States,William R. Dormandy, Jr. 117

PPBS and MIS: Their Role in Managing Education,Joseph A. Perkins, Jr. 123

An Overview of Planning-Programming-Budgeting Systems,John W. Dorsey 132

Planning-Programming-Budgeting Systems: Boon or Bane forCost-Effectiveness Studies, Orlando F. Furno 141

Financing the School Food Service Program at the State Level,Thelma G. Flanagan 150

Financing the School Food Service Program at the Local Level,Irene Y. Ponti 158

National Educational Finance Project, R. L. Johns,Kern A?exander, and Richard A. Rossmiller 162

Long-Range Planning for Public EducationA Texas Example,Glenn H. Ivy 171

Revision of State Support Programs, Vernon Sletton 182

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The Determinants of Educational Expenditures in New YorkState, Lloyd L. Hogan and Fred H. Bentley 188

Bond Issue Election Defeats: Selected Western States, 1966-67,W. Montfort Barr anct A. T. Lindley 197

Understanding Local Budgets, Thomas J. Northey 212Awards in School Finance Research

The Investment of Idle Funds by Large Public SchoolSystems, Bobby D. Anderson 218

Local Determinants of Per-Pupil Expenditure in SuburbanHigh School Districts, Dale E. Fisher 221

Property Tax Determinants of Educational Expenditures,Laurence E. Harvey 229

An Analysis of the relationship Between Social Characteristicsand Educational Voting Patterns, Wilson K. Jordan 239

An Adequate Foundation Program and State DistributionFormula for Indiana School Districts, Ralph L. Kelly 246

Effects of Matching in Federal Aids on Selected Indiana SchoolDistricts, Alex C. Moody 250

Allocating Financial, Resources by Using Legal ProgramDescriptions, Donald M. Wickert 256

Determination of the Need for Intra-County Equalization inTennessee, Edward E. Williams 261

Roster of Participants 264

4

Foreword

IN ITS I 2TH ANNUAL Conference onSchool Finance, the Committee onEducational Finance of the NationalEducation Association went beyondthe traditional concerns of schoolfinance practitioners.

Some authors attempted a defini-tion of equality of educational oppor-tunity. Others presented evidence thatequality of educational opportunity isnot being achieved. One is left with afeeling that neither the end nor themeans to achieve equal educationalopportunity through finance plans areas clear as they once were to educato,.sand to school fimince practitioners.Agreement seems to exist only on thefact that the financing of schools is intransition. Revolt by students, teach-ers, parents, or taxpayers seems a pos-sibility if reforms and restructuringare not extensive and immediate. Thepapers differ in proposed solutionsand likely directions for the future.

The Committee on EducationalFinance of the NEA presents thesediverse views as a contribution towardunderstanding the diverse forces af-fecting school funding. The viewsexpressed by the authors are their ownand do not necessarily reflect theviewpoint or policy of the Committeeor the NEA.

Once again papers of the winnersof awards for doctoral dissertationsin school finance are presented. TheCommittee wishes to express its ap-

preciadon to Dr. Forrest E. Connor,Executive Secretar: of the AmericanAssociation of Scho, Administrators,and 'Dr. Glen Robinson, AssistantExecutive Secretary for Research,NEA, who with the Chairman of theCommittee on Educational -7inanceserved as the committee of ju, ges forthe awards.

The Committee also expresses itsappreciation to the staff of the Re-search Division who contributed tothe Conference and the Proceedings:Joanne Bodley, Research Assistant;Gaye Baber Becker, Conference Co-ordinator; Beatrice C. Lee, Publica-tions Editor; Wally Sliter, Chief, CopyPreparation; Louise Pfender, NoniPalmer, Ann Rossilli, Carol A. Milan,and Carolyn J. Turner, Secretaries.A special note of appreciation is ex-tended to Eugene P. McLoone for-merly with the Research Division andnow a professor in the Department ofEconomics, College of Business andPublic Administration and the De-partment of Administration, Supervi-sion, and Curriculum, College of Edu-cation, University of Maryland) whodirected this Conference. Without theassistance of these staff members, andthe program participants, the C")m-mittee could not accomplish its tasks.

William D. Firman, ChairmanNEA Committee on Educational

Finance, 1958-69

5

(1

Greetings from the National Education Association

Glen RobinsonAssistant Executive Secretary for Research

IT IS MY PLEASURE to bring you greet-ings from the National EducationAssociation and from PresidentGeorge Fischer and Executive Secre-tary Sam Lambert. As some of yourecall, Dr. Lambert was part of thepioneering group that started theNational School Finance Conferencein 1957 and has taken part in manyof the previous meetings. He is in-terested in what you will be doinghere this year and sends to you hiswarmest and best wishes.

The program of the Committee onEducational Finance is one of NEA'smost important activities. All theaspirations and ambitions for Ameri-can education depend upon anadequate financial base for schools.The NEA Committee on EducationalFinance has contributed to improvingthe climate for public supportschools. It has helped to increaspublic awareness of the crucial roh.played by school finance in Americaneducation. The Committee hashelped stimulate growth of sophisti-cated scholarship and research in thisfield. Through the compilation andpublication of research reports incooperation with the NEA ResearchDivision, it has established a centerfor disseminating information abouteducational finance. Perhaps the mostimportant contribution of the Com-mittee to the development of school

finance is its sponsorship of thisAnnual Conference.

Whui this Conference was startedby NEA 12 years ago, it was only asmall discussion group of a few peop:einterested in improving school sup-port. Today, it is recognized as themajor forum for discussion of boththeory and practice in school finance,and the published Proceedings of theConference have become major sourcebooks of school finance literature.NEA is pleased and proud of thisgrowth. It is a source of great satisfac-tion to see the increasing number ofpersons who attend the Conferenceeach year and the growing influencewhich this group has come to exercise.

NEA feels a close relationship withyou. I know that you reciprocate thatfeeling. Last year a number of you in-quired about becoming NEA mem-bers. This year it will be possible forthose of you who wish to join NEAto do so right here. We have mem-bership application blanks at theregistration desk, and you can pickthem up after this session or at anytime during the Conference. Weshould like to extend to all of youwho are not now NEA memLen acordial invitation to join the NEA.

The Conference meets this ycar at atime of ferment of ideas about thefuture of educational finance todiscuss problems related to "Schools

/7

in Transition." One important prob-lem you wii: discussing is the set ofcurrent lawsuits which contend thatcertain state and local school financeplans violate the "equal protection"clause of the Fourteenth Amendmentto the CnnsLitution. NEA and itsCommittee on. Educational Financehave a keen interest in the outcome.of these cases, which could, I believe,have as great an impact on existingschool finance and school districtstructure as the one-man-one-votedecision had in the political arena.During the past few months the Com-mittee on Educational Finance hasbeen following these cases closely andstudying their implications. Last

8

week, NEA in conjurilion with threeother national groups, entered anamicus curiae brief asking the S.1-

preme Court of the United States tohear the arguments in support ofequal treatment under school financeplans in the Illinois case of McInnesv. Ogilvie.

In this, as in other problems to bediscussed at this Conference NEA hasa strong interest in the ideas that youwill be considering. As you begin thisConference, I am pleased to extend toyou the greetings of the NationalEducation Association and to withyou a successful and constructivemeeting in discussing the financialproblems of "Schools in Transition."

The Meaning of Commitment

Harold Taylor

1 BEGIN wirit the opening lines of"The Campus on the Hill," a poem byWilliam D. Snodgrass, from his bookof 10 years ago, Hmres Needle:

Tomorrow has broken out today:Riot in Algeria, in Cyprus, in Alabama;Aged in wrong, the empires are decliningAnd China gathers, soundkssly, like evidence.What shall I say to the young on such z

morning?

Nine years later, the campus is still onthe hill, tomorrow is still breakingout today, and only the names of theplaces of rioting have changed, withmore added to the list--Biafra, Beirut,Prague, Jordan, Vietnam, San Fran-cisco, the Soviet borderwhile Chinahas gone on gathering, soundlessly,like evidence, and every day we facethe task of asking, What shall we sayto the young on such a morning?

Somewhere in the middle of the1960's the students and Americansociety together reached the end of anera. At a certain point it became clearthat the texture and quality of thenational life had altered within itself,and in such a way that the institutionsdesigned to support it the univer-sities, the schools, the government,the economic structure, the socialagencies, the political system itself

Dr. Taylor is Lecturer aid Consultant, NewYork, New York.

had become incapable of respondingto the deepest needs of its citizens.Before that point, it was possible forthe old ways of life to continue whilean American war went or. and a socialrevolution gathered strength. Americamade continual proclamations of com-mitment and admonitions to herselfas the bodies piled up and the violencegrew. Reports were written, speecheswere made, political leaders weremurdered, research of every kind toldthe story of a confusion of commit-ments and a welter of contradictorypurposes while the country enter-tained itself with sports festivals,along with filmed, televised, andwritten versions of the violence andsocial disorder it claimed to abhor.

Then something started to happen.The students and those they admiredentered into a common percer.don ofthe size of the national failure andthe enormity of possible disaster. Theenemy was seen to be within; it was amoral complacency in the use ofnational power, a turning away froma reality which had lost its true mean-ing. It was then no longer possibleto proclaim, to point, to denounce,to deplore, to stand slack-jawed whilethe evils multiplied. There had to beaction of a large-minded and generouskind, and it began to be seen that ifthe field of action were not taken by

9

those within the present institutionof a democratic society, the institu-tions would be swept away or alteredin such degree as to become unrec-ognizable in a democracy.

The students had become aware ofthe arithmetic of commitment. In acapitalist democracy, the question ofwho has the money and how it isspent is a basic testing point of thevalues of the society and its priorities.In a society which constantly measuresitself by numbers and statistics, all theway from body counts of the dead oneither side in its wars to lifetimebatting averages in its baseball scoresand grade-point averages in its highschools and colleges, a clear measureof its commitments can be given bywhat it does with its money.

Looking at it from this point ofview, we count up the score and findthat we have commited $70 to $90billion a year and 33,000 Americanlives to a war which has been disas-trous to our national and interna-tional life, that we have been seriouslythinking about putting $50 to $100billion into a futile anti-ballisticmissile system which can only escalatethe arms race while providing no se-curity for upwards of 20 millionAmerican citizens subject to instantannihilation, that we are willing toinvest $30 billion in a race to put aman on the moon before the Russiansdo, $10 billion to a supersonic trans-port which will carry the well-to-do atincredible rates of speed across thecountry and around the world tocarry out missions of no great impor-tance, while we cut the funds avail-able for education, hold downteachers' salaries, reduce our foreignaid programs, refuse to invest in inter-national programs even to the amountof the $16 million authorized for theInternational Educati 3n Act of 1966,

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.and while the educational systemfalters for lack of funds, 20 millionAmericans remain below the povertyline, and 10 million of our people atsuch low nutritional levels that theyare either at or below the starvationline.

These arithmetical facts have notbeen lost on the members of a newgeneration, two-thirds of whose mem-bers have been raised in comparativeaffluence, while the other third hasbeen struggling in their black com-munities, on the Indian reservations,in the ghettos, white and black, ruraland urban, to gain an economic andsocial opportunity guaranteed tothem by the commitment of Americandemocracy to a just society. That iswhat the student protest movement isabout. The students have simplypointed out that if the commitmentof this country to military and techno-logical enterprises can be made sogenerously and lavishly, the UnitedStates, as the richest, most powerful,and resourceful nation-state in theworld can spend its money and itshuman resources on making a societyin which every human being has achance to become what he is capableof becoming.

In this, the students are joined by ascattering of educators. Ralph Tylerhas estimated that it will take anadditional $6.5 billion a year offederal funds to deal adequately withelementary and secondary schools.Clark Kerr estimates that by 1976, itwill take an additional $15 billion ayear to cope with the needs of thecolleges and universities. Yet all overthe country, the present educationalbudgets are suffering from the attri-ti':--1 of poverty, with more and morecit;7.eas, governors, and state legis-lators looking for ways of reducing thetaxes and sums for education, while

looking at television programs of menin orbit in outer space, athletes whoare paid from $50,000 to $100,090 ayear, and scenes of war in which thespending of $100 million a day is acommon occurrence.

So much for the arithmetic of com-mitment. What about the philosophy?

Those presently alarmed at thevehemence and militancy of Americanstudent action should be remindedthat the history of American highereducation is the tiistory of studentswho came into it and transformed itby what they did there. The facultycame into the system because thestudents were there to be taught.College presidents and trustees werein it because the faculty had to beassembled to teach, and buildings,grounds, and equipment had to bebought, money had to be raised. Thecharacter of the curriculum and howit was planned depended partly on theavailable knowledge and its divisioninto appropriate patterns, partly onthe purpose for which the college hadbeen started, but mainly on the pur-poses and character of the studentbody attracted to it.

In the nineteenth century, changesin education came about when it be-came impossible to continue with theold ways of teaching and with the oldcurriculum, because the older wayshad lost their power to educate thepeople for whoa-i they were intended.The educators, therefore, lost controlof student lives. The purposes of thestudents were not linked to the con-tent of the curriculum, no matter whatthe ,..urposes of the college as statedby its authorities. The students eithercould not or would not learn whatthey were told to; they would notbehave according to plan. Theyrioted, demonstrated, sign'.d petitions,threw rocks and tomatoes, or simply

put up with it and retaliated by notlearning. Or even worse, they wentelsewhere.

For it is also true that the historyof American education is not so muchthe story of institutions as the storyof a particular breed of men andwomen who started institutions forstudents, for a variety of motives, todo a variety of things. Sometimes itwas simply a question of finding a jobby starting up an educational businessof one's own. At others, it was toteach a religious faith, to advance thecause of science, or industry a voca-tion or a profession. Whatever themotive, the colleges could not havebegun if there had not been a suffi-cient number of students who wereattracted to the purposes of the insti-t"tion as ae1vertised, and the institu-tions could not have continued if thestudents founci no purpose in stayik.7there.

Another way of saying this is topoint out that students act as instru-ments which register automaticallythe character and needs of theirsociety, and act as the testing pointfor the relevance of one or anotherkind of education to the society. Thechange in the middle years of thenineteenth century from the classicalcurriculum to the introduction of thesciences and other subjects was notmerely a sign that the curriculumhad fallen behind the availableknowledge of the nineteenth century,but that the curriculum had becomeirrelevant to what the students in-tended to do wail their education.The students would not learn it be-cause they could not use it.

If colleges continued to offer onlythose subjects sanctified by culturalhabit and tradi don, they would eitherlose their students or create a crisisin morale among the ones they already

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had. If colleges continued to demandparticular standards of conduct in thestudents' personal, political, or sociallife in a society which was more openand free than the society inside thecollege or university, they inevitablyfound themselves confronted withdirect challenges to their authority tomaintain controls. The changes camefrom the challenges.

In the structure of Americanhigher educationthe earlier acade-mies which became colleges, the land-grant universities, the colleges forwomen, the Negro colleges, the Catho-lic and Protestant colleges, the com-munity colleges, the teachers collegesthe forms and patterns of the cur-riculum itself have been shaped moreby the constituencies which the in-stitutions have attracted than by aphilosophy of education to which theinstitutions and their adherents gaveinstitutional and cultural expression.By constituencies I mean not onlythe students. They are the center ofan entire cluster of constituencieswhich revolve around them. Theseconsist of their parents, the taxpayers,the legislators, the faculty, the ad-ministration, the employing agencies,the donors, the alumni, arid, in a largescnse, the public, which gives its tacitassent to a system in which public andprivate funds are encouraged to flowinto the stream of education for thegenerations. The philosophy of edu-cation is formed by the demands of ademocratic, pluralistic society, and bythe tension between these demandsand the response made to them by theeducating community in the schools,colleges, and universities.

This is in fact the source of theenormous strength of the Americansystem of higher education. It haskept the system in touch with its ownsociety, again, through the necessity

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of dealing with the students who areits representatives. When educationis planned from the top down, as it isin the European and English universi-ties to which so many American uni-versity planners have given intellec-tual obeisance, it is bound to losetouch with the reality of the students'lives and what those lives containand is then unable to connect its ownpurposes with the needs of the stu-dents it teaches. The centralized sys-tem of European higher educationand its colonial counterparts in Asia,Africa, and Latin America give ex-pression to the political and culturalsystem of a class society, not to thelife-needs of new sections of thesociety among the middle and lowerclasses.

Something of this attitude towarda centralized intellectual and cultural,and therefore political, authority hasentered the American system. It hascome through the rise to power ofthe universities as autonomous socialinstitutions, whose autonomy is com-promised by the very source of theirstrength, that is, the direct connec-tion between them and the existingcenters of power in government, in-dustry, and the technological com-munity. The academic professionwith its administrative apparatus notonly controls the sources of manpowerfor operating the society, it controlsthe curriculum and the institutionsthrough which the manpower is

developed, and dictates the terms inwhich education is conducted, with aninfluence spreading downward as faras the kindergarten and elementaryschools.

That is how universities lost touchwith their students. In rising to theirpresent degree of power, the academicprofession and the universities werenot carrying out a plan of centraliza-

tion consciously developed by theirmembers to gain control of the societyand its educational system. They weresimply carrying out the task societyhad assigned to themto create anddistribute the knowledge needed bythe social organism to make it func-tion. Their method of creating, as-sembling, and distributing the know-ledge was to band themselves togetherinside the universities in groups ofexperts in each of the departmentsand divisions of knowledge, and tohand on what they knew by lectures,textbooks, works of scholarship, andresearch. As far as students were con-cerned, the faculty assumed that theycame to the university to receiveknowledge from the experts, and thatif they did not come for that, theyhad no business being there. What-ever might be the students' politicai,social, cultural, or personal interest orcommitments, these were consideredirrelevant to the primary reason fortheir attendance, which was to learnwhat was taught in the curriculum.The reason the American universities,colleges, and schools have not hadserious trouble with their studentsuntil the recent past lies in the factthat they have been class institutions,including the public universities andeven the public schools, which havenow been caught in the act of sub-verting the lives of an entire sector ofthe lower classes. While controllingthe flow of entrants into the privilegesof the society, the colleges and uni-versities have benefited from the factthat until now the lower classes, par-ticularly the black community, havesubmitted unwittingly to that control,without knowledge enough to under-stand the nature and possibilities oftheir own situation. The childrenand the families of the poor and theblack, lacking the educational, politi-

cal, or even psychological means tomount a revolt, have submitted in thepas_ to the controls of a society whoseeducational system has screened outthe luse-nots in favor of the haves.

This is not because a band of class-conscious white racists have built anational system of education designedto hold down the underprivileged.There are sections of the country,more than is commonly recognized,where this is the case. If it were notfor the law, there would be manymore. Other sections, mainly in thesuburbs, develop their own educa-tional enclaves which are in factprivate schools to which tuition ispaid and called local taxes, and havenothing to do with have-nots of anykind. But this is not the nationalintent ror is it claimed as nationalpolicy. In fact, the main struggle toachieve a democratic educational sys-tem is between the federal governmentand those in the separate communitiesand states who oppose it.

The American educational systemhas gradually evolved over the yearsfrom the intentions of a democraticsociety whose members have not facedthe consequences of their own inten-tions, and whose educators have sel-dom thought of the intimate connec-tion between education and socialchange. The universities and schoolshave simply grown to their presentsize and power by adapting to theneeds of those with a political andeconomic constituency, and as newconstituencies have arisen and thenumbers within them have increasedto an overwhelming size, the olderpatterns of educational and socialthought have persisted until blownout of their place by social or eco-nomic dynamite.

It was Horace Mann who went tothe center of that problem. "Educa-

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tion, then," he said, in his classicAmerican statement, "beyond allother devices of human origin, is thegreat equalizer of the conditions ofmenthe balance-wheel of the socialmachinery. I do not here mean thatit so elevates the moral nature as tomake men disdain and abhor the op-pression of their fellow-men. Thisidea pertains to another of its attri-butes. But I mean that it gives eachman the independence and the meaticby which he can resist the selfishnessof other men. It does better thanto disarm the poor of their hostilitytowards the rich: it prevents beingpoor." 1

There is now a very large popula-tion of college students; the 61/2 mil-lion of them compose 40 percent of allcollege-age American youth. Exceptfor a half million, they are all middle-and upper-class whites, many of whoseparents at one time were poor, andthey have confirmed Horace Mann'sprophecy. They have the indepen-dence and the means to resist theselfishness of other men; a minorityamong them have created the condi-tions under which a humanitarianmovement has been set in motion.The concerned students, whether radi-cal, liberal, moderate, or conservative,are seeking commitments which cangive direction to their lives and mean-ing to their education.

What are the commitments theyseek?

They are looking for ways in whicheducational reform can address itselfto the problem of building a newsociety. Having found too little helpfrom their elders, they are now form-ing their own community of the

I Mann, Horace. "Report for 1848." Lifeand Works of Horace Mann. Vol. IV. Bos-ton: Lee and Shepard Publishers, 1891.p. 251.

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young, in tutoring in the ghettos, join-ing VISTA, the National TeacherCorps, the Peace Corps, in the freeuniversity movement, in student ex-perimental colleges. In their own way,they are returning to that most origi-nal of American dates, the idea of theland-grant university. They want bet-ter education, not only for themselves,but for all the citizens. They wantcitizens' schools and people's colleges.

The land-grant idea was a radicalphilosophical principle. But it was somuch a product of American experi-ence, of the American temperament,and of the local American conditionsat the time of its origin that any at-tempt to cite a philosophy which couldbe said to have directed its educationalwisdom would be intellectually impos-sible. It did, of course, rely on popu-list sentiment, and it did express abold educational theory. But the phi-losophy and the arguments to supportit as congressional legislation in 1862emerged from the American situationof the nineteenth century. The land-grant proposal did not furnish a co-herent set of arguments which couldbe expressed in a philosophy untillater on, after it had formulated itsown meaning through experience ineducational and social action. It foundout what it was through discoveringwhat it was doing.

Consider, for example, the use ofland as a basis for the national sup-port of uni-. ersities to be adminis-tered by the states. Although the ideaturned out very well, it was not pro-duced as an educational or social con-cept, but by the fact that the politicalsituation in the 1860's was one inwhich (a) it could be argued thatwhat was being done for the childrenof the businessmen and the well-to-doshould be done for the children ofworkers, farmers, and the common

man; and (b) that it could be donewithout increasing taxes or takingrevenue av- y from business and in-dustry, simply by giving away land, ofwhich there was a great deal around,and letting the states make what useof it they could, for revenue and eco-nomic investment. Had the MorrillAct proposed a national tax to makeits educati:.-nal program possible, itwould have died early.

Or consider the philosophy of ser-vice to all citizens which flowed fromthe land-grant conception and grewinto the strongest social and economicinstrument the universities of anycountry have ever had. The philoso-phy did not spring from the minds ofintellectuals for use as an American:loctrine. It grew from the particularnature of American social and eco-nomic expansion, which, given theelements of a capitalist liberal democ-racy, had to create its own kind ofeducational instruments if it were tobe successful in its expansion.

If I had a choice as to how I wouldlike to see an educational system de-velopedby educational plans linkedto a clear social philosophy and madeby intellectuals, or by starting withthe needs of an expanding democraticsociety and making institutions to meetthose needs as the society went alongI would unhesitatingly, gladly, en-thusiastically, and irrevocably choosethe latter. Having made that choiceretroactively, I would unhesitatinglydefend it and the educational conse-quences in America which have flowedfrom it, as a philosophy of educationwe were fortunate enough to haveinvented from the materials of theAmerican experience. The nineteenthcentury debate was between the utili-tarians in support cf the practicalfunctions of the university in servingits society, and those on the other side

who supported the conception of theuniversity as the sanctuary of scholarsand the home of the disembodied in-tellect. The debate helped to resolvethe question into its practical answers,and it made clear that the distinctionitself was false. Unless the universitycould extend the range of its service tosociety by moving into the broaderareas of scientific and scholarly re-search, and at the same time couldreach out to the communities andtheir members to minister to the in-tellectual, cultural, and educationalneeds which existed there, it could doneither one with any great success.

One reason was that the citizens, ifthey were to support the public uni-versities, had to be able to see whatthey were getting for their money.They had to believe in what theiruniversities were doing, and it wouldbe very hard indeed to convince theuneducated American citizen that heshould pay for the education and re-search training of an elite of Ameri-cans who would use their educationand intellectual privilege either forpurposes exclusively their own or forrunning the country in ways whichthey, as elite, thought advisable. Thisis not anti-intellectualism on the partof the citizen. It is the natural re-sponse of the citizen in a democraticsociety whose institutions are con-ceived as servants to the people andnot as agencies for expressing the willof an intelligentsia. The form of thepolity produced the form of its edu-cation.

What seems to me to have now hap-pened is that the primary insight ofthe American conception has slippedout of the minds of those who nowconduct the contemporary (rebate. Inany number of ways, it is of the high-est degree of importance for Americathat controversies such as those deve:-

15

oped in California over the presentand future of higher education shouldhave reached the stage they have inpublic visibility and public impor-tance. It is a controversy about howAmerican life should be lived and whatshape the American future should take.The presence of Governor Reagan asthe political symbol of American ma-terialism and authoritarianism is asimportant as the presence of the stu-dent protest movement against it, sinceit makes clear the fundamental issuearound which the most s-rious educa-tional and political questions must beraised.

A controversy of this magnitude inone state is an educational factor inthe politics of all states. Havingworked its way from the Berkeley of1964 toward some kind of resolutionabout the nature of the public obliga-tion of the public university towardits students and its citizens, there is akind of historical inevitability in thefact that the same kinc., Jf test has beenvat so clearly and forcefully in thepublic obligation of the private uni-versity in the case of Columbia Uni-versity in 1968.

If the colleges and universities run-tinue the present pace of tbAr slowadaptation to the legitimate educa-tional demands of the disadvanta,;ed,black and white, they will find them-selves outrun by events and changesover which they have no control.There are now forces within the massdemocracy, below the level of publicvisibility in the past, which have be-gun to coalesce and te become highlyvisible through the ins ruments of themass media. By the ye,: act of organ-izing the black-power movement andusing it to take political action forthemselves, the members of the blackcommunity have created their owneducational environment with ia own

16

intellectual and cultural stylea styleof direct action and confrontation pol-itics. Having been blocked from theregular educational system, and hav-ing found that large parts of that sys-tem are in any case irrelevant to theirneeds, the black activists have edu-cated themselves through their life inthe streets, through their rallies, dem-onstrations, speeches, churches, com-munity groups, rent strikes, televisionwatching, and the transister radio.

The example of Malcolm X's lifeand what he has written about it, thelife of Martin Luther King and hisspeeches and television appearances,the speeches of Stokely Carmichael,the actions of Eldrige Cleaver and theBlack Panthers, the manifestos anddemands of the black student move-ment, the black comics, from MabsMobley to Flip Wilson and DickGregorythese are the teachers in anover-all educational environment inwhich black speakers at parents' meet-ings and protest rallies have replacedthe role of whi :e teachers and univer-sity professors. The classroom is thestreet. The curriculum the wholeculture; the arts of jazz, folk music,spirituals, church servic's inject them-selves into life and replace the ban-ality of art appreciation classes inschools and colleges with live perform-ances of public arts which are satu-rated with political, social, and spiri-tual meaning.

Direct action and political organi-zation provide for the black commu-nity and its growing number of youngactivists the content of a new kind ofsocial knowledge drawn from experi-ence, and a new political style spring-ing from the oral tradition of thosewho never learned to read. If youcan remember what the preacher said,you don't need to read it; if you canremember what was done to you and

your ancestors who have told you theirstories, you can create your own 1k-erature by saying it, singing it, actingit while others write it down. Theothers, both black and white, will putit into their magazines and researchreports, their television and radio pro-grams, their musical comedies, rockrecords, interview programs, and films.

In this way, the black communityhas talked, acted, and organizedaround issues and demands rising fromits own culture, creating its own in-tellectuals who start with a belief inthemselves, without the handicap ofhaving been educated through thestereotypes from the textbooks to ex-plain the Negro to himself. Withoutformal education, the black commu-nity is free to make its own demandsin its own terms, and if it has notlearned to follow white rules of politi-cal and s )cial behavior, it has learnedinstead how to teach the whites aboutthe blacks, and how to teach the edu-cators what the black communitywants from its schools and colleges.The social science and humanitiescurriculum is thereby being reformed,mainly because the black students,their parents, and the black commu-nity have demanded the reform. Theyhave insisted on a reinterpretation ofthe historical past and contemporaryhistory to take account of the realityof Afro-American culture. In doing so,the black activists and their surround-ing constituency have become catalystsfor education and social change whilerallying to their cause a younger gen-eration of whites who see white societythrough their eyes and who find thatthey see more clearly that way.

There is therefore in the making anew movement, started by the youngergeneration, aided by forces elep withinthe society and the existence of federalfunds, for a form of national service

aimed directly at the problems of so-cial change. The manpower for socialchange already exists in the Americanhigh school and the American colleges.What remains to be done is to providea national economic and social frame-work in which the manpower can beput to work, with the colleges andunivezities acting as the administra-tive and intellectual centers for car-rying out the program.

A plan for national service can be-gin on the campuses, not only withproposals for educational change inthe service the young can presentlygive in conjunction with their collegestudies, but by the development ofcomprehensive plans and policies tobe urged upon the government foralternatives in service to military con-scription. Only one more step needbe taken beyond the present situationto form a national service corps foryouth, with scholarships, fellowships,and stipends to match, containing inone concept Ole Peace Corps, the Na-tional Teacher Corps, VISTA, JobOpportunity Ce.aters, Head Start, andall the others, w:th more besidesinwhich youth can serve not war butpeace, not social status but social need.The autonomy of the present pro-grams could be preserved, while theadministration of the human servicescurricula and projects could be ar-ranged by the colleges, with directgrants to qualified candidates in thesame style as the GI Bill followingWorld War IL

Although it does not appear onthe surface, the volunteer movementlinked to national service is an exten-sion of the idea of land-grant educa-tion, defined not only as the idea ofbringing to the citizens the educationthey need, but doing so by federalsubsidy which leaves the educationalprograms in the hands of the colleges,

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universities, and the students. It isalso linked to the elective principle bythe fact that the subsidy would beprovided, as was the case with theveterans of World War II, directly tothe students, who may then choose theinstitutions and the programs whichthey wish to enter. Because their edu-cation would then be linked to a formof community service, there would bea generous degree of latitude in theform their education will take. Partof what has been proposed by theCarnegie Commission on Higher Edu-cation in its 1968 report, Quality andEquality, can 15e-converted to this con-cept. The report recommends a civil-ian GI Bill, the direct grants to stu-dents and a cost-of-education allow-ance to the colleges of their choice.A modification of the idea could pro-vide for direct grants to students forwork in the human services linked tocollege studies in the humanities, so-cial sciences, and education.

When we look at our resources inhuman talent, we find that we havethem it -profusion. The energies ofyouth have already been revealedpartly in the revolt against establishedauthority and existing social evils,

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mainly in the initiative they havealready taken for the reform of edu-cation and society. When we look atour human needs, we find a host ofproblems of a kind which can besolved only with the cooperation andsupport of the thousands and thou-sands of young Americans and theirallies in the older generation.

What now remains is to match ourneeds with our resources and to investour money and our energy in thepeople and their educational system.You who are here tonight are, amongall others, those most knowledgeablein the use of American economic re-sources for the solution of Americaneducational problems. You know howit can be done. You know that it mustbe done. The commitment which youseek on the part of others you alreadyhold among yourselves. It is, there-fore, a matter of deciding, throughyour deliberations at this conference,what can and should be said to theyoung on such mornings as followsuch evenings as these, and which, dayafter day, go to make up the weeks,months, and years of struggle to usethe world's resources for the benefitand welfare of mankind.

The Changing Economy and Its Implications for Schools:

Education Costs, Tax Bases, and Government Support

John D. Hogan

AN IMPRESSION has taken hold amongthe general public that supp ort ofpublic education in the Unite Stateshas at last attained some level ^.F ade-quacy. Participation of the federalgovernment in school finance, espe-cially in metropolitan areas, is pre-sumed to have brought this happysituation to pass. This viewpointprobably underlay the tendency ofschool bond issues and budgets tohave tough sledding in many districtsand for education come off badlyfrom the trade-off processes in whichit competed for federal financial re-&ources during this ear of continuedprosperity. We can lament this mis-understanding and try to set the factsstraight; but we must recognize thatthe facts are difficult to package forgeneral consumption, and that publicimpressions reflect attitudes as well asignorance of facts.

Any inquiry into the sharing proc-ess that determines how financial re-sources will be used in the Americanpublic sector during 1969 encountersat once the stark reality of the Viet-

Dr. Hogan is VicePresident of Planning andResearch, Nationwide Insurance Companies,Columbus, Ohio. This paper was deliveredat the Conference on Critical Issues Affectingthe Schools in an Era of Change, January 24-28, 1969, Washington, D. C.

nam war. The war will for the thirdyear require a greater outlay than thecurrent expenditure on elementaryand secondary education by federal,state, and local governments. Nogreater challenge to the financial costof the war can be raised than that ithas traded the cost of a fully equippedmodern high school for the extermina-tion of five to ten Vietcong.

Indirect effects of the war have fur-ther aggravated the problems of schoolfinance. Interest on the enlarged fed-eral debt caused by the war has in-creased the harden on the federalbudget of fixed charges, categories ofexpenditure that are treated as prior-ity claims in the budget process. Highinterest rates have led school districtsto withdraw bond issues for schoolconstruction and to suffer defeat on arecord proportion of those put to vote.Nor has the war-inspired temporarysurtax on the federal income tax madethe task of obtaining state and localfunds for education any easier; thecitizen who wishes to protest highertaxes turns on the one tax open to hisdirect influence and votes down theschool levy. In choosing "guns andbutter" we have not only overcom-mitted our resources but have forceda redistribution of resources withinthe public sector to the disadvantage

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of education and other non-militaryexpenditures.

But for the Vietnam war, educationwould probably be receiving a largershare of public financial resourcesthan it is. The -war, however, can bemade too mucti the whipping boyfor education', financial bind. Theprincipal categories of the educationfinance problem have not changedmuch during the past 20 years andremain faithfully descriptive today:the inadequate property tax base oflocal support, pre-emption of the in-come tax base by the federal govern-ment, Balkanization of the metropoli-tan area by government jurisdictions,and cost pressures arising from marketforces that operate on teacher salaries.If the war were not claiming its lion-size share of public sector resourceseven if the federal aids to the schoolswere double the prospective 1969 rateeducation finance would still betroubled by long-standing unresolvedproblems.

The paradox is that the case foreducation has never been stronger.Education enjoys a good press, hasthe basic role in the war on poverty,and is credited with being the majorsource of growth thrust in the econ-omy.' Motherhood and the home to-day have no more sacrosanct statusthan education. The education financeproblem can be compared to a chron-ically ill patient who is kept working

1 Denison, Edward F. The Sources of Eco-nomic Growth in the United States and theAlternatives Before Us. Supplementary PaperNo. 13. New York: Committee for EconomicDevelopment, 1962. p. 270. Credits educationwith 42 percent and advance of knowledgewith 36 percent of the growth rate of 1929-1957 in real national income per employedperson.

Denison, Edward F. Why Growth RatesDiller. Washingtcn, D. C.: Brookings Insti-tution, 1967. p. 299. Credits education with22 percent and advance of knowledge with34 percent of the growth rate of 1950-1962.

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by palliatives that quiet his symptomswhile his underlying malady lingerson. Our capacity to apply palliativesgrows as the economy grows, butthe underlying maladybecause it re-duces the leverage of new furiescontinues to threaten achievement ofsupport objectives.

Education Costs

Within the current expenditure cat-egory elementary and secondary schoolcosts are related most directly to sal-aries, the factor constituting somefour-fifths of current expenditure. Onaverage, during the past 10 years, theannual increase for teachers' salarieshas been 6 percent. With an annualpupil enrollment increase of about3 percent and a quality improvementof perhaps 1 to 2 percent, current ex-penditure increases have averaged 16percent annually, a rate sufficient todouble the total in about seven years.Current expenditure per pupil in av-erage daily membership (ADM) hasincreased at a rate of 8 percent.=

These numbers tell us something ofthe course education expenditure hastaken over the decade past, but theyconceal important aspects of educationexpenditure, too. The extreme varia-tions among states, and among schooldistricts within states, are subsumedin the averages. And the rates of in-crease reveal little about the level ofeducation support achieved in statesand districts where the expenditurewas low at the beginning of the 1958-1968 period. In terms of the nationalaverage current expenditure per pupilin ADM, the range among states in1968-69 extended from 43 percent be-

2 National Education Association, Re!. archDivision. Estimates of School Statistics, 1968.69. Research Report 1968-R16. Washington,D. C.: the Association, 1968. 36 p.

iow the average to 62 percent above.3An ominous tendency concealed inthe over-all expenditure data is thedistribution of expenditure betweenmetropolitan area central cities andsuburban areas; in 32 of 36 metropoli-tan areas studied, the central city cur-rent expenditure per pupil in ADM in1964-65 was less than in the suburbs."Moreover, the central city suburbangap is widening as the central cityneed for special education servicesintensifies.

The assignment of education expen-diture to changes in pupils, prices, andquality factors accounts for the broadcategories that "explain" costs. Oneof the categories, prices, dominates theother two; but the term prices requiressome explanation. The chief pricefactor in education inputs is teachersalaries, a value that has risen at anannual rate of 6 percent during the1958-1968 period. Behind this growthis the annual increase of salaries of-fered college graduates in all fieldsand the increasing number of careerchoices open to women as alternativesto teaching. To refer to this phenom-enon as inflation acting on schoolbudgets involves a misconstruction ofthe teacher salary issue. It would bemore accurate to interpret teacher sal-ary increases as a reduction in exploi-tation until market forces bring aver-age salaries more nearly into line withother professions.

Pupil load data also conceal as-pects of demand for education ser-vices. More school-age children areattending school, enrolling sooner,and staying longer. In the central

3 Ibid., p. 35.4 Advisory Commission on Intergovernmen-

tal Relations. Fiscal Balance in the AmericanFederal System. Vol. 2, Metropolitan FiscalDisparities. Washington, D. C.: GovernmentPrinting Office, October 1967. p. 65.

cities, where the resources to financeadditional pupil loads are deterior-ating, the pressure is greatest. Withbirth rates having peaked in the late1950's and now declining, increases inelementary enrollment may be negli-gible for the decade ahead and enroll-ment increases will decline at bothhigh school and college levels. Someexpectations have been raised that theeducation burden will be substantiallylessened by this turn in the age pro-file.3 But the central city demand forspecial education services to meet theneeds of an expanding enrollment in-dicates that expenditure increases willnot soon subside.

Quality is an elusive trait in educa-tion. The comprehensive New YorkState Quality Measurement Projecthas been under way for a decade andhas yet to produce firm, unequivocalguidelines to quality of education out-put. In large part quality is a residualafter prices and pupil loads have beennetted from expenditure totals. Withteacher education attainment and ex-perience increasing, the 1 to 2 percentquality measure is an imputation thatseems warranted. But the statisticsindicate some devebpments that runcounter to quality. Class size has beenincreasing in central cities, and teach-ers appear to be a declining propor-tion of the school professional staff asservice specialists increase in number.

The Base of SupportThe economic base of support, de-

fined as the national income, showsevery prospect of growing at a recordrate during the next decade, surpass.ing projections considered optimistica few years ago. A trillion dollar rateof Gross National Product will prob-

3 Chase Manhattan Bank. "A PromisingDecade in Education." Business in Brief,No. 82, October 1968.

2I

ably be achieved 'iate in 1970. Giventhe revenue response that all tax baseshave demonstrated in the postwar pe-riod, we might conclude that educa-tion finance can look forward to aperiod of sufficiency. But educationsupport depends upon many factorsin addition to the economic base.

The most important determinant ofeducation support is the ability ofstate and local governments to tap theeconomic base, a condition that de-pends more than anything else on thewillingness of citizens to bear taxeslevied on them for school support. Inestimating the future course of thisquality of citizen grace, we may errif we take the past as a trustworthyguide. The postwar period has seena dramatic increase in state and localrevenuesfrom $13 billion in 1946to $102 billion in 1968in large partfrom imposition of new taxes and in-creases in tax rates. It seems highlyunlikely that these gains could berepeated during another two-decadeperiod.

More than 90 percent of .school rev-enues are raised from state and localsources despite the new programs thatdoubled revenues from the federalgovernment in the 1965-66 school year.Since 1965 the local share has slowlydeclined to 51.9 percent for the 1963-69 school year, the state share declined,then increased to 40.9 percent, and thefederal share-7.9 percent in 1965-66has declined to 7.3 percent. Thesignificance of these share trends iswhat they augur.

School districts are almost com-pletely dependent upon property taxesfor tax source income. In a periodof sharply rising expenditure needs,property taxes, even under circum-stances of increasing property values,are an undependable r venue source.Incorporation of property value in-

22

creases into the tax base is a slow andunpopular process. State tax revenues(57.6 percent from sales taxes, 24.1percent from income taxes) are moreresponsive than property taxes tochanges in income, hence are morereliable tax sources to meet theirshare of expenditure increases as theyoccur. But state taxes, especially theincome tax, are increasingly subject torevenue-reducing administrative pro-visions that erode tax productivity inthe name of "tax simplification."Moreover, states are under continuouspressure to show their hospitality toindustry by keeping taxes low in rela-tion to neighboring states. Twelvestates have no personal income tax;and 10, no corporate income tax.

On the assumption that federal aidincreases 75 percent on the 1966 base,projections of state and local govern-ment revenue and expenditure to 1970and 1975 indicate that state and localgovernments in the aggregate will beable to finance theii expenditureneeds.? This over-all balance will givelittle comfort to the central cities andother pockets of revenue need such asschool districts and institutions ofhigher learning.8 The trends in rev-enue sources and expenditure needsare r4 _ring against them.

Hogan, John D. "Revenue Productivityof State Income Taxes." Proceedings of theFifty-Ninth National Tax Conference. Co-lumbus, Ohio: National Tax Association,1967. p. 414-15.

7 Tax Foundation. Fiscal Outlook for Stateand Local Government to 1975. New York:the Ft-v-mdation, 1966. 128 p.

B Mushkin, Selma J., and McLoone, Eugene.Public Spending for Higher Education in1970. Research Memorandum 374. Chicago:Council of State Governments, 1965. 68 p.

Mushkin, Selma J. Local School Expendi-tures, 1970 Projections. Research Memoran-dum 382. Chicago: Countil of State Govern-ments, 1965. 84 p.

At the time of thf federal govern-ment's entry into education financeon an increased basis in 1965 a con-cept of "fiscal federalism" was coinedto describe the tripartite financial sys-tem from which state and local gov-ernment would thenceforth benefit.To share with state governments the"fiscal surplus" produced by thatworld wonder, the federal revenuesystem, was considered not only fittingbut necessary to the prosperity of thecountry. Federal grams had begun tobypass the states and go direct tocities, and, with the inexorable work-ings of Baker v. Carr, conservativeroadblocks in the state legislature werecrumbling. A new era in Americanfiscal relations was dawning. The cur-tain will go up on that eta when theVietnam burden is finally removed.Until then the future of "fiscal fed-eralism" and education support willbe shrouded in doubt.

Government Support

From a financial support viewpointthere can be little controversy over thequestion of increased federal partici-pation in eo ication finance. An argu-ment can be made that the federalgovernment is an unreliable sourceof funds in that it may build com-mitments beyond its iiscal capacity,as now, or that the automatic eco-nomic stabilizers in the federal sys-tem increase and decrease revenuescontracyclically and, possibly. asyn-chronously with state and local needs.But the facts of federal revenue elas-ticity with respect to income, inter-state migration of families, and statephobias about industrial climate makea strong case for substantial increasesin the federal role. An equal share,with state and local governments, ofthe 1975 education expenditure esti-

mate of $53 billion would be a modestobjective for the federal government.

Other means of financial supportthat would better meet preferences formaxiwum local control can be de-sip al. But the roadblocks to success-ful implementation of any such designare awesome. A pet scheme that I havenursed along since proposing it inNew York 10 years ago is illustrative.The objective is to maintain educa-tion as a local function by preservingthe community basis that so well fitseducation practices in such areas ascurriculum flexibility, above-standardsalary schedules, and involvement ofteac:iers, parents, and social servicesin common tasks, but to create as wella basis for policy formulation withrespect to activities that must be largescale; for example, levying a sales orincome tax, borrowing money, pur-chasing supplies, and providing cer-tain high-cost services such as educa-tion telecommunications. Only schooldistricts have the capacity to organizeso that these different activitiesthosehampered by scale and those benefitedby scalecan coexist. School districtboundary lines alo ie among govern-ment jurisdictions have proved suffi-ciently flexible to promote efficiencythrough reorganization. It is certainlyfeasible to extend the principle froma few districts to many.

A federation of school districts toachieve the benefits of large-scale econ-omies yet retain community-level in-teraction for activities that are ham-pered by scale is a practical way tohave our cake and eat it too. The fed-eration would ideally be coterminouswith metropolitan area boundariesand create a jurisdiction having somemeaningful relation to the geographiclocus of metropolitan lifewaysshop-ping, commuting, recreation, etc.From the viewpoint of financial sup-

23

port the federation should be em-powered to levy a tax with high reve-nue productivity, i.e., an income orsales (surtax) tax.9

A modest flat-rate tax on incomewould appear to produce revenuegains for metropolitan school districtfederations sufficient to meet projectedexpenditures and m2,ntain propertytaxes at current rates in relation toequalize(' (market) value, given theexpanded federal support role as-

sumed in the Committee for EconomicDevelopment, Council of State Gov-ernments, and other projections ofstate and local revenue. All of thee-tisting administrative provisions de-signed to achieve equalized supportfor schools with needs/resource im-balances could be incorporated in sucha plan. In terms of financial supportthe shift to a tax mix having greaterincome tax weight is vital; the financeobjective is to create a base of sup-port that will grow commensuratewith needs.

9 In this respect especially, the proposaldiffers from the ACIR recommendation thatcounty and regional school property taxingdistricts be established. See: Advisory Com-mission or Intergovernmental Relations. Fis-cal Balan.e in the American Federal System.Vol. 2, Metropolitan Fiscal Disparities. Wash-ington, D. C.: Government Printing Office,October 1967. p. xxiv, recommendation 8.

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Concluding RemarksThe order in which presentations

to this Conference have proceeded ishighly appropriate. Financial supportis a comr,riling problem, on the onehand because social forces that chal-lenge education practice are at workand on the other hand because theprevailing ethic, including educationsupport mechanisms, has brought thedisturbing forces to an activist pos-ture. We are the victims of our ownhandiwork, frustrated in dealing ade-quately with emerging problems be-cause of past policies. Education iswell supported and well financed onlywhere an atmosphere of problem-freecalm rules. If education support de-pended only upon the economic bas!and its prospects, we could be san-guine about financing our needs. Un-fortunately, a large segment ofpopulation behaves as though scenespecial immunity from the effects ofghetto problems had been grantedthem. Suburbia, as Avery Post de-scribes it, "is a walk on the mild side.It is decency raging in the streets. Itis structured blindness, deafness anddumbness." More than any othervalue we need to build the convictionthat life today is lived on the outerridge with everyone's security threat-ened while the ghetto's security isthreatened.

Some Political Aspects of Educational Finance

Farris Bryant

WHEN I WAS INVITED to address thisgroup of educational finance special-ists, my initial reaction was to out-line in some detail the educationalfinance recommendations adopted bythe Advisory Comm ission on Inter-governmental Relations. On secondthought I decided that this approachwould be somewhat akin to carryingcoals to Newcastle. In fact, it mightbe interpreted as a rather gratuitousexercise because cur efforts in this fieldhave been limited largely to trans-lating some increasingly accepted con-cepts of equalization into suggestedlegislative language.1

1 Shannon, John. "The Role of the Statein Equalizing Educational OpportunityAnACIR Legislative Proposal." The Challengeof Change in School Finance. Proceedings ofthe Tenth National Conference on School Fi-nance Sponsored by the Committee on Edu-cational Finance. Washington, D. C.: Na-tional Education Association, 1967. p. 31-47.

See also: Advisory Commission on Inter-governmental Relations. "Fiscal Measures forEqualizing Educational Opportunities forEconomically and Socially Deprived Chil-dren." 1968 State Legislative Program of theAdvisory Commission on IntergovernmentalRelations. M-35. Washington, D. C.: theCon emission, September 1967. p. 248-58.

Advisory Commission on Intergovernmen-tal Relations. New Proposals for 1969, ACIRState Legislative Program. M -89. Washing.-ton, D. C.: the Commission, June 1968. "Met-ropolitan Educational Authority," p. 202 -1-202-5. "Property Tax Relief for Low-IncomeFamilies," p. 321-1-321-7. "Districts for Spe-cialized Educational Facilities," p. 902 -1-902.5.

Therefore, I have decided to con-centrate on the political rather thanthe technical side of the educationalfinance equation. As one who haslabored rather long in the public pol-icy vineyard, I am increasingly con-cerned about the growing gap be-tween what the experts say we mustdo and what the public is willing toaccept. To put the issue more directly:There is a growing gap between whatthe educational finance experts say wemust spend and what the public iswilling to buy.

In this context, the men in the mid-dle of this rug-of-war--the elected offi-cialsare often disdainfully viewedas "compromisers" or at best the pol-iticans are regarded as a necessaryevil 1 our system of adversary politics.

In reality, to become a statesman, apolitician must first become an educa-tor; he must educate in order to pro-vide policy leadership to the people ofhis city, state, or nation. On the onehand, our elected officials endeavor toconvince an increasingly hostile publicof the wisdom of buying our cora-

Gov. Bryant is Chairman, Advisory t;ommis-sion on Intergovernmental Relations; Mem-ber, Bryant, Freeman, Richardson and Wat-son, Partners at Law; and former Governorof Florida.

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plicated Robin Hood-type plans forbuilding greater equalization powerinto state foundation programs. Onthe other h end, they must attempt toeducate the educators (ordinarily nota docile group) on the need to be moreresponsive to both public attitudesabout education and to intergovern-mental fiscal realities.

As one who has been in the politicalcross fire between those who proposenew and better ways of spending pub-lic funds and those who are asked tofinance those proposals, I think Iknow, and possibly understand, therole of the elected policy-maker as amediator, compromiser, and educator.

We know that new ideas cannotreadily be rammed down the publicthroatit gags too easily.

We know what public service im-provements are needed; we are evensure that we hear loud public de-mands for them. It is not by accidentthat political oratory plays up the nicethings we will do when we are electedand plays down the costs.

But when we set out to do the thingswe promisedimprove the quality ofeducation, make sure that equal edu-cational opportunities are availableto all, assure that nobody goes hungry,provide clean air and water, keep thestreets safe and facilitate the flow oftraffic through themand the expertspresent us with all kinds of neat or-ganizational and financial plans to dothose things, we find a widening gulfbetween us and our constituelts. Andif we want to serve in our democracy,we had better listen to the clamor thatcomes across that gulf.

Pick up any governor's State of theStat message these days and you willsee what I mean. He will start with along list of "needs":

The educators tell him more stateaid is needed t' keep up with rising

26

teachers' salaries and to provide forabsolutely etiential enrichment.

The welfare peoplethey are now"human resources" peoplepoint tothe growing case loads and rising costof living.

The cities need moneyand sofar most states have not been veryresponsive to their needsto copewith their burgeoning problems inthe face of onerous local tax burdens.They are getting some help from thefederal government for housing andurban renewal, for mass transporta-tion, for "safe streets," for water andsewage disposal, but it is far fromenough.

So the governor adds up these needsfor more spending and it comes to astaggering sum. Mind you, he and hisbudget staff have already gone overthe departmental requests and theyhave tried to "cut out the fat." Stillthe extra amount is more than cancome out of the current tax structure.Then comes the soul searching. Howdo we raise the new funds? Do we askfor an income tax? (12 states do nothave one.) Do we raise income taxrates? (About 15 more states barelytap its potential.) Do we raise sales taxrates? (Only six states are still withouta sales tax, and they are small ones.)Do we keep hitting the nuisance taxes(liquor, cigarettes, amusements, etc.)?

Increasingly these hard tax choiceswill be accompanied by an agonizingreappraisal of our present system offinancing education. Because schoolcosts bulk so large, the friends of pub-lic education will need all the helpthey can get from the public at large.This means, for example, that theywill have to be far more attentive thanthey have been in the past to the grow-ing public demand that the educa-tional establishment produce sufficientinformation to enable tl a public to

evaluate the *electiveness of its schoolsystem. Moreover, from here on out,the champions of public educationwill have to be somewhat more solici-tous about the fiscal needs of hardpressed cities and counties and the ex-traordinary burdens that the propertytax imposes on low-income families.

Working with Cities and CountiesLet me elaborate first on the fact

that education is but one of manycompetitors for public funds despiteits earlier "fair-haired" position in ourstate-local fiscal system. Since the endof World War II expenditure for ele-mentary and secondary education hasgrown faster than for any other publicdomestic function. Per-capita expen-diture for local schools jumped almost600 percent between 1946 and 1967.Compare this with some of the otherfunctions: police and fire, about 300percent; public welfare, less than 400percent; health and hospitals, andhighways, about 500 percent each.

Fiscal independence of most schoolsystems from city and county govern-ments has been a significant factor intheir ability to tap the local 1 ax basemore readily than could noneduca-tional programs. School officials gen-erally can go directly to the taxpayerswith their requests, and up to now atleast the combination of educatorsand parents has been usually unbeat-able. As a result, education has overthe years been able to take a growingshare of the property tax piefromone-third in the 1940's to more thanhalf today.

Because the massive and growingschool pressure on the local propertytax is forcing many cities and countiesto the fiscal wall, the needs of thesegovernmental units will also have tobe taken into consideration by statelegislators. Thus, requests for educa-

tional funds must be scrutinized along-side those for more police protection,health and welfare services, sanitation,and mass transit facilities. Thescarcer resources become, the moreattention has to be paid to theirproper allocation among competingdemands for governmental services.The total public needs of the statehave to be considered, regardless ofthe governmental mix of responsibilityfor meeting them.

The practical effect of this situationwill be to force the representatives ofthe public school systems, the cities,and the counties to work together ifthey expect to come up with a satis-factory state aid package.

Measuring Educational Achievement

Let me raise a second painful issue,that of measuring educational achieve-ment. While it is true that it is notpossible to measure all aspeQs of tiieeducational process, some importantelements can be measured. Let merecall what Francis Keppel, the veryable former U. S. Commissioner ofEducation, said before the Councilof State School Officers in 1965:

The American people today expect more ofAmerican education than ever before. At sucha time, :sn't it clear to all of us as educatorsthat what we don't know can hurt us?

Moreover, if the leaders of publiceducation drag their feet on this issue,local school systems will increasinglyturn to the private sector for help. Itis my under i;anding that some schooldistricts have :already contracted withprivate firms, organizations that guar-antee for a fixed amount to raise thereading level of every pupil by at leastone grade.

There is increasing evidence thatmany of our educational leaders nowrealize that it is high time theydevelop a new report card, this one

27

for our school systems. At its recentmeeting in Washington, the Educa-tional Commission of the States tenta-tively agreed to assume responsibilityfor over-all management of a mostsignificant project, the National As-sessment of Education. I am re-minded of the old cavalry saying, "Ifyou don't want to get kicked by amule, get up by its head."

Property Tax Relief

Property tax relief for low-incomefamilies stands out as the third areaof concern. It is a sad commentaryon the affluent society if it must forcelow-income householders through theproperty tax wringer in order tofinance its schools and other localpublic services. It is no wonder thatthe elderly in particular are most avidin their opposition to the approval ofnew school bond issues and higherschool tax rates.

Many years ago we in Florida rec-ognzied the need to relieve home-owners of undue property tax burdensand at the same time to encouragehome ownership. We, like a numberof other states, did it by allowing everyhomestead a partial exemption (up Lo$5,000 in Florida) of assessed valua-tion. This kind of exemption is bene-ficial to those who can afford only lowand moderate price homes.

Wisconsin has recently come upwith a more complicated plan forproviding tax relief. This state planmaximizes property tax relief for thepoor while minimizing the drain onthe state treasury.2

Let me close with my basic themethe growing gap that separates whatthe educational experts say we mustspend and what the public is willingto buy. In my estimation you car). zo

2 See footnote 1.

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a long way toward resolving this issueif you follow three policies:

1. On the intergovernmental frontwork closely with the politicalleadership of cities and counties indeveloping a comprehensive approachto state and federal aid policies thatconsiders the needs of education inconjunction with other governmentalfunctions.

2. On the expenditure sidetakethe leadership in developing plansfor evaluating pupil achievement andthe over-all effectiveness of our publicschool systems.

3. On the tax sidesupport legisla-tion that will shield low-income fami-lies from high property taxes.' A group of topnotch political scien-

tists crystalized the issue we have beendiscussing today when they wrote:Governmental support for education is ashighly political as support for any other gov-ernmental function. Levels of educationalfinance for public schools are not determinedby the fiat of professional educators or thehopes and expectations of parents and teach-ers. State aid to local school districts . . isthe outcome of extended and highly complexpolitical struggles which involve the inter-action of group interests, parties, boards,commissioners, and departments of education,governors, legislative leaders and followers,courts, academic scribblers, opinion leadersin the mass media, and a Lost of lesser indi-viduals and institutions3

In an irreverent world in which itis claimed that God is dead and re-bellion against established values andauthorities is commonplace, it is notstrange that educational assumptionsalso are challenged. I am not con-cerned about the challenge to God,but mortal institutions must meettheir challengers or be overcome,

3 Bailey, Stephen K., and others. School-men and Politics: A Study of State Aid toEducation in the Northeast. Syracuse, N. Y.:Syracuse University Press, 1962. p. 103.

The Education Gap

Ldward J. Steimel

As A NONEDUCATOR standing before agroup of educators, I feel like a fishout of water. Maybe I should saylike the fish i the frying pan. Butbecause by your invita.ion to me tospeak here today you have concurredin one of my preachings, I can onlyexpress my gratitude to you. I havefor ome time maintained tha inorder to build the kind of public sup-port for education that it must have,the public must be brought into therole of policy making far more thanit has been in the past.

There once was a day not long agowhen the South, its people, and itsproblems were looked upon as the ex-treme opposite of the big cities of theEast, the North, or the West. Today,we see that the racial composition ofthe big city and the prime urbanproblems are identical to thcse of theSouth. Twenty, 30, 40, anl even 50percent Negro populations are com-mon to most of the big cities just asthey are common to the South.

So the solutions found to theseproblems in the South may well bethe solutions that will work in theNorth. The reverse, of course, is true.Unfortunately none of us will solve

Mr. Steirnel is Executive Director of thePublic Affairs Research Council of Louisiana,Inc., Baton Rouge, Louisiana.

these problems until we know theirnature better. Most of us who thinkwe understand their nature simply donot.

I might add on behalf of my part ofthe country, that it will not profit anyof us to blame any one section ofthe nation or any generation for theproblems we haw: today. That onlyfurnishes us with an tzcuse for notdoing the job we have before us.

I shall deal primarily with theeducation gap in America as a majorfactor in the urban crisis, becauseI seriously believe that it, more thananything else, is at the root of allthe major problems of our urbanareas.

Before I attempt to define whatI consider to be the education gapin America, let me focus on the gen-eral goal of public education inAmerica. Stated very briefly, it is tooffer to every child in America aneducation up to the limit or optimumof his capacity. There is nothingwrong with that. It is certainly inkeeping with the democratic nature ofour public school system. It is oneof the main reasons for the greatachievements of our educational sys-tem It has kept us on the track, atleast to a degree. It has preventedus from preventing certain childrenfrom getting a good education, as

29

systems of education in some nationsdo. It has led to the building of agreater stock of education in our en-tire population than any other na-tional system would have permitted.

Our criticisms, therefore, may becentered on how we have gone aboutachieving our goal. Our criticisms arethus placed in the context of makinga better system out of the best over-allsystem in the world. With all itsfaults, and it has many, I have to con-clude that it is the best when viewedfrom all standpoints.

What Is the Problem?

If we have such a good system ofeducation, what is the problem? Theproblem is many faceted, but at theroot of it is that age-old problem ofselfishnessor a nicer term self-interestof all of us which if pro-perly harnessed can be used to solveour problems in education. The greatachievements of our whole economicsystem, which is based heavily onharnessed self-interest, prove that.

Now to put the rest of my discussionin perspective, let me ask you, whohave most of the options available toanyone concerning the exact educa-tion you want for your children, if youwould be willing to send your childrento the worst school in your com-munity?

Children do go to these schools.Are they less important than yourchildren? Their parents have nooptions. Most of you in this audiencehave all the options. You have theoption of neighborhood selectionbased upon the fact that a good schoolmay be in a particular neighborhood;and if that school weakens, you canmove to another neighborhood.

In recent years as court decisionshave chipped away at our unequalsystems of education for black vs.

30

white, for af!laent vs. poor, well-educated vs. illiterate, not jus' in theSouth but in major population centersoutside the South, we have seen moreand more middle- and upper-incomewhites move farther out into thesuburbs or turn to private schools.

Will this destroy public educationthrough a mass exodus of the childrenof the more affluent people to privateschools? Will they withdraw theirsupport? Many have said that will bethe result. If this happens, are weprepared to accept its impact on oureconomy, on our society, and on ourwhole American system? Are we pre-pared for the greater stratification ofour society that this will bring andperhaps the full undoing of our sys-tem of government?

The answer of course is no. But ifwe really mean it, we have a job cutout for us: to help find the myriadof answers needed to guide all thoseour school officials, we hope, but ourcourts if necessarywho will bemaking the decisions on the fate ofeducation in America.

These answers cannot be providedjust by educators. Education is thebusiness not just of schoolmen andstudents but also of everyone, partic-ularly the leaders in our economy.They employ the choicest productsof education. They become wealthyat it. Why, then, do they not havesome worthwhile ideas on shapingeducational policy?

May I strongly warn against callingon business and industry leaders onlywhen you want money. Call on themto help shape educational policy andyou will find them volunteering themoney more readily.

Good businessmen know a goodbusiness deal. And public education isa good deal. Dr. Theodore Schultz ofthe University of Chicago makes good

sense when he shows the high eco-nomic return on dollars invested ineducation.1 Business and industrialleaders understand his kind of rea-soning. See that they know aboutSchultz. But more importantly seethat you involve them in your localschool decisions.

Different Aspects of theEducation Gap

Now let us look at some of thegaps we, and others like us whopreceded us, have permitted todevelop because on occasion we havepermitted our American goal ineducation to get subordinated to ourpersonal goal in education for ourown children.

There is first the achievement gap.This can be described in many ways,but probably one of the most dramaticways is to look at the achievementgap between the white and theblack populations. Negroes today areachieving approximately three tofour years less education at the pointof high-school graduation than arewhites. This varies only by degree forother minorities, particularly Mexi-cans, Puerto Ricans, and Indians. Itvaries only by degree in the Southas compared with the North. TheColeman report 2 shows this as doother studies.

How could it be otherwise when wehave subjected the Negro to a hun-dred years or more of no schooling andto a hundred years of woefully inade-

1 Schultz, Theodore W. "Education andEconomic Growth." Social Forces InfluencingAmerican Education. Sixtieth Yearbook ofthe National Society for the Study of Educa-tion, Part H. Chicago: University of ChicagoPress, 1961. p. 46-88.

2 Coleman, James S., and others. Equalityof Educational Opportunity. U. S. Depart-ment of Health, Education, and Welfare,Office of Education. Washington, D. C.: Gov-ernment Printing Office, 1966. 787 p.

quate schooling; and we shall be atleast a hundred more years in mop-ping up the mess that we have made.

The quality of Negro public educa-tion in Louisiana, I dare say, is notatypical of that to be found acrossthe South and, because the educa-tional lags of one generation spillinto each succeeding generation, thequality in other parts of the nation isseverely dampened. Thus, a briefglimpse at Negro public education inLouisiana over the past half centuryor more may indicate the obstacles weface.

Louisiana had no public schoolsystem for Negroes worthy of thename until after World War II. In1910, the school year for Negroes was80 days, or four months, half of thelength of the term for whites. Thepupil-teacher ratio for Negroes wasdouble that of whites. Negro teacherswere paid one- third as much as whitesand we spent one-fifth as many dollarsper pupil for Negroes as for whites.

As recently as 1940, the averageschool term for Negroes was sevenmonths compared with nine monthsfor whites. The pupil-teacher ratio forNegroes was 35 to 1, compared with 23to I for whites. The average Negroteacher was paid less than half asmuch as the white teacher, and wewere spending less than one-third asmuch to educate a Negro pupil as wespent for whites. So it is no wonderthat Negro education today is lacking.

Most Negro teachers in our publicschools today got all or part of theireducation under such conditions. So,in spite of the fact that significantprogress has been made in reducingthese deficits the past 25 years, thelegacy of the past is still with us.

Negro teachers coming off the as-sembly line today, largely from Negrocolleges, though better prepared than

31

10 years ago, are much less well pre-pared than white teachers, and theseyoung Negro teachers will have 40years ahead of them in our publicschool system.

The ignorant and illiterate parentsof this generation are not capable ofperforming the vital parent role inthe education of their children, andthus the children of this generationare doomed to lower achievement thanotherwise.

Unless this cycle of perpetual re-tardation is broken, the gap can neverbe closed. You and I must find theway to break the cycle.

Fourteen years have gone by sincethe now famed Supreme Court deseg-regation decision. If we measure thelot of the masses of Negroes today,we see really little change. Sure, thereis a black mayor in Cleveland andone in Gary, a black legislator inGeorgia and one in Louisiana, andmore Negroes are voting today. Butthe masses of Negroes are still un-educated, they are still most prom-inent among the unemployed, andthey still live in ghettos from NewYork to Los Angeles.

Fourteen years since the SupremeCourt decision, and in the 1967-68school year, 14 percent of the Negrochildren in the entire South wereenrolled in white schools. That is arate of 1 percent per year. Will ittake one hundred years? Perhaps not,but the resistance to school desegrega-tion based upon many factors whichhas resulted in 86 percent of Negrochildren still attending all-Negroschools is at least a measure of theenormity of the problem of closing thegap in achievement. It may welltake a hundred years to close the gap.It may take longer. But it will neverbe closed if we maintain largely sepa-rate schools and low-quality Negro

32

colleges where academic standards arebased on the low standards of theNegro high schools. For these collegesare turning out the teachers the pop -elate most of the Negro classroomstodaythe same teachers who willpopulate more and more white class-rooms tomorrow. These Negro col-leges have to be upgraded, or theymust go.

Yet, merging these students withachievement differences of one to fourgrades between e white and theNegro and merging faculties with likedisparities present enormous prob-lems of maintaining quality at thelevel now enjoyed by the majority.We whites demand that.

Our job, therefore, it to see to itthat quality is maintained on a levelat least equal to that of the presentwhite high school. It can be donethrough extensive use of the many in-novations that have been found inrecent years.

At PAR (Public Affairs ResearchCouncil of Louisiana, Inc.) we havejust published a study which focuseson some of the steps that can be takenin fact are already being taken bysome school systemsto offset theotherwise deteriorating effect thatmight result in the quality level ofour school systems as a result ofmerging a dual system into a singlesystem of education.

There is also an .:hievement gapfor children not now in schoolchild-ren of age 6, age 5, age 4, age 3, age 2,and age 18 months. Children of theseages have largely not been a concernof the public school system in thepast, but children of these ages dohave a massive achievement gap. Ifan attack is not made at this level,yes, even down to age 18 months ifnecessary, we may well be missing themost fruitful potential in removing

the achievement gap between theminority and majority groups in ourschool systems. This achievement gap,of course, is most notable in childrenwho come from culturally and sociallydeprived homespoor folks, real poorfolks, of any color.

Why did we have to wait for theHead Start program for 3- to 5-year-olds to show the public schools amajor reason why Negroes do sopoorly in school? Why did we have towait so long to admit openly thatNegroes are often a full grade behindwhite children as early as age 6 whenthey enter the first grade? Why didwe have to wait so long to find outthat no matter what is done after age6, most Negroes who are already be-hind at that point will not ever catchupespecially if we don't change ourapproach? Why did we have to waitso long to learn that preschool workeven as early as age 3 is too late forsome children? Why did we have towait so long to learn that even thoughthese childen may be equal in achieve-ment up to age 15 months, children inpoverty may be expected to begintheir intellectual retardation at thatpoint?

Another question: Why have wenot really tried to find out how mucho this problem of achievement inchildren of one race compared withanother is really environmental andhow much of it is due to heredity?

We talk about it a lot and withgreat conviction, but with much moreemotion than fact. Putnam a has writ-

3 Putnam, Carleton. Race and Reason: AYankee View. Washington, D. C.: PublicAffairs Press, 1961. 125 p.

Jenson, Arthur R. "How Much Can WeBoost IQ and Scholastic Achievement?" Har-vard Educational Review 39:1-123; Winter1969.

Kogan, Jerome S., and others, "How MuchCan We Boost IQ and Scholastic Achieve-

ten on it. So have many anthropoli-gists and other scientists. Counteringtheir arguments have been many sociascientists, but the fact is that solid re-search on these differences amongAmerican ethnic and racial groups issorely lacking. The neglect of twohundred or more years is with us, andwe find it hard to separate this neglectfrom heredity. If there is a heredityfactor, we should find out what it isso that we can work with it. I claimno answer here, but we should andcan find the answer, and until we do,we shall not have the best in educa-tion.

Education Offerings Gap

There is also the gap between edu-cational offerings afforded children ofwell-educated and affluent parents andchildren of the poor. Discriminationin the quality of schools and the qual-ity of teachers is not just related torace. It is related to the economicwell-being of children and their fami-lies. The richest neighborhoods havethe best schools; they have the bestteachers; they have the best andstrongest curricula. They also haveparents who have time to complainand the stamina to complain andfriends higher up whom they can useto bring pressure for what they want.The poorest neighborhoods have noneof these.

And the gap grows wider, unlessyou and I show the way to end thiskind of segregation.

Flexibility or Adaptability Gap

Then there is the flexibility oradaptability gap. Our public educa-tional system performs admirably forchildren of 90 to approximately 120IQ whose parents are neither too

ment? A Discussion." Harvard EducationalRev;cw 39:2734'56; Spring 1969.

33

stupid nor too smart and who providereasonably well for their children.

Our system does a poor job, and insome cases no job at all, for childrenbelow 90 IQ, for children above 120IQ, and especially above 140 IQ; forchildren of average IQ but whose par-ents are illiterate or poverty stricken;for children who do not fit the patternof average or normal in intelligence,in appearance, or in habits that con-form to those of most of us. Thesemay be children of any race.

Our teachers simply are not pre-pared psychologically, nor from thestandpoint of knowledge or aptitudesto work effectively with these childrenwho deviate from the "average-income,average-IQ, white child" because ourcolleges of education have not caredenough to train teachers for this mis-sion and our school boards have notcared enough to establish these pro-grams fast enough because you and Ihave not cared enough.

Now we have to solve this prob-lem because civil rightswhen we inthis country get through defining itwill not just mean Negro rights, butit will mean poor white people'srights, emotionally disturbed chil-dren's rights, cerebral palsy children'srights, mentally retarded children'srights. This bear is on the move andeither we prepare a good program forall, or we drown in mediocrity.

Instructional Design Gap

There is further the instructionaldesign gap both as to methods and asto curriculum. We already know howto make education a lot better thanwe have made it, but the pressureto implement these better methods hasnot been present to the extent thatit is now. We have implemented everso slowly because the educationalestablishment preferred not to move.

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Now there is pressurethe pressure,for example, of an unqualified Negroteacher standing before your child ina classroom and maybe standing inthe way of his education. This is pro-viding some of the self-interest im-petus we have needed.

What should we teach? Should weteach the knowledge amassed before1950, or should we teach the knowl-edge amassed since 1950? We are toldthat the latter body of knowledge isgreater. We cannot teach both bodiesof knowledge if we keep using thesame dispensing machine.

We still have 9-month schools.Why? Why not a longer term to meetthe requirements of the more diverseenrollments we face today. A longerterm will offer the advantage of re-medial programs for those who needit, enrichment programs for averageachievers, and acceleration for fastachievers.

Why do we have 6-hour days? Whydo we have school only in daytime?Why not night school?

Why teach mathematics beyond theeighth grade for everyone? How manypeople really use mathematics beyondthe eighth-grade level? Could thosetwo, three, or four years have beenbetter spent learning something else,something about people, for example?

If the goal is to offer education tothe limit of the ability of every child,why is our system so college-orientedand so little directed to vocationalpursuits? Why is it right to use taxdollars to train students for the voca-tion of lawyer, doctor, architect, re-searcher, teacher, but not the sameequivalent tax dollars for vocationsof welder, carpenter, instrument spe-cialist, chemical plant operator, andpipefitter?

Only one child in five finishes col-lege. Four in five do not. We who are

among the one in five run the show,and I venture to suggest that we havecheated the others. The four in fiveare grossly under-prepared for produc-tive lives. You and I are responsiblein large measure, and you and I losealong with the others because of it.

From the standpoint of organizingfor :nstruction there are several ques-tions we should answer.

Why 12 grades when the pupils inthe 12th grade today often haveachievement rai:,es as much as eightgrades apart?

Why any grades at all? Why notthe nongraded school? Rather thanbeing unstructured it has a more com-plex structure than even the 12-gradesystem. The point is that where thereare great disparities in achievementas will surely be the case with sub-stantial desegregationthe ungradedschool may prove to be far more adapt-able to children at whatever achieve-ment level they may be, and it permitsthem to move at their own pace. Andit need not slow down the fastachiever.

Why not use flexible groupings ofstudents based upon subject-matterskills? It is clear that students do notmature and achieve in all subject areasat the same pace. Why try to makethem do it? Making this suggestion, Iam fully cognizant of Judge J. SkellyWight's adverse decision in 1967 4 re-garding ability groupings, but I amlikewise convinced some such group-ings as these will be necessary and thatthey can be utilized in a manner notto go counter to the court's ruling.Certainly in many instances this deviceis educationally sound. I know of nofederal judges who really believe theyhave all the answers to this question.

4 Hobson v. Hansen, 269 F. Supp. 401(1967).

We know that some teachers arebetter than others. All children shouldget the benefits of that -.ne fourth-grade reading teacher who is superb,not just 25 children out of the 100fourth-graders. We must consider suchapproaches as team teaching whichmay well permit use of some of theteachers who do not meet the higheststandards and do so without sacrificingquality. Team teaching permits spe-cialization, joint curriculum plan-ning among several teachers, and asuperior teacher to offset a teacherwho may not be so superior. Whyhave we used these approaches solittle?

We must somehow find the answerto paying the superb teacher enough.We shall never get the share of talentin the public school we need unlesswe are able to match that market fortalent. It is our estimate that to matchthat market for talent we shall haveto be paying the average public-schoolteacher about $12,000 in 1975-76.

But the American people will neverpay that superb teacher what she isworth so long as the wo-st teacherin the system is paid the same. Wemust find a better system for reward-ing the exceptional teacher than pro-moting her to a supervisory post. Weneed her as a teacher in the classroom,and we must find a way to pay hermore.

If you want to see a whole genera-tion of the educational gap, the socialgap, the cultural gap, and the eco-nomic gap telescoped before youreyes, as I have, let me suggest thatyou spend a day or two in Philadel-phia visiting two or three of the Op-portunities Industrialization Centersthere. Or go to Detroit and visit asimilar program. There you will find20-year-olds and 35-year-olds who forone reason or another were lost by

35

the public schools. Illiterates getbasic education; the unskilled aregiven skills, and they are given jobs.The fact that the) are there andthat they are learning under condi-tions far from ideal shows that theycould have done so in their school-ageyears. Yet, the best of them have losta generation, and many of them havelost much more. You and I are moreresponsible than they are.

The Research Gap

There is, moreover, the researchgap. I believe most of us would agreethat education is the most importantsecular enterprise in our society. Yet,surely it is one of the least researched.Thus, it has stagnated.

Bestor 5 ventured forth in this field,as did Conant s and a number ofothers, but they have been heavilyresisted by the educational establish-ment, headquartered in the collegesof education, which have been guard-ing the status quo. Title IV of theElementary and Secondary EducationAct of 1965 is at least affording anopportunity toward filling this re-search void through creation of re-search laboratories throughout thecountry. Today there are some 20sach laboratories, and I have beenprivileged to serve on the board ofthe one covering the area of Louisianaand Texas ever since it was establishedsome two and one-half years ago. Our

5 Bestor, Arthur E. Educational Wasteland:The Retreat from Learning in Our PublicSchools. Urbana: University of Illinois Press,1953. 226 p.

6 Conant, James Bryant. The Education ofAmerican Teachers. New York: McGraw-Hill Book Co., 1963. 275 p.

Conant, James Bryant. Shaping Educa-tional Policy. New York: McGraw-Hill BookCo., 1964. 139 p.

Conant, James Bryant. The Comprehen-sive High School. New York: McGraw-HillBook Co., 1967. 95 p.

36

laboratory is spending approximately$2.5 million this year alone principallystudying the question: how to im-prove education for the Negro andfor the Mexican-American.

These are major problems in thisparticular area of the country. If wefind answers to these questions, theywill be answers that will be of benefitto every metropolitan area of theUnited States. Fortunately, we believethese laboratoriesestablished as non-profit corporations with boards thatmust be representative of the societyat large rather than representativeonly of educatorsare bringing tobear in the area of research not justthe views of educators but the viewsof employers of education as well.Top corporate executives serve on ourboard.

Fortunately, too, people from thecolleges of education are finding thatthose outside their normal sphere ofacquaintance have just as deep-seatedan interest in education as they have,and the communications gap that hasexisted for so long is beginning to beclosed. None of these laboratoriescan boast of any major accomplish-ments as yet, though we on the boardof the Southwest Educational Devel-opment Laboratory believe we are onthe verge of some discoveries. Yet,the fact that we are trying to find theanswers through research will ulti-mately prove fruitful if we are willingto put our findings to the test.

We know that those industries,those activities in our society, thathave made great progress through thegenerations have done so largelythrough research. Though it is longoverdue, I hope we have finally ar-rived at the point where we are willingto pour money into research in educa-tion. I wish it were not necessary forthe federal government to supply all

these funds, but if it cannot be ob-tained from other sources, I still amin favor of it because research is sorelyneeded in this field.

How Do We Close tho EducationalGap?

How do we close the educationalgap? We close it by re-examiningeverything about our system in termsof the question: Does this operation,this program, this practice, have any-thing about it that stands in the way ofoffering every child an opportunity tomake optimum advancement?

Experimentation

We close it by massive experimenta-tion, carried on with disadvantagedchildren of ages one through six andand with all forms of early childhoodeducation centers, to learn at whatage and under what conditions pre-school education should be offered.

Involving Parents

We close it by establishing programsto involve the parents, even parentswho are totally illiterate, in the schoolactivities to show them how they mayhelp their children get an education.

Strengthening Teacher EducationPrograms

We close it by strengthening teachereducation programs for all teachersand by modernizing materials andmethods used and by a,' pting themto the various children who will usethem. For teachers of the disadvan-taged, special training must be pro-vided, and the teachers must be morecarefully selected than they have beenin the past. Very few white teacherstoday, for example, are equipped todeal adequately with Negro children,for they simply do not understandthem. They have not been trained for

this special kind of work, and thereare virtually no programs to trainteachers to work effectively with thedisadvantaged.

Testing and Evaluation of ChildrenWe close the education gap by mas-

sive testing and evaNation of theachievements, aptitudes, and poten-tials of all children from preschoolthrough high school as a prerequisiteto developing a program to trulysharpen d talents of all children tothe fullest. I do not agree for onemoment that tests will pass from thescene, nor that they should. We must,of course, recognize their limitations,but we must have tests to learn wherethe starting place is with each child.

Counseling for All Children

We close the education gap by pro-viding counselingcompetent coun-selingfor all children at all levels.Far too many parents, in fact mostparents, are either too biased or tooignorant to guide their children with-out this kind of help.

Ungraded Schools

We close the instructional designgap by scrapping entirely the ideathat every child should progress onegrade ach year. We should replacethis with ungraded schools or flexiblegroupings based upon subject-matterachievement, or whatever such de-vices are best suited in a given setting,so as to permit children to progressas well as they are able.

Rewriting Instructional Materials

We close the education gap by re-writing instructional materials tomatch the particular language, cul-tural, and the social lags that existamong certa'n groups of children,especially the Negro and the Mexican-

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American. On this point I mightmention that the Southwest Educa-tional Development Laboratory has aproject funded primarily by the Na-tional Science Foundation over thenext school year that will cost $137,000to provide completely new instruc-tional materials at the second, fifth,and seventh grades in three schoolsin Baton Rouge. One is in an all-Negro school, another in an all-whiteschool, and another is a racially bal-anced school. The project includesthe creation of 24 publications for justthese three grades, half of them toaid the teachers. It involves a greatdeal of money on a very limited pro-ject, but it may be one of the cheapestand best investments we ha-re evermade. li, too, may be a flop. Butsomewhere down the line, if we keepinvesting in this kind of venture, weshall find the answers we seek.

Comprehensive and ContinuousTesting of Teachers

We close the educational gap further by comprehensive testing andevaluation of teachers so that we canidentify the qualified and the un-qualified, and by retraining tenureteachers who are found lacking inacceptable skills. Also we may needto provide a salary incentive to en-courage such teachers to upgrade theirpreparation.

This may be the most expensive andmost massive undertaking of all, butit is an absolute must. For example,in Louisiana, 39 percent of the pupilsin the public schools are Negro.Thirty-seven percent of the teachersare Negro, and most of them had in-ferior educational opportunities. Howwould you suddenly replace so manyteachers if vou should find them lack-ing in qualifications, even if youcould legally do so? Ninety-eight per-

38

cent of these teachers in Louisianahave college degrees. A goodly num-ber have master's degrees. Yet, a veryhigh percentage could not pass theNational Teachers Examination. Un-der faculty desegregation they willsoon be teaching whites.

Summary

In summary, the education gap ismost pronounced for blacks, forMexican-Americans, for children ofpoor economic status, and for childrenof low and children of high IQ. Thereasonable fruits of education are notbeing reaped by perhaps a quarter ofour children who should not be over-looked. It will cost billions:

1. To establish programs of earlychildhood education

2. To train teachers to work withthe disadvantaged

3. To retrain 15 to 20 percent ofour entire teacher force

4. To update teacher training prcgrams in our colleges of educa-tion

5. To establish innovations thatmatch the peculiar talents of ourvastly different children

6. And maybe to start training somechildren as early as one year old.

And it will cost more to do the re-search required to know what next todo in education. For even if we knewall the right ways to do it today, manyof them would be wrong tomorrow.

But it will cost far more billions ifwe do not do it. It will cost billions inwelfare for young people whose skillswill soon be outmoded because oftheir lack of education. It will costbillions for young people who are un-employed. It will cost billions inburned cities. It will cost billions inthe breakdown of law and order, andit may cost something more preciousa breakdown of our democracy.

Financing Public School in the 1970's

Erick L. Lindman

METHODS AND THEORIES of publicschool finance change from decade todecade, not so much because bettersolutions are found for old problems,but because the problem changes. In-structional emphases differ, new equip-ment becomes available, patterns oftaxation change, and governmentalresponsibilities shift from one level toanother. These changes profoundly af-fect ideas and methods used in financ-ing public schools.

There is a danger that we will clingtoo long to methods that worked wellin the past and fail to see the need forchange. Or, sensing the need forchange, we may lack the inventive tal-ent needed to design a new systemsuitable for the broader instructionalprogram in its new socioeconomic con-text.

There are many ways to view recenteducational change. For the purposeof this discussion, it is appropriate toconcentrate upon those changes whichhave a direct and significant bearingupon the problem and methods ofpublic school finance. These are (a)the more active role of the federalgovernment in education, (b) thechanging concept of equal educational

Dr. Lindman is Professor of Education,University of California, Los Angeles, Cali-fornia.

opportunity, and (c) the growth ofprogram-related grants in aid. Eachof these has profound implications forfinancing education during the decadeahead.

The More Active Role of theFederal Government

Less than a decade ago, when wespoke of the school finance partner-ship, we referred to two partnersthe state and the local school dis-trict. Moreover, we usually meant thejointly financed foundation program.Now there are three active partners,and a clarification of the role of thenew partner is essential.

Only a few years ago, interstateequalization of public-school resourceswas the role which nearly all educa-tional leaders would assign to the fed-eral government. This role called forgeneral support for public schoolsgranting greater amounts per pupilto low-wealth states with virtually nofederal direction over the expenditureof the granted funds.

This concept of the federal role wasbased upon a historical distrust ofthe concentration of power, whetherpolitical, religious, or economic, orthe power to determine how chil-dren should be educated. In theUnited States, where diversity and thefree market place of ideas are the

39

dominant ingredients of our educa-tional system, national controls seemedwholly inappropriate.

Moreover, under local control ofeducation many communities devel-oped excellent school systems. Distin-guished citizens accepted positions onlocal school boards, and local propertytaxpayers contributed toward the in-creasing school budget with remark-able generosity. New types of educa-tional programs were pioneered in thecities. All this happened under stateand local control of education.

There were, to be sure, inadequateschools in many communities. In mostcases these inadequacies could betraced to deficiencies in the localschool tax base. The assessed valua-tion of taxable property per pupil wasso low in some communities thatschool tax rates, far above the average,failed to provide sufficient funds foreven a minimum program.

To remedy this deficiency, the statesinvented new state-aid systems whichprovided greater amounts of state sup-port per pupil to the low-wealth dis-tricts. Along with the effort to im-prove the financial support for publicschools ^ame increased state supervi-sion and effort, to consolidate schoolsinto larger and more efficient schooladministrative units.

But progress was spotty. Some statesmade great progress; others lagged farbehind. Comparisons among the statesrevealed shocking differences in thelevel of education of its citizens. Dur-ing World War II and during the Ko-rean War, the number of young menwho were unacceptable for militaryservice because of educational defi-ciencies was intolerably great in somestates.

Again, a careful examination of thefacts revealed that most of the stateswith inadequate schools were also the

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states 'n which the per-capita incomewas suostantially below the nationalaverage. In general, the people inthose states were making as great aneffort to finance their schools as werepeople in other states. They weredevoting as large a percentage of theirincome to the support of schools, butthe funds available to the schools weregrossly inadequate.

These facts indicated an appropri-ate role for the federal government:It should provide general support forpublic schools without federal control,granting larger amounts to low-wealthstates, precisely as state governmentshad done for local school districts. Theassignment of this role to the federalgovernment was based upon the as-sumption that the causes of inade-quate schools are basically fiscal andthat state and local school leadershipthat will make wise choices in the useof additional funds exists or can befound.

Although the federal role is stronglysupported by educators, it has notbeen accepted by the U.S. Congress.Instead, during recent years, new fed-eral legislation has emphasized thestimulation role. In this role, thefederal government imitated privatefoundations and granted funds foreducational research and developmentand for temporary support of innova-tive programs.

Federal emphasis upon stimulationof new innovative programs reflecteda national concern for change and, itwas hoped, improvement in public-school programs and procedures. Theneed for improvement was apparentto everyone, and the approach seemedappropriate to most.

Small temporary grants under scoresof different federal grant programswere offered to local school systems anduniversity researchers. Many promis-

ing ideas were proposed. Some ofthem have contributed to the improve-ment of education; others were dis-continued and forgotten when thegrant was terminated. Some of themno doubt lack merit and should bediscontinued; some have merit buthave been dropped because funds fortheir continous support are lacking.This suggests a third role for the fed-eral governmentthe continous sup-port of educational programs of spe-cial interest to the federal government.Instead of merely stimulating the ini-tiation of a new program and thenwithdrawing the federal contribution,leaving the increased burden upon thelocal property taxpayer, the federalgovernment would provide continu-ous support for worthy supplementaleducational programs. Federal grantsfor vocational education and for com-pensatory education illustrate this fed-eral purpose. But even for these pro-grams the federal contribution is rela-tively small in relation to their costs.

If the continuous support of selectedsupplemental educational programs ofspecial interest to the federal govern-ment is an accepted federal role, theallocation procedures need to be re-examined. Techniques suitable forstimulation purposes are not appro-priate for continuous support pur-poses. For continuous support, thetotal cost of each program must beascertained along with the capacity ofstates and localities to contribute. Onthe basis of this information it shouldbe possible to develop a variable per-centage grant plan which would beeffective. Or perhaps the programsshould be operated on a contract-for-services-rendered basis.

Regardless of the grant-in-aid tech-nique which is ultimately accepted,the distinction between methods ap-propriate for temporary stimulation

purposes and those appropriate forcontinuous support purposes shouldbe carefully considered. Not only aredifferent allocation formulas needed,but also the administrative roles ofthe three levels of government shouldreflect the different federal purpose.

New Concepts of EqualEducational Opportunity

For more than a quarter of a cen-tury, an accepted purpose of stateschool support has been equalizationof educational opportunity. To besure, this effort has been conducted inthe political arena where fund limita-tions and conflicting interests haveproduced compromises with the ideal.Presumably, this situation will notchange.

Despite these realities, a clearer defi-nition of equal educational opportu-nity is needed. Several possible defi-nitions come to mind. Some of theseare:

1. Equal educational opportunity isachieved if all students are exposedto identical educational programs. Al-though the word equal suggests iden-tical programs, this definition mustbe rejected. Nc one would suggestthat equal medical service implies thesame medical treatment for all pa-tients. Similarly, educational ti ..at-ments must reflect the needs and tal-ents of students.

2. Equal educational opportunity isachieved if all schools serving the samegrade levels expend the same amountper pupil each year for current pur-poses exclusive of pupil transporta-tion. This definition has been usedfor the development of most founda-tion programs throughout the UnitedStates. It is inadequate because itfails to recognize unavoidable costdifferences encountered in differentschool districts for different types of

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students. Suitable education for phys-ically handicapped children, for voca-tional students, for students with spe-cial talents, and for students in needof compensatory education do not costthe same.

3. Equal educational opportunityis achieved if all schools serving thesame grade levels have equal numth3rsof pupils per professional staff mem-ber and professional staff members arepaid in accordance with a uniformsalary schedule. This definition is es-sentially a refinement of the seconddefinition and is substantially achievedwithin the boundaries of school dis-tricts. Yet we are well aware of thelimitations of this definition. Even ifthe racial composition of schools were"balanced," there would still be differ-ences in resources needed to providesuitable education for different stu-dents.

4. Equal educational opportunity isachieved if state funds are allocatedamong schools so as to provide addi-tional teaching resources for pupilswhose achievement test scores are sub-stantially below established norms.This definition reflects the growingconcern for compensatory and reme-dial education. It suggests that equal-ity of educational opportunity shouldbe measured by student performance.Such a goal could lead to neglect ofstudents with special talents.

5. Equal educational opportunityis achieved if all students have equalaccess educational programs suitedto their needs and talents. Althoughthis definition is the most difficult toimplement, it must guide educationalplanning in the years ahead. Theother definitions have been useful inthe past, but they fall short of an ac-ceptable ideal for American education.

If the fifth definition is accepted,the school finance plan must provide

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for greater variation of instructionalprograms within and among schoolsystems. Most of the foundation pro-grams we have developed fail to pro-vide adequately for needed programvariation. Moreover, it is not likelythat the foundation program conceptcan provide the required flexibility.For this reason, the foundation pro-gram must be supplemented by care-fully designed supplemental aids. Butthese supplemental grants in aid mustbe carefully designed so that their rela-tionship to the basic program is clear.In general, school finance practice hasnot developed satisfactory methods forrelating categorical grants in aid tothe basic foundation program.

Program Related Grants in Aid

In the development of systems forfinancing public schools during thedecade ahead, program related grantsin aid will play a more prominent role.In the past, special or categorical aidshave been regarded as necessary evilsby most school administrators becauseof the constraints they place on thebudgetary process and because of theirburdensome administrative concomi-tants.

Appropriating agencies, however,Like their clarity of purpose. Unlikegeneral support, categorical aids seemto assure legislators that for a rela-tively small appropriation, substan-tial program improvement will beachieved. For this reason categoricalaids tend to proliferate.

The problem, then, is to retain theirclarity of purpose and avoid their ad-ministrative constraints and burdens.This can be achieved by consolidatingexisting categorical aids into fewerprograms with broader purposes.

Moreover, the public-school chartof accounts should be program ori-ented. Direct expenditures for well-

established continuing supplementalprograms, such as vocational edtica-tion, and special education, should besegregated in the basic public-schoolaccounting system. This change wouldprovide essential information concern-ing program costs and would facilitatethe evaluation process.

With this information, it should bepossible to develop techniques for re-lating categorical supplemental aids tothe basic foundation program. More-over, proper emphasis upon the extracosts of supplemental programs shouldgo a long way toward solving theschool finance problem of large cities.This emphasis, along with appropriaterecognition of the municipal overbur-den when the local taxpaying capacityof a city school system is determined,should lead to a solution of the prob-lem of financing schools in the urbancenters.

In the decade ahead there will bemore emphasis upon evaluation ofschool programs. For specially aidedsupplemental programs, the evalua-tion process will take on a new sig-nificance. While the basic program issubject to modification and improve-ment, it cannot be terminated. But if

a specially aided supplemental pro-gram is not producing results in alocal school system, the aid for suchprogram may well be discontinued.

In the past, "process standards"have been established in an effort toassure quality. For example, to beeligible for state aid for special educa-tion, school districts are often requiredto employ a teacher with special train-ing and maintain a prescribed smallclass size. In the future, evidence con-cerning "program accomplishments"may replace "process standards" indetermining whether or not state aidfor the program is continued.

Thus, the concepts of programbudgeting, and cost-effectiveness maybecome an important element inschool support systems of the 1970's,requiring new techniques and proce-dures.

This brief look into the future indi-cates the nature of the problems offinancing public schools in the decadeahead. It suggests some approachesto solving the problem. But the formi-dable task of connecting existing stateand federal school support laws intoviable programs for the 1970's remainsto be done.

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The Judicial Assault on State School Aid Laws

August W. Steinhilber

ONE OF THE MOST significant constitu-tional issues involving education sincethe Supreme Court of the UnitedStates ruled on Brown v. Board ofEducation (347 U.S. 483 (1954)) isbeing litigated in our courts. Thatissue, stated in simple terms, questionswhether a state, through its structureof school finance laws, should be per-mitted to allow unequal support ofeducation within its boundaries. Anincreasing number of law suits havebeen filed attacking state school aidprovisions as discriminatory, unreason-able, irrelevant to educational needs,and thus in violation of the Four-teenth Amendment of the Constitu-tion of the United States.

The first suit was filed by the De-troit School District just over one yearago, February 2, 1968. Similar suitswere instituted in Chicago (McInnisv. Ogilvie); Los Angeles (Serrano vPriest); San Antonio (Rodriguez v.San Antonio Independent School Dis-trict); Bath County, Virginia (Burrussv. Wilkerson); and San Luis ObispoCounty, California (Silva v. Atasca-dero Unified School District); to men-

Mr. Steinhilber, a Lawyer, is Director ofFederal and Congressional Relations, Na-tional School Boards Association, Evanston,Illinois.

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tion a few.i While the names of thecases are not that relevant ior discus-sion purposes, the issues are. Ratherthan describe each case in detail, Ishall review the legal issues involvedand mention a few of the particularfacts.

At the outset, one further groundrule. I will make one important omis-sion from the discussion of legal issues,that related to court jurisdiction, in-cluding procedural issues. While theseprocedural matters are important tothe lawyers involved in the litiga-tions, and some cases may be dismissedfor procedural reasons, I firmly be-lieve that there is enough precedentto grant jurisdiction if the SupremeCourt of the United States can beconvinced of the importance of thesubstance of the cases.

1 Editor's note: At press time these caseswere in various stages of litigation. The Su-preme Court of the United States affirmedthe judgment of the Federal District Court inMclnnis v. Ogilvie (293 F. Supp. 327 (1968)on March 24, 1969 (37 Law Week 3354)). TheFederal District Court denied the relief re-quested in Burruss v. Wilkerson (-- F. Supp., May 23, 1969). The Detroit case is.schcd-uled to be heard in the fall in state courts ofMichigan. The California cases have beenappealed from an initial adverse decision.Also, several other places are investigating orhave initiated suits.

Constitutional Setting

The Fourteenth Amendment readsin part, "(N)or shall any state . . .

deny to any person within its jurisdic-tion the equal protection of the laws."This, the equal protection clause, for-bids all invidious discrimination andrequires equal treatment of persons insimilar circumstances. States may notarbitrarily treat people differently un-der their laws. As the Supreme Courtsaid in Barbier v. Connolly (113 U.S.27 at 31 (1885)):

Equal protection and security should be givento all under like circumstances in the enjoy-ment of their personal and civil rights; thatall persons should be equally entitled to pur-sue their happiness and acquire and enjoyproperty; that they should have like accessto the courts of the country for the protec-tion of their persons and property, the pre-vention and redress; of wrongs, and the en-forcement of contr..as; that no impedimentshould be interposed to the pursuits of any-one except as applied to the same pursuits byothers under like circumstances; that nogreater burdens should be laid upon onethan are laid upon others in the same callingand condition.

This prohibition applies only tostate action. State action does includeany agency of the state be it judicial,legislative, or executive and any in-strumentality of the stat.2. A state can-not avoid the prohibition by trans-ferring or delegating its responsibilityto a private body. The equal protec-tion clause does not require absolutelyidentical treatment for all; it does per-mit reasonable classification within thelaw. Once again, using the court'swords, the classification "must alwa.7-..rest upon some difference which bearsa reasonable and just relation to theact in respect to which the classifica-tion is proposed, and can never bemade arbitrarily and without any suchbasis" (Gulf, Colorado and Santa Fe

Railway Company v. Ellis, 165 U.S.150 at 155 (1897)).

Thus, a state, having undertaken aresponsibility, must treat all alike orjustify as reasonable any classificationsystem which treats individuals dif-ferently.

State Action

There can be no doubt that thestates have undertaken the educationfunction and that all states have con-stitutional provisions relating to theestablishment of a system of publiceducation. All states provide state fi-naneal assistance in the support ofpublic education. Only three statesdo not require school attendance bychildren and of those three, two makecompulsory attendance a matter oflocal option. The concomitant re-quirements placed on the local schooldistrict are the state laws requiringthe local school district to maintainand operate a school for a specificperiod of time. Forty-five states havesuch a requirement, the usual mini-mum statutory school term being 180days, found in 32 states. Many stateaid formulas contain additional pro-visions pertaining to the school term.

What is many times forgotten in thediscussion of state responsibility foreducation is that school districts them-selves are subdivisions and creaturesof the state. They are as much a stateagency as the state department of edu-cation. School facilities, although paidfor out of local taxes, are the propertyof the state and ultimate control ofthe property rests with the legislature.A state legislature can create, alter, orabolish a school district as it deems fit.There can be no question that oursystem of public education falls withinthe definition of state action; in fact,education may be something muchmorea state responsibility.

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Specific ArgumentsThe assaults on state educational

aid laws question the reasonablenessof such laws which permit the qualityof education a child receives to bebasically dependent upon the propertyvalues within the school district wherethat child lives. Does geography orthe wealth of a particular school dis-trict whose existence, you recall, canbe changed at the will of the legisla-ture bear any reasonable relationshipto educational needs? Should pupilsliving in one district hay,: great ma-terial advantages over the children inanother when the educational need;are the same, or given a more severetest, when the educational needs ofthe second group are greater?

When one compares either the 1964-65 per-capita or per-pupil expendi-tures of the central cities with areasoutside those cities, the disparity isstriking. Los Angeles: central city,$424 per pupil, outside, $654 per pu-pil; Chicago, $433 and $578; Detroit,$454 and $539; San Francisco, $565and $758; St. Louis, $411 and $594;Newark, $515 and $619; and Cleve-land, $433 and $609.2

The taxable property behind eachpupil is likewise striking. In Illinoisit varies between $3,000 and $114,000;in Michigan, between $1,300 and $53,-000; in California, between $3,700 and$306,000.

If voting rights cannot be condi-tioned on *.,-alth, as the SupremeCourt ruled in striking down statepoll taxes (Harper v. Virginia Boardof Elections, 383 U.S. 663 (1966)), howcan education? If the relative valueof a person's vote cannot be condi-

2 Advisory Commission on Intergovernmen-tal Relations. Fiscal Balance in the AmericanFederal System. Vol. 2, Metropolitan FiscalDisparities. Washington, D. C.: GovernmentPrinting Office, October 1967. p. 66.

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tioned on where he lives (Baker v.Carr, 369 U.S. 186 (1M)), how canhis education be so conditioned?

Without trying each case, some ofthe ligitation does highlight the dis-parity to which I refer.

In the San Luis Obispo case, theplaintiffs pointed out that the assessedvaluation in Beverly Hills is $94,000per elementary-school child while inthe Atascadero school district it is but$15,000. Furthermore, Beverly Hillsproperty is taxed at a rate 25 percentlower than Atascadero yet raises morerevenue per pupil ($575 as comparedwith $88). Yet the state provides instate aid virtually the same amountper pupil to each school district.

In the San Antonio litigation, itwas pointed out that the people inEnglewood Independent School Dis-trict have a lower per-capita income,a lower mean income, a lower familyincome, and a lower per-pupil expen-diture than surrounding school dis-tricts, yet their tax rate is not lowerand their education system is poorlyfinanced.

A case arising in Florida, althoughunique in facts, raises the same issues.3A Florida statute states that anycounty that imposes on itself morethan 10 mills ad valorem propertytaxes for education will not be eligiblefor state aid. Given the wide disparityof property values in the state, onecounty can raise $725 per pupil fromproperty taxes while another can raiseonly $52. The argument is that thisprovision denies children in property-poor counties an equal education op-portunity because it limits the tax rate

3 Editor's note: The original complaintwas dismissed by the federal district court;on appeal to the U.S. Circuit Court for theFourth Circuit, the complaint was reinstated.At press time no decision on the merits hadbeen rendered.

and this limitation bears no reasonablerelationship to education needs. Itprevents parents and taxpayers fromproviding as fine an educational sys-tem as provided in other counties.

The Detroit facts show that the citynow taxes property at the highest ratepossible under state law. Of the $167million spent for general maintenanceand operation of the schools, $81 mil-lion comes from local property taxes,$70 million from state aid, and $16million from miscellaneous sources.

Detroit is plagued by the same prob-lems that exist in other cities. Educa-tion costs are rising. The tax base isshrinking. Educational needs are be-coming more acute. Serious financialquestions are linked to municipaloverburdens.

The state aid formula takes twobasic criteria into consideration: (a)the number of children and (b) stateequalized valuation of property. To amuch lesser degree, a factor comparesthe total tax rate with the average taxrate for all other districts. In com-parison with many other examples,the Michigan finance laws are notarchaic. Yet these statues are attackedfor failing to (a) correct the disparityin the level of local property revenuesin the state; (b) compensate districtswith marked differences in the qualityof schools, equipment, etc.; (c) takeinto consideration differences in thecost of salaries, construction, etc., invarious areas of the state; and (d) con-sider added costs in districts havingconcentrations of educationally dis-advantaged children who need specialservices above and beyond regularschool programs.

There is court language which maysupport the proposition that the de-nial of a fair system of financial sup-port for education is the denial ofeducation for a segment of a state:

It is now dearly settled that once the Stateundertakes the function of providing publiceducation to its citizens it cannot arbitrarilydeny such education to citizens in one areaof the State while continuing to make publiceducation available to citizens in the otherareas. The most recent pronouncement ofthis proposition was on May 25, 1964, by theSupreme Court in Griffin, etc., et. al. v. CountySchool Board of Prince Edward County, et.el, supra. Therefore, as long as the State ofAlabama maintains a public school system itcannot make public education "unavailable"for a class of citizens as was here attemptedby the defendant State Board of Educationand Governor, while making public educa-tion available to a different class of citizensin other areas of the county and State. (Leev. Macon County Board of Education, 231 F.Supp. 743 at 754 (1964))

EducationA Personal FreedomUp to now, the discussion has been

based upon "equal protection" undera state assumed but not a requiredfunction. Perhaps the issue mvy beresolved under the "due process"clause of the Fourteenth Amendment.That clause forbids a state from de-priving a person of life, liberty, orproperty without due process of law.While this argument has not beenstrongly advanced, education may bea personal freedom the same as free-dom of speech. The Federal interestin education is more than passing. Itshistory is long, and at times the rightto an education has been on the vergeof being declared national policy.

Seven times the enabling legislationfor new states carried a requirementthat the state constitution must makeprovisions for public education. Whenformer Confederate states were giventhe right to representation in the Con-gress, the Congress enacted statutesstating that the state constitution maynever be amended so as to deprive anycitizen or class of citizens of schoolrights (16 Stat. 62). In Brown v. Boardof Education (347 U.S. 483 at 4931954)), the Supreme Court said:

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Today, education is perhaps the mostimportant function of state and local govern-ments. Compulsory school attendance lawsand the great expenditures for education bothdemonstrate our recognition of the impor-tance of education to our democratic society.It is required in the performance of our mostbasic pudic responsibilities, even service inthe armed forces. It is the very fuundation ofgood citizenship. Today it is a principal in-strument in awakening the child to culturalvalues, in preparing him for later professionaltraining, and in helping him to adjust nor-mally to his environment. In these days, itis doubtful that any child may reasonably beexpected to succeed in life if he is deniedthe opportunity of an education.

Education is most basic to our so-ciety and our way of life. The federallegislative support of education startedin 1787 with the Northwest Ordi-nance, and has continued to the ex-tent that billions of dollars are nowappropriated in support of education.

Perhaps education has become morethan a function that a state can under-take or drop at its discretion. Per-haps it has become a birthright of ourpeople which cannot be deprivedwithout due process of law. Thefailure of a state to adequately supporteducation may be an arbitrary denialof education without due process oflaw. This argument may seem far-fetched, but so have been many otherconcepts which we now accept.

Remedies

What is most distressing aboutthese cases is the lack of easy remedies.What can the courts do, consideringthey have no legislative authority?In the Florida litigation, a remedy

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can be fashioned. Simply declare themillage limitation statute unconstitu-tional. This does not offer any sugges-tions for resolving other cases. Courtscannot enact state aid formulas.

I submit, however, courts will asthey have in the past give fair warn-ing of future ruling. The politicalthicket of reapportionment was notentered until it was apparent thatlegislators could not or would not act."Separate but equal" was the law un-til it became apparent the "separate"provision was adhered to but neverthe "equal." Taxpayers' suits againstfederal expenditures were once for-bidden under the "lack of standing"doctrine enunciated in Frothinghamv. Mellon 262 U.S. 447 (1923)) untilFirst Amendment rights caused thecourts to look again in Flast v. Cohen(88 S. Ct. 1942 (1968)).

I believe some peripheral cases likethe Florida one will be decided onnarrow grounds. The decisions willcarry dicta which will be a warningfor the future. If no corrective actionis taken, we may find a court rulingthat pending the adoption of a fairsystem f distribution of educationalfunds, all taxes, property and other-wise, will be forwarded to the -'ateand realloted to local school districtson the basis of identical per-pupilamounts.

For those of you who gasp, is thismuch different from an order requir-ing all members of a state legislaturebe elected at large pending the court'sacceptance of a reasonable reappor-tionment plan?

Detroit's Fight for Equal Educational Opportunity

Abraham L. Zwerdling

THE DECISION of the Detroit Board ofEducation to file suit against thestate of Michigan challenging theconstitutionality of the presentmethod of financing public educationin the state, may be considered atfirst blush a bold, radical step. Intruth, it is conservative in the truesense of the word, which is defined asinvolving the preservation of existinginstitutions. This lawsuit has itspurpose to conserve and protect theAmerican system, which has as itstouchstone equal opportunity forfree public education.

The Northwest Ordinance of 1787,which included in its territory whatlater became the state of Michigan,proclaimed:

Religion, morality, and knowledge beingnecessary to good government, schools atldthe means of education shall forever be en-couraged.I

Alexis de Tocqueville said in hisclassical work, Democracy in America:

It cannot be doubted that in the UnitedStates the instruction of the people power-fully contributed to the sup, in of the demo-cratic republic; . . .

I Northwest Ordinance of 1757: Article III.

Mr. Zwerdling is Vice-President, Board ofEducation, Detroit, Michigan, and a partnerof the law firm, Zwerdling, Miller, Klimist,and Maurer.

In the United States politics are the endand aim of education?

Free public schools became a real-ity in America durhg the years 1830to 1860. Children could attend theseschools without a tax being levied onthem for attending. Financing theschools was not tied to the wealth ofthe student's family. It is plain thatin large part public education was aplan to educate the poor. Educationwas to be the great social equalizerby which each individual found hisplace in society on the basis of meritand ability alone. As Horace Mannsaid:

Education . . . beyond all other devices ofhuman origin, is the great equalizer of theconditions of manthe balance-wheel of thesocial macHnery. . . . It does better than todisarm the poor of their hostility Towards therich: it prevents being poor.a

The states started out by delegatingthe task of public education to thelocal communities. Local communi-ties were required to finance theirown schools with local funds alone.As a result, pub' is schools varied in

2 de Tocqueville, Alexis. Democracy inAmerica. New York: Alfred A. Knopf, 1960.Vol. I, p. 317.18.

3 Mann, Horace. "Report for 1848." Lifeand Works of Horace Mann, Vol. IV. Boston:Lee and Shepard Publishers, 1891. p. 251.

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quality with the weak-. in the com-munity.4

The Flat Grant System

In 1906, Cubberley, an early ex-ponent of equal educational oppor-tunity, called for the states themselvesto participate in the financing ofpublic education. He advocated thatstates supplement local resources withso many dollars per pupil per dayof attendance or per employed teacher,the so-called flat grant system offinance to encourage extension ofschooling.°

This was a pittance to the poorerdistricts in their attempts to providea modicum of public education anddid not bring about equal educationalopportunity. State money was paidto all districts on the same basis, andthe program did aot offer any hopeof bringing the product provided tothe poor closer to that provided tothe rich.

The Foundation Program

The next step in the effort to bringabout equal educational opportunitycame in the 1920's through George D.Strayer and Robert M. Haig. 1 heydeveloped what today is known asthe foundation program in stateschool finance. Under this programa district would be guaranteed a cer-tain minimum amount per pupil ifit was willing to tax itself so manymills. For example, if the establishedminimum was $200 per pupil, andthe state equalized valuation of a

4 The writer is deeply indebted to Readingsfor Sessions on Schcol Finance, an unpub-lished manuscript by S. Sugarman from whichhe has borrowed and paraphrased in detail-ing the history of school finance.

5 Cubberley, Ellwood P. Schoo! Funds andTheir Apportionment. Contributions to Edu-cation, No. 2. New York: Teachers College,Columbia University, 1906.

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district was such that by taxings itsproperty owners 20 mills it could notraise ;200 per pupil, the state wouldmake up the difference. It was be-lieved that this program would achieveequal educational opportunity.

In 1933, the Report of the NationalSurvey of School Finances included aSchool Finance Charter with variousplanks calling for the adoption of thefoundation program. This includeda proposal for an adjustment forwealth which would equalize educa-tional opportunity.°

In 1936, the League of WomenVoters joined the fight for the founda-tion program, declaring, ''The stateshould offer all children equal educa-tiona. opportunities."

With broad support, the founda-tion program of public school financewas widely adopted. This is the basicschool finance program we have inmost states today. It is the programwe have in Michigan.

The Failure of the FoundationProgram

Tcday we recognize that the founda-tion program of school finance hasfailed us. It has failed to provide theequal ducational opportunity weexpected. It has failet; because inmany states the minimum amountguaranteed by the state is far belowthe amount required for a minimallyadequate education. The state equal-ized valuation iii the poor local schooldistricts is such that they must taxthemselves at many times the rate awealthy district taxes itself to raisethe same amount for education. In

a Mort, Paul R. State Support for Pu5licEducation. U.S. Department of the Interior,Office of Education, National Survey of SchoolFinance. Washington, D. C.: American Coun-cil on Education, 1933. 496 p.

Michigan the River Rouge District'sproperty valuation per resident pupilin 1965-66 was $53,156, while theForsyth District's was $1,319 perpupil? In Illinois the MonticelloDistrict. had $114,000 per pupil prop-erty valuation for taxation, and theBrookport District had $3,000.8 InCalifornia, the Big Creek 'District in1966-67 had $288,975 per pupil inADA property valuation; the ShastaUnion District had $5,750.9 In NewYork the range is from over $200,000to under $5,000.19

The present system of school financehas failed because, among otherreasons, it does not recognize thatmany districts, particularly those inlarge cities, are overwhelmed withother demands on the property taxfor stun essential items as policeprotection and welfare, and, there-fore, cannot allocate enough for edu-cation.

The present system has fr.iled be-cause if does not even provide forequality in per-pupil expendituresamong the various school districts,let alone take account of differencesin construction and maintenancecosts and teacher salaries, or the addedcost some districts face in educatingthose disadvantaged child/9n who

7 Michigan State Board of Education. Rank-ing of Michigan High School Districts by Se-lected Financial Data, 1965-66. F.u!letin 1012.Lansing: the State Board.

B McLure, William P., Chairman. Educa-tion for the Future of Illinois. Report of aStudy by The Task Force on Education.Springfield: State of Illinois, December 1966.p. 115.

9 California State Department of Education.Average Daily Attrndance and Selected Finan-cial Statistics of -,11ifornia School Districts,1966-67. Sacramento: the Department, 1968.p. 95 and 114.

10 Allen, James E., Jr. "The State, Educa-tional Priorities, and Local r lancing." in-tegrated Education 6:55-61; September-Octo-ber 1968. p. 59.

show up zzt school less able, and notyet ready, to learn. In Californiatotal current expenditures per pupilin ADA varied from $297 to $1,345in 1966-67 "; in New York, from $470to $1,600 12; and in 1967-68 in Vir-ginia from $848 per pupil in Arling-ton County to $374 per pupil inAmherst County." The variation isto the disadvantage of the poor dis-tricts with the most disadvantagedchildren.

Think of what all of this means interms of class size, teacher trainingand quality, remedial programs, com-pensatory education programs, ageand condition of school plant, qualityand quantity of textbooks, scienceequipment, language laboratories,physical education facilities, counsel-ing and psychological assistance, andso on." All of this, as Dr. JamesConant has written, "jolts one'snotions of the meaning of equality ofopportunity." 15

In a country which premises itspolitical, economic, and social systemon the belief that every child is en-titled to make the most of his ownabilities, we are still preferring theeducation of some children over thatof others. Generally speaking, the poorchildren of the inner city get the least,and the children of the affluent get

11 California State Department. of Educa-tion, op. cit., p. 97 and 115.

12 Allen, James E., Jr., op. cit. p. 58.13 Virginia Education Association. Virginia's

Educational Disparities. Richmond: the As-sociation, February 1969. p. 6.

14 Keppel, Francis. The Necessary Revolu-tion in American Education. New York: Har-per and Row, 1966. p. 77.

Thomas, J. Alan. School Finance and Edu-cational Opportunity in Michigan. Lansing:Michigan Department of Education, 1968.p. 22, 25.

is Conant, James B. Slums and Suburbs:A Commentary on Schools in MetropolitanAreas. New York: McGraw-Hill Book Co.,1961. p. 3.

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the most. The social cost of all this isnot only the personal tragedies ofthose d;:advantaged children to whomthe lack of equal educational oppor-tunity spells the end of the Americandream, but it is also the waste involvedin turning out candidates for thewelfare tolls and prisons instead ofproductive citizens. It is the threatto our system involved in the socialdynamite of alienution.

I submit to you that the failurelies in the present method by whichwe finance public education.

This is not the fault of those schooldistricts, such as Detroit and otherbig cities, which have inadequateresources and extraordinary needs.It is the fault of the state whichcreated those districts. It is the statewhich is responsible for publiceducation. Under the Michigan con-sitution, the state itself is explicitlycharged with the responsibility ofsupporting and maintaining thepublic elementary and secondaryschools in the state of Michigan."The constitutions of 38 states ex-plicitly provide that public educationis the responsibility of the state."

Public education and its financinghas always been the responsibility ofstate government. Until now moststates have attempted to fulfill thisresponsibility by delegating a sub-stantial part of it to local school dis-tricts. When this system fails, the state

16 Michigan Constitution of 1963, ArticleVIII, sec. 1-2.

17 Johnson, George M. The Constitutional,Legislative and Decisional Law As It Relatesto the Purposes of Public Elementary andSecondary Education Maintained in the FillyStates of the United States. (Unpublished)p. 2. The Supreme Court of the United Stateshas ruled on many occasions that the stateacts through the smaller units it creates, e.g.,Cooper v. Aaron, 358 U.S. 1 at 16 (1958). Thepractical effect of these decisions is to makeall 50 states responsib.e for public education.

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is responsible. As the courts have saicimany times:

A contrary position would allowa state to evade its constitutional re-sponsibilities by carve-outs of smallunits."

To us on the Detroit Board of Edu-cation, this means that the state isresponsible for what has happened inDetroit on account of inadequate re-sources.

The Detroit Experience

Let me tell you a little bit aboutthe Detroit public school system andthe children who are in it. There arealmost 300,000 children in our system.They do not meet national norms onthe Comparative English Test. Nordo they meet national norms on theSCAT-STEP test battery. We havethe dubious distinction of being abovethe national average in the numberof young men not passing the selec-tive service test."

Every year we graduate approxi-mately 13,000 children from our highschools. For the year 1966-67, we had10,150 dropouts." In eight of our 22high schools more than one-half ofthe starting freshman class will dropout without finishing. In Jame cases,it is more than 60 percent." Whilethe national dropout rate is falling,ours is rising."

Ow- high-school diplomas are re-garded by many employers as less than

is Allen v. County School Board of PrinceEdward County, 207 F. Supp. :49, at 354(1962) affirmed 377 U.S. 218 (1963).

is Report of the Detroit High School StudyCommission, 1968, p. 108.

20 Michigan Department ,J Education. An-nual School Holding Power Report, 1966-67.

21 Report of the Detroit High School StudyCommission, 1968, p. 189.

22 Detroit Public Schools. Relationship ofIncrwe to Some Indices of High School Suc-cess in the Detroit Public Schools. Detroit:Board of Education, 1968. p. 12.

valid." The average black high-schoo'student who completes 12 years ofschooling in the Detroit system scoresat eighth-grade level in reading com-prehension and communication skills.

Fifty-one percent of our elementary-school classes are overcrowded. Simplyto achieve state wide average, our sys-tem would need 1,650 more teachersand 1,000 additional classrooms. Thecost for this would be $63 million."

Five to 10 percent of the teacherswe have now are not fully qualified,and 5 percent of our buildings aremore than 50 years old."

It costs more to get a teacher tocome to Detroit. It costs more toacquire site for a building in Detroit.We have to build the building upinstead of out, and that means higherconstruction and labor costs.

We have costs many other schooldistricts outside the big city do notface at all. Our attendance officersmade some 125,000 phone calls lastyear. A very small percentage of themwas for truancy. The majority hadto do with children staying out ofschool because of poverty. They didnot have shoes. They did not haveglasses. They did not have winterclothing, and so they did not cometo school."

To a certain extent we pay the pricefor the whole nation's failure to pro-vide equal educational opportunity.We have a very heavy influx of chil-dren from the South. Our recordsshow that children who have been

23 Kerner, Otto, and others. Report of thrNational Advisory Commission on Civil Dis-orders. New York: Bantam Books, March1968. p. 90.

24 Ibid.25 Speech by Norman Drachler, Superin-

tendent of Detroit Schools, at Potomac Insti-tute School District Inequities Conference,November 9, 1968.

26 Mid.

in Detroit less than five years andwho are in the eighth grade are notdoing as well as children who havebeen with us five years or longer. Wehave in our system right now between10,000 and 15,000 youngsters whohave come from Southern states, andwi a are living, not with parents, butwith a sister or uncle or some otherrelative."

The mobility in our system is in-credible. We have a school in oursystem which opens in September with1,000 pupils and closes in June with1,000 pupils, a different 1,000 pupils.It has a turnover rate of about 125percent per year. We have pupilswho move five or six times a year."Is is not obivous that it costs moremoney to educate these children?

These statements of inadequacyshould not be taken as a reflection onthe children involved. We believeany child is educable, but a child withthe handicap of poverty needs morehelp than he would need if he hadthe foresight to select affluent, edu-cated parents to give him a headstart.

Where do we get the money todo the job we have to do in a bigcity such as Detroit? Our stateequalized valuation has droppedalmost $1 billion in less than ICyears, from $5,672,175,000 in 1960 toS4,807,698,000 in 1968. Yet our en-rollment is up from 285,350 to297,151.29

We have gone to the taxpayers inthe past with some modest success, butour people can no longer afford topay more taxes. The city is more and

27 Ibid.28 Ibid.29 Detroit Public Schools. Cqmparative

Study of School Taxes and Other Taxes inDetroit, Dearborn, and Grosse Pointe. De-troit: Board of Education, 1968.

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more a thy of the black, the old, andthe poor. Of our almost 300,000children, as of two years ago, 57 per-cent were black.30 As of now thefigure is approximately 60 percent.This is up from 40 percent eightyears ago. We have 265,000 peopleover the age of 65 in our city. Thisfigure has tripled in less than 15years. These peopl, are paying theirshare of property taxes yet they haveno children in school.31 In total prop-erty taxes for city, county, and schoolpurposes, their tax effort is 3.15 timesthe tax effort of Dearborn and 2.67times the tax effort of Grosse Pointe.The suburbs surrounding Detroit areable to spend up to $500 more perpupil than we are able to spend inDetroit, and their people can affordit better than the people of the corecity.32

To the fullest extent of its re-sources the Detroit School Board hastried to provide equal educationalopportunities for the children in thedistrict. To that extent we have in-stituted new educational and teachingtechniques in our schools. We havetried to pay a competitive salarywhich would bring the best teachersinto our schools. Some 38 percentof our teachers, and about 21 percentof our administrators are black, arecent and continuing trend. Wehave tried to replace our outdatedand obsolete facilities. The result isthat we had a deficit of $6.6 millionlast year, and will have a deficit of$8.4 million this year. We are at ourtax limit, and can tax no more.

In February 1968, knowing that wehad exhausted all other approaches,the Detroit Board of Education filed

BO Kerner, Otto, ar.d others, op. cit.al Detroit Public Schools, op. cit.92 Kerner, Otto, and others, op. cit.

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suit against the state of Michigan,charging that the state had failed inits responsibility to provide equaleducational opportunities to the chil-dren of our district in violation ofthe Equal Protection Clause of theFourteenth Amendment of the Con-stitution of the United States.

What is the theory of our case?The Fourteenth Amendment providesthat no state shall deny to any personwithin its jurisdiction the equal pro-tection of the laws. In the area ofpublic education, this has been inter-preted by the Supreme Court to meanthat when a state undertakes to pro-vide public education, education be-comes "a right which must be madeavailable to all on qua' terms." Iquote from the Supreme Court'sopinion in Brown, v. Board of Educa-tion:Today, education is perhaps the most im-portant function of state and local govern-ments. Compulsory school attendance lawsand the great expenditures for educationboth demonstrate our recognition of the im-portance of education to our democraticsociety. It is required in the performance ofour most basic public responsibilities, evenservice in the armed forces. It is the veryfoundation of good citizenship. Today it isa principal instrument in awakening thechild to cultural values, in preparing himfor later professional training, and in help-ing him to adjust normally to his environ-ment. In these days, it is doubtful that anychild may reasonably be expected to succeedin life if hi is denied the opportunity of aneducation. SutN an opportunity, where thestate has undertaken to provide it, is a rightwhich must be made available to all onequal terms S3

The state of Michigan has under-taken to provide public education.Indeed, it is expressly required to doso under the Michigan Constitution.The facts, as I stated them earlier,'make it obvious that public educa-

33 347 U. S. 483, (1954).

don in Michigan has not been pro-vided to all on equal terms.

We ask the Court in our suit todeclare the present system of schoolfinance in Michigan unconstitutionaland to send the matter back to thestate legislature for appropriateaction. What we seek is equal edu-cational opportunity for every childin the state. This is what publiceducation is all aboutgiving everychild an equal chance to fulfill hispotential. We can give a child noless and say that ours is a land ofequal opportunity.

Just as special educational facili-ties and services are required to pro-vide physically handicapped children,such as the deaf and blind, with edu-cational opportunities comparable tothose enjoyed by normal children,special educational facilities andservices must be provided childrenwho are disadvantaged because theylack the necessary preschool back-ground and extracurricular educa-tional experience in order to learneffectively. If education is to be anopportunky, it must relate to theneeds of the pupil. The state recog-nizes this by providing extra moneyfor the physically handicapped. Itmust do the same for those who suf-fer from the fact that their handicapdoes not show physicall,

Our lawsuit against the state ofMichigan is based on equal educa-tional opportunity, an idea whosetime has come, or more accurately,is long overdue. The necessary judi-cial precedent has been carefully laid.Brown v. Board of Education decidedthat there can be no unlawful dis-crimination in public education.The reapportionment cases of theearly 1960's held that discriminationon the basis of geography was unlaw-ful. The recent and already famous

decision by Judge J. Skelly Wrightin the Federal District Court for theDistrict of Columbia in Hobson v.Hansen required a program of com-pensatory education when such wasnecesary to provide equal educa-tional opportunity to all the chldrenin Washington's school sys.em.34

Since our suit was filed last year,the idea of equal educational opportu-nity has been supported by the bring-ing of similar actions in Chicago,Illinois; San Antonio, Texas; BathCounty, Virginia; Muskogee, Okla-homa; Kenosha, Wisconsin; and LosAngeles, California. We are told thatfive other large cities will be filingcomplaints shortly, and at least 40other city school boards are closelywatching this litigation. The in-adequacy of present public-schoolfinance will be coming relentlesslybefore the courts until a favorableconclusion is reached,

The Detroit suit, commenced bythe Detroit Board of Education instate court, is now awaiting trial there.Meanwhile, a suit commenced inFederal Court by a group of citizensin Illinois received a quick rulinggranting the state's motion to dismiss.These plaintiffs now have an appealpending before the Supreme Courtof the United States, asking it to takejurisdiction of the case. Whetherthe Court will do so, or whether it willsend the matter back for trial on itsmerits, remains to be seen.35

The widespread support and inter-est in this subject is indicated by thenames on the two amicus curiae briefsjust filed in the case, McInnis v.C gilvie.

One amicus curiae brief in supportof plaintiffs is by the t. -tional Edu-

34 Hobson v. Hansen, 269 F. Supp. 401(1967).

35 See Editor's note, page 44.

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cation Association, the Urban Coali-tion, and the Lawyers' Committeefor Civil Rights Under Law. Anotherone is by the American Federation ofLabor, Congress of Industrial Organi-zations; American Federation ofTeachers; American Jewish Com-mittee; International Union, UAW;Scholarship, Education and DefenseFund for Racial Equality, Inc.; andthe Western Center on Law andPoverty.

In its request to the Supreme Courtof the United States to int.ervene asamicus curiae in the support of plain-tiff, the National Education Associa-tion states that this case "raises theapplicability of the Equal Protectionclause to State allocation of resourcesto school children, as an issue whichhas major implications for the financ-ing of public education in every com-munity, urban, suburban and rural,of America."

At the time our suit was com-menced, there was relatively littlepublished on the concept of evaleducational opportunities and theinadequacies of present public schoolfinance. Books and journal articlesare appearing with increasing regu-larity." The idea will not go away.

se Keppel, Francis. The Necessary Revolu-tion in American Education. New York:Harper and Row, 1966. 201 p.

Wise, Arthur E. Rich Schools, Poor Schools.Chicago: University of Chicago Press, 1967.228 p.

Daly, Charles U editor. The Quality ofInequality: Urban and Suburban PublicSchools. Chicago: University of Chicago,1968. 160 p.

Benson, Charles S. The Cheerful Project.Boston: Houghton Mifflin Co., 1965. 134 p.

Coons, John. Private Wealth and PublicEducation. Cambridge: Harvard UniversityPress, 1969.

Horowitz and Neitreng. "Equal ProtectionAspects of Inequalities in Public Educationand Public Assistance Programs from Placeto Place Within a State." U.C.L.A. Law Re-view 15:787, 1968.

Allen, fames E., Jr. "The State, Educa-

56

Dramatic and essential changes inpublic school finance are inevitable.

The last two U.S. Commissioners ofEducation have strongly endorsed theidea of equal educational opportunity,as does the present Commissioner.The momentum is picking up andwill not subside until equal educa-tional opportunity is a reality.

The impact of this type of litiga-tion will be nationwide, and theeffects will be dramatic. But let meemphasize what will not be one ofthe effects. It is not our intent, noris it our belief, that improvement ofthe educational opportunities in oursystem will be at the expense of sub-urban or other systems. We regardit as axiomatic that the 50 percent ofthe districts that already have theresources to provide better thanaverage educational opportunities aresufficiently represented in the legis-lature to see to it that their ownprograms are not diminished, butrather that the total educational re-sources are increased. For similarreasons, we do not see any transfer ofthe administratim of public schoolsfrom local to state authorities.

We do believe that a successful con-clusion to this litigation will lead tothe transfer cf public school financefrom local to state authority, and willprobably mean the eventual end ofthe local property tax for schoolfinance. A local district which is guar-anteed by the state the difference be-tween the amount it raises locally andthe amount necessary to provide its

tional Priorities, and Local Financing." In-tegrated Education 6:55-61; September-Octo-ber 1968.

Kirp, David. "The Poor, the Schools, andEqual Protection." Harvard Educational Re-view 38:635, 1968.

Campbell, Alan K. "Inequities of SchoolFinance." Saturday Review 52:44, 46, 48;January 11, 1969.

children with equal educational op-portunities will have little incentiveto tax itself. This would achieve a re-sult advocated by Conant, that educa-tional decisions at the local level bedivorced from considerations of localtaxes.37

I personally welcome the demise ofthe local property tax for school fi-nance. It is inefficient and inequi-table. Moreover, it would be betterfor public education if it were abo-lished.

Although he has not yet endorsedsuch a step, Dr. James Allen, the newU.S. Commissioner of Education, haspointed out that such a transfer offinancing to the state level wouldhelp solve many pressing school prob-lems, including school segregation andinefficient small districts."

Success in this litigation will resultin a greater role for educators infuture legislative determinations re-specting the allocation among the

37 Conant, James Bryant. "New State Rolein Financing Schools." Compact 2: 41.43:August 1968.

38 Allen, James E., Jr., op. cit., p. 56.

local districts of the state's resourcesfor education. When the state legis-latures turn from their present pre-occupation with state equalized val-uation and millage to consideringinstead only those factors which tendto equalize the educational oppor-tunities in different parts of the state,educators and educational researcherswill have to be consulted and heard.It behooves educators and educationalresearchers to give more thought tothese problems now. Their advicewill be sorely needed by the legisla-tures as they tackle these questions ofpublic-school finance in a new frameof reference.

Finally, and most importantly, ifthis litigation succeeds, a.,:ter 150 yearspublic education will begin to fulfillits original purposeto insure equalopportunity and end poverty. I trulybelieve that equal educational oppor-tunity is the main answer to the prob-lems of race and poverty which con-front America today, both rural andurban America. It is for this reason,above all others, that we must succeed.We ask your continuing support.

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Contemporary ChallengesMyths or Models

George J. Collins

CONTEMPORARY challenges are innu-merable. Myths are assumed to be"imaginary or fictitious," and modelsshould be "imitated." The selectionof topics of concern for this sessionare happily limited: a) inner cityschools and decentralization, (b) equaldistribution of funds, (c) tax reforms,(d) state and federal investments, (e)100 percent state support, (f) longerschool year, and (g) nonschool facili-ties.

Inner City Schools andDecentralization

Current human interactions inlarge cities and on campuses providea new series of needs, problems, andchallenges to responsible educationalleaders, governmental agencies, andsocial service organizations. Evidencefrom inner-city residents reflects newdemands for housing developments,family services, education, and rec-reation.

Community residents demand newinvolvement in developing programsand services for their needs. Theirrequests for health and social service

Dr. ;ollins is Assistant Commissioner of Edu-cation, Massachusetts.

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are heavy. Volunteer agencies andcommunity services are overwhelmedby demands and a lack of brain power,and money demands for day care,tutoring, unemployment assistance,retraining, health services, dental ser-vices, programs for the elderly, andcommunity action participation, toname just a few requests from a neigh-bOrhood study group in Boston.

Frustration with "education" par-ticularly, has caused the more vocalcitizens to demand quality schools,control of curriculm, and the rightto hire and fire teachers. Decentral-ization of some responsibilities del-egated to local school boards repre-sents the latest discovery of citizendemands for democratic participation.

Teachers are unprepared for widedivergencies of heterogeneous group-ing and the technology of the elec-tronic age. The usual learning theo-ries and educational methods arecurrently less effective for about 40percent of the students in the innercity. Inexperience with broadened re-sponsibilities requires n-w preservicetraining and mid-career retrainingwith multidisciplinary talents.

Colleges and universities remain onthe periphery except for isolated grant

projects. Concerted actior.. within thesame institution is noticeably absent,although they have their share ofproblems and needs. Institutions ofhigher education, however, representthe most concentrated resource ofknowledge and human capacitiesstudent and staffto develop plan-ning alternatives arid demonstrativeresearch to break through the cloudsof doubt and overambitious demands.

The challenges surround us. Suc-cessful implementation of demc -raticdreams, new emphasis, courses, andmajor research are required. Historywill record the present inaction ofour most reliable and resourcL:alinstitutions as a catastrophe of ourtimes.

We cat, learn from the "model"developed by Mort and his associates16 years ago in the Bronx ParkCommunity Project,' or, further backin history :tom the format for devel-oping participative democracy ineducation prepared by Dewey.'

The hastily contrived myths weredemanded by federal coordinators,and presented and enacted with foun-dation and federal funds withoutregard to statutes or knowledge ofthe background principles or modelsof Dewey and Mort. Communicationbreak downs closed schools unneces-sarily. The mass media hastenedconfrontations, but did little to cha-ffy the issues.

The roles for professional expertsin decentralization for the 1970's havechanged. The omnipotent expert is

1 Polley, John W.; Loretan, Joseph; andBlitzer, Clara. Community Action for Educa-tion: The Story of the Bronx Park Commu-nity of New York City. New York: TeachersCollege, Columbia University, 1953. 102 p.

2 Dewey, John. Democracy and Education.New York: Macmillan Co., 1916. 134 p.

no longer accepted. The new expertmust be a catalyst with a backgroundof education in a participative democ-racy. He has to:

1. Listen to the participants: mu-nicipal officials, school officials, schooladministrators, instructional staffmembers, noninstructional staff mem-bers, students, parents, and other tax-payers.

2. Guide the participants in artic-ulating their needs and establishingpriorities.

3. Help in the development ofcommunication techniques and coor-dinating procednres among the par-ticipants.

4. Expedite realistic planning firthe fulfillment of immediate neces-sities and long-range goals (establishpriorities).

5. Encourage continuous communi-cation of participants for assessmentof heeds, establishment of priorities,and development of new long-rangeplans.

Decentralization is here to stay.The models developed decades agofor suburban communities like Wid-mere-Hewlett and others on anadvisory basis need the force ofstatutory enactment to break downthe political barriers in modern urbancenters. Once the machinery is estab-lished, what Dewey theorized andMort verified with research, and localcitizen groups hoptd would happen,will begin to happen. Participationand involvement will lead to higherschool expenditures and better educa-tional quality for our city children.

The fiscal implications with or with-out Program - Planning- Budgeting Sys-tems will be felt in demands for themore evident "quality" measuresdocumented by the Mort Simplexand recently by Igoe at the 11thNational Conference on School Fi-

59

nance.3 The order of the demandsmay be different, but one can beoutraged by unattractive startingsalaries for teachers, outdated ,,Act-books, inadequate supplies, closedschools on week ends and evenings,push outs, dusty-book libraries, poorlymaintained school facilities, over-crowded classrooms, lack of support-ing specialists, dull and inadequatelearning spaces, failure to keep upto date, and a void in research.

Decentr'lization extends the rela-tion of citizen advisory committees,and demands for new meaningfulinvolvement are seen in cities, sub-urbs, and rural areas. Educationalstatesmen can help by listening, thenassisting with the articulation anddevelopment of more responsive andequitable educational opportunities.Teacher power from negotiations willbe augmented as parental fear andapathy develop into concern, advice,and demands. The double-headedparent and taxpayer will meet hisdemands coming in or ask himselfgoing out, why his child's educationalfinancing has a low priority.

Equa: Distribution of FundsEqual distribution of funds over-

emphasizes need and underemphasizesability to support a program. Fed-eral programs have operated on atheory of need. In the practical poli-tics of obtaining congressional votes,

s Igoe, Joseph A. "The Development ofMathematical Models for the Allocation ofSchool Funds in Relation to School Quality."interdependence in School Finance: The City,the State, the Nation. Proceedings of theCommittee on Educational Finance. Wash-ington, D.C.: National Education Associa-tion, 1968. p. 208.

Mort, Paul R., and F'irno, Orlando F.Theory and Synthesis of a Sequendial Sim-plex: A Model for Assessing the Effectivenesso; Administrative Policies. New York: Teach-ers College, Columbia University, 1960. 104 p.

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equal distributions among the stateshave always been a subtle but primeobjective of the Congress. Defensebudgets are frequently analyzed todiscover the distribution of fundsamong states. Since 1965, whenfederal funds were first distributed tochildren needing special "compensa-tory" education based on a distribu-tion formula of low-income families,quite by accident equalization haspredominated federal distribution offunds for elementary and secondaryeducation. Alexander and Johns dis-covered a correlation of .65 betweenpersonal income per child 5-17 yearsof age and allocations of fundssignifying a fairly high equalization."

Most 1.tate legislatures have alsoprovided funds for special needs, withequal distribution. In fact, 80 per-cent of all state programs, 354 of 441distribution systems are on a flat -grantor equal distribution basis. Only 30percent of state funds. however, aredistributed on an equal distributionsyste, -. Special purpose grants con-tinue to increase in number (an in-crease of 61 from 1957-58 to 1966-67)and the largest percentage (71) ofspecial purpose aid is distributed onan equal distribution system. It issurprising that so many states useequalization for special purpose pro-grams.

In 1966.67, among the special pur-pose grants funded, were programsfor special education in 50 states,kindergarten in 33 states, and thenewest "compensatory" programs in16 states. The affinity betweenspecial-purpose grants and equal-dis-tribution programs was not by acci-dent. In one respect this reflects a

Alexander, S. Kern, and Johns, ThomasL. Extent u j Equalization in Federal GrantPrograms. Unpublished report, U.S. Office ofEducation, November 1967.

legislative awareness that leeway forfunding new and needed programs isnot readily available in all districts.In another respect it is the traditionalway of enacting laws. Practically,legislators sometimes are convincedthat the only way to assure that everyone has his "good" program to up-grade education and obtain everyvote needed for enactment, the statemust fully fund the program in everydistrict, much to the dismay of strictequalizationers. With a low returnbased on equalization, some districtsmight choose to forego the new pro-gram, if they do not already have it.Traditionally, however, school officialsreact less adversely to legislative man-dates or suggested improvementswhen the sweetner is provideddc liars.

Disadvantages

Every legislative enactment hassome disadvantages. Even the mostbeneficial programs can have theiradverse effects that become apparentonly after a few years of operation.In Massachusetts, with the noblestintent, a statute was passed to elim-inate or reduce racial imbalance.Evidence today indicates that newfacilities can be built only in pre-dominantly white areas or wherebalancing can take place. As a result,the central ghetto of Boston does nothave the excellent recreational facili-ties in the new schools for afterschool, evening, and summer pro-gram 3.

Equal distribution of funds ignores(a) unequal ability to support pro-grams, (o) unequal cost to conductneeded programs, and (c) differencesin funding the same program becauseof prevailing salary inequities. (Notethat federal distributions of funds forESEA based on national averages fa-

vor states with lower expenditureswhich is a noble model, but ignoresthe cost of living, school expenditures,and salaries needed to attract morecompetent staff members in higherexpenditure states.)

Tax Reform

Tax reforms present the most chal-lenging problem to all three levelsof government. The U.S. Burea.a ofthe Census reports that tax revenueis federal 60 percent, state 20 percent,and local 20 percent. The federal gov-ernment obtains about half of itsfunds from taxes on personal ir :ome.This tax revenue is the largest (esti-mated at $81 billion) and has theleast negative reaction. Current re-volt is directed toward state and localgovernments and particularly localschool -bend elections (about one-thirdof them fail).

Postponements of school construc-tion add about 12 percent a year tothe cost of a building, or about 18percent if you include interest. Thisproblem alone signifies the misappre-hension and irresponsibility of con-structing schools from revenues thatare susceptible to the brunt of tax-payer revolts. Unknowingly, tax-payers are losing money fiddling whileinflation continues. Their childrenand the community pay dearly fornegative tax actions. I have lived longenough to see rejected school buildingproposals, purchased years later atfour times the cost and at the expenseof a generation of children.

Local school operating expendi-tures have been inching ahead, con-siderably behind educational needs,and stifled by overreliance on an over-burdened property base.

Since World War II, legislative ap-propriations for education have pro-

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vided the bulk of our leadershipgains in most states.

Legislative commissions for tax re-form are working in a few states;however, the on-going resources are"perceived" by state residents as "at-the-tax limit," and under-utilized taxesby the states are "taboo or off-limits"if you want to be re-elected. "Educa-tion" and education by state legisla-tures have failed miserably in helpingtaxpayers understand their responsi-bilities and the need for a balancedtax system.

Underutilized taxes are reported byACIR.5 The $2 billion of under-utilized taxes are "political questions,"inextricably interwoven with socialand emotional reactions of legislatorsand voter-taxpayers. Most financialplanners know what to do logicallyin each state, but action must wait forchanges in public attitudes and publicpolicy. Public policy today, sad tosay, in most states demands a mora-torium on new taxes.

The Congress, as representative ofthe states, should limit personal in-come taxes to $89 billion. How? Cutdefense spending about 10 percent ayear. This is not "blasphemy." Re-duce expenditures for everything fromthe megamultiple new devices to ex-perimental stockpiles and concentrateon research and higher "program-planning-budgeting-production." Cur-rent overexpenditures and overexten-sions world-wide are new generationof follies.

Shift school construction costs awayfrom local taxpayers. Limit the fed-eral income tax and allow states toextend theirs. Cut defense spending.

5 Advisory Commission on Intergovernmen-tal Relations. Fiscal Balance in the AmericanFederal System. Washington, D. C.: Ccvern-ment Printing Office, October 1967. Vol. 1,p. 328-24.

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Why? Because the Congress willnever be responsible for educationit is a state responsibility. Further,the Congress in Article I, Section 8,of the Constitution of the UnitedStates has no specific power, and,therefore, cannot constitutionally actas a collector and distributor of taxesto states without an amendment.

Tax reform is a myth. Public pol-icy wants luxurious waste and taxcuts, not reform for the next fewyearsthat is until more Johnniescannot find a seat or have a teacher.

State and Federal Investmentsin Education

State investments have increasedfrom $1 billion in 1945-46 to $14billion. Equalization of special-purpose grants must be developed orthe grants must be integrated intoa comprehensive "block grant" tolocal districts. The paper work andspecial programs are wasteful and asequally ridiculous as the proliferationof federal programs appeared to me in1966, after I had spent one year asBureau of the Budget forms clearanceofficer in the U. S. Office of Education.

More funds should come from thefederal cuts in income tax rates anddefense waste. A recent study 6 showsthat 45 states expressly authorize com-mon schools. Many of those use thesacred phrases, common, general orequal. Legislative statutes usually arereplete with such phrases as equaleducational opportunity. Then, allstates prescribe financial systems tosupport education not based on op-portunities or needs, but WEALTH.

Collins, George J. "Constitutional andLegal Bases for State Action." Education inthe Stales: Nationwide Development Since1900. Washington, D. C.: Council of ChiefState School Officers, 1969. VOL 2, Chapter 1,p. 5-69.

Based on providing equal educa-tional opportunities, states must andshould provide more than 90 percentof the aid in some districts. Thelevel of support naturally must in-crease to provide a foundation orbasic or equal educational oppor-tunity, including some funds forKort's "lighthouse" experiments. Thesystem must have incentive opportuni-ties for local districts to exceed thestate-supported program. State sup-port for incentive programs shouldalso be equalized by wealth availaL lelocally.

Need must be measured, not aloneby numbers of students and weighting,but also as a help to the educationallydisadvantaged. Class size does make adifference. Furno and Collins reporteda comprehensive study of 312 variablesby tracing 16,449 pupils irr grade 3for five years.? There were 1,992 classi-fications of pupils for parental occupa-tion (4), IQ (4), class size (4), home(2), achievement (2), faculty (2), race(2) and program (2). The probabili-ties are overwhelmingly on the sideof smaller classes (fewer than 25pupils). The answers are not absolute,for absolute answers to complex prob.lems are an oversimplification. Eventhe atom has been based on probabilis-tic theory since 1958; why not humanlearning complexities which are farmore complex.

Less than a fraction of 1 percentof federal funds is for general aidto public education. The 7 percentreferred to as federal contributions isalmost entirely for special-purposeprograms, not general aid in the regu-lar operating budgets. A decade agoI wanted 33 percent of the educa-

7 Furno, Orlando F., and Collins, George J.Class-Size and Pupil Learning. Baltimore:Baltimore City Public Schools, 1968. 146 p.

tional expenses (current and capital)to be supported by federal aid. Butthere are too many forms to complete,too much red tape, too many amend-ments to support the special interestof power groups, and too little re-sponse to changing needs to fight thisuphill battle for another 100 years(from Morrill in 1862 to ESEA in1965).

The Congress has known for twodecades that there was and is a seri-ous shortage and overuse of inade-quate school facilities, and it hasshirked its responsibilities. Only $1out of every $9,600 collected by thefederal government is used for schoolconstruction (impacted aid and lim-ited ESEA programs). About $1 outof every $10 local and $1 out of every$72 state are invested in school con-struction.

For operating costs our governmentsinvest $1 out of every $3 local, $1out of every $4 state, and PENNIESout of every $197 federal, or if youcount extracurricular ESEA, impactedaid, EPDA, etc., you would receive$1 out cf every $132 federal.

In general, Federal support for edu-cation i, a myth with "faint" hopesfor special programs.

100-percent State SupportOne current myth indicates that we

do not have a system of 100-percentstate support, of education. An his-torical review of legislation and edu-cation indicates that state legislativeresponsibility for education was dele-gated to local school districts or muni-cipalities. State legislative taxing au-thority provided state trustees (localschool officials) to use state taxing au-thority to tax property in local schooldistricts to support the state responsi-bility for education. Today, after afew generations, state responsibilities

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and state taxing powers are a mythto any local citizen.

Equal opportunity cases should ex-pose the inequities in present enroll-ment and property-wealth based form-ulas.8 The myth is misinterpretationof equal dollars for all children in astate. The problem will be to educatestate legislatures to understand thedifferences between support and wiil-ingness to invest in better schools.There must be some measure of localwillingness to provide "lighthouse"and better support for educationabove the equal support recommendedby the court. Without a favorablejudicial ruling to require better legis-lation for equalization, full state sup-port is a myth.

A model to follow where states canbeneficially move toward 100-percentstate funding is capital constructionfor schools. The savings to a third ofthe districts each year would be 20 to40 percent of the cost of construction.The savings to the remaining two-thirds of the districts would be about25 percent of t' .e cost of constructionby accelerating needed projects in ad-dition to state assumption of costs.

Longer School Years

A substantially longer school yearfor all children is a myth. The aver-age numbers of day among statesand districts range from about 170 to185; the median is about 179 days.A few days could be added to theaverage. Some states could add asmany as l5 to 20 days. Present taxrevolts, dollar shortages for cducation,teacher bargaining, summer programs,parental vacations, camp experiences,needed earnings by students, and alack of that frill, air conditioningmake a full summer program a myth.

8 See Editor's note, page 44.

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The models worth emulating areprograms for field trips, study abroad,remedial or extended opportunitiesin the summer. Programs in air-conditioned buildings will have wait-ing lists.

Nonschool Facilities

Nonschool facilities for all schoolchildren are a myth. Two snow daysand parents are screaming for schoolto begin. Television, libraries, cul-tural opportunities, and one-to-one orsmall group instruction by parentsprovides diminishing returns exceptfor the very, very exceptional parent,once reading progresses past the firsthundred words and even before thatfor most parents.

The models for nonschool facilitiesare field trips and museums, if mean-ingful pre-use and post-use experienceare integrated with the trip. The taxdollar could not afford the drain onfull school expeditions. The non-school facilities are exhausted in thearea when the numbers exceed a fewhundred.

There are models of greater utili-zation of special facilities in many ma-jor cities today; but a desk, a book,or a quiet group-oriented activity ora school facility are hard models tocorrelate negatively with even theColeman wizardry.

Theory or Practice

Financial experts can provide themost beautiful theory of balanced taxprograms, equalized and incentivereimbursements, staff requirements,and other exemplary educational re-forms or innovations. Computer-assisted experts can simulate any num-ber of changes in the variables forextending the options to correct statereimbursement formulas. The model

builders and models are within closerreach than the moon, but politiciansand legislative practices are not buy-ing models.

In practice, legislators are still in-vesting in myths which replicate thetraditional ways of taxing and distri-buting funds with only minor changes.The courts are our one ray of hopeto shatter a few legislative myths ex-peditiously. kesponsible school fi-nance officials in each state should beready with the models and a varietyof options to equalize the support ofa worthy basic progra.0 for the inhabi-tants of the 21st century, including a

program that brings incentive fundsfor every district to do some experi-menting. Members of key legislativecommittees must be participants in theformula development. In 1963, myfirst draft of Demonstration Centersnow Title III of ESEA was for fivedistricts. Today every district shouldbe experimenting to test the mythsand models of the educational enter-prise with local and state funds fromlocal taxpayers and without a ream ofstate or federal proposal forms. Onemodel we should all follow in financ-ing is to eliminate the paper workin the practice of operating schools.

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Decentralization and the Financecf Inner-City Schools

Henry M. Levin

THE PURPOSE of this inquiry is to de-termine how we can get more re-sources to the disadvantaged child inthe inner city, resources that will beused to substantially improve his edu-cational cuportunities. This analysiscan be divided into three steps: (a)obtaining more money for school dis-tricts with disadvantaged children, (b)using that money to support servicesfor disadvantaged children withinschool districts, and (c) spending themoney in such a way that it yieldsresults.

While the traditional literature onschool finance has been devoted to"equalizing educational opportunity"within states, much of the recent dis-cussion has focused on financing edu-cation for that group with the leastopportunity, the educationally disad-vantaged. Even the most conservativeeducator would agree that equality ofeducational opportunity implies equaleducational resources among schools;but in the past few years, equality ofeducational opportunity has beenincreasingly interpreted as meaningsome semblance of equality in terms

Dr. Levin is Associate Professor of Education,School of Education, Stanford University,Stanford, California.

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of educational output. This latterinterpretation implies That greatereducational resorces be devoted .othe schooling of ..udents from lowsocial strata relative to those allocatedto middle- and upper-class children.

As we know, by either standard ourefforts have failed. The school districtsleast able to afford substantial supportof their schools are those saddled withthe largest proportions of poor anddisadvantaged pupils. Neither federaland state compensatory programs norstate equalization programs have mademuch of a dent in the unequal dis-tribution of educational opportunityas reflected by school expenditures.Foundation programs and other equal-ization plans have simply not achievedtheir putative goals b1 a wide mark.To cite some examples, Californiashowed per-pupil current expenditureextremes of $1,710 and $274 in 1967,while for Michigan the high mea-sure was $915 and the low one was$394. Moreover, to no one's surprise,the high-expenditure districts werecharacterized by middle- and upper-income children while the low-expen-diture districts were charged withschooling the poor. In effect we havebeen investing greater social resourcesin improving the educational profi-

ciencies of the rich than of the poor.I doubt whether this phenomenonfulfills anyone's concept of fosteringequality of opportunity.

Why do these inequalities persist?Though ma ny would like to believethat they are due to differences infiscal effort among districts, this doesnot seem to be borne out. In a sub-stantial number of cases the low-expenditun districts are burdenedwith far higher tax rates than are thehigh-expenditure districts. The ine-qualities persist for a combination ofboth technical and political reasons.The technical reason is simply thefact that the mechanistic aid formulasare too simple to take into account allof the factors that lead to inequalityin school expenditures. More impor-tant, however, are the political prob.lems that limit meaningful equaliza-tion. The powers-that-be at the statelevel are unwilling to radically redis-tribute state funds, for that wouldrequire the wealthy and politicallypowerful school districts to heavilysubsidize the poorer ones. This poli-tical recalcitrance is evident in theunrealistically low level of foundationsupport. It is doubtful whether anystate legislator would wish to send hischild to a school that was financed atthe foundation level. Similar criti-cisms can be aimed at the other"equalizing" grants, The point is thata little equalization may be enoughto salve some social consciences, butit is surely not meaningful in termsof guaranteeing equality of educa-tional opportunity.

Further, categorical grants pro-vided for low-income chitdr'm havebeen far too meager to fill the gap.Over $1 billion a year has been spentunder Tide I of the Elementary andSecondary Education Act of 1965, butthis must be considered to be merely

a start in the right direction. Unfor-tunately, the publicity given Title Iprograms tends to hide the fact thatit represents only about 3 percent oftotal expenditures for the country asa whole. In some large cities per-p ipil expenditures are just half ofwi at they are in the outlying suburbs,evi with the Title I contribution.One superintendent of a large cityschool system characterized Title Iwith Mark Twain's definition of theBlack River: 'It is a mile wide andan inch deep."

Yet, I am somewhat optimisticabout getting more resources to theimpoverished districts and particu.larly to the cities. First, the federalrole in subsidizing the education ofthe disadvantaged is likely to inc.- ,:aseduring the forseeable future. Second,a relatively new legal strategy mayforce the states to take a more domi-nant role in promoting equality ofeducational opportunity. It is believedthat the present inequalities in ex-penditures violate the equal protec-tion clause of the Fourteenth Amend-ment of the Constitution of theUnited States.I The state courts haverepeatedly ruled that education is astate function, not a local one. Localschool districts are considered to besubdivisions of the state only for pur-poses of administrative convenience.Whether school taxes are collected bythe state or local school districts, theyare considered to be state taxes; andif disparities exist in the revenue re-sources available to school districts,such differences exist as a consequenceof the state's discretion.

2 Kirp, David L. "The Poor, the Schools,and Equal Protection?' Harvard EducationalReview 38:63F-68; Fall 1968.

Wise, Arthar. "Is Denial of Equal Educa-tional Opportunity Constitutional?" Admin-istrator's Notebook 13:1.A: Yebruary 1965.

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On this premise at least a dozencities, including Detroit, Chicago, andSan Antonio, have begun to sue theirrespective state:, with the goal of re-quiring the states to foster a truermeasure of equality of opportunity.While some of the suits argue forequal expenditure, others assert thatequal protection of the law requiresunequal expenditures based upon theinner-city child's extra educationalneeds. In practical terms the stateswould be required to undertake a farlarger share of the financial burden,one that would require substantiallylarger allotments to the city schools.It appears that if these cases can docu-ment the proposition that lower ex-penditure schools limit the educa-tional opportunity of their pupils visa vis higher expenditure schools, thereis a good chance that the states willbecome fully responsible for remedy-ing present inequities.

Let us assume that this phenome-non in conjunction with increasedfederal aid will improve substantiallythe allocations to city school districts.Much of the work done on financingthe city schools implies that if thiswere to come about, the problems offinancing the inner-city schools wouldbe pretty much solved. Here I mustregister a strcng dissent, for (a) thereis little guarantee that all of the in-creased funding would be distributedto the pupils for whom it was in-tended, the educationally disadvan-taged; and (b) there is even Less assur-ance that the money would be usedto mount effective programs thatwould capitalize on the cultural attri-butes of poor, black youngsters in theinner-city schools,

To begin those city schoolswith lower-class and black enrollmentshave been discriminated against foryears in the allocation of resources.

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These inequalities have not been di-rectly visible on accounting statementsbecause, as all of us know, our ac-counting systems, do not report ex-penditures on a school-by-school basisin sufficient detail for analysis.2 More-over, almost every school superinten-dent will deny that such inequitiesexist. Yet, every study that I know ofthat has audited funding on a school-by-school basis within cities has foundthat poor children and black childrenwere attending schools that were con.siderably less well endowed than theirwhite, middle-class counterparts.3Not only have these differences beentolerated (and perhaps promoted) inthe past, but what is more surprisingis that a recent analysis of a largecity in its third year of a well-knowncompensatory education program re-vealed the same resource liscrimina-tion in favor of white and middle-class pupils and to the detriment oflower-class and black pupils. Unfor-tunately, the publicity given to com-pensatory education efforts 4 has giventhe impression that the disadvantaged

2 Some large cities notably Chicago. Mein -phis, and Atlanta, do present such datalocally in budgets, but need not report themto state or other authorities. The data aremainly salary payments to staff in the schools.In these cases, area, central purchases, orcentral-office expenditures are not pro-ratedto give actual expenditures.

3 Sexton, Patricia C. Education and In-come. New York: Viking Press, 1961. 298 p.

Thornblad, Carl Eric. The Fiscal Impactof a High Concentration cf Low-IncomeFamilies upon the Public Schools. Urbana:University of Illinois, 1966. Abstract: Dis-sc.!ation Abstracts 27:4094-g5; June 1967.

U.S. 89th Congress, 2nd Session, HouseCommittee on Education and Labor, TaskForce on Antipoverty in the District of Co-lumbia. A Task Force Study of the PublicSchool System in the District of Columbia ash Relates to the War on Poverty. Washing-ton, D.C.: Government Printing Office, 1966.119 p.

4 Cohen, David K. "School Resources andRacial Equality." Education and Urban So-ciety 1:121-37; February 1969.

are receiving more school resourcesthan the non-disadvantaged. Thetruth of the matter is that while some"inner-city" schools show higher ex-penditure, than some "middle-class"schools within cities, on the averagethe schools attended by to rarer -classchildren are still being discriminatedagainst visa vis those attended bymiddle-class children.

One example of the misleadingpublicity is that given to the MoreEffective Schools (MES) for the Disad-vantaged in New York City. It is truethat expenditures on these particularschools approximately doubled. Whatis not pointed out is the fact that theMES schools represent only 21 out ofover 900 schools in New York City,and probably over half of these 900schools serve educationally disadvan-taged populations. Let any NewYorker who seriously believes thatmore is being done for the poor thanfor the rich simply compare theschools in the Riverdale section withthose in East and Central Harlem.Of course, it is important to pointout that discrimination against theinner-city schools is not so much aplanned phenomenon as it is an ex-cellent example of institutional rac-ism. The unified salary schedule givesthe same reward to a teacher nomatter how desirable the teachingsituation within each city. It is littlewonder, then, that the least experi-enced teachers and long-term substi-tutes prevail in the inner-city schoolswhile the more experienced teachersare found in the middle-class schools.If we really cared for the needs of thedisadvantaged, we would be providingthe inner-city schools with a moreexperienced teaching force, even ifsubstantial salary differentials andother benefits were required to achieveit. Instead, both school administra-

tors and teacher organizations havepreferred to treat the unified salaryschedule as inviolate regardless of itsimpact on inner-city schools.

The fact that teachers in the inner-city schools are at the lower experi-ence rungs is the primary reason forthe lower per-pupil expenditures inthose schools. Yet the central schoolboards seem unwilling to return tothose schools the "savings" on teachersin the form of substantially more per-sonnel, supplies, and ether amenities.Rather the "savings" from lowerteacher budgets in the ghetto schoolsrepresent implicit subsidies for themiddle-class schools. Another form ofinstitutional discrimination is the"accruals" on teacher salaries whichmust be returned to the central schoolauthority when tcachers are absent.The teacher absentee rates are farhigher in ghetto schools than in otherschools, so this also reduces the allo-cation to the former group of schools.Many other instances can be cited.

But even when additional financesare allocated to the inner-city schools,they are simply used to supply moreof the same resources and programsthat have already failed the inner-citychild. Most peculiarly it is expectedthat the teachers, curriculum, schoolorganization, and educational meth-ods that have consistently failed theghetto child will somehow succeedif only class size is reduced and morelibrary books and counselors areadded. Needless to say, comp mcatoryeducation programs have not shownvery encouraging results.

I maintain that the central schoolbureaucracies are presently incapableof formulating instructional programsthat will capitalize on cultural differ-

ences.a Instead, the programs assume

5 Ashton-Warner, Sylvia. Tearher. NewYork: Simon and Schuster, 1963. 224 p.

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th7.. the child is deficient and needsremediation or more of the same ap-proach that has not worked. Morecareful analysis suggests that the inner-city child is culturally different andneeds a different approach. But theculturally different strategy a has notbeen substantially adopted by thelarge cities, and the schools have con-tinued to fail the inner-city child.That is where we stand.

Decentralization as a Remedy

In my view, deccntralization of thelarge-city schools has several advan-tages over the present approach forgetting more resources into the inner-city schools and for using them moreeffectively. These advantages wouldhe outgrowths of the following planfor financing decentralized schools.?

Since decentralized school districtswould obvioosly be :no small to raisetheir own revenues, the provision offiscal resources would continue to bea function of the central school au-thority. The central school boardwould provide each decentralizedschool board with a lump-sum budget,and each local board would possesssubstantial discretion in allocating itsbudget. Financial accounts and ac-countability would remain in thehands of the central school authority,but the actual disbursements for eachschool could be authorized only bythe local governing board for thatschool. On the basis of this decision-making power, the local governingboards would construct their programs

6 Baratz, Joan, and Shuy, Roger. TeachingBlack Children To Read. Washington, D. C.:Center for Applied Linguistics, 1969. (Inprocess)

7 James, H. Thomas, and Levin, Henry M."Financing Community Schools." The Com-munity School. (Edited by Henry M. Levin.)Washington, D. C.: Brookings Institution,1969. (In process)

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and purchase the necessary compo-nents to implement them, a course ofaction that is not permitted under theexisting regulations.

In general, the size of the lump-sumallocations would be directly relatedto the degree of educational need ofthe pupils. That is, schools with largenumbers of educationally disadvan-taged enrollees would receive largerallotments per pupil than wouldschools whose puriilr were more ad-vantaged. One way of fulfilling thesecriteria would be to require the cen-tral school authority to distribute itsown resources among decentralizedschools in such a way that each localschool board would receive the samebasic allotment per pupil. Then, stateand federal monies would be used toaugment the local distribution accord-ing to the level of need among thedecentralized districts. Using this ap-proach, the higher levels of govern-ment would be responsible for financ-ing the additional resources requiredfor compensatory education, a roleconsistent with the goals of the lar-ger society tc equalize educationalopportunity.

It seems that this arrangementwould go far to counter financial dis-crimination against inne,-city schoolsfor the simple reason that such in-equitable treatment would be visible.That is, per-pupil allocations could beeasily computed from lump-sum budg-ets and school enrollments. Underthe present accounting system school-by-school expenditures are not com-puted or reported, so such inequitiesare not visible.8 On the other hand,if a lump-sum budget were reportedfor each school, the social hypocrisyevident in preaching compensatoryeducation for the poor while imple-

8 See Edi.tor's note, page 44.

menting it for the rich would beobvious. The visibility of lump-sumresource allocatic patterns would en-able a measure of social accountabilityand would tend to dampen much ofthe sub rosa fiscal discriminationagainst schools in poor and blackneighborhoods. (Of course, even with-out decentralization the states shouldrequire school-by-school expenditureinformation from school districts.Some of the difference will certainlybe due to differences in function andlevel of school as well as variationsin maintenance and contingency-typeexpenditures. Yet, these factors canbe adjusted for, and an analysis canbe made of intra-district resource allo-cation. Jr- my opinion such informa-tion would serve to counter discrimi-nation against the powerless andpoor.) Thus, decentralization wouldhelp to serve the second aim that Ioutlined in my introduction, that ofgetting to the poor, educational re-sources that they do not seem to begetting under a central bureaucracy.

The second advantage of decentral-ization would be that the inner-cityschools should be able to use resourcesmore effectively to improve their op-:,. ations than have the city-wide bu-

reaucracies. The central school boardsseem to be unable to appreciably de-viate from an educational approachthat simply has not served inner-cityyoungsters effectively. The participa-tion of parents and other membersof the community in running theschools would lead to a more totalinvolvement in the school by its con-stituency that is possible under thepresent rigid structure. Differences incommunity needs would be reflectedby differences in educational strate-gies, a phenomenon which is not possi-ble within the confines of fhe presentuniversalistic model.

In addition, resources would be de-voted to the affective needs of disad-vantaged children to promote thesense of self-worth and identity of thepupils being served while imparting tothose youngsters the ability to influ-ence their li7cs. The often noted effectthat the "one approach school system"has on undermining the self-worthand dignity of black and other poorchildren would be consciously attackedby diversifying the schools to serveparticular needs.

The decentralized school board inconjunction with its teachers and ad-ministrators would work out relevanteducational strategies, and the abilityof tie school board to allocate its ownbudget would enable it to obtain thenecessary mix of resources. Librarybooks would not be forced uponschools that have no libraries, andscientific equipment and overheadprojectors would not be 71located toschools that do not have the relevantprograms, personnel, or facilities touse them. These anachronisms havetaken place quite regularly under thetraditional and highly centralized sys-tem. Decentralized schools might wishto purchase some services from outsidecontractors wherever the schools' owncapabilities were least adequate. In-deed, the community has the most atstake in the education of its children.Given this incentive, we can expectthat the community decision-makingbody will have a deep interest inplanning programs and allocating itslimited resources in the most effectiveway possible.

Needless to say, the transition fromcentralized to decentralized schoolswill not be an easy one. Thoughthe present city school systems areeducationally ineffective for substan-tial numbers of youngsters, they ap-oear to operate in a highly organized

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way. Indeed, the present pattern ofadministering the schools has bene-fitted from half a century of experi-ence in establishing procedures tohandle any possible contingency (ex-cept the failure to be educationallyeffective). Any quest for drastic changein the schools must necessarily beaccompanied by a certain amount oftrial and error and extensive planning.But I hold out little hope of substan-

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tially improving the inner-city schoolswithout the drastic structural reformthat would make the parents and com-munity the agents of change. Otheraspects of decentralization may beproblematical depending upon one'sobjectives, but clearly decentralizationhas much to recommend it in termsof getting more resources into theinnP,--city schools and using themwide! r.

Criteria for Evaluation of Financial Aid to Education:The Need for Reexamination

Ernest Bartell

THE CRISIS OF COSTS that faces thenation's schools is not likely to dimin-ish in the foreseeable future, accord-ing to most economists, regardless ofefforts to increase efficiency in admin-istration of our school systems, for theprincipal stimulus to increase the costsof education comes from the nature oftechnological progress outsid 2 the edu-cational sector itself. Rapid and sus-tained technological change makes itpossible for wages rnd salaries inmany sectors of the economy to risesteadily with no inflationary increasesin the prices of goods produced. Theeconomy can afford to pay the widget-maker twice as much an hour withoutinflation today because he producestwice as many widgets in an hour'stime as formerly.

So far, however, in education therehave been few such comparable in-creases in measurable productivity.Nevertheless, salaries of teachers mustkeep pace with those of their peersin more economically productive em-ployment. Since salaries account formore than half of the operating ex-penditures per pupil in our schools,a substantial and steady increase incosts can be expected to continue as

Rev. Ernest Bartell, C.S.C., is Professor ofEconomics, University of Notre Dame, NotreDame, Inaiana.

long as productivity in education lagsbehind productivity in the rest of theeconomy.

The financial burden placed uponlocal school districts by these charac-teristics of the economy, of course, hasincreased pressure for more broadlybased financing of all levels and typesof school operations. However, greaterfederal and state support increases thecomplexity of evaluating both the ef-ficiency and the equity of school fi-nance. Simple criteria for evaluatingthe efficiency of educational inputshave proven adequate in the past tocall attention to important privateand social returns to education.Straightforward analysis of high ratesof incomes generated by educationalinvestments have been adequate toprovide an economic argument forfederally supported educational pro-grams consistent with objectives offiscal policy at the federal level. Theresult in the past few years has beeninitiation of federally supported sup-plementary services to general edu-cation, for example, under Title Iof the National Elementary and Sec-ondary School Act, as well as of spe-cial educational programs such asOperation Head Start, Job Corps,Neighborhood Youth Corps, and vo-cational training under the VocationalEducation Amendments of 1968.

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However, oversimplified conven-tional criteria for analysis of costs andbenefits may produce results that areinadequate to justify enthusiastic ex-pansion of the federally supportededucational programs that must com-pete with other expenditure programsin the pursuit of federal goals of highemployment and of assistance to mi-nority groups. Similarly, simple stan-dards for analysis of the incidence ofthe burden of educational financeplaced upon a single tax base are oftenno longer adequate as criteria forascertaining the equity and feasibilityof programs of financial aid to educa-tion.

The total programs of educationalfinance will more and more be theresult of combinations of local effort,and state and federal support, alllinked by increasingly complex for-mulas determined independently atthe various levels of financial support.This problem, which in the past hascentered on links among federal, state,and local financial decisions for edu-cation, is now further complicated bythe introduction of additional politi-cal decentralization in the form ofcommunity control of schools.

It is not likely that initiative inpromong rational, comprehensiveanalysis of both efficiency and equityin the finance of the nation's educa-tional efforts will be taken by thosewhose educational interests are onlytangential to their primary responsi-bilities. Yet, the Economic Report ofthe President for 10691 makes it clearin its discussion of federal programsof aid to education that as experienceand data from existing programs ac-cumulate, evaluations that will deter-

1 Economic Report of the President. Trans-mitted to the Congress, January 1969. Wash-ington, D. C.: Government Printing Office,1969. p. 161-62.

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mine the degree and direction of fu-ture support will be made. Hence, theburden of providing the kind of com-prehensive analysis that will accountfully for costs, benefits, and abilityto support educational programs maywell rest upon the educational profes-sion itself.

To illustrate the magnitude of thistask, we shall review here some ofthe criteria that are currently beingused or developed to explain the im-pact of federal educatic:,:d expendi-tures upon the economy and societyand to offer some examples of impli-cations of interrelated policies for fi-nancing education at different levelsof government.

Criteria for Evaluation ofBenefits of Federal

Educational Expenditures

Operational criteria for evaluationof federal expenditure programs arequite naturally related to economicgoals of federal policy, such as elimi-nation of poverty, and to social goalsof equality of opportunity. A con-venient economic criteric a for evalua-tion is one based on attainment ofminimum standards of income, for ex-ample, the number of persons whoare enabled to cross a poverty lineor threshold level of income. The useof some poverty level of income, ofcourse, is somewhat arbitrary andvaries with family size and geographi-cal location. Biases based upon theseconsiderations, however, are not likelyto affect the measurement of benefitsfrom educational expenditures anymore than from other social expendi-tures.

On the other hand, discrete thresh-old criteria of this kind are likelyto introduce a bias unfavorable toeducational expenditures when com-pared with direct personal transfers

or subsidies, such as those incorpo-rated in negative income tax policies.The use of a fixed threshold level ofincome as a measure of the contribu-tion of subsidized educational pro-grams to the elimination of povertyfails to capture the contributions tonational income made by educationon either side of the threshold. AsRibich has pointed oth, movements ofsubstandard incomes closer to the pov-erty threshold as a result of educationand improvement in income that liesjust above the threshold are easilyoverlooked in a comparison of effectsof special educational programs withdirect personal transfers intended toraise people above a poverty thresh-old.2 Returns to education, even tospecialized, income-oriented programs,such as Job Corps and vocationaleducation, are likely to be too diffuseover time to be easily comparablewith measurable effects of noneduca-tional transfers on the elimination ofpoverty.

As a matter of fact, with the excep-tion of job retraining, the programsevaluated by Ribich have all displayedincome-benefit-to-cost ratios of lessthan unity. Moreover, educational ex-peoclitures under existing programsnverinok certain segments of our so-ciety entirely, particularly our elderly,who, if birth rates condi, to declinein the United States, Will account fora larger share of our population incoming decades.

On the other hand, measurementof the conventional rate of return oneducational investment that is so fa-miliar in the economics of educationis equally unsatisfactory, since it isinsensitive to changes in the distribu-

2Ribich. Thomas 1. Eeuration and Pov-erty. Washington, D. C.: Brookings Institu-tion, 1968. Chapter 2, "Poverty Lines andthe Criteria of Policy Choice," p. 17-33.

tion of income. The educational in-vestments with the highest income-to-cost ratios may simply be those thathelp the rich become richer. As longas measured contributions to incomeand output are explicitly or implic-itly used for comparative evaluationwith other federal expenditure pro.grams, some measure more sensitivethan a single poverty threshold willneed to be enforced, particularly tojustify relatively expensive specialeducation programs, such as man-pc wer retraining.

More precise indexes that weighttotal economic gains and high-prioritypoverty thresholds can be constructedfor more effective comparative evalua-tion of educational expenditures. Inthis cue, it may be necessary for edu-cators to present a more nearly com-plete analysis of the complementaritythat exists between educational ex-penditures and other more direct pro-grams aimed at reducing unemploy-ment and measurable poverty, inorder to offset unfavorable competi-tive comparisons of educational ex-penditures with programs of directtransfers to raise incomes.

For example, several economistssince Pigou have suggested a frame-work of analysis of complementaritythat is overlooked in many theoreti-cally simplistic empirical evaluations.To the extent, for example, thatexpenditures on education reducethe ranks of low-income unskil'edworkers, the supply of that target com-ponent of total labor supply dimin-ishes. The decrease in supply alonemay be sufficient in a market economyto push war rates of the remainingsupply of unskilled labor upward,thereby lowering the cost to societyof maintaining a minimum thresholdlevel of income through direct trans-fer programs such as the negative

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income tax. Nevertheless, as long asspecific and localized economic targetsdo secure high priority among futurefederal objectives, educational ex-penditures may simply not measureup to professional expectations underthe scrutiny of increased comparativeanalysis.

Not all federal aid to education,of course, is or will be earmarked forspecialized income-generating pro-grams. General education, for ex-ample, is the target of Title I of theNational Elementary and SecondarySchool Act. Contemporary economicevaluation of general education fre-quently uses as its index of outputsome measure of academic achieve-ment, usually in terms of grade-levelattainment if basic skills. Use of singlethreshold, grade-level criterion forevaluating aid programs would ob-viously be subject co some of the samedifficulties associated with target levelsof personal incomes, namely, the fail-ure to measure improvements belowand above the threshold.

However, other problems of evalua-tion of the impact of expenditures ongeneral education have arisen in manycontemporary analyses of educationalinputs. It is not atypical for expendi-tures per pupil for education to be astatistically insignificant determinantof achievement in regression analysesof general educational output, or atleast for expenditures to be less sig-nificant than other independent inputvariables. Indeed, the Coleman Re-port indicated that not only expendi-tures per pupil, but other direct inputmeasures, have little relation to in-dexes of pupil achievement .3

3 Coleman, James S., and others. Equalityof Educational Opportunity. U.S. Depart-ment of Health, Education, and Welfare,Office of Education. Washington, D. C.: Gov-ernment Printing Office, 1966. 737 p.

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Levin and Bowles have claimed thatmulticollinearity among certain inde-pendent variables in the Colemananalysis destroys the explanatory valueof conventional educational inputvariables.4 A new Coleman Report,currently in preparation, attempts totreat this problem by isolating andgrouping its explanatory variables ac-cording to a research strategy bestdescribed as the principle of com-monality. Other technical difficultiesin systematic evaluation of the contri-bution of educational inputs to pupilperformance also call for further re-finement in analysis. For example,the fact that indexes of pupil achieve-ment are normally ordinal measures,while dollar expenditures and mea-sures of other inputs are usually car-dinal measures, may increase the diffi-culty of identifying the relationshipbetween inputs and outputs, and itmay justify more refined transforma-tions of variables before dei)endablerelationships can be established underexisting econometric techniques.

It thus may well happen that withmore refined analysis the influenceof input variables, such as educationalexpenditures, may prove to be moresignificant, and that on-going evalua-tion of such inputs will providestronger support for financial aid togeneral education. Neverthele...1, re-gardless of the techniques of evalua-tion that will be developed, it is likelythat much actual and proposed finan-cial aid to general education will con-tinue to appear costly relative to thegoals being sought.

Equality of opportunity is o = le socialgoal stressed at the federal levelthat admits of varying interpretations

Bowles, Samuel S., and Levin, Henry M."More on Multicollinearity and the Effective-ness of Schools." Journal of Human Resources3:393-400; Summer 1968.

some of which may appear to prej-udice the case for educational expen-ditures. Where equality of oppor-tunity is defined operationally simplyto refer to provision of equal dollarvalues of services, there is virtually noevaluative problem, but only the taskof identifying and measuring the ap-propriate dollar costs to be equalized.However, when as in some proposalsfor compensatory education, equalityof opportunity demands equality ofpupil performance, the dollar expen-ditures required to raise performanceof disadvantaged children to objectivelevels of their peer groups may appeardisturbingly high to policy makers.

The responsibility may well fallupon the educational profession it-self to satisfy doubts of policy makersabout the efficacy of compensatoryeducation expenditures. Here a pointthat may need to be clarified anddemonstrated empirically is the factthat compensatory education expendi-tures must compensate not only fordeficiencies in classroom education re-ceived by the disadvantaged, but alsofor deficiencies in nonschool educa-tional inputs cs well, particularly incontributed services provided by par-ents in the home to the total proc essof education of their children.

Dugan has inputed dollar values tothe time contributed by parents atvarious socioeconomic levels and hasintroduced these values with consid-erable success into his analysis as ex-planatory variables of differences inpupil achievement.5 The value ofparental services is found to varywidely when those services are pricedaccording to market opportunity costs,

5 Dugan, Dennis. Social and Public Costsof Education: A Comparison. Washington,D.C.: U.S. Department of Health, Education,and Welfare, Office of Education, 1969. (Un-published)

that is, according to income - earningpotential of parents themselves basedupon their own educational attain-ment, and according to the time avail-able to mothers at different socio-economic levels for child care in thehome. Measured against the total dif-ference in dollar values of accumu-lated educational inputs, in and outof the home, the otherwise apparentlyhigh costs of compensatory educationbegin to assume a new, more efficientachievement.

Moreover, preliminary evalu.aionsby the U.S. Office of Education andthe Office of Economic Opportunitysuggest that early compensatory edu-cation, such as that provided by Op-eration Head Start, offers substantialcost savings over compensatory edu-cation at a later period in the lifeof the pupil. Thus, it may well bethat only after the costs of educationare adequately measured as an ac-cumulation of investments in thepupil from many sources over theentire life of the pupil can an ac-curate measure of the marginal costsand benefits of many proposed aid pro-grams, especially at th federal level,be adequately evaluated and ulti-mately justified to the policy maker.

Intergovernmental Distribution of Aid

Once an amount of aid to educa-tion is justified on the basis of itscontribution to social and private ob-jectives, there remains the re-exami-nation and evaluation of the criteriaor formulas by which that aid is bothdistributed and utilized among regionsand the governmental units that rep-resent those regions. Studies currentlyunder way at the U.S. Office of Educa-tion indicate that the 50 different for-mulas used by the 50 states for allo-cating their own funds to local pub-lic education are inconsistent, not

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standardized, and generally unsuitableas mechanisms for distribution of fed-eral block grants through the statesto local public schools.0

It has been found that under ex-isting formulas, most urban areas tendto get less than a per. capita share ofhe states' own funds for education

with no recognition of possible highercosts of education in these areas.State aid formulas result in losses ashigh as 63 percent below state aver-agee on a per-capita basis in certainlarge urban areas. The variations arefrequently' due to matching grant fea-tures and to distribution on the basisof local property tax revenues de-signed to insure local maintenance ofeffort.

Such variations are seen to be in-compatible with declared objectives offederal aid to education, such as equal-ity of opportunity. Hence, currentproposals for distribution of federalaid tend to incorporate criteria thatare more straightforward than exist-ing state equalization formulas. Typi-cal recommendations favor averagedaily membership as the basic cri-terion with an adjustment for thenumber of disadvantaged children ina given school district. Enrollmentrather than attendance figures are usu-ally favored because of the high pro-portion of school operating expendi-tures that is independent of actualclassroom attendance.

Part of the difficulty in achievingadequate equalizing effects with manystate formulas stems from their reli-ance upon local school district prop-erty values as the base for equalizationfeatures, and upon the property tax

6 U.S. Department of Health, Education,and Welfare, Office of Education. Federal andState Financing of Local Public Education.Washington, D.C.: the Office, 1969. (Unpub-lished)

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itself as the indrx of maintenance ofeffort by local districts. Both theseapproaches are likely to bias distribu-tion against urban areas as long asurban property values continue todeteriorate relative to those in thesuburbs.

Moreover, a study by Hirsch sug-gests that efforts by local communi-ties to increase the base of propertyvalues by attracting industry to thearea may be self - defeating.' Analysisof the impact of 16 industrial sectorsin the St. Louis SMSA upon income,employment, and values of commer-cial and residential property indicatethat less than two-thirds of them hada net positive effect on the status offi:cal resources available to local gov-ernment, even after allowance wasmade for increased eligibility forstate aid. Without allowance for stateaid only three of the 16 industrialsectors had a net positive effect onfiscal resources. The rationale behindthese conclusions stems from highpositive employment effect of someindustries, which increases total popu-lation in the area and hence increasesthe school-age population and schoolcosts more than proportionately tothe increase in property to, revenues,even when state subsidies under exist-ing formulas are included.

One difficulty with federal aid chan-neled through states that is yet to befully analyzed and resolved is thepossibility that federal aid will be usedfor services that would otherwise beprovided by the states and local dis-tricts themselves, rather than as trueincrements to state and local effort.Recent budget analysis of 11 citiesand their suburbs for the years 1965

7 Hirsch, Werner Z. "Fiscal Impact of In-dustrialization on Local Schools." Review ofEconomics and Statistics 46:191.99; May 1964.

through 1967 by the U.S. Office ofEducation suggests that fears of suchsubstitution effects thwarting federalobjectives are not wholly warranted.9Results of the analysis indicate thatin 1967 most of the federal aid wasused by school districts to provide alevel of educational services over andabove that provided in 1965, althoughin 1963 the same was true on theaverage only for the suburbs, not forthe cities themselves. In many areasthere was also evidence of additionalstate effort during the two-year period,although, as indicated in the Officeof Education study cited above, thedistribution was biased in fai or ofsuburban areas over center city dis-tricts.

It is further suggested that increasedemphasis on community control anddecentralization of educational deci-sion making will offer additional as-surance that federal funds will beused for additional services, for ex-ample, in compensatory education,rather than as a substitute for stateand local effort. The fact that subsi-dies would be reflected in lump-sum

U.S. Department of Health, Education,and Welfare, Office of Education. An Exam-ination of Federal, State, and Local Expendi-tures for Elementary and Secondary Educa-tion, 1965 to 1967. Washington, D.C.: theOffice, 1969. (Unpublished)

budgets of each community school, asLevin has pointed out, would makepossible a true social accounting forhigher level aid for such purposes ascompensatory education.9 Such localaccountability assists in maintainingthe principle that federal aid shouldstrive for uniform national equaliza-tion of social benefits, especially inthe provision of services to disadvan-taged children, who often find theirway to cities as the result of highpopulation mobility. At the sametime, community control offers de-sirably weak constraints to the kindof consumer choice and local inno-vation that make possible optimalsatisfaction of individual preferencesand needs for education according toconventional principles of allocativeeconomics. Nevertheless, refinementof national policy criteria by whichaid can be distributed to attain theseobjectives in a multi-level govern-mental system, like development ofcriteria for the evaluation of the totalcontribution to national goals of edu-cational expenditures, must continueto depend on independent initiativeand comprehensive analytic effortwithin the educational profession it-self.

9 Levin, Henry. Financing CommunitySchools. Washington, D.C.: Brookings In-stitution, 1968.

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Contemporary Challenges: Monitoring Human Inputsinto the Schools

Austin D. Swanson

SCHOOL FINANCE ANALYSTS have tradi-tionally been concerned with the effi-ciency of school operations. Duringthe early years of this century theconcern led to an obsession with keep-ing costs down, with little recognitionthat this action might diminish theeffect of schools on children. In the1930's, sparked largely by the insightsof M, In, we became aware that therewas variation in the effectiveness ofschools and that generally thoseschools which produced better resultswere also higher consumers of eco-nomic resources.1 It was also notedthat high-expenditure school districtstended to be Close with large por-tions of their populations being busi-ness and professional people who werewell educateu and earned high in-comes.

Studies of the present decade havebegun to indicate the limitations ofeconomic resources in affecting theeducational achievement of children,especially those from lower socio-

1 Ross, Donald H., editor. Administrationfor Adaptability. Revised edition. New York:Metropolitan School Study Council, 1958.643 p.

Dr. Swanson is Associate Professor Educa-tion, State University of New Ycrk at Buffalo.

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economic backgrounds. These morerecent studies have provided us witha better understanding of what wehave long known about the generalrelationship between community char-acteristics and school effectiveness.They dramatically demonstrate thatas school financial analysts we canno longer limit our attention to eco-nomic inputs alone. We must alsoaddress ourselves to the effects ofvariations in human inputs upon theabilities of schools to reach their statedor implied objectives. We can nolonger ignore the fact that to opti-mize the efficiency or effecti veness ofthe schools, we must be able to con-trol the allocation of human inputsas well as economic inputs.

In their pioneering study of Penn-sylvania school districts, Mort andCornell in 1936 discovered the thenrevolutionary fact that two-thirds ofthe variation in the adequacy or qual-ity of school services could be ex-plained by the characteristics of thecommunity and its population.2 Therelationship held up in over a genera-tion of studies and in samples rangingfrom a single metropolitan area to

2 Mort, Paul R,, arid Cornell, Francis G.American S.hools in Transition. New York:Teachers college, Columbia University, 1941.546 p.

the United States as a whok.3 Therationale which Mort developed toexplain this effect was that communi-ties with high-quality human resourcesallocate larger amounts of economicresources to the schools than commu-nities with low-quality human re-sources. This rationale directly attrib-uted the better output to the higherallocation of financial resources.

Subsequent studies, notably thoseof James 4 and Thomas 5, made ofProject Talent data have found thatthe effect of community or humaninputs upon pupil achievement re-mains as strong as it was in the Mortstudies.

Following the theory that increasedexpenditure yields increased outputper pupil, our response to the plightof ghetto children was with money,at first with trickles of state and localmoney and then with the massiveamounts of federal money throughTitle I of the Elementary and Sec-ondary Education Act. Then came theCivil Rights Commission Report, Ra-cial Isolation in the Public Schools,°the Coleman report 7 and all the con-troversy that surrounded it, and amyriad of more limited studies, 300of which were summarized by Wein-

3 Ross, Donald H., op. cit.4 James H. Thomas, and others. Wealth,

Expenditures and Decision-Making for Edu-cation. Stanford, Calif.: Stanford University,School of Education, 1963. 203 p.

5 Thomas, J. Alan. Efficiency in Education:A Study of the Relationship Between SelectedInputs and Mean Test Scores in a Sample ofSenior High Schools. Doctoral dissertation.Stanford, Calif.: Stanford University, 1962.

U.S. Commission on Civil Rights. Racialisolation in the Public Schools. Washington,D.C.: Government Prini.ng Office, 1967.276 p.

7 Coleman, James S., and others. Equalityof Educational Opportunity. U.S. Departmentof Health, Education, and Welfare, Office ofEducation. Washington, D.C.: GovernmentPrinting Office, 1966. 737 p.

berg.5 The general thrust of thesestudies is unmistakable. Despite highcosts, the yield of compensatory typeeducational programs is slight whenapplied to groups of children frompredominately lower socioeconomicenvironments. The yields are greaterand the costs are less when lowersocioeconomic children are educatedin an environment dominated bymiddle-class children. To those con-cerned with optimizing the effect ofeconomic resources devoted to edu-cation, the implicat:on is clear. Toget the "biggest bang from the educa-tional buck" decision makers must beable to control the mix of pupil in-puts as well as of economic inputs.

In trying to gain a better perspec-tive of the findings of the 1960 6, thestudies of the 1930's, 1940's, aid1950's are not totally irrelevant. Dur-ing the earlier period, the deprivationwas not in the cities but in ruralareas. Two basic tactics were usedto overcome this deprivation: schooldistrict consolidation and increasingeconomic resources allocated to ruralschools. School district consolidationserved several purposes. It producedlarger units which could realize econ-omies of scale, and enlarged the localtax base. But probably the most im-portant effect was to bring togetherthe laboring class children of the farmwith the middle-class children of thevillage. It also extended the fruit ofthe village middle-class leadership tofarm children. The results have beengood in most rural areas where thereis a significant middle class. Thesame cannot be said for other areassuch as Appalachia.

8 Weinberg, Meyer. Desegregation Re-search: An Appraisal. Bloomington, Ind.:Phi Delta Kappa, 1968. 314 p.

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In addition to the need for a bal-anced social structure in school dis-tricts, these earlier studies pointed tothe importai_ce of community involve-ment in the educational process, par-ticularly when the principal meansof financial support originated out-side the district. Mechanisms wereinvented for accomplishing this, in-cluding elected school boards, budgetreferendums, bond referendums, com-munity advisory committees, and eventhe so-called community school.

The stage has changed, but theactors are basically the same. Theactors are people, and they functionapproximately the same as people dida generation or two ago. Once againthe people are divided in school dis-tricts according to their socioeconomicstatus, but now the division takesplace in huge urban complexes in-stead of sparse rural areas. The peopleare divided into ghettos in urbancenters and into small homogeneoussuburbs of varying reputation on thefrinf;e. While there are some blue-collar suburbs, the tendency for high-income, low-cost citizens to live in thesuburbs and for low-income, high-costcitizens to live in the core is welldocumented.9 Even the core's monop-oly op industry, business, and retailactivity has been broken.

People apparently still desire toparticipate directly in the school's pol-icy making. The school districts ofmost suburbs are small enough to per-mit this, but the core ghettos are partsof huge city school districts whosenineteenth century bureaucratic struc-tures permit little community involve-ment. So the residents of core cities

9 Advisory Commission on Intergovernmen-tal Relations. Fiscal Balance in the AmericanFederal System. Vol. 1. Washington, D. C.:Government Printing Office, October 1967.355 p.

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are now hard at work trying to de-centralize the school bureaucracy andin essence to make it look similar tothat of the suburbs.

Can we support this further frac-tionalization of our nation? I thinknot. I recognize the importance ofcitizen involvement. I subscribe tothe concept, but I do not subscribeto the imposition of a political struc-ture designed for a sparse rural set-ting upon densely populated urbancommunities. Total decentralizationwould institutionalize a fragmentedsociety. It would secure the economicand social advantages of the affluentsuburbs while permanently legislatingthe existence of blue-collar suburbsand poverty ghettos. The hope ofrestoring to the schools their earlierfunctions of social integration andfacilitation of social mobility wouldbe lost.

The alternative to decentralizationis centralization of the cities andsuburbs. Yet, an extension of existingbureaucracies in big city school dis-tricts today would lead to total catas-trophe. Centralization would distrib-ute the wealth more evenly. It wouldgive decision-makers control over themix of pupil inputs. It would diffusethe energies of middle-class leader-ship. It would not permit meaning-ful citizen participation, however, andit would probably level educationalservices to mediocrity. Such an ex-panded bureaucracy would inevitablyfall of its own weight.

The solution to the governance ofeducation in metropolitan areas lieswith neither of the simplistic notionsof centralization or decentralization.The eventual solutions will probablycontain elements of each. The timehas come to carefully examine thesupportive functions of public educa-tion to determine under what condi-

tions and at what levels each canmost effectively be carried )ut.

I see no alternative to the furthercentralization of the financing func-tion. This will take the form of in-creased federal and state aid, but italso needs to involve some form ofmetropolitan coordinating board withtaxing and borrowing powers. Con-current with centralized finance is aneed for decentralization of adminis-tration to intermediate and school lev-els. The refinement of planning, pro-gramming, budgeting systems (PPBS)techniques provides a promising man-agement framework within which thesimultaneous movement in these ap-parent diverse directions can takeplace.

In decentralizing administrative de-cisions to thf. school level, a varietyof approaches to staffing and curricu-lum should be facilitated and en-couraged. Experience to date in theevaluation of alternative teachingmethods shows that 99 times out of100 there are "no significant differ-ences." It is highly improbable thatexperimenting with new instructionalforms will harm children. However,we need to maximize the possibilityof discovering those one in a hundredmethods which do make a difference,which may be more efficient and moreeffective.

Neither centralization of financenor decentralization of administrationinsures meaningful and direct publicparticipation or guarantees againstgeneral mediocrity. Two additionaldevices should be considered for ac-complishing these objectives: evalua-tion units attached to both the metro-politan and the intermediate boardsand open enrollment. The evaluationagencies should regularly evaluate theprograms of a school against the spe-cific objectives developed by the school

for itself within the general policyframework established by the metro-politan and intermediate boards. Suchdata are needed for making decisionsabout the wisest use of resources andconstitute an important support ofPPBS. Granting parents the right toselect the educational institutionswhich they believe are most appropri-ate for their children provides a de-gree of involvement unknown in pres-ent school governmental structuresand at the same time injects a largedegree of competition into our presentmonolithic systems. Voting for school-board members and participating invarious referendums are at best sym-bolic exercises in densely populatedmetropolitan areas. Consumer free-dom of choice constitutes a far moremeaningful and powerful vehicle forparticipation. Such an arrangementwould permit school advisory com-mittees to take on new importanceand vitality because their memberswould no longer be a captive clientele.Their membership would consist ofpersons who possessed the power toremove their children from the insti-tution if they were not satifieci withits services and to place them in com-peting institutions.

Without some constraints, open en-rollment would result in segregationsimilar to that which we know today.The reputation of a school is deter-mined largely by the reputation of itsclientele rather than by what theschool does to or for its clientele.A monitoring mechanism would beneeded for insuring that the enroll-ment of a school approximated thesocioeconomic composition of its met-ropolitan area. By making the clien-tele of schools similar, school selec-tions would more likely be made onthe basis of school accomplishments.This would undoubtedly mean the

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end of the neighborhood school, butnot the end of schools. It would prob-ably mean the eventual consolidationand coordination of facilities on aseries of campuses.

All of this means that as schoolfinancial analysts we have to expandour thinking. For too long we haveaccepted the present system axiomatic.ally. We have attempted to shore upwith economic resources a syste:.which is irrelevant to urban America.In so doing we have only temporarilypushed back the day of restructuringmetropolitan school systems. The spe-cific pattern of this restructuring willvary to accommodate the unique char-acteristics of each metropolitan area,but there appear to be certain pro-visions which will be common to most:

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1. Centralization of the financingfunction

2. Decentralization of the admin-istrative function

3. Decision-making through a PP-BS structure, including an ex-tensive cost-effectiveness analy-sis support system

4. Competition among units byproviding parents freedom ofchoice of school

5. Control of the socioeconomicmix of pupils in schools and inprograms

6. Consolidation of school facili-ties on a series of campuses.

In meeting the challenge of the fi-nancial needs of metropolitan areas,we must carefully consider the veryimportant effects of human inputs aswell as economic inputs.

Decentralization in New York City

Lloyd L. Hogan

THE MOST SIGNIFICANT social dynamicin the nation today (apart perhapsfrom the Vietnam War) is the urbani-zation of American life. This process,however, is not new. Indeed it is partof a series of dramatic historicalevents: (a) the international migra-tions to North America primarilyfrom Europe, (b) the transformationof the economy from dependence onagriculture to the organization of astrong industrial base, (c) the vastmigrations of people from south tonorth during the inter-war years, andlastly (d) the internal conquest ofthe west that gave America its dis-tinctive character. The result of allthese movements has been the forma-tion of concentrated clusters of peoplewhich we call cities and metropolises.

This process will continue unabatedinto the 21st century. It is estimatedthat by 1980 over 90 percent of theAmerican people will be living inurban areas. The figure in 1920 was51 percent, and in 1967 it was 71 per-cent.

These vast and dramatic move-ments of people into the urban areas,while resulting from the same sets

Mr. Hogan is Assistant Director of UrbanEducation, State Education Department ofNew York, Albany, New York.

of social forces, exhibit certain spe-cial characteristics in different periods.The underlying pattern has been themovement of the new migrants intothe center of the city in proximity iothe commercial and industrial estab-lishments. At the same time the moreaffluent people have moved away fromthe center to the outer fringes.

Prior to World 'War II, the politicalboundaries were sufficiently broad sothat everyone, migrant and affluentresidents alike, continued to remainwithin these boundaries in spite ofmigration patterns. Since World WarII, however, the political boundarieshave remained stationary while themigration patterns continue unabatedso that sooner or later the populationgrows beyond the confines of theseboundaries, spilling over into the sur-rounding suburban towns. In otherwords, the political boundaries of themunicipal corporation more and moretend to be at variance with the socialrealities of population growth andchange.

In recent years the peculiar char-acteristics of the dynamics of popula-tion change have been that the newmigrants are Negroes from the southor Puerto Ricans while for the mostpart the affluent segment of the popu-lation has been white. The result

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has been a changing complexion ofboth the central city and the subur-ban town, the central city becomingmore and more Negro and the subur-ban areas becoming predominantlywhite middle class.

To illustrate close to home in NewYork Stateduring the 1950's thepopulation of New York City re-mained almost stationary because theoutward net migration of 800,000whites matched almost completely thenet inward migration of Negroes andPuerto Ricans. The s.m-rounding met-ropolitan areas grew by leaps andbounds. Another example is thegrowth of Leavittown in NassauCounty which did not exist beforeWorld War II and which was 50percent larger in 1960 than the coun-try's biggest city (Philadelphia) wasin 1790. By 1960, Leavittown hadover 65,000 inhabitants, almost allwhite. This example could be mul-tiplied many times throughout thenation, particularly in the older citiesof the East.

The meaning of these events foreducation in states like New York isthat the central city will continue fora long time to be a Negro populatedcity; on the other hand, the urbanareas surrounding the city will con-tinue for quite a while w be white.Quality integrated education, there-fore, as a meaningful educationalpolicy has not been realized in thepast and cannot now be realized.

Perhaps the most dramatic achieve-ment in education in states like NewYork has been the -eorganization ofsmall and ineffectiv . districts outsidethe cities into viable ind quality edu-cational systems. This was achievedthrough many devices. Among themwere state-supported transportationsystems, strong and pervasive super-visory activities, the construction of

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new or improved physical facilities,and a series of complex financial sub-ventions designed to stimulate spe-cific aspects of state policy. In theseactivities the full machinery of thestate was used with the self-imposedrestriction that local autonomy wasthe order of the day. The result hasbeen that good school systems weredeveloped, and the local communityplayed and continues to play a de-cisive role in running those systems.Yet, while the "quality" element wasrealized, these schools continued tobe almost exclusively white. Conse-quently the "integration" concept wasreally never pursued nor realized.

In New York City, for example,there are approximately 550,000 non-white public-school pupils out of atotal public-school population slightlyin excess of a million, and the trendtoward a larger proportion of non-white pupils is continuing. Moreimportant, however, is the fact thatin certain areas of the citySouthBronx, Bedford Stuyvesant, South Ja-maica, and I-iarlemthe nonwhitepublic-school population is approach-ing 100 percent.

The estimated educational uncer-achievers of the city are placed atslightly in excess of 45 percent of thetotal school population. Similarly, theconcentration of these pupils withgreat educational needs approaches100 percent in some parts of the city.

The meaning of all these eventsis that a policy which has proveditself effective in the past ought to bepursued. The elements of this policyseem to be (a) a reorganization ofschool districts of a sufficient size toprovide a comprehensive educationaloffering, (b) local autonomy involv-ing strict community control of theschools, and (c) state financial sub-ventions designed to develop a "qual-

ity" education as distinct from "in-tegrated" education. A policy involv-ing these elements certainly workedthroughout the rest of the state inthe past, and there is no reason whyit should not work in the large citiesnow.

Strategy for Dealing withDecentralization

The first and fundamental elementin the strategy for dealing with de-centralization of New York City isthat the state commit itself stronglyand unequivocally to the principleof decentralization. The people ofthe local communities of the cityare deeply committed to this conceptand will resort to drastic measures asa reaction to state, city government,or central board actions which theybelieve to undermine the concept ofdecentralization.

Furthermore, as we pointed outearlier, this is the announced policyand practical activity of the state asit applies to schools in the state out-side New York City. Certainly wehave been committed to the conceptof local autonomy in the conduct ofschool affairs and have liberally pro-vided the resources to local autono-mous school boards to develop educa-tional programs in their own image.

Another important element of sucha strategy must be that the state com-mit itself to an unambiguous policy ofquality integrated education in the de-centralized districts. The brute facts oflife at this moment in history may pre-clude immediate integration. Theseconditions arose from the populationdynamics alluded to earli_r. Indeed,the solution of this component must

come from the major thrust of theeconomic, political, and social institu-tions with a minor role played byeducation. Hence, a relentless pur-suit of the "integration" componentmust not be used as a subterfuge forinaction.

In the past a successful policy ofdeveloping quality schools in the ur-ban areas outside the cities has beenpursued. As we have pointed outearlier, these schools have not beenintegrated and there is very littleprospect that they will be integratedin the near future. Nevertheless, thiscircumstance did not deter the fullmobilization of the state's resourcesin the development of quality schoolsin these areas. The same resolve mustbe shown in the case of the decen-tralized schools in New York City.

Another important element in thestrategy of decentralization must bea direct and strong relationship be-tween the state and the local schoolboard. As part of this strategy therelationship between the local andthe central boards must be correspond-ingly clarified and legally codified.

Also, the state should place: com-plete trust in the ability of parentsand local community groups to or-ganize and conduct good school sys-tems. We have done this in the pastwith respect to other school districts,and by and large this policy has beensuccessful. Furthermore, in this periodthe confidence of the people in thet.fficacy of the power structure to pro-vide good schools for their childrenis at its lowest point. The fact is thatwith the dramatic statistics on under-achievement in these schools, thepeople themselves believe that theycan do no worse.

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Effect of State Aid on Local Taxation:A Case Study of an Oregon County

Henry Osibov

THIS STUDY WAS done to minister tothe turbulence of feelings aroused by asuspected tax inequity that was felt bymany in the rural area of HarneyCounty, Oregon.' It was necessary torelate the feelings aroused to the col-lections of taxes and transfer andexpenditure of school taxes collectedat the local and at the state levels.The major taxes were the local prop-erty tax and the state income tax, andthe major focus was the expenditurefrom those revenues for schools. It wasnecessary to unlock the secrets of whoactually pays the taxes and where andfor wi'at that tax money is actually,evero.nally spent. Furthermore, if thestudy was to influence "school tax-payers' feelings," it was necessary thatwe expose the people who had arousedfeelings to suc'n theories as (a) mea-surement of the goodness of a tax;

1 Osibov, Henry, and Paus, Gregory. HowDid Simultaneous Intermediate EducationDistrict Equalization and Distribution of StateSupport to the School Districts Effect theImpact of Taxes for Schools in 1966-67 in anOregon County? Eugene: University ofOregon, Bureau of Educational Research andService, 1968.

Dr. Osibov is Associate Professor of Education,University of Oregon, Eugene, Oregon,

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(b) contentions about what is the bet-ter measure of taxpaying ability orwealth, "true cash value of property"(TCV) or income; (c) what measure ofwealth is being used and what othermeasure of wealth could be used; and(d) some objective basis for choosingbetween ad valorem value of propertyand personal income as the bettermeasure of wealth.

Among the obstacles were: (a) thelack of valid information, especiallyabout the income tax collections andtransfers and final site of expenditureof all funds except local property taxlevied in the districts; (b) absenceof written precedent or tested pro-cedures for abstracting the informa-tion needed; (c) necessity to communi-cate findings in a context that woulddisplace the existing traditional con-cepts of such terms as local taxes, statemoney, rich districts, equalization, andothers; stimulation of thought andanalysis that might lead to consensusfor political action by the Intermedi-ate Education District (IED) Board,and the state legislature. Initially, noone knew where transfer of schoolmonies led or where the final irrof a tax was. It had to be z,:ackeddown. The history of how it evolvedis many faceted ai<< too obscure for

anyone to know. We were not surewhat our study would reveal.

We began the job of identifyingand accumulating totals of taxes paidin the two designated areas, UnionHigh School District #1 and UnionHigh School District #2. We thentraced the transfers of those tax fundsto other governmental bodies. It wasthen necessary to dissect the pools oftax money as it was divided up byshifting and to reassemble all fundsfrom each original and intermediatesource at the site (Area I or Area II)of expenditure. In layman's language,we were establishing who paid the taxmoney in the first place and tracingthat money through middlemen to siteof expenditure for public schools andthereby determining who was actuallypaying for education in two areas ofHarney County.

Because tax matters are heavilyladen with political implications, wedecided early to make no recommen-dations based upon economic factorsalone. In fact, it was our major aimto search for objective information,much more accurate than any previousinformation, about actual dollars oftax collections for schools from theresidents of each of the two areas. Tothis end, we assembled taxes paid ineach of the two areas in 1966-67, andexpenditures for schools in each of the

two areas independently and sepa-rately.

The amount of local property taxpaid in each area was established byapplying the millage levied to theTCV for 1966-67. Nece3sary refine-ments were made to the initialamount, such as reducing it by theamount of tax relief and discountsallowed, and adding prior taxes col-lected.

The state income tax was a morecomplicated riddle to untangle; how-ever, actual amount paid in the twoareas was secured by identifying tax-payers in each of the two areas byaddresses and by computer proct.,s;rigof the State Tax Commission indi-vidual income tax information ontapes. The remaining 37 percent ofGeneral Fund Revenues was assumedto be paid by Harney County citizensand by the residents of the two areasin the same proportion that incometaxes were paid into the State GeneralFund. Several officials from the StateTax Commission, the State Treasur-er's Office, and the Scate Departmentof Education, were consulted to helpto establish the divisions of taxes paid.A 10 percent increase in the taxesattributed to Harney County wasadded to what was deemed to be thehighest probable level of Lax paymentsin the State General Fund in order to

TABLE 1.PROPERTY AND INCOME TAXES PER HOUSEHOLD, HARNEYCOUNTY AND AREAS i AND H, OREGON, 1966-67

Item Harney County Area I Area II

2 3 4

Property taxes per household $ 425.19 $ 936.00 $ 281.00State income taxes per household 173.05 106.32 183.35

State and local total $ 598.24 $1,042.32 $ 464.35

Federal incomes taxes per household 699.79 3 40.80 755.25

Total direct taxes $1,298.03 $1,383.12 $1,219.60

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TABLE 2.INCOME AND STATE AND FEDERAL INCOMES TAXES PERCAPITA AND PER HOUSEHOLD, OREGON AND AREAS I AND 0, 1966-67

State Area I Area II

2 3 4

True cash value of property/household $17.587.48 $20,390.61 $19,706.10Income /household 6,840.38 3.696.00 6,291.00Incomo/capif.a 2,558.92 1,447.84 2,238.22State income faxes/capita 80.50 41.66 65.23State income taxes/household 215.59 106.32 183.35Federal income tax/capitc 337.78 144.78 268.69Federal income tax/household 902.94 340.87 755.25

assure that Harney County tax pay-ments to the state would not be under-sta ted.

The expenditures were collectedfrom the audited reports of the1966.67 expenditures of all the schooldistricts in Area I, and all of the schooldistricts in Area II. These, of course,were accurate reports of expenditures,but they did not conform to taxescollected, nor should they be expectedto. Beginning-of-year balances a-1end-of-year balances are two itemsthat would vary the amount of totalexpenditure either up or down fromthe amount of taxes collected.

Summary of Findings andImplications

Area I with a TCV per household of$80,391 and an income per householdof $3,696 actually paid $45,988.12more in identifiable taxes than wasexpended for schools in the area.Area II with TCV per household of$19,706 and an income per householdof $6,291 received $64,137.82 morefrom the state than was paid by arearesidents and $45,988.12 frcm Area Ito supplement the total amount ofidentifiab:le tax revenues raised inArea II to make up the total of 1966-67school expenditures. Area II receiveda total of $105,645.51 of property and

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income tax collected outside Area II.This occurred partially by design ofbasing both state equalization andIED tax collections on the TCV perweighted pupil in average daily mem-bership (ADMW) within school dis-tricts.

Most students of economics and taxauthorities contend that income is abetter measure of wealth and abilityto pay taxes. If the body politic inOregon would accept income as thebetter measure of wealth and taxpay-ing ability and equalized school costsaccordingly, Area I would enjoy netreceipts above taxes paid and reducedtax payments.

Table 1 indicates that Area I resi-dents paid $77.03 less income tax perhousehold than Area II residents; andmore than three times as much prop-erty tax per household as Area IIresidents paid. The most dramaticrevelation was that the rural house-holds paid $936 of property tax outof reported income of $3,696 perannum. More than one-fourth of in-come was spent to pay property taxes.This is part of the way of life ofranchers who in their own words,"live poor to die rich."

Under the presently accepted prop-erty-value thesis of measure of wealth,Area I pays a little more than double

per household of combined propertyand income tax paid by residents inArea II. When federal income tax perhousehold is included, most of theexisting lower taxes in Area HI dis-appear. However, Area I resklentsstill pay $163.59 more in total directtaxes per household than Area IIresidents.

Considering total tax payments,present tax collections treat the twoareas as if Area I has greater taxpayingability. However, by the income stan-dard, Area I is being subjected to atax over-burden. The Area I tax over-burden produced by the property-value measure of wealth now used isreduced substantially by the propor-tionately large transportation grantsto Area I, the lower income tax paidand the Area I receipts from stateincome tax relief.

A major implication of the findingsof this study with state-wide applica-tion is the depiction of tax treatmentof the poor (low-income and property-poor) segregated in a low-income areawithin one county. How the unsegre-gated low-income household (notproperty-poor) fares in a more wealthy(by income measure) area under thepresent tax system could be dete.mined. Somc light by implication isalso shed upon how the low-incomefamily would fare under equalizationplans based upon level-of-incomemeasure of wealth if all taxes werecollected on income base. Some cau-tions are also in order: (a) How valida measure of farm income is the tax-able income reported for federal in-come tax? (b) Do absentee landlordsown large portions of the rural landarea and thereby increase per-unitTCV far more than in other areas ofthe state? (c) Do satellite rural resi-dents receive free benefit; at measur-able levels from services paid for by

hub-city taxpayers? (d) Do rural arearesidents provide privately for them-selves, services that city folk pay forand use through the public sector?

Items for Consideration inAdvocating Equitable Taxation

The measures of income and TCVof property in this study are meanamounts for residents of each area.Means are useful measures for com-parison, but the ranges yield greaterextremes of advantages and disadvan-tages that penalize and reward indi-vidual taxpayers. In this perspective,reflect a moment upon what is the lotof the taxpayer with an $1,800 incomein relation to the one with a $9,000annual income in each of the twoareas.

The State Tax Commission com-puter runs indicate that 34 percent ofOregon income tax returns, 250,000of 731,000 returns, had less than $3,500annual income. What is the taxes-paidimpact on such a household as com-pared with the household with a$7,000 income living in Area I? inArea II?

What will be the effect of the pro-posal to use the sales tax to providedirect tax relief from property tax? 2

The sales tax base is the amount ofmoney each household spends. Thatmeans that a selected part of income,the money expended, is taxes insteadof a tax-base of the amount one earns:income as the tax base, or the valueof property owned as the property taxbase. The sales tax rate is uniform, alltaxpayers pay the same percentage ofmoney spent regardless of how much isearned, and regardless of how much ofit is expended and becomes taxable.

2 Editor's note: The voters in Oregon de-feated the proposal to enact a sales tax forproperty miief on June 3, 1969.

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The sales tax will shift the tax burden.Property-poor taxpayers in Area I willget some relief. In our objectiveanalysis of the tax shift, other house-holds even less able to pay will supplymuch of the tax money to provide the

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property tax relief. Few will pay one-fourth of th income in sales tax, butat least as many will pay in moremarginal dollars, dollars more desper-ately needed to purchase subsistencelevel necessities.

Federal Legislation: The NEA Posture

Mary C. Gereau

THE NEA LEGISLATIVE Commissionhas adopted a program for the 91stCongress that emphasizes three majorpriorities:

1. Full funding of eh ;sting categor-ical aid programs, especially Title Iof Elementary and Secondary Educa-tion Act (ESEA).

2. Enactment of general federal aidto the states for elementary and sec-ondary education, with the basic grantto be $100 per school-age child in eachstate, and a supplemental equalizationgrant based on the ESEA Title Iformula. The total is estimated to be$7.6 billi 3n. Not less than 50 percentof the basic grant is to be used forteachers' salaries. The supplementalequalization grant is for urgent unmetneeds. This is not proposed as a sub-stitute for present categorical aids, butrather for acceptance on the part ofthe federal government that it hasa responsibility, along with state andlocal governments, to finance educa-tion.

3. Enactment of a federal profes-sional negotiation law for teachersunder the U. S. Office of Education.

In addition, NEA is supporting leg-islation to expand and extend theschool lunch and breakfast program

Mrs. Gereau is Legislative Consultant, Na-tional Education Association, Legislation andFederal Relations, Washington, D.C.

to all disadvantaged children, to estab-li -11 a Bureau of Early ChildhoodEducation hi the U. S. Office of Educa-tion, and to transfer Indian educationfrom the Department of Interior to theU. S. Office of Education. (The lasttwo items are in keeping with the ob-jective of creating a Cabinet level De-partment of Education.)

The 91st Congress will be concernedprimarily with tax reform and socialsecurity. In this area the NEA is con-cerned specifically with securing theright of deduction, from gross incomeof teachers' educational expenses forinservice education for tax purposesand in increasing the retirement bene-fit tax purposes, for those retiring un-der public systems other than socialsecurity, to a figure comparable r thatof social security recipients. We alsoare seeking to extend Medicare cover-age to teachers not covered by socialsecurity.

In addition to advocating full fund-ing of existing programs, such asESEA, the Education Professions De-velopment Act, the Vocational Edu-cation Act of 1968, and the HigherEducation Act student aid programs,the NEA also seeks adequate appropri-ations for the Department of DefenseOverseas schools, for the education ofIndian children, and for the ModelCities program.

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The NEA seeks the enactment ofamendments to its Charter, as re-quired by the Representative Assem-bly, to abolish the NEA Board ofTrustees and transfer its duties to theNEA Executive C3rnmittee.1

The NEA is also involved in secur-ing constitutional reform to lower thevoting age to 18 years. The StudentNEA furnishes the leadership in thisarea, with support from the NEALegislative Commission and staff, theAssociation of Classroom Teachers,and the NEA Committee on Citizen-ship. And the NEA will continue towork for a copyright law that will notrestrict teachers in fair use of copy-righted materials of any kind.

In testimony before the House Edu-cation and Labor Committee on Feb-ruary 6, 1969, Mrs. Frances M.Carnochan, Chairman of the NEALegislative Commission said:

The NEA is intensely concerned, as weknow are the Chairman and members of thisCommittee, that the ESEA be improved andexpanded to accomplish its vital objectives.We are proud to have been involved in thedevelopment and initial enactment of thislegislation and pledge our continued concernand support.

For the record it must be said, however,that the NEA, representing some two millionteachers of the National and state affiliatedassociations, is convinced that ESEA, alone orin concert with other legislative measuressuch as the Educational Professions Develop-ment Act, the National Defense EducationAct, etc., cannot achieve for American edu-cation the hopes and aspiration that the na-tion has for the education of its youth. Inaddition to these programs, which properlyconcentrate primarily on the needs of thedisadvantaged, a massive financial effort onthe part of the federal government to joinwith the states and local communities in pro-viding adequate funds for quality educationof all children must be forthcoming and soon.

1 Editor's note: This bill was passed JuneSO, 1969, and signed by the President.

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We have been saying this for well over 25years. We believe that, had the federalgovernment responded to our pleas, we wouldnot now be faced with the crisis in ourschools .vnich has resulted in the need forsuch programs as ESEA. We will expand thisthesis in other hearings at a later date. Theremainder of our comments in these hearings-vill be related to HR 514 (extension ofESEA;.

As you know, in late summer of1968, bills were introduced in both theHouse and Senate based on NEA's"$6 Billion General Federal Aid" pro-posal. In this, the 91st Congress, theprogram will be introduced by Repre-sentative Call Perkins (D-Ky.), Chair-man of the House Education andLabor Committee. We had hopel thatthe bill would be introduced 'ay thistime, but Chairman Perkins IA ishes tomove the ESEA amendments throughthe House before moving on to gen-eral federal aid. From comments byvarious members of the House Edu-cation Committee, it is apparent thatRep. Perkins will have strong alliesfor the general aid bill.

However, the real test for educationmeasures will be in the Appropria-tions Committees. The Nixon Admin-istration is faced with the same fiscalpicture as the Johnson Administra-tion. The Vietnam hostilities con-tinue. Pressure for the Anti-Ballist5cMissile (ABM) program, despite wide-spread public opposition, will drainoff any funds that "peace" may leaveavailable in two or three years. Thespace program supporters have alreadylaunched a massive campaign for in-creased billions in the next few years.The demands for urban programscannot goihunheeded without incurringadditional confrontation such asmarred the cities in 1967. The appealof "law and order" indicates largecommitments of federal funds for en-

forcement, if riot for curing the rootcauses of crime. The repeal of the10 percent surtax is air( .,dy beingplaintively called for. Tax reform, ifit comes at all, will net necessarily in-crease federal revenue. In addition, wehave the problems of air and waterpollution, continuing foreign aid, andwage and salary increases for federalemployees. The anticipated "surplusafter Vietnam" is, in the minds ofmany, a myth, since there is an alreadylong list of claimants lining up.

Does this mean that NEA is merelygoing through the motions in prepar-ing a general federal aid bill? Not atall. The NEA Legislative Commissionis in dead earnest. The NEA Execu-tive Committee and Board of Direc-tors are committed to this program.But these bodies alone cannot securethis legislation. The active, vocal, con-tinuing, dedicated, persistent supportof every member of the teaching pro-fession is required. If the teachingprofession, and its allies among par-

ents, school boards, and consumers,concentrates on impressing the Con-gress with the vital necessity of gen-eral federal aid to education, alongwith the categorical aids designed tomeet special problems, th.s legislationcan be enacted. But if the professioncontinues as it has in the past, to frag-ment into a myriad of pressure groupssupporting only funds for the handi-capped, or for science, or art, or foraudiovisual programs, or for, yes, re-search in which certain constituenciesare most personally inwrested, we willbe at the tail end of the long line ofclaimants as 1,4,- have been for so long.

I am personally convinced that atany time the organized unified teach-ing profession can do anything itwants to doif it tries hard enough.The key words are organized and uni-fied. The time is now. The desisionas to whether the country has generalfederal aid to education is not up tothe NEA Legislative Commission. Itis up to youand youand you.

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Federal Education Programs

Emerson J. Elliott

THE BUREAU OF THE BUDGET works forthe President of the United States. Itdoes not operate a program. Its solepurpose is to assist the President inany way that will help him to operatethe federal government. Presidentshave many objectives, not all of themconsistent. A President wants to movethe nation's educational system for-ward. He also wants a strong nationaldefense, a low rate of unemployment,a fair income for farmers, health, andsafe cities. He must pay the intereston the national debt and meet thestatutory requirements for social se-curity. But he also wants to check in-flation and prevent deflation, to havea low budgetpreferably balanced orwith a surplusto keep down federalemployment.

The Bureau helps the President byoffering him alternatives to achieve asmany of his objectives as possible. Thisis done through a process of evaluat-ing, comparing, contrasting, and re-viewing. The job of complementingthe work of the experts and profes-sionals in the agencies is achievedthrough knowledge of how to makethe levels of government work, a viewacross the government, and providing

Mr. Elliott is Assistant Director (Education),Human Resources Programs Division, U.S.Bureau of the Budget, Washington, D.C.

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a place to air conflict and seek a wayof resolving it.

Questions of public policy are notresolved within the mysterious depthsand the anonymity of the Bureau ofthe Budget, but are referred to theWhite House and the President fordecision. The chief product of theBureau of the Budget is the Budgetfor the United States Government, inwhich the President's decisions arean;tounced.

The President's BudgetThe budget sets forth the Presi-

dent's plan for federal programs tohelp meet the whole range of the na-tion's domestic and international re-sponsibilities. The President presentshis budget to the Congress each Janu-ary, six months before the start of thefiscal year. This technical and for-bidding document is not a forecast ofthe revenue measures or budget re-quests which the Congress will ap-prove or of the expenditures whichwill finally be made. Rather, it indi-cates the President's judgment of pri-orities and of the best mix of relativelevels for each program among thehundreds operated by the federal gov-ernment. It takes into account the de-mands for federal funds as well as therevenues available and the effect offederal spending on the economy. It

is the one device in the federal systemfor forcing all program decisions intoorder.

The budget submitted to the Con-gress by President Johnson before heleft office proposed for the fiscal yearbeginning July 1, 1969, federal outlaysof $195.3 billion, an amount equallingabout r percent of the Gross NationalProduce. It called for a surplus of$3.4 billion and a continuation of the10 percent surtax. It was characterizedas a budget whicIt would provide for"the defense of freedom" while allow-

, ing the nation to "move ahead inmeeting the pressing needs we face athome," yet "stem the increased pricepressures we have experienced in thepast few years." President Johnsonsaid, "While adhering to a restrictiveexpenditure policy, I am making rea-sonable provision in the 1970 budgetfor the requirements of ongoing pro-grams, proposing reductions whereverpossible and recommending some se-lective improvements and expansions."

At the request of President Nixon,the Bureau of the Budget asked eachfederal agency to review its plans forspending in fiscal year 1970 with aview toward reducing activities of lowpriority and redirecting other pro-grams consistent with objectives of thenew Administration. That review isnow under way, and the President'sconclusions will be transmitted to theCongress within the next few weeks.

The Special Analysis onFederal Education Programs

Because the budget is so huge andcomplex, there has developed over theyears a series of annexed reports de-signed to make the budget, or certainaspects of it, more clear. Eighteen spe-cial reports were prepared in tonne -don with President Johnson's 1970budget and drawn together in a vol-

ume called Specie Analyses; Budget ofthe United States, Fiscal Year 1970.This includes, for example, reviews offederal credit programs, civilian em-ployment, manpower activities, healthprograms, income security, aid to stateand local governments, public works,and federal education programs. TheSpecial Analysis on Federal EducationPrograms most concerns us here today.

Federal education programs mightbe described as serving two main pur-poses. The first is to support educa-tion per se. Activities included underthis heading would be the programs ofthe Office of Education and the Na-tional Science Foundation, Head Startand Follow Through under the Officeof Economic Opportunity, collegehousing loans, and education ofAmerican Indians. The second pur-pose isthrough the use of resourcesof educational institutionsto ad-vance knowledge and achieve othernational objectives. Included here aresuch diverse activities as support of re-search at universities to extend medi-cal knowledge, GI benefits which helpreturning servicemen attend school orcollege, training of manpower to im-prove delivery of health services, andprofessional training of military offi-cers.

Some 400 federal activities are in-cluded in the Analysis, and the totalfor fiscal year 1970 approximates $10billion. I shall try to give some per-spective on these programs by describ-ing federal funds according to fivedifferent dimensions.

A Decade of Federal Aid toEducation-1960 to 1970

Outlays for federal education pro-grams are estimated to cost very nearly$10 billion in 1970, an amount repre-senting 5 percent of the total federalbudget. Education expenditures have

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grown much faster than the federalbudget as a whole: The federalbudget has roughly doubled,$92 billion to about $195 billion be-tween 1960 and 1970 while educationexpenditures have grown five-fold,from $2 billion to $10 billion.

The upsurge in federal outlays wassharpest in fiscal year 1966, the firstfiscal year after enactment of many ofthe now well-known landmark lawsfor federal aid to education. In thatsingle year federal funds increased bymore than $2 billion, an increase of60 percent over 1965. Neither the ab-solute dollar increase nor the growthrate has been so great since that year,but by 1970, $4 billion will have beenadded to the 1966 level.

Federal Objectives in Education

Reviewing the composition of theincreases in federal funds for educa-tion over the decade, one can identifytwo principal objectives which thefederal government has pursued: first,an opportunity for the best educationwhich the nation can offer to eachindividual, suited to his abilities andinterests and without regard to hisfamily incom,-, race, or place of resi-dence; and second, an improvement inthe quality of education through ex-perimentation with new materials andmethods, new ways of using and train-ing personnel, and new organizationsdesigned to ensure regeneration andrenewal of tile nation's educationalinstitutions,

Activities which are addressed to thefirst objectiveexpanding educationalopportunities for all include grantsto improve education of the poor andthe handicapped, to expand collegefacilities, and to provide financ al as-sistance particularly for college stu-dents from low-income fail lies. Alsocontributing to this objective are GI

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benefits and social security paymentsfor college-age children of retired, de-ceased, or disabled social security bene-ficiaries. Federal activities promotingthe second objectiveinnovationshave brought about an expansion ofexperimental, demonstration, and fac-ulty training programs, including suchnew departures as the educationallaboratories, Teacher Corps, the Na-tional Foundation on :he Arts and theHumanities, and the Corporation forPublic Broadcasting. Federal expendi-tures for these two objectives are esti-mated to total $4.9 billion in 1970,one-half of the total federal outlays foreducation. While GI benefits totaledabout $1/4 billion in 1960, almost allof the other programs which make upthis one-half of the federal outlay foreducation have been enacted by theCongress since 1960, and most of thosewithin the past four years.

Federal Funds in Relation toInstitutional Financing

Another useful indicator of federalactivity in education is the share ofreceipts in educational institutionswhich are derived from federalsources. In elementary and secondaryschools between the fall of 1964 andthe fall of 1969, the federal share hasabout doubled from about 4 percentto about 8 percent. In higher educa-tion the figure has been more constant,ranging around 22 percent. Thesemeasures perhaps obscure more thanthey reveal. The federal governmentis supporting a very large proportionof some activities, much less of others.For example:

Federal funds represent abouttwo-thirds of all research and develop-ment in institutions of higher learn-ing.

Federal support for education re-search and development probably rep-

resents more than 90 percent of thenational total.

Federal funds used for purchaseof school equipment and materialshave been estimated to equal as muchas one-half of tne total annual sales ofsuch equipment and sup "lies.

Other areas where federal assist-ance is a predominate factor includestudent aid, graduate fellowships, andteacher training.

I believe it would be reasonable toconclude that the federal share of fi-nancing of education, now equal toabout one-seved':, of the budgets ofeducational institutions in the nation,has been increasing and is of extraor-dinary importance in a number ofareas.

Federal Funds by Agency

Another dimension by whi,:h toview federal education programs isaccording to the federal agency whichadministers the funds. It is usual forthe public to consider the Office ofEducation as the government's chiefeducation agency. And so it is. By alarge margin the Office of Educationprograms are collectively the largestpart of the government's effort. Yet,the Office accounts for only $4 out ofevery $10 in federal education outlays.Office of Education grants are pre-dominant at the elementary and sec-ondary level where they represent70 percent of the total federal out-lays; OE programs account for lessthan one-fourth of the expendituresfor higher education. Other programsbring the Department of Health, Edu-cation, and Welfare (HEW) total por-tion to nearly 60 percent of the totalfederal outlays for education. In-cluded here are the medical researchand health professions training pro-grams of the Public Health Service,

and social security benefits for stu-dents.

The Department of Defense ac-counts for about $1 in $10, largelyfor graduate and professional trainingand for academic research in institu-tions of higher education.

The remaining 30 percent of federalfunds is scattered through about 20federal agencies ranging from the Na-tional Science Foundation (NSF) andthe Office of Economic Opportunity(0E0), through the Veterans Admin-i.;'.,aLon (largely for GI benefits) andthe fledgimg National Foundation onthe Arts and the Humanities, to theLibrary of Congress.

The fact that so many federal agen-cies are supporting education activi-ties is not, in my view, so much ademonstration that the federal govern-ment is disorganized as it is a demon-stration of the importance of educa-tional institutions (particularly highereducation) for performance of researchand graduate training which are essen-tial to accomplishment of the missionsof each of these agencies.

Federal Funds by Educational Level

The primary description of federalprograms in the federal Analysis ac-companying the 1970 budget wasbased on outlays for education bylevel. The most dramatic growth overthe past decade has been in programsfor support of elementary and second-ary education. These expenditures,estimated at $3.4 billion for 1970, arepredominately for improving educa-tion of the disadvantagedOEO'sHead Start, and Office of EducationElementary and Secondary EducationAct (ESEA) Title I and handicappedprograms. Research projects, the newanti-dropout program, teacher train-ing efforts, and now, under recent

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amendments, vocational educationalso contribute to this objective.

The largest category of federal sup-port accounting for more than halfthe total, is higher education. Whilethe number of federal agencies in-volved is much greater than the num-ber participating in elementary andsecondary programs, the federal as-sistance for higher education falls intomore easily described groups:

$1.9 billion rovides for grantsand loans to college students. Aboutthree-fourths of this amount is forstudent support at the undergradua::level, one-fourth primarily for fells -

ships at the graduate level.$1.5 billion supports academic re-

search in institutions of higher educa-tion. The largest portions are underthe auspices of HEW, Defense, andNSF.

Another $1.5 billion provides forcollege facilities and equipment(largely through academic facilitiesgrants from the Office of Educationand housing loans from the CollegeHousing Loan program) and for sup-port of current operations in collegesand universities (primarily throughcost-of-education allowances paid as apart of fellowship and traineeshipgrants and training of students in thehealth professions and rehabilitationservices).

The total of $5.0 billion compareswith $1.0 billion in 1960 and $1.7 bil-lion in 1964. The remaining $1.4 bil-lion in federal support for educationis divided among support for adultand continuing education (especiallythe extension programs of the Depart-ment of Agriculture), technical andprofessional training of public em-ployees (predominately military), andaid to foreign students attending col-leges and universities in the United

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States and to educational institutionsin foretn countries (through AID,Peace Corps, and the Department ofState).

Some Present Concerns AboutFederal Education Programs

Against the background of federaleducation programs just described, Iwould like to suggest some personalconcerns and views about educationprograms at this point in time.

First, what are we getting for ourmoney? To cite one example, it seemsto me we see daily in the press thesame or even harsher criticisms of theschools and what they are failing to dofor the disadvantaged than we did be-fore the advent of federal programsenacted a few years ago. We find localtaxpayers increasingly less inclined tosupport local school bond issues. Ac-cording to the Office of Education thebond approval rate for the first sixmonths of fiscal year 1969 is 50 per-cent, and that the comparable rateover the past decade has been 73 per-cent. We are unable to say what in-gredients of the educational systemmake for success. In my opinion edu-cators at all levels will increasingly becalled upon to account for their stew-ardship in management of publicfunds in terms of producterluca-tional attainment of children. O! theother hand, there have been somehighly interesting experiments. Undera contract with the Office of Educa-tion, the American Institutes of Re-search identified 21 programs from allacross the country which had pro-duced significant cognitive achieve-ment gain on the part of pupils en-rolled in them. I believe there will bemore experimental projects to developmodels for use in the classroom and totry them out on a systematic basis sothat in the future we can say what

components of education make adifference.

Second, how can we better plan andcoordinate our programs? The BudgetDirector spoke before the Governor'sConference February 27, 1969, on thesubject, "New Directions in FederalAid Policy." He made trese com-ments:

The Federal categorical grantthe princi-pal tool of fiscal federalismhas had nearexplosive growth since 1963, whether mea-sured in terms of the number of grants, theirdollar magnitudes, or their effects on inter-governmental relationships.

While categorical grants have proven to beeffective in many instances, their rapid growthhas caused serious problems in terms of:

A bypassing of elected chief executives,Overlapping programs and duplication

at the State-local level,Inflexibility and distortion of State and

local budgets,Additional administrative costs and pro-

gram delays and uncertainties,An information gap about available

grant programs which is difficult to close,and the placement of a premium on"grantsmanship,"

Severe competition at all levels for ca-pable administrative and technical per-sonnel.

The time has come for major reform. Newintergovernmental policies of the FederalGovernment should move toward responsibledecentralization which will support State andlocal leadership. This means placement ofFederal responsibilities in our own regionaland district offices as well as enlargement ofState and local responsibilities in making oursystem of federalism fully responsive andeffective.

It seems likely that education pro-grams are among those to which theDirector referred. The Office of Edu-cation alone now operates about 80programs compared with about 17 in1960.

Third, how can we make more effec-tive use of the private sector of theeconomy? Within recent years we havewitnessed initiation of a program offederal interest subsidies for loans

made to college students by states orbanks. Just last summer the Congresspassed legislation to provide for fed-eral interest subsidies for college hous-ing and academic facility loans. TheJohnson budget proposed that thesesubsidiesusing the private moneymarket instead of the federal budgetbe substituted for direct federal loancapital for construction. Private enter-prise might well be tapped in anotherway, by contracting with schools fora level of educational performance,much as they con tract now to build aproduct meeting certain specifications.There is no reason that the incentivesystem should no operate here in thesame way that it has in other sectors ofour economy.

Fourth, what will the future bring?There has been much comment latelyfrom former Budget Director Schultzeand others concerning the federal fis-cal activities for the next several years.The gist of the argument is that whilerevenues will increase automaticallyfrom increases in individual and cor-porate income, much of the expansionwill be required merely to offsethigher costs of doing government busi-ness and for so-called uncontrollableexpenses (e.g., higher social securitybenefits), even when allowing for phas-ing down the military from the Viet-nam war. These observers see a moreoptimistic picture by 1974 than by1971-72. The new President has madeno commitments yet as to his policies,which will vitally 9,ffect the govern.ment's role in the economy and thedistribution of its expenditures. Butsurely education must expect to beweighed among many competitors forfederal funds. It should be able toshow not just a nebulous "need," butreal evidence that there will be suc-cess in terms of educational attain-ment of children.

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The 1967 Census of Governments

Lynden Mannen

CENSUS BUREAU programs on govern-ments are the primary source of com-prehensive data on finances and em-ployment of state and local govern-ments. These governments constituteone of the most important and dy-namic sectors of the national economy.Their tax yields totaled about $70 bil-lion in calendar 1968, and their an-nual expenditure is at a rate well over$110 billion. These governments havemore than nine million employees, orthree times as many as the fee" calgovernment.

Growth of the state and local sectorsince World IA'ar II, as measured inthe national inrome accounts, has faroutpaced that of the federal govern-ment and the private sector. Whilethe federal government share of pur-chases of goods and services (GNP)moved up from 8.3 percent in 1946 to11.5 percent in 1967, the state andlocal government share more thandoubled, from 4.7 percent to 11.0 per-cent. The sharp growth of nationaldefense expenditures associated withVietnam during the past two years haskept federal purchases abreast of state-local growth. However, current pro-

Mr. Mannen is Senior Staff Adviser, Govern-ment Division, U.S. Bureau of the Census,Washington, D.C.

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jections indicate that state and localgovernment purchases of goods andservices will continue to rise rapidlyand by 1975 may be 60 percent greaterthan such federal spending.

With the accelerating demands fordomestic services since World War II,state and local government employ-ment has grown by leaps and bounds.State government employment rosefrom about 800,000 in 1946 to over2,300,000 in 1967, and local govern-ment employment more than doubled,from about 2,800,000 to 6,700,000. In1967, state and local governments ac-counted for almost one-seventh of allnon-agricultural employment, as com-pared with 4.1 percent by federal em-ployment, nearly 21 percent by whole-sale and retail trade, and 29 percent bymanufacturing establishments. Overthe past four years, state and localgovernment employment has shownan average annual increase of about500,000 persons, while federal civilianemployment has risen only a totalof 450,000 over the four-year period.

During the half-century before 1902.when the Census Office was establishedas a continuing agency, some state andlocal government data were beinggathered in connection with majordecennial census operations. Princi-pal findings were issued regularly in

reports of the "Census of Wealth,Debt, and Taxation." From 1902 un-til 1942 there was a separate govern-mental census at approximately 10-year intervals. A revised statute pro-viding for the Census of Governmentsto be taken regularly each five yearswas enacted in I950, but the first suchproject for which funds were appro-priated was the 1957 Census of Gov-ernments. There was a similar Censusfor 1962. The 1967 undertaking isscheduled to be substantially com-pleted about mid-1969. A few of thefinal major reports and the bulletinsfor each state will be issued in thelatter half of 1969.

This Census will provide some 7,000pages of published statistics, severaltimes that volume of unpublished datain the form of tabulations in micro-film which can be suppliA or repro-duced at nominal cost, and an evengreater volume of underlying figureson punch cards and computer taperecords, usable for reproduction orspecial tabulations.

Basic data have been assembledfrom all governments in the nation,to supply national, state, metropolitanarea and county-area aggregates, andcomparative statistics for sizable in-dividual governments. Like the 1957and 1962 undertakings, this quinquen-nial census deals with four major sub-jects: governmental organization, pub-lic employment, taxable property val-ues, and governmental finances.

Governmental Organization

The Census Bureau's directory list-ing of local governments has beenbrought up to date. Together withrelated research and survey opera-tions, this has provided statistics onthe numbers of local governments andpublic school systems with selecteddata on their characteristics; a sum-

'nary text description of the variouskinds of local governments legally au-thorized in each state, and of majortypes of governmental entities recog-nized as dependent agencies ratherthan separate governmental units;also, statistics showing numbers ofpopularly elected officials, by type ofgovernment; and a related summarytext description of the various typesof elective offices provided for by stateconstitutions and general laws.

Three preliminary reports on "Elec-tive Offices," "Governmental Units,"and "Public School Systems" issued inlate 1967 have been superseded by thetwo final reports in these areas, Gov-ernmental Organization (Vol. 1) andPopularly Elected Officials of Stateand Local Governments (Vol. 6, No.1).

There were 81,248 local govern-ments in the United States at the be-ginning of 1967, indicating a decreaseof about 10,000 from the 1962 total.Two trends are evident from similarcensus findings over the past 25 years:a continuing sharp decline in thenumber of school districts, resultingfrom widespread school reorganizationand consolidations, partially offset bya marked rise in the number of specialdistricts. The national total for alllocal governments in 1967 comprises3,049 counties, 18,048 municipalities,17,105 townships, 21,264 special dis-tricts, and 21,782 school districts.

In addition to the 21,782 schooldistricts classed as independent localgovernments, there were 1,608 "de-pendent" school systems which areregarded as agencies of other govern-mentscounty, municipality, town-ship, or state. Accordingly, in Census1. ureau reports on governments, data1,-n- these dependent systems are in-cli tded in figures shown for the parentcol. inty, municipality, or other type of

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government applicable, rather than infigures for school. districts. However,tabulai,ions or reports for "publicschool systems" 'nclude data for bothschool districts aad dependent systems,numbering altogether 23,390 publicschool systems.

Illinois has more local governmentsthan any other state, with more than6,000, and Hawaii has only 19. Sevenstates each contained more than 3,500local governments, accounting alto-gether for about two-fifths of the localgovernmental units in the nation andfor only one-fourth of the populationin the United States. For the entirecountry, the number of local govern-ments per county averaged 26, rangingfrom three local governments percounty-type area in Virginia up to68 per county area in New Jersey.

Some of the implications for fiscalfederalism of the detailed data onnumber and distributions of govern-mental units are suggested in a re-port 1 of the Advisory Commission onIntergovernmental Relations:

The large number of lolal governmentsmeans for example, that the property taxbasethe principal support of local govern-mentis divided sometimes rationally butoften quite irrationally among govermentalunits. Throughout the system as a whole,some units enjoy relative local fiscal easewhile others totter on the brink of fiscalexhaustion as they pass through various stagesof development. The fiscally poor frequentlymust pressure the overlying State governmentfor sustenance. The variety of ways in wnichStates have responded is a credit to the in-genuity of man. The list includes sharedtaxes, local supplements to State imposedtaw. equalization grants, unconditionalgrants, and outright assumption of fiscal andprogram responsibility. One of the strengthsof the federal system is its demonstrated

1 Advisory Commission on Intergovern-mental Religions. Fiscal Balance in theAmerican Federal System. Vol. 1. Washing-ton. D.C.: Government Printing Office, Octo-ber 1967. p. 72-73.

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capacity to adapt to the diversity of localcircumstances. In the process, however, aclear, orderly division of authority and re-sponsibilities as between States and localitieshas been lost.

This two-volume study, along withthe Commission's new report, Stateand Local Finances: Significant Fea-tures, 1969, provides extensive infor-mation on the needs and ability ofstate and local tax sources to respondto ever-increasing demands and costsof government services. It also out-lines policies designed to strengthenthe financing of various componentsof our federal system.

Taxable Property Values

This second major phase of the Cen-sus of Governments concerns the basefor property taxation which is by farthe largest single revenue source oflocal governments. This project dealswith valuations officially set as of 1966.The Volume 2 report, Taxable Prop-erty Values, provides several sets ofdata, including statistics on assessedvaluations, by state and county, andfor major individual cities, by majortypes of property; estimated distribu-tions, state by state, of taxable realtyby use class; and findings from a sam-ple survey of real estate sales recordedduring a 6-month period of 1966.Findings from this sales survey in-clude, for the various states, by use-class of realty, the number of measur-able sales, assessed value, sales price,and indicated assessment ratio; andalso, for the several hundred largestlocal assessing are is, sales ratio databased on measurable sales of single-family houses.

The report also supplies, for thefirst time, comparative statistics onnominal and effective rates of all gen-eral property taxes imposed on single-family houses in 122 major city areas,

and in "balance of county" for coun-ties overlying 63 of the major cities.These findings relate to total generalproperty taxes imposed within eachcity area or outlying county area byall taxing jurisdictions.

Gross valuations of property subjectto local property taxes in the UnitedStates increased from $280 billion ini956 to $499 billion in 1966, the re-port shows. Exclusions of assessedvaluations granted special exemptionsreduced th 1966 amount subject totaxation by nearly $15 billion to a nettotal of $484 billion. Of this amount,$42 billion was for state-assessed prop-erty (mainly railroads and other utili-ties), and $64 billion was for locallyassessed personal property, such as mo-tor vehicles, business inventories, andfarm livestock. The remaining $893billion, representing 78 percent of theproperty tax base, was locally assessedreal estate.

Some 75 million separate pieces ofreal estate were listed on local assess-ment rolls. More than half of these(42 million) were nonfarm residentialproperties, and about one-fifth wereacreage and farm plots. Vacant lotsnumber about 14 million properties.Real estate used for commercial andia-idustrial purposesstores, factories,hotels, and the likemakes up onlyslightly more than 3 percent of allproperties on local tax rolls, but ac-counts for one-fourth of the valuationsset by local assessors for propertytaxation.

Single-family nonfarm houses makeup 50 percent of all local realty valua-tions in the nation. Adding in multi-Lanill, property, nonfarm residencesaltogether account for 60 percent ofall real estate values set by local as-sessors. Acreage and farms contribute11 percent, and vacant lots less than3 percent.

The number of pieces of real estateon local assessment rolls ranges froma high of 6 million in Californiadownward to a low of only 77,000 inAlaska.

In 38 of the 50 states, nonfarm resi-dential property accounts for morethan half of the total dollar amountof local real estate valuations. The12 exceptions are typically rural states,and in five of these at least 45 percentof the total real estate assessment is foracreage and farm properties.

Over-all assessments for the nation'staxable real property averaged 32.8percent of the sales value in 1966.The figures are based on a sample ofreal estate transfers recorded in a 6-month period in 1966. Residentialproperty assessments averaged 36 per-cent of the actual sales price. Com-mercial and industrial property av-eraged 35 percent; vacant lots, 23percent; and acreage and farms,19 percent.

Census findings show that the ratioof assessments to sales price for non-farm residential property varied widelyfrom state to state. In Idaho, Minne-sota, Montana, North Dakota, andSouth Carolina the state-wide averageassessed value was less than 15 percentof the sales price. At the other ex-treme, this ratio averaged more than50 percent state-wide in Alaska, Con-necticut, Delaware, Florida, Hawaii,Kentucky, Maine, Maryland, NewHampshire, New Jersey, North Caro-lina, Rhode Island, and Wisconsin.

The report cautions that the per-centage relationship between taxableor assessed value and sales price shouldnot be confused with property taxrates, which are also sometimes ex-pressed in percentages. A high assess-ment ratio does not necessarily meanheavy property taxation, nor does alow ratio necessarily mean a low prop-

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erty tax rate, since the actual tax bill-ing is derived by multiplying the tax-able assessed value by the nominalrate.

Real estate listed on local tax rollsin 1966 was officially assessed by localofficials at $393 billion, considerablyless than the estimated market valueof $1,227 billion. Five years earlier, inthe 1962 Census of Governments, tax-able real estate was found to be as-sessed at $282 billion in 1961, whilethe market value was about $1,000billion.

Widespread gains in the quality ofproperty tax assessment are indicatedby the 1967 findings. More than three-fifths of the reported assessing areas of50,000 inhabitants or more show a "co-efficient of dispersion" of less than20 percent for their assessments ofnonfarm houses. The 1962 Census ofGovernments found only one-third ofthe assessing areas of 50,000 or moredoing this well in 1961. Five yearsearlier, in 1956, the proportion wasonly a little over one-fifth.

The coefficient of dispersion is ameasure, in percentage terms, of theaverage departure of individual assess-ments from the typical or median levelof valuation for the kind of propertyinvolved in a particular assessing area.Thus, a low r ercentage denotes uni-form assessments and- a high percent-age reflects variation. A 20 percentdispersion figure has been cited asan "outside limit" for acceptability.

Smaller assessing areas covered inthe Census survey show similar im-provement during the past decade,though they still lag behind the areasof over 50,000 population. In 1966,nearly half of the smaller areas sam-pled had a dispersion index for non-farm house assessments of under 20percent, as compared with only one infive of such areas 10 years earlier.

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Property tax rates and assessmentratios on single-family homes variedwidely among the 122 major citieswhich were covered in the 1967 Cen-sus study. In the city with die lowesteffective tax rates, the median rate was$3.60 per $1,000 of sales price. In thecity with the highest effective tax rates,the median rate was $43.10 per $1,000of sales price. The median rate for all122 cities in the report was $18.50 per$1,000 of sales price. The tax ratesincluded levies for all governmentswithin the city area, including school,county, township, special district, andsta to property taxes.

The level of assessment for seven ofthe 122 cities averaged less than 15 per-cent of sales price, while at the otherend of the scale 14 cities assessedsingle - family homes at median ratesof 60 percent or more of sales price.Median point for 122 cities was30.1 percent of sales price.

Property tax rates, in relation tosales price, generally were higher inmajor cities of the Northeast than inother regions. Ten cities in the North-east had median rates of $30 to $43.10per $1,000 of sales price, while °ill,'two cities in the North Central regionand one in the South had rates higherthan $30.

In 63 cases in which tax rates forcity and surrounding county ratescould be compared, 39 cities hadhigher rates than the rest of thecounty; in 9 cases there was little dif-ference; in 15 cases city rates werelower than rates for the rest of thecounty.

Public Employment

A third major phase of the Censusof Governments deals with public em-ployment and payrolls as of the monthof October 1967. The findings are to

be issued soon in two reports whichwill make up Volume III.

Employment of Major Local Gov-ernments (Vol. III, No. I) presentsdata on public employees and October1967 payrolls for the 3,049 county gov-ernments, municipalities over 10,000population and sizable townships,school districts with enrollmei. ts over3,000, and relatively large special dis-tricts.

Compendium of Public Employ-ment (Vol. III, No. 2, scheduled to bepublished about the end of April) pro-vides comprehensive statistics on ci-vilian public employment for themonth of October 1967. It presentsdetailed information on employeesand payrolls of all governmentsfederal, state, and localby level ofgovernment and by function. Com-parative historical statistics are in-cluded. Various tables supply infor-mation on average monthly earningsand annual pay rates of full-time pub-lic employees, and on coverage ofthese employees under contributoryprograms for retirement protection,health and hospital benefits, and lifeinsurance.

Extensive detail is shown, state bystate, concerning employment andpayrolls of state and local govern-ments, with distributions by functionand by type of government. Localgovernment data are summarizedseparately, with functional detlil, forlocal governments located within stan-dard metropolitan , tistical areas andfor each county area in the nation.Selected items are presented for sizegroups of county governments, mu-nicipalities, townships, and schooldistricts.

Governmental Finances

The fourth major phase of theCensus of Governments deals with

finances; i.e., taxes and other revenue,by source; expenditures by functionand by character and object; indebt-edness and debt transactions, by termand by character; and holdings of cashand securities. The 1967 Census hasassembled information on these sub-jects from all governments in theUnited States, covering fiscal yearsthat ended between July 1966 andJune 1967.

Findings are to be published na-tiorally by state, county, and metro-poll 1.-n area, and for sizable individ-ual municipalities, townships, schooldistricts, and special districts. As inthe case of the other phases of theCensus, the many hundreds of pagesof published data will be supple-mented by a considerably larger vol-ume of microfilmed tabulations, andalso, of course, by detailed records inthe form of computer tapes.

We expect that the five reports,which will make up Governmental Fi-nances, Volume 4, will be completedby about mid-1969. Finances of SchoolDistricts, No. I, is tentatively sched-uled for issuance in April, and thecomprehensive Compendium of Gov-ernment Finances, No. 5, may be re-leased by late June. The Volume 5report, Local Government in Metro-politan Areas, is scheduled to be com-pleted by July.

opical Repo! is

The periodic census also providesvarious topical studies or reports.Four of the Volume 6 topical studiesfrom the 1967 Census have been issuedto date, as follows:

No. I, Popularly Elected Officialsof State and Local Govern-ments

No. 2, Employee-Retirement Sys-

tems of State and LocalGovernments

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No. 3, State Reports on State andLocal Government Finances

No. 4, State Payments to LocalGovernments

The remaining three topical studieswhich will provide a historical reviewof governmental data, state rankings,and a graphic summary, are expectedto be issued in July through Auguse.

Recurrent Surveys

Census Bureau annual surveys ongovernment statistics provide com-parative federal, state, and local finan-cial statistics on a fiscal year basis anddata on public employment and pay-rolls for the month oi October. Thesesurveys cover all the state gove. umentsand about one-tenth of all local gov-ernments. The reports present na-tional totals and data by state onrevenue by source, expenditure byfunction and by character and object,indebtedness, financial assets, andpublic employment and payrolls.

Quarterly sample surveys providesummary national estimates on taxrevenue and on construction expendi-ture of state and local governments.

In recent years, the annual reportson finances and employment have sup-plied nationwide local governmentsummary totals by type of govern-ment, local government totals by state(but not broken down by type of gov-ernment), detailed comparative datafor individual state governments, andcomparative statistics for the 310 citygovernments of over 50,000 popula-tion. These city data relate to themunicipal corporations as such, anddo not include amounts for the vari-ous other overlying or underlying lo-cal governments that operate withinthe urban areas.

For many years, widespread needshave been expressed for comparative

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county government data and for fi-nances and employment aggregates oflocal governments operating withinmetropolitan areas and within countyareas. Such data are generally avail-able only at five-year intervals fromthe Census of Governments.

Summary data on finances of localgover-ments within each of 38 majorSMSA's were developed for fiscal 1964-65 and fiscal 1965.66. Results of theelimited exploratory efforts were issuedin the reports, Local Government Fi-nances in Selected Metropolitan Areas,for each of the two fiscal years.

Consideraaon is being given pro-posals to expand coverage of annualsurveys on finances and employmentto supply comprehensive comparativedata for the 72 largest SMSA's, their223 component county areas, and theother 47 county areas (outside the72 SMSA's) having 200,000 or moreinhabitants. Local governments inthese 270 county areas serve morethan half of our nation's inhabitantsand account for about two-thirds ofall local taxes and local public ex-penditures in the United States. Theproposed report would feature com-parative per-capita data, based on theBureau's new series on current popu-lation estimates for large SMSA's andtheir component county areas.

Relations with Local Governments

I should like to emphasize the co-operative nature of the periodic cen-sus of governments and of our annualsurveys on governmental finances andemployment. For the states and a fewof the largest and more complex localgovernments, we compile most of thefinancial data in relatively extensivedetail, from official reports and rec-ords. Generally, however, in our col-lection of basic data on local govern-

ments, and for ,:ertain surveys on stategovernrrient data, we rely on mail can-vass methods. We are most gratefulthat in these mail surveys we consist-ently obtain from both local and stateofficials a very high rate of returns ofgood quality. We enjoy cordial rela-tions with virtually all of the repre-sentatives of public schools and ofother educational agencies with whomwe deal, and benefit by their promptand generous aid in response to ourinquiries and requests.

Census Bureau programs have alsobeen greatly aided by close workingrelations with various governmentaland professional associations, includ-

ing the National Education Associa-tion. Its represen.atives and membersfor many years have hrlr ed to planand develop our programs, and theycooperate effectively in supplying asubstantial portion of the raw data.In turn, many of them are importantusers of the statistical data. We aregratified that presentations at confer-ences of the NEA Committee on Edu-cational Finance and at other profes-sional associations concerned withgovernmental services and finances, aswell as articles and statistical data inyour annual report, newsletters, jour-nals, and other publications so oftendraw upon Census Bureau findings.

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Comparability of Statistics and School Finance

Carol Joy Hobson

BECAUSE OUR SCHOOLS are in transi-tion, there is considerable pressure torestructure school financial accountingto produce hard data on where themoney is coming from, how it is beingspent, which educational programs aregetting what shares of the school dol-lar, and which educational programsarc: deemed most effective in terms ofdollars invested. We do not knowwhen the reform in school accountingwill occur to produce all of the re-quested data to the satisfaction of allconcerned, but we can anticipate con-cern on the part of the educators if adisproportionate amount of the edu-cational dollar is spent for recordkeeping and administrative reports.

Transition is indicated by the in-creased efforts being made to meet theindividual needs of the pupils, thequestioning of traditional methods ofschool administration demonstratedby demands for community control,greater emphasis on preprimary edu-cation, and the ascent of teacher andstudent militancy. Also, the growingacceptance of planning-programming-budgeting (PPB) as an aid to decision-making not only affects the way school

Mrs. Hobson is Chief, Elementary and Second-ary Educational Surveys Branch, Office ofEducation, U.S. Department of Health, Ed-ucation, and Welfare, Washington, D.C.

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funds are expended, but may ulti-mately lead to a restructuring of thepresent means of financing education,and a complete revision of schoolaccounting.

Whether these expected reforms inschool accounting (which entail a verysophisticated record system and ex-pensive data-processing equipment)will lead to a revolt on the part ofour educators is yet to be seen. Wemust expect, however, that as educa-tion continually changes, data tech-nology must be extended to includemeasures appropriate to such modernconcepts as PPB and evaluation sys-tems. Further, as new target groups,such as migrant workers, the handi-capped, and bilinguals, are singled outfor special attention, more data andrecords are required to administer andevaluate these programs.

Effect of Federal Aid onFinancial Statistics

The massive categorical federal aidprograms have been a bane and aboon to establishing comparable fi-nancial statistics. When you considerthat education in this country is stateand-local (and mostly local), it is amaz-ing that we have progressed as far aswe have in achieving comparable sta-tistics in school finance. With the ex-

ception of forms to apply for and toaccount for federal funds, all of thethousands of questionnaires and formscoming into the U.S. Office of Educa-tion are filed on a purely voluntarybasis.

That federal aid has been a bane toour ongoing statistical program maybe illustrated by the typical adminis-trator, short of personnel with twoforms to completeone to account forfederal funds so that he can get moreaid, and one to report general purposestatisticsyou know which one will becompleted first. Hence, quite often weexperience some considerable delay inobtaining general statistical data fromour respondents.

Federal aid has been a boon toachieving comparable financial statis-tics in that legislation frequently speci-fies that only certain accounts must beincluded in calculations for certainprograms to be supported by the fed-eral government. For example, stateallocations for the billion dollar Ti-tle I program under the Elementaryand Secondary Education Act arebased on a specific definition of stateper-pupil expenditure. Any state un-able to report in accordance withthe prescribed definitions could bepenalized.

Our task in the National Center forEducational Statistics is twofold: totry to provide comparable financialand other data needed for decisionmaking and to try to reduce the bur-den on our respondents by not requir-ing the completion of voluminousforms which may duplicate one an-other.

Our concern with the extensive datarequirements imposed upon the stateled us last summer to prepare a listingof all known forms that state educa-tion agencies may have occasion to filewith the U.S. Office of Education dur-

ing the 1969 fiscal year. This com-pilation revealed that 75 forms aredue annually, 4 forms are due twicea year, 1 is due three times a year,5 are due four times a year, 2 are duemonthly, and 34 have due dates notyet established. This revelation re-sulted in the appointment last Augustof a task force to explore the possibili-ties of reducing the reporting burdenon state education agencies throughthe consolidation of forms and to re-view the actual utilization of the datareported. The chairman of this TaskForce on Forms Consolidation is ap-propriately the Assistant Commis-sioner for Educational Statistics.

Data Sources

Our reports in the area of stateschool systems flow into the Office asa result of the filtering of informationthrough many levels. The state dataare based on data supplied by local orintermediate administrative units andrepresent the cooperative efforts of al-most 3 million persons at the state,intermediate, and local levels, includ-ing superintendents, principals, teach.ers, bus drivers, school lunch person-nel, and secretarial and clerical per-sonnel. Data for our reports originateat some 100,000 public elementary andsecondary schools, in 20,000 localschool systems, in the 50 states, plusthe 20,000 nonpublic elementary andsecondary schools.

Meeting the broad service functionof collecting, analyzing, and dissemi-nating basic educational statistics insuch a diverse system of education isa formidable assignment. And whenwe add the requirements that the databe comparable, timely, and adequateto meet the major requests for infor-mation for decision making, we havea task which amazes visitors from coun-tries with central statistical burea,ts.

111

The effort to achieve comparablestatistics in school finance has been anuphill struggle for many years. Dur-ing the past 60 years, the U.S. Office ofEducation has sponsored hundreds ofnational conferences to develop meth-ods to achieve uniform statistical re-ports of state and local school systems.Handbooks, manual, and other pub-lications have been issued to encour-age uniform procedures and defini-tions and to assist state education de-partments in their efforts to revisetheir own record and report forms.

Development of the HandbookProgram

Prior to the initiation of the Hand-book Program in 1950, four major at-tempts were made on a national scaleto improve the standardization ofeducational terminology.

The first national effort occurredduring the years 1909-1912. The Na-tional Education Association estab-lished a Committee on Uniform Rec-ords and Reports, which issued a re-port in 1912 (U.S. Bureau of Educa-tion Bulletin, 1912, No. 3) calling forcontinuous effort to improve the com-parability of statistics. With the com-pletion of its report the committee dis-banded, and no further effort wasmade until 12 years later.

In 1924, the National Association ofPublic School Business Officials, theNational League of Compulsory Edu-cation Officers, NEA, and the U.S. Bu-reau of Education cooperated to pro-duce the Report of the Committees onUniform Records and Reports (Bul-letin 1928, No. 24). Uniformity ofrecord and report forms was recom-mended, but few definitions wereincluded.

In 1928, the first meeting of theCouncil of Chief State School Officersappointed a committee to study uni-

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formity of educational statistics. Itsfirst report in 1929 emphasized theneed for the participation and activeinvolvement of the federal govern-ment, working closely with the statedepartments of education. This placedthe central responsibility at the federallevel. However, the funds requestedto carry out this program were notgranted, and efforts again faltered.

The third national effort began in1934, with participation of the U.S.Office of Education and the directorsof research of the state educationagencies. Work dealing with statisticsand report forms was undertaken, andseveral conferences were held. Onereport was issued, Circular 204, Fi-nancial Accounting for Public Schools.This effort terminated in 1939, as theimpending war focused attention else-where.

The end of the war brought a re-newed desire to establish a programof educational standardization. ANational Committee on the Coopera-tive Program on School Records andReports was established, and studycommittees were appointed. Two re-ports were published: a revision ofCircular 204, Financial Accounting forPublic Schools, and Records and Re-ports for Pupil Transportation,Special Series No. 2, 1949. By 1949,this program had also lapsed intoinactivity.

In 1949, the Council of Chief StateSchool Officers urged that progress bemade on an emergency basis in the es-tablishment of a "recommended uni-form system of basic school recordsand reports." It was decided to dothis through a program of identify-ing, classifying, and defining items ofeducational record information to bemaintained, as defined, by school sys-tems throughout the country. Thisled directly to the establishment of

the Handbook Program. This pro-gram has thus far produced the fol-lowing publications:

Handbook I.

Handbook II.

Bulletin No. 21

Handbook III.

Handbook IV.

Handbook V.

Handbook VI.

The Common Coreof State EducationInformation (1953).

Financial Account-ing for Local andState School Systems(1957).

Financial Account-ing for School Sta-tistics (1959) Hand-book II Supplement.

Property Account-ing for Local andState School Systems(1959).

Staff Accounting forLocal and StateSchool Systems(1965).

Pupil Accountingfor Local and StateSchool Systems(1964).

Standard Terminol-ogy for Instructionin Local School Sys-tems (to be pub-lished in 1969).

The work involved in producing ahandbook is immense, requiring theparticipation of a large number ofspecialists. A typical project scheduleincludes:

1. Conference of executive secre-taries of selected national or-ganizations

2. Project team of the U.S. Officeof Education to research theavailable literature

3. Planning conference4. First draft (limited working

paper)

5. Specialist conference6. Second draft (limited working

paper)7. National Review Conference8. Third draft (enlarged distribu-

tion and use by some)9. Regional Conferences (review

and beginning of implementa-tion effort)

10. Fourth draft11. Final National Review Confer-

ence in which endorsement ofeach participating organizationis obtained

12. Fifth draft (for widespread dis-tribution and implementation).

This program has helped to defineterms for decision making, increasecommunication and flow of informa-tion among school systems, standardizethe information flowing from one levelto the next, allow for coding of thedata, and increase reliability andvalidity of statistics.

Future handbook programs are be-ing planned to standardize terminol-ogy of state education agencies, todevise a comprehensive system ofeducational management information,and to integrate PPBS concepts intoeducational terminology.

Generally, three to five years elapsebetween the decision to develop ahandbook and the actual publicationof the finished product. And as manyof you may have noted from thevoluminous footnotes in our Statisticsof State School Systems publications,it takes 5 to 10 years (a former col-league would estimate 30) for the 50state school systems and tens of thou-sands of local school systems to imple-ment systems which yield comparabledata.

Presently, an effort is under way torevise the financial accounting hand-book. To be most meaningful, therevised Handbook II should interre-

113

late financial data with data on staff,pupils, curriculum, and facilities, thusmaking possible a comprehensive sys-tem of educational information.

Committee on EducationalData Systems

The Committee on EducationalData Systems (CEDS) was establishedas a standing committee by the Coun-cil of Chief State School Officers onNovember 23, 1962. The Committeehas 55 members, one appointed byeach chief state school officer. Thework of the Committee is performedby a nine-member Planning Commit-tee which meets quarterly, three timesa year at the expense of the U.S. Officeof Education. In addition, severalseparate committees charged withspecific assignments, such as Title Iof the Elementary and Secondary Edu-cation Act, meet as the demand arises.CEDS maintains close contact with theU.S. Office of Education, particularlywith the National Center for Educa-tional Statistics. The official U.S.Office of Education liaison with CEDSis the Assistant Commissioner for Edu-cational Statistics, who is also the headof NCES. As the principal advisor tothe Commissioner in the field of edu-cational statistics, the Assistant Com-missioner for Educational Statisticsleans heavily on CEDS in carrying outthe original mission of the Offi Le, thatof "collecting such statistics and factsas shall show the condition and prog-ress of education in the several Statesand Territories."

As representatives of their respectiveChiefs, CEDS members work for thedevelopment and implementation ofthe best possible program to provideall levels of school governmentlocal,state, and federalwith timely, ac-curate, and significant data on allaspects of education.

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CEDS representatives have orga-nized themselves into regional groups(such as NESCERS, WESCERS,SESCERS, and MID-WESCERS)which meet periodically, with U.S.Office of Education representatives tokeep abreast of new developments.

Relationship of NCES to OtherOE Bureaus

Although the National Center forEducational Statistics collects generalpurpose statistics to fulfill the originalmission of the U.S. Office of Educa-tion, other bureaus and staff officesalso conduct surveys and studies tocollect special purpose and programdata to administer and evaluate pro-grams which are federally aided orexperimental in nature. Recognizingthe desirability of having one focalpoint of contact between the stateeducation agencies and the U.S. Officeof Education, and the fact that CEDSis concerned with the total informa-tion requirements of the state andfederal governments, the Deputy Com-missioner established a CoordinationGroup on Educational Statistics andInformation in August 1968. Thiscommittee is a top policy advisorygroup composed of three chief stateschool officers, three CEDS members,and five U.S. Office of Education em-ployees (the Deputy Ccmmissioner,who is chairman of the group; theAssociate Commissioner for Federal-State Relations; the Assistant Com-missioner for Educational Statistics;the Assistant Commissioner for Pro-gram Planning and Evaluation; andthe Director of the Office of Manage-ment Information). This group ad-vises the Commissioner with respectto the following related issues:

1. The type of information the U.S. Officeof Education will attempt to collect from thestates and how such information will be used.

2. The establishment of a centralized pointof contact between the U.S. Office of Edu-cation and the states with regard to thecollection of information and statistics (Pres-ently CCSO's receive requests for informa-tion from several different U.S. Office of Ed-ucation sources. All such contacts are to becleared through a central point to eliminateoverlap and confusion.)

3. Comparability of statistical and infor-mation systems (The Advisory Group willreview the utilization of the extensive workalready accomplished by CEDS in developingcomparable information systems and hand-books for statistical information.)

4. The problems created by the U.S. Officeof Education when bypassing state educationagencies to gather educational statistics fromlocal education agencies.

5. The problems of federal program guide-lines that appear to have power of regulationsor laws.

Uses of Financial Statistics

Even if each state and local schoolsystem adopted standard terminologyand definitions, and kept uniform rec-ords of receipts and expenditures,there would still exist some non-comparability of the data because ofthe varying ways by which schools arefinanced. We are constantly cautiouswith regard to the development ofstate rankings, or any other measurederived from str.te averages which areused to indicate the quality of educa-tion. The most widely quoted aver-age, when comparisons are made be-tween states, is the current expendi-ture per pupil. Our caveats andlengthy footnotes are overlooked. Weare accused of creating distortions instate data when actually the distor-tions that do occur are created by thenature of the beast. For example, theemployer's contribution to the teach-ers' retirement fund may be made bythe local school board, or by the localgovernment in fiscally dependentschool systems, or by the state edu-cation agency on the behalf of local

school systems, or by the state legisla-ture directly and never pass throughthe regular school accounts. Our staffspends a substantial amount of timeto make certain that regardless of themethod by which he contribution ismade, the monies are included. Weresearch the records of retirement sys-tems and utilize the reports of theGovernments Division of the U.S.Bureau of the Census. In those stateswhere some political jurisdiction otherthan an educational agency pays foroperation of the schools, it is verydifficult to obtain "the true currentexpenditure." It is doubtful that auniform cost accounting system em-ployed by all political jurisdictionsrendering education-related services,would be feasible. It is even debatablethat such a system could be designed,and it is very unlikely that all juris-dictions could be persuaded to adoptit since the costs of maintaining sucha system would outweigh any benefitsderived.

With regard to the pupil measureused to determine current expenditureper pupil, the Handbooks recommendusing average daily membership(ADM) instead of average daily at-tendance (ADA), or some other pupilcount. ADM has several advantagesover ADA. It measures requiredschool facilities better since there isno reduction in expenses due to pupilabsence. By averaging pupil member-ship for the entire year it does notdistort the figures of in- or out-migra-tion states. Yet, for ADM to be com-parable from state to state, there mustbe agreement on the number of con-secutive days of absence to be followedby automatic withdrawal.

By developing the Handbook series,the U.S. Office of Education has en-deavored to provide a basis for re-porting comparable data. We have

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worked diligently with the states tosecure adoption of standard terminol-ogy, definitions, and accounting.However, since this is a voluntarycooperative effort, and we lack theauthority to compel the states to com-ply, we must depend upon discussionand persuasion.

Crisis in Education andSchool Finance

Study after study indicates the highcorrelation between !,)cation of school,family socioeconomic status, housing,and school attitudes on the one hand,and school achievement and educa-tional attainment on the other. Ac-cording to a recent survey conductedby the U.S. Office of Education,schools provide little opportunity forminority group pupils to overcomethe deficiences which they initiallybring to school. "In fact they fallfarther behind the white majority inthe development of several skillswhich are critical to making a livingand participating fully in modernsociety. Whatever may be the com-bination of nonschool factors pov-erty, community attitudes, low edu-cational level of parentswhich putminority children at a disadvantage inverbal and nonverbal skills when theyenter the first grade, the fact is theschools have not overcome it." 1

In his appearance before the HouseCommittee on Education and Laborearlier this month, Secretary Finchnoted, "The core cities contain thehighest concentration of the poor and

1 Coleman, James S., and others. Equal-ity of Educational Opportunity. U.S. De-partment of Health, Eciacation, and Welfare,Office of Education. Washington, D.C.:Government Printing Office, 1966. p. 21.

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educationally deprived, and they areexperiencing mounting difficulties infinding adequate resources to supporttheir school systems." 2 PresidentNixon's task force on education rec-ommended last month that an addi-tional $1 billion of federal aid bemade available to big city school sys-tems. The task force said it believedthat Title I in its present form wasnot having a significant impact onthe massive problem of urban educa-tion.

Although it is generally agreed thateducation spells the difference be-tween our national growth towardmaturity or catastrophe, we have yetto make education an effective instru-ment for social change by neutra1;Lingthe adverse conditions of disadvan-taged pupils. Education should be oneof the principal means by which dis-advantaged peoples acquire upwardmobility. As practitioners of schoolfinance, you can assist in the formu-lation of ways to inject additionalfunds into those areas most in need,those that invariably have the lowestcapacity to obtain adequate resources.You can assist state eduction agenciesto examine how they a- n more effec-tively stimulate local school systemsto make the best possible use of theschool dollar. To determine if ourschools are operating at maximumefficiency, i.e., each pupil has theopportunity to achieve his full poten-tial, sound financial accounting prac-tices and relevant statistical data mustbe available.

2 Statement by the Honorable Robert H.Finch, Secretary of Health, Education, andWelfare, before the Committee on Educationand Labor, House of Representatives, March10, 1969.

Comparative Costs of Education Among States

William R. Dormandy, Jr.

NEW YORK STATE SPENDS considerablymore per pupil for elementary andsecondary education than any otherstate, according to information re-ported biennially by the U.S. Officeof Education. As a result, the NewYork State Education Departmentinitiated a study to determine if theexpenditure information, as reportedby the U.S. Office of Education, wasactually comparable among states. Aneffort was further made to determinewhere educational expenditures dif-fered greatly among states to provideinsight as to why New York State wasspending so much more than otherstates.

The states studiedCalifornia,Connecticut, Illinois, Michigan, NewJersey, and Pennsylvaniawerechosen because they had one or morecharacteristics in common with NewYork State such as rural and urbandistribution of pupils, large-city prob-lems, numbers of pupils being edu-cated, and relatively high expendi-tures for education. The New YorkState study team visited the educationdepartment of each of the six states.Educational and fiscal policies and re-porting practices were discussed and

Dr. Dormandy is Associate, Educational Fi-nance Research, The University of the Stateof New York, The State Education Depart-ment, Albany, New York.

eventually compared to determinewhere reported information could, ordid, vary among the selected states.

Information requested by the U.S.Office of Education for its Statisticsof State School Systems includes bothfiscal and program data for publicelementary and secondary schools.Items requested and definitions usedare those found in Handbook I, TheCommon Core of State EducationalInformation.

The ability of states to report pro-gram and fiscal information in termsof items and definitions designated inHandbook I is a limiting factor whencomparing expend; `ures among states.Another factor, which is not obvious,is the degree of uniformity in account-ing procedures among school districtsin making their reports to state edu-cation departments. The ability ofstates to extract expenditures for non-public education from total expen-ditures when reporting to the U.S.Office of Education also affects thereliability of expenditure comparisonsas does the extent to which all ex-penditvres for education can be identi-fied and reported.

Per-Pupil Expenditures Defined

The per-pupil expenditures pub-lished by the U.S. Office of Educationare obtained by dividing total current

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expenditures for a state by the averagedaily attendance of that state. Totaltorrent expenditures, as defined, in-clude expenditures for:

I. Full-time elementary and secondary dayschools (administrators, supervisors, instruc-tion, other school services, operation of plant,maintenance of plant, and fixed charges)

2. Administration by state board of edu-cation and state board for vocational edu-cation

3. Administration by state department ofeducation and miscellaneous state expendi-tures for education (regular programs, emer-gency programs, and miscellaneousstatecontributions for teacher retirement, socialsecurity, etc.)

4. County and intermediate administrativeunits.

Average daily attendance is definedas the aggregate days attendance of theschool divided by the number of daysschool was actually in session. Allexpenditure categories as defined fortotal current expenditures were in-cluded for each state when computingper-pupil expenditures.

Variations in ComputingAverage Daily Attendance

The method of computing averagedaily attendance differs among statesand, therefore, not all states conformto the U.S. Office of Education defi-nition. Since this statistic is directlyrelated to resulting per-pupil expend-iture information, nonconformingstates cannot be compared accuratelywith those which do follow the U.S.Office of Education definition. Cali-fornia includes all legally absent pu-pils as part of average daily attend-ance. Connecticut includes a portionof summer school attendance. Thegreatest discrepancy, of course, iscaused by the method used by Califor-nia. The ratio of average daily attend-ance to fall enrollment for Californiais 99.5 percent compared with 91.1 per-

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cent for New York State. Some statesdo not use ADA as a basis for distrib-uting state aid and, therefore, oftendo not check such information foraccuracy, or do not receive ADA infor--nation from local districts and esti-mate the information on the basis offall enrollment.

Accounting Procedures

Most states follow the federal ac-counting system or one parallel to itbut in more detail. There appears tobe no serious problem among states inreporting fiscal information in a man-ner consistent with that recommendedby the U.S. Office of Education. The'system used by New York State differsfrom the federal system, but expend-itures can be regrouped to fit thefederal system accurately.

Some deviation exists among states,however, in that not all states identifynew equipment as current expense.Those states that place all equipmentcosts in capital outlay, in effect areexcluding costs which have been in-cluded by other states. Some statesleave the accounting designation ofequipment to the discretion of localschool districts.

Local to state reporting variationsmay occur when reporting expendi-tures for items and staff which overlapdefined categories. The impart ofthese variations could be considerablewhen comparing districts withinstates, but should be of negligible im-portance when making comparisonsamong states as long as basic stateaccounting systems are comparable.

Nonpublic-School Expenditures

The U.S. Office of Education re-quests states to remove nonpublic-school pupil expenditures when re-porting public elementary and second-ary expenditures. States often include

such expenditures in state publica-tions; this can result in some variationbetween state and U.S. Office of Edu-cation published expenditures.

Many stases provide no nonpublic-school services and so no such costsare included in their reporting. Stateswhich do provide services such as bus-ing, shared teacher time and healthservices to nonpublic schools and loanequipment or .'extbooks, often find itimpossible to identify such costs. Somestates make no attempt to excludethese costs, while others estimate costs.The accuracy with which nonpublic-school expenditures can be removedfrom public education expendituresaffects comparability of costs amongstates.

Identification of AllEducational Expenditures

This study indicates that most stateshave instances where sane expendi-tures for educational purposes areassumed by another agency or munici-pal government and not reported aseducational expenditures. These tendto be more prevalent where school dis-tricts are fiscally dependent upon an-other municipal government. Suchomissions are not attempts to obscureeducational costs, but usually existfrom traditional patterns of financing.It is believed that such omitted ex-penditures are minute compared withthe over-all costs of education andwould not greatly affect the per-pupilexpenditure comparison among states.

Perhaps the greatest loss of actualeducational expenditure causing dras-tic distortions amoi.,3 state per-pupilexpenditures results from the differentmethods used among states for financ-ing and reporting retirement costs.New York State has a fully funded re-tirement system. Other states operateon a variation of the pay-as-you-go

plan whereby payments are made byone or more combinations of teacher,local district, and state. In cares whereteachers participate in payments, thesepayments are not reported as edu-cational xpenditures. Stat-. tend tomake payments only to the extentthat money is needed by the retire-ment system to meet current expendi-tures whe.i they operate on the pay-as-you-go system. Under these circum-stances, only the amounts needed forcurrent operation are reported as re-tirement costs.

As an example, consider that allformal education stopped. Therewould be no further retirement ex-penditures necessary in New YorkState (even though the system is nowcompletely subsidized by local dis-tricts) since reserve funds have beenset aside to meet retirement costs forretired teachers. States operating on apartially funded system, however,would have to continue making re-tirement contributions to cover thecost of retired teachers until such time's all such teachers were deceased. Re-tired teachers in such states have noassurance that the state will continueto make sufficient payments to meetcurrent -:osts, and if they do not, theirretirement income would be reduced.

Comparability of Per-PupilCosts Among States

The degree of comparability of per-pupil costs among states varies withthe ability of the states to adhere tostandardized definitions when makingreports. The degree of accuracy be-tween state comparisons varies de-pending upon the states selected. Thegreatest variation in reporting pro-cedures for the states in this studywas between California and NewYork; thus comparisons between these

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TABLE 1.-SUMMARY uF EXPENDITURES PER PUPIL IN FALL ENROLLMENT,SELECTED STATES, 1965-66

ItemCali-

forniaCon-

necticut Illinois MichiganNew

JerseyNewYork

Penn-sylvania

1 2 3 4 5 6 7 8

TOTAL INSTRUCTIONAL EXPENDI-TURES $398.72 $424.47 $364.91 $337.57 $401.18 $495.61 $347.86Instructional staff expenditures 354.08 380.79 328.29 308.36 365.13 455.41 311.46

Principals and assii 'ants 25.23 22.73 11.84 19.14 19.70 47.65 13.55Supervisors 5.18' 8.43 3.51 4.00 4.6"7 11 5.92Classroom teachers 306.19 332.92 301.15k 271.15 324.22 391.51 279.44Librarians c 3.64 4.74 c 4.38Guidance personnel 17.48 11.L9 d IA 8.63 12.35 7.15Psychological personnel c 1.71 10.76 .67 2.29 1.86 fOther d .07 1.03 2.71 .86 2.04 1.02

Other instructional expenditures.. 44.64 43.68 36.62 29.21 36.05 40.20 36.40Secretaries and clerks for

instruction 20.53 11.24 11.00 10.50 11.37 g b

Textbooks 4.18 7.12 3.60 3.95 6.29 6.42 6.16Library books and periodicals 2.50 2.57 3.75 2.67 4.25 i 6.36Teaching supplies d 10.05 10.44 8.42 10.98 19.08 10.92Other instructional supplies and

expenditures 17.43 12.70 7.83 3.67 3.16 14.70 12.96

TOTAL OTHER SCHOOL EXPENDI-TURES 149.96 122.79 153.09 124.30 170.72 270.87 150.07Other school services 40.26 43 '3 29.81 27.39 65.64 64.09 39.05

Attendance 1.01 1.71 1.15 2.69 1.59Health 5.82 7.44 4.60 1.31 8.85 10.5' 7.70Transportation 11.93 21.19 14.65 17.45 16.96 37.59 20.13Food 9.09 7.58 8.66 6.74 6.61 8.93 7.40Miscellaneous 13.42 7.27 .89 .18 32.071 4.31 2.23

Operation ar.4 maintenance 66.93 64.17 79.66 70.27 70.61 78.79 60.19Op-ntior of plant 48.87 a 65.48 54.08 51.25 d 43.50Maintenance of plant 20.12 d 14.18 16.19 19.36 d 16.69

Central office expenditures 17.33 15.14 22.59 16.63 20.28 25.37 22.32Superintendents, assista,its, clerks'

salaries 14.89 d 16.67 13.11 16.38 17.42 18.88Other expenses 2.44 d 5.92 3.52 3.90 7.95 3.44

Other 25.44 k 21.03 10.01 14.19 102.62 28.51Retirement paid by local units 17.25 k 13.87 2.25 7.24 93.85 21.41Other district fixed charges 8.19 k 7.16 7.76 6.95 8.77 7.10

TOTAL OTHER EDUCATION EXPENDI-TURES 39.00 37.23 21.46 38.59 55.20 7.92 25.60Retirement paid by state 14.02 31.00 17.49 34.86 50.63 .231 20.77Intermediate unit expenditures 12.52 1.39 g .39 2.02

Education department expendi-tures 12.46 6.23 2.58 3.73 4.18 7.69 2.81

Administration of educatio,. de-partment and state board 3.81 6.02 2.17 2.40 3.23 4.63 1.94

Other 8.65 .21 .41 1.33 .95 3.06 .87

TOTAL CURRENT EXPENDITURES $587.68 $584.49 $539.46 $500.46 $627.10 $774A0 $525.53

TOTAL CURRENT EnENDITURES PERADA (U.S. OFFICE OF EDUCATION.) $592.00 $625.00 $590.00 $551.00 $680.00 $859.00 $559.00

Supervisors included with principals.b Includes librarians and guidance personnel.c Included in guidance expenditure.d Not reported.e Included in classroom teachers.g Included in other staff.g Included in instructional staff.h Included in other instructional supplies and expenditures.1 Included in other instructional supplies.

Includes special projects.k Included in miscellaneous under other school services.I Retirement for education department employees.

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TABLE 2.-SUMMARY ANALYSIS OF EDUCATIONAL PERSONNEL' SELECTED STATES, 1965-66

Instructional staff per 1,000 pupils b

Guid- Psycho- Educe-Fall enrollment Class- ance logical tion

Princi Super- room person. person- Central depart-State Elementary Secondary Total pals visors teachers Librarians nel nel Other Total staff Other ment

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

California 2,754,500 1,507,500 4,262,000 1.9 0.7 36.3 0.3 0.7 0.1 40.1 0.5 0.8 0.2Connecticut 367,801 206,997 574,798 2.3 0.5 44.0 0.5 1.3 0.2 48.7 0.5 1.1 0.9Illinois 1,366,2a 721,466 2,087,689 1.6 0.8 39.9 0.6 0.7 0.1 0.1 439 0.8 0.5 0.3Michigan 1,165,010 810,000 1,9'5,00( 1.6 0.5 42.5 0.4 0.9 0.1 0.1 45.0 0.9 c 0.2Ne.v Jersey 847,000 439,000 1,286,00*) 1.7 0.5 47.1 0.6 1.0 0.2 0.1 51.1 0.8 2.2 0.3New York 1,833,184 1,357,661 3,190,845 1.9 0.8 48.5 0.8 1.1 0.3 0.3 53,7 0.4 1.2 0.7Pennsylvania . 1,226,421 963,408 2,189,829 1.3 0.7 39.1 0.6 0.8 0.1 c 42,5 0.6 1.2 0.3

Based on: U. S. Department of Health, Ecoucation, and Welfare, Office of Education. Preliminary Statistics of State School Systems, 1965-66. Washington, D. C.:Government Printing Office, 1968. 17 p.

b Based on: U. S. Department of Health, Education, and Welfare, OUl:e of Education. Fall 1965 Statistics of Public Schools: Pupils, Teachers, Instruction Rooms,Expenditures. Washington, D. C.: Government Printing Office, 1966. p.

e Not reported.

two states are the least accurate of theseven states involved.

Once per-pupil costs of educationhave been determined, it is necessaryto examine components of the over-all costs if differences among statesa-e to be explained.

Analysis of Educationa ExpendituresAn analysis of educa, ional expendi-

tures among the states selected wasmade for 1965.66 by using pupils infall enrollment as the pupil base forcomparison. This was used since themethod of arriving at fall enrollmentamong the selected states was con-sistent whereas considerable variationsexist among the states in determiningaverage daily attendance. Fall enroll-ment information was obtained fromthe U.S. Office of Education publica-tion, Fall 1965 Statistics of PublicSchools, since enrollment informationreported in Statistics of State SchoolSystems is an accumulative enrollmentfigure.

Problems in Analyzing EducationalExpenditures by Components

The comparability among states ofan educational component cost analy-sis is difficult to determine since statesvary in their reporting procedureswhen identifying expenditures byitem. States sometimes combine itemswhen reporting; such combinationsmust be executed for the other stateswhen making comparisons of cost. Forexample, New York State combinesexpenditures for administrators andsupervisors. The cost for these twoitems must be combined for the otherstates in comparisons with New YorkState.

Analysis of Educational Personnel

An analysis of educational per-sonnel among selected states was de-

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.veloped by using Part I of PreliminaryStatistics of State School Systems,1965-66 as the source of information.States again varied from the U.S.Office of Education definitions, caus-ing considerable differences amongstates in the manner of identifyingsegments of total instructional staff.These variations cause some distortionamong states when staff categories arecompared. Over-all total instructionalstaff statistics should be reliable andcomparable. Fall enrollment was againtaken from Fall Statistics of PublicSchools, and elementary and second-ary fall enrollment was taken fromTable 4 of the same publication.

Identifiable instructional staff com-ponents, as seen in Table I in-clude principals, supervisors, class-room teachers, librarians, guidancepersonnel, psychological personnel,and other personnel. Information wasalso available for central staff per-sonnel, other central staff personnel,and personnel of the state educationdepartment. Special teacher informa-tion was not reported by states in amanner which would produce com-parable results among states and sowas not presented.

Owing to inconsistencies in report-ing procedures among states and lackof correlation between reported fiscaland program information, it was im-possible to develop teacher salary orelementary-secondary cost relation-ships which would be comparableamong states.

Improved Reporting

It is hoped that as a result of thisstudy, problems How existing whichcause distorted cost comparisonsamong states may be overcome, thusyielding more accurate comparisonsin the future.

PPBS and MIS: Their Role in Managing Education

Joseph A.. Perkins, Jr.

SINCE THE ADMINISTRATION of educa-tion has become an accepted disci-pline, there has been little or nosignificant change in how we budgetand manage the resources committedfor education. Management tools de-veloped for other governmental opera-tions and for industry are now beingretailored to meet the increasing prob-lems of resource management in edu-cation. The purpose of this paperis to examine two of these tools, plan-ning-programming-budgeting (PPB)systems and management informationsystems (MIS), and their relationshipto each other.

Increasing public-school expendi-tures have led to the search for waysto use the available resources moreeffectively and efficiently. Tax andmanpower resources which are neededto support public services are clearlylimited. Because public education hasbeen called upon to solve economicas well as social problems, expendi-tures for education will continue toclaim a significant share of the taxdollar. Since these expenditures arerising and available tax resources arebeing stretched, the public is demand-ing better justification of educational

Dr. Perkins is Principal, Peat, Marwick,Mitchell O. Co., Certified Public Accountants,Washington, D.C.

costs. The growing unrest among tax-payers is evidenced by the increasingfailures of levy and bond issue elec-tions, some causing the dramatic clos-ing of schools.

For years, school administratorshave done a poor job of telling thestory of budget needs to the public.No real effort has been made to talkabout the cost of educational pro-grams and the effectiveness of ourprocesses and methods.

For years, school officials have beenable to report the transportation costper pupil/mile, per bus, and perroute. Similarly they know the costsof cleaning, heating, and maintaininga school building, feeding a child, orrunning an athletic program. How-ever, very few can tell what it coststo raise a child's reading or computa-tional skill to a higher level, ncr canthey say if more or less should be spentto achieve this new level in a 'longeror shorter time, nor are they sure ifthey are communicating to the tax-payers these objectives in relation tocosts.

Against this background, school of-ficials are becoming more cognizantof the need for a more responsive andtimely system which will effectivelycommunicate the cost of educationaloutputs. They need a system whichwill allow for better decision making,

128

alternative selections, planning, andforecasting. PPBS appears capable ofmeeting these needs.

PPB Defined

A planning- programming- budget..ing system is an integrated system thatprovides school executives with betterinformation for planning educationalprograms and for making choicesamong the alternate ways in whichfunds can be allocated to achieve theschool district's established objectives.It aids the decision-making process byidentifying goals and objectives, theprograms to reach these objectives,the methods of evaluating the pro-grams, and the cost of operating them.

The analysis and evaluation whichare central to the implementation ofa PPB system require identification ofthe public-school end-products. Analy-sis requires that activities be con-sidered as they relate to each other.Therefore, the search for alternativeways of meeting defined objectives areconsidered through various combina-tions of personnel, facilities, and ma-terials to bring about the desired edu-cational product.

The important question routinelyasked in the course of PPB imple-mentation is, How much additionallywould be gained by way of achievingthe defined objective through spend-ing more or less for the purpose?

Within PPB, the familiar processesof program development and budget-ing are explicitly combined. It is asystem in the sense of centering onprogram goals, objectives, and evalua-tion. The value of PPB in educationresults not from the individual tech-niques that have been developed, butfrom the integration of them nto asystem and their procedural applica-tion to educational decision making.

124

PPB Concepts

In an educational setting, PPB isbased on three concepts:

1. The existence in each school dis-trict of an analytic capability whichcarries out continuing in-depth analy-ses by reducing objectives and pro-grams to quantifiable units so tnatthese programs can be evaluated

2. The existence of a multi-yearManning and programming processwhich uses an information system topresent data in meaningful categoriesessential to the making of major deci-sions by school administrators

3. The existence of a budgetingprocess which can take broad programdecisions, translate them into morerefined decisions in a budget context,and present the appropriate educa-tional program and financial data foraction by the superintendent ofschools and the board of education.

PPB Essentials

Further, PPB in education musthave the following four essentials:

1. An output-oriented educationalprogram structure which presents dataon all of the operations and activitiesof the schools in categories which re-flect the schools' goals and objectives

2. Analyses of possible alternativeobjectives of the schools and of thealternative programs for meeting theseobjectives (Many different techniquesof . nalysis will be appropriate, butcentr& to this step should be analysesin which alternative educational pro-grams will be compared with respectto both their costs and their benefits.)

3. Adherence to a time cycle withinwhich well-considered informationand recommendations will be pro-duced when needed for decision mak-ing and for the development of thebudget and educational program

4. Acceptance by line officials, withappropriate staff support, of responsi-bility for the establishment and effec-tive use of the system.

PPB Products

The products of such a system ineducation will include:

1. A comprehensive multi-year pro-gram and financial plan systematicallyupdated

2. Analyses of program results re-lated to objectives prepared annuallyand used in the budget preview, spe-cial studies in depth from time totime, and other information whichwill contribute to the annual budgetprocess.

The over-all system is designed toenable each school district to:

I. Make available to board mem-bers and administrators more con-crete and specific data relevant fortheir broad decisions

2. Describe more concretely theobjectives of educational programs

3. Analyze systematically and pre-sent for the board's and the superin-tendent's review and decision, possiblealternative objectives and alternativeeducational programs to meet thoseobjectives

4. Evaluate thoroughly and com-pare the benefits and costs of educa-tional programs

5. Produce total, rather than par-tial, costs estimates of educationalprograms

6. Present on a multi-year basisthe prospective costs and accomplish-ments of educational programs

7. Review objectives and conducteducational program analyses on acontinuing year-round basis insteadof on a crowded schedule to meetbudget deadlines.

PPB Cycle

The schematic diagram on page 126shows the PPB systems cycle. Theelements are:

I. The needs of the communitymust first be identifiedthe needs ofthe children, adults, business and in-dustry, and other governmental units.

2. These needs must then be trans-lated into goals. Goals are generalstatements of purpose or intent; theyare not related to a specific periodof time, and they are not quantifiableor measurable in any way other thanby a broad subjective review. Thesegoals need to be arranged in hier-archical structures in order that theymay be broken down into manageableunits. A typical goal structure isshown on page 127.

3. Objectives, which are desiredquantifiable accomplishments withina time framework must next be de-veloped. These objectives must relateto a goal, be measurable, state themethod of measurement, indicate theevaluative criteria, and state the timeperiod for achievement. A typicalobjective structure is shown on page128.

4. When the goals and objectiveshave been developed, approved, anddocumented, it is necessary to developprograms to accomplish the objectives.In most school districts these programsalready have been documented in theform of course outlines or curriculumguides and often include some objec-tives. At this point, the evaluativeinstruments which will be used toassess the program operation shouldbe identified.

5. The dollar f.:,nres must next bedeveloped in the form of a budgetfor the approved programs. Not onlyis the budget for the next year pre-pared, but financial plans for several

125

PPBS CYCLE

GOALS

based oncommunity

needs

PROGRAMSI Identify resource

needsIdentify evaluation

instruments

OPERATEPrograms

Manageresources

OBJECTIVESand criteria

for evaluation

BUDGETMYFP

Allocate resourcesSelect alternatives

EVALUATEEffectiveness

andEfficiency

COMMUNITY NEEDSChildrenParentsGovernmental UnitsBusinessIndustry

TYPICAL GOAL STRUCTURE

G1

I

G2

G3

G4

GI To provide all students the opportunity to develop skills and characteristicsenabling them to gain employment.

G2 To provide all students the opportunity to develop skills and characteristics inbusiness, industrial arts, and agriculture.

G3 To provide all students the opportunity to develop skills and characteristics intyping, shorthand, bookkeeping, and office machine operation.

G4 - To provide all students the opportunity to develop skills and characteristics inbookkeeping.

127

TYPICAL OBJECTIVE STRUCTURE

G1

ot

G G2

0 02

G G G3

0 O 03

G G4

O 04

I

01 For ninety percent of the graduatingseniors that wish to enter the laborforce to gain employment in businesswithin months of graduation as mea-sured by a district survey.For ninety percent of graduating se-niors that wish to enter the laborforce gain employment as desired inbusiness, industrial arts, and agricul-ture within three months of gradua-tion as measured by a district survey.

03 For ninety percent of the businesscurriculum students to meet the fol-lowing standards:

Typing 40 words per minute asmeasured by the IBM test with 90percent accuracyShorthand 60 words per minuteas measured by the Gregg testwith a 2,000 word vocabulary

02

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Bookkeeping demonstrateunderstanding of journals, incomestatements, and balance sheets asdetermined by classroom testsOffice Machine Operation meanscore equal to national average onNCR tests

04 Upon course completion ninety per-cent of students will be able toaccomplish the following based onclassroom tests:

State and understand the basicaccounting equation of doubleentry bookkeepingUnderstand the function of andmake journal entriesUnderstand three depreciationcalculation methods

years, usually five, are developed. ThisMulti-Year Financial Plan is generallya significant departure from the cur-rent practice of developing budgetsfor only the following year. It is atthis point that alternative budgetedprograms are examined and select^don the basis of the resources avail-able.

6. In the PPB cycle the next activityis the actual operation of the programsand the management of the resourcesto implement them. These resourcesare, of course, he people, places, andthingsthe staff, buildings, supplies,and equipment.

7. The final step in the cycle is toevaluate the effectiveness of the pro-gram operations against the criteriaestablished for the various programobjectives. "yule process the recyclesby using the evaluation informationto determine whether objectives wereattained or were not attainable be-cause of either program or resourcelimitation.

A PPB system is a con.tantly chang-ing process. The initial effort to starta system requizez that all current pro-grams and activities be subjected tothis systematic analysis process. Asineffective programs and activities arepurged from the system, 'heir replace-ments are subjected to the sameprocess.

Large and Small District Data Needs

The level of sophistication, or depthof detail, for the data developed inschool districts will be determined pri-marily by two factors: (a) the size ofthe district and (b) the progress madein background essentials for PPB (e.g.,goals, objectives determined, and costaccounting system in effect). Thenumber of tasks required to convertcurrent data to PPB depends on thesize of the district: the larger the dis-

trict, the more tasks required. Largerdistricts require development anddocumentation of more goals, objec-tives, criteria, and programs. Wheredistricts have made significant prog-ress toward the development of anoperational PPB, the effort will be inadapting and improving what hasbeen accomplished consistent with thedesigned system. Where a district hasnot yet commenced a data system,significant effort will be required todevelop and document (at even a grosslevel) goals and objectives, evaluationcriteria, pingrams to perhaps onelevel, and to initiate a budget and costaccounting system. Censidering thesefactors, it is expected that the levelof detail and sophistication of thePPB will vary among school districts.

It should be noted here that theutilization of data-processing equip-ment will greatly enhance a PPB sys-tem. The volume of data to be han-dled in fully expanded PPB is huge,and any method to speed up theprocessing of data and the develop.ment of management reports shouldbe used. However, districts which arecurrently using m?nual or electric ac-counting machine systems can still ac-complish the major steps for PFB.Goal identification, objective quanti-fication, and evaluation criteria donot mandate data processing.

Costs can be kept by broader pro-grams and levels. Many districts havedone this for years without the aidof EDP. It may mean the expansionof the existing accounting system bythe addition of more individual ac-counts, but many school districts havebeen regularly keeping detailed costdata on their operations.

Management Information Systems

The investigation of current in-formation requirements and operating

129

systems usually reveals varying degreesof detail in local school districts. Fivemajor categories of data must bedeveloped in order to estimate, evalu-ate, and report within the multi-yearframework of a PPB system. Theypertain to pupils, programs, person-nel, facilities, and finances.

Pupil Data

One of the major ingredients ofPPB is program evaluation. The cri-teria developed in each district toevaluate programs will vary and mayinclude not only classroom test re-sults, but other pupil statistics suchas dropout rate, college entry rate,or return-to-school rate. The schooldistricts implementing PPB will findit necessary to record such statisticsin a consistent format, and reportthem in specific time frames andagainst specific programs. The dis-tricts should also be prepared toutilize these statistics in the prepara-tion of new programs, as well as inthe evaluation of current programs,and to maintain such statistics forlong periods of time to develop be-havior patterns, trend reports, andlong-range program evaluations.

In the multi-year financial planningportions of PPB, the districts will findit necessary to project pupil enroll-ment data, not only in number of stu-dents, but also in socioeconomicchanges within the community.

Program Data

Goals, objectives, evaluation cri-teria, and program memoranda per-taining to each individual programoperating in the school district mustbe recorded, stored, and reported forthe successful operation of a schooldistrict PPB. This is true for boththe educational programs (i.e., mathe-matics, English, social studies), as well

130

as the special programs (counseling.career guidance, and ancillary services,transportation, maintenance, custo-dial).

Personnel Data

At least two major clusters of in-fo;mation on school district employeesare required by a PPB system: payrollirformation and assignment informa-tion. Within the PPB framework, adistrict may choose to distribute thefirst-grade teachers' pay to several dif-ferent first-grade programs, whilecharging all of the kindergartenteachers' salary to a single preschoolprogram. For a high-school Spanishteacher who works two periods a dayas a counselor, who is an assistant foot-ball coach three months of the schoolyear, and who teaches driver trainingon Saturdays, specific portions of thisteacher's salary must be pro-rated tothe Spanish program, the counselingprogram, the physical education pro-gram, and the driver training pro-gram.

Facilities Data

The expenses involved in the opera-tion of each school district facilitymust be recorded by specific facility toaccommodate the information storageand reporting requirements of a PPBsystem. This will require the develop-ment of location and sublocationcodes and the assignment of thesecodes to such items as inventory sup-plies, maintenance projects, and con-struction projects in the school dis-trict.

Financial Data

In addition to the program-orientedbudgeting r nd accounting, the tradi-tional function-oriented budgetingand accounting should be maintainedby responsibility levels (organiza-

tional units), fund, and functionalareas as long as they are required. Itshould be emphasized that in orderto preserve data comparability forstate, federal, and local analyses byexisting functions, such as instruction,administration, and transportation,budgets can be cast in both ways, i.e.,by line item within the function for-mat and in a program format.

A caution should be inserted hereto allay the fears of educators whoare unfamiliar with school fiscal af-fairs. Accounting. enriched by its sib-lings of cost accounting and budget-ing, is crucial for the successfuloperation of PPB, but it is merelya tool of the organization, not the end.Educational decision makers mustguard against forming conclusionsabout instructional activities solely onthe basis of costs. Costs must beknown better than they normally arein schools, but costs must be weighedagainst benefits a nd values held bycitizens for the development of theirchildren.

Managment of Local School Systems

PPB systems and management infor-mation systems must be designed forlocal educational agencies to first pro-vide for good management of the re-sources and programs. Informat'.onas an output from these systems must,as mentioned earlier, allow for betterdecision making, planning, alterna-tive selecting, and forecasting. Infor-mation for reporting to the state andfederal levels should be an automaticbyproduct cf these systems. As moreand more states and the federal gov-ernment move to adopt PPBS formanaging at their respective levels,it would be desirable to have the in-formation output from the localagencies be an automatic input to thehigher levels.

ConclusionPPE provides a new approach to an

old problem, that of better utilizingour limited resources in hope of im-proving the learning process.

School administrators hold one ofthe most demanding jobs in the na-tion. The selection of program al-ternatives is no less promising in itspotential pay off at the school districtlevel than at state and federal levels,but to -late, there is little applicationof PPB among school districts. Thisis caused by (a) the lack of specificknowledge of PPB, its associated tech-niques, and its potential rewards ali)the part of most school administrators,and (b) the shortage of qualified ana-lysts and selected personnel to design,implement, and operate successfulFVB systems.

Although these deterrents forcesome aeoli-:istrators and boards feducation to shy away from investigat-ing PPB, it is encouraging to seeothers pioneering with this new tool.Technical advisory help is now avail-able to school distrit 3 that wish toventure. California is involved in thedevelopment of a model PPB systemfor /11 districts of the state, theDade County (Miami) School Systemin Florida has a joint PPB projectwith the Association of School Busi-ness Officials, and several individualschool districts have initiated projects.Workshops and inservice programsare available.

If education is to hold a priority forexpenditure of tax resources, and ifthe American taxpayer is to get betterjustification for his tax dollar, schoolofficials now have the opportunity toutilize PPB, undergirded by an MIS,as a new decision-making tool to com-municate more clearly the necessityfor such expenditures and the mannerin which the tax dollar is being spent.

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An Overview of Planning-Programming-Budgeting Systems

John W. Dorsey

You HAVE PROBABLY HEARD aboutplanning-programming-budgeting sys-tems (PPB) either in the context of theMcNamara era in the Department ofDefense where PPB was applied tomajor defense problems, or in thecontext of the federal nondefenseapplications which have occurredsince 1965. Or perhaps you haveread about it in the literature ofmany differeat disciplines; it has beenwritten about widely in many subjectareas. PPB was "in" during the John-son administration, and I think it isalso going to be "in" during the Nixonadministration. President Nixon hasappointed an assistar '. director of theBureau of the Budget in charge ofplanning-programming-budgeting sys-tems, which, at least, indicates thathe holds the system in high regard andplans to continue it.

Some state governments have alsodeveloped a strong interest in PPB.California and Wisconsin are wellalong in their systems, and Marylandhas been working on a managementinformation and planning system forthe past 12 months. Although Mary-

Dr. Dorsey is Director, Bureau of Business andEconomic Research, University of Maryland,College Park, Maryland.

132

land has recently changed governors,the new administra don has endorsedthe system and is encouraging its fur-ther development. Even some coun-ties and cities have been working onPPB. The 5-5-5 Project under theleadership of Dr. Selma J. Mushkinof The George Washington Universityhas provided technical advice and as-sistance to five states, five cities, andfive counties toward the applicationof a system and has published a varietyof materials useful to any other localor state government which may planto adopt PPB.

Economic Foundations of PPB

While PPB draws upon many disci-plines, it finds its strongest basisitsprimary justificationin economics.Economics as a discipline rests uponthe postulate that the wants of menare unlimited and that the resourcesavailable to fulfill those wants arescarce. Nearly -everyone aspires togreater and greater things, but theland, the labor, the capital, and themanagement available to satisfy thosewants are scarce. This, then, gives usa definition of economics: Economicsis a social science dealing with theallocation of scarce resources to theirmost efficient uses in fulfilling the un-

limited wants of men. PPB is thesame kind of thing. It is a method-ology for assisting in the allocationof the scarce resources available togovernments so that these resourcesmay be used in a most efficient wayto fulfill the unlimited wants of thepeople the government serves.

Problem of Scarcity

In explaining the problem of scar-city, the economist often uses a simpledevice called a production passibilitymodel. To illustrate, I shall makefour assumptions: (a) There is fullemployment of resources in the econ-omy. (b) The supply of resources isfixed; that is, the amounts of land,labor, and capital available are notincreasing or decreasing. (c) Tech-nology is constant; that is, the meth-ods of production are not changing.(d) This is an economy in which onlytwo things are produced. On theassumption that the two productsare gin and bourbon, the productionpossibility schedule shows the alterna-tive combinations of gin and bourbonthat could be produced by this hypo-thetical economy. For example, youcould have 10 barrels of gin and nobourbon, or four barrels of bourbonand no gin, or the various combina-tions of gin and bourbon that areshown below:

Production Possibility Schedule

Bourbon (barrels per day) 0 1 2 3 4Gin (barrels per day) 10 9 7 4 0

Opportunity Cost

This simple model illustrates afundamental principle of economicsthe principle of opportunity cost. Theopportunity cost of any product isthe amount of alternative productswhich must be foregone. In otherwords, if you are producing 10 gin

and no bourbon, but you want to pro-duce some bourbon, you have to giveup some gin. The opportunity costof the first barrel of bourbon is theone barrel of gin you must sacrificein order to produce the bourbon. Theopportunity cost of the second barrelof bourbon is the two barrels of ginyou must sacrifice. Society must,therefore, choose between gin andbourbon, and must decide how muchof each to produce.

A vivid illustration of the oppor-tunity cost principle is the tax sur-charge currently levied on the federalincome tax. The tax surcharge in-creases the tax payable by 10 percentF er year. If, for example, you had topay $300 additional tax, the oppor-tunity cost is the $300 of goods andservices sacrificed because of thehigher tax payments.

Trade-off Between Public andPrivate Sectors

We can, thus, use the productionpossibility chart to examine thetrade-offs in the allocation of resourcesbetween the public sector and the pri-vate sector. Let us represent the pub-lic sector with schools and the privatesector with discotheques. The oppor-tunity cost of the first million dis-cotheques or night clubs is 1,000schools. As we increase production ofprivate goods, public goods must besacrificed:

Production Possibility Chart

Schools (OW) 10 9 7 4 0Clubs (000,000) 0 1 2 3 4

If the economy has some unemploy-ment, it is possible to increase theproduction of both schools and nightclubs without giving up either. Or ifmore resources become availablemore labor, more land, more capitalit is possible to have more schools and

133

more clubs. Or if technology changes,new methoiJs of production becomeavailable, it is possible to have moreschools and more night clubs. But, ifnone of those things happens, we mustchoose between schools and clubs.

The Pricing System andthe Private Sector

In the private economy these de-cisions are made in a rational waythrough the pricing system. Govern-ments do not have to intervene, ex-cept on occasion. The interaction ofprivate groups within society answersthe basic questions with which we areconcerned. The consumer has a cer-tain dollar income to allocate tosatisfy his numeroue. wants. He ranksthe alternative possibilities accordingto the amount of utility or satisfactioi.that he gets from each of them perdollar spent, and then spends his dol-lars until his income constraint isreached. While the consumer is try-ing to maximize his satisfaction, thebusinessman is trying to maximize hisprofits. He examines his revenues andcosts, and then sets his prices and out-put so that his profits are as high aspossible. The interaction of con-sumers trying to maximize their sat-isfaction and businessmen trying tomaximize their profits results in re-source allocation, which answers thefundamental questions of any eco-nomic system: What will be produced?How will it be produced? and Whowill get it? These basic questions areanswered through the market systemwith a minimum amount of govern-ment intervention. The price systemdoes it. The profit motive does it.Incentives do it.

Different Kinds of Public GoodsIn the public economy we do not

have the same advantage. We do not

134

have a price system. We do not haveprofit motives. We do not even haverevenues for most government services.If the pricing system and the profitmotive are such efficient allocators ofresources, why do we not use themin the public sector to allocate re-cources there? It would be possibleto use them in some areas of the pub-lic sector, but totally impossible in(Alters. Here are five categories whichare illustrative of the different kindsof things produced by the public sec-tor.

Category one is collective goods,and for collective goods it is impos-sible to use a price system. An exampleis national defense; it cannot be dis-tributed t.. particular individuals onthe basis of whether or not they arewilling to pay for it. We either havenational defense for everyone, or wedo not have it for anyone.

The second category of goods is anarea where a price system is con-ceivable, but is not practical; forexample, fire protection. We couldbill people according to the size ofthe fire tuat was put out, but certainproblems come to mind immediately.What happens if a person's creditrating is poor? Would the fire de-partment respond? Or would theyrespond only where high profits seemassured? Thus, the pricing systemwould seem to be an impractical wayto allocate fire protection resources,and, therefore, fire protection is gen-erally put in the public sector. Policeprotection is the same type of thing.

A third category is where the pric-ing system would work, but we havedecided not to use it for social reasons.Education is a classic example. Wecould put education strictly on a pric-ing system. We could bill parentsaccording to the number of childrenthey have in school. Parochial schools,

ti

private schools, and universities do it.However, a long time ago we foughtthe battle of the public school system.It was decided that it was sociallydesirable to have everyone exposed toat least a minimum of education, andthat it was good for each of us to havethe others of us educated. Therefore,the educational system was taken outof the private sector and put into thepublic sector, and the price system wasnot used to allocate resources.

Other areas which must ..)e public,or should be public, are areas wherethere are social costs - -areas where theprivate producer has no incentive un-der a price or profit systc;f1 to elim-inate certain social costs which he im-poses upon all of us; for example, airpollution or water pollution. Thesteel producer has no incentive toeliminate air pollution because it in-creases his costs to do so, and if hiscompetitors did not take steps to elim-inate pollution, the one producer whodid eliminate it would have highercosts than the other producers. So, ifsocial costs are to be taken intoaccount, government must intervene.

Another area is where there areextremely high risks. If the risks areso great that profits are not reasonablycertain, the private economy will notundertake the venture. An exampleis space exploration. The private econ-omy cannot afford the billions andbillion.; of dollars that it takes to puta man on the moon, since the payoffis so uncertain. It i , not clear whatprofit opportunities are on the moon;and so if moon exploration is to beundertaken, it has to be done by thepublic sector rather than by the pri-vate sector.

Whether a Good Is Public or Private

These broad decisions about whatshould appropriately be public and

what should appropriately be privateare usually made through the politicalprocess. Once the decision is madethat defense, education, and healthcare are to be public commodities,government agencies must decide whatis the best way to provide nationaldefense, what is the best way to pro-vide education. and what is the bestway to provide health protection.Since there is no price system, profitmotive, or revenues to guide thesedecisions, some other device is neededto determine the allocation of re-sources in the vital and ever-growingpublic economy.

The PPB SystemIn the past some cif us may have

relied a bit too much on intuition andthe law of averages rather than on amore structured, systematic processof analytical decision making. PPBis a concept which says that govern-ments are concerned with broad ob-jectives, but the resources available togovernments are limited. The systemis basically an economic system pred-icated on the idea that there is neverenough of anything to do everything,and that the cost of any kind of actionor decision consists of the oppor-tunities that are sacrificed in takingthat action. The principle of oppor-tunity cost applies. Furthermore, anyfactors of production employed in thepast are sunk costs which should nolonger be considered. Rather, weshould look to the future and findout what the marginal costs and bene-fits of particular decisions are.

The PPB Components

Planning is the process of deter-mining objectives. (When PPB wasimplemented in the federal govern-ment, it was amazing how many fed-eral government agencies had never

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explicitly determined what they weresupposed to be doing.) Programmingis the steps or independent activitieswhich enter into the attainment of aspecified objective. And, of course,budgeting is the process of system-atically relating the expenditure offunds to the accomplishment of ob-jectives. Programming bridges thegap between planning and budgetingand concerns resource allocation,transforming inputs into outputs,measuring the costs, feasibility, andeffectiveness of alternative courses ofaction, trying to get the greatest bene-fit from any given expenditure, andcontinuous program appraisal andreappraisal. Therefore, PPB is amethodology for organizing decisionmaking. PPB does not make deci-sions; people make decisions. PPB isa system to help people make betterdecisions by for,ing au explicit de-lineation of objectives in quantitativeterms, if possible; by encouraging asystematic comparison of benefits andcosts; and by projecting activities overan adequate time horizon. Budgetingused to be concerned with next year.Under PPB, it is supposed to be con-cerned with five years from now oreven 10 years from now. We mustconsider the consequences of all thethings we are doing now for five, 10,or 15 years in the future.

History of PPB

PPB is not entirely new. As a mat-ter of fact, there is not much in it thatis new. The Dupont Corporation andGeneral Motors were early users ofprogram budgets in private industry.

The federal government used aform of program budgeting from 1940to 1947 in the controlled materialsplan, a device to allocate the scarceresources available for World War II.David Novik, who is now at the Rand

136

Corporation, was in charge of thatplan and used cost effectiveness tech-niques to decide how the strategic re-sources needed in World War IIwould be allocated to possible alterna-tives uses.

Hitch and McKean's Economics ofDefense in the Nuclear Agel was thefirst really systematic application ofeconomics and systems analysis tothe problem of national defense.Under President Kennedy ^d Sec-retary Robert McNamara, Hitch be-came Assistant Secretary of Defense incharge of systems analysis; at thatpoint, PP13 was born in the federalgovernment. In 1965, President John-son decided that the success of PPBin the Department of Defense hadbeen such that the syste.a. should beextended to all civilian agencies ofgovernment.

Another way of looking at thisevolution is to consider the stages ofbudget reform as they have been laidout by Schick.2 There are really threefunctions of budgets: control, man-agement, and planning. All budgetshave some aspects of each of these,but over time the emphasis on each ofthese characteristics of budgeting haschanged. During the 1920's and 1930'sthe budget was largely a control de-vice, and its principal function was tomake sure that funds were spent asthey were supposed to be spent.Accounting was the dominant skill inbudgeting during this period.

During the 1930's and 1940's, man-agement became more important inbudgeting. The professional manager

1 Hitch, Charles J., and McKean, RolandN. Economics of Defense in the Nuclear Age.Cambridge, Mass.: Harvard University Press,1960. 422 p.

2 Schick, Allen. "Systems Politics and Sys-tems Budgeting." Public Administration Re-view 29: 1S7 -51; March/April 1969.

took over from the accountant as thebudget officer, and efficiency measureswere generated which made thebudget a useful managerial tool. TheHoover Commission Reports addedand accelerated this process.

By 1960, planning was emerging asan important third aspect of budget-ing, and, indeed, under a full PPBsystem, planning would be the mostimportant aspect of the budgetingprocess. Under PPB, economics be-comes the dominant skill.

Past Budgetary DefectsCorrected by PPB

The systems which preceded PPBwere deficient in a number of respects:They did not specify concretely theaccomplishments of existing programsor the planned accomplishments ofnew programs; they did not identifyalternatives; they did not show futureyear costs; and they did not talk aboutmarginal datahow much of an incre-ment each program will be gettingand what that means in terms ofvalue received. They did concen-trate on efficiency and on work ratherthan on value and product.

In PPB systems the budget is formu-lated to tell you what government isdoing and how well the things govern-ment is doing conform to the objec-tives which have been established.Structurally, a program budget is out-put oriented. It focuses on whatgovernment is doing, rather than onhow many paper clips, rubber bands,supplies, services, and salaries (inputs)were used. It is a program budgetrather than an administrative budget.And it is usually composed of cate-gories, subcategories, and elements.

Categories are groupings of agencyactivities which serve the same broadobjective. Subcategories are a furtherbreakdown of activities on the basis

of narrower objectives. Elements arethe specific products, i.e., the goodsand services, which contribute to theagencies objectives. For example, adepartment of public welfare mighthave the following programs: familyservices, child welfare services, servicesto the blind, services to the aged, aidto tl -! disabled, special aids to localunits )f government, and aids to in-dividth Is. The child welfare serviceprogram might be further brokendown into subprograms as follows:child center, boarding home care forfoster children, special project, aid todependent c:1ildren, licensing aiddirect services, and community andcounty services.

As an example of a program struc-ture for education we might use onepreplred by the State and LocalFinances Project,3 for the objective ofeducational opportunity. Under thatmight be preschool educational assist-ance which includes Head StartAnnual, Head Start Summer, 2ndMigrant Day Care. There might beelementary and secondary educationalassistance which includes neighbor-hood youth corps in-school programs,neighborhood youth corps summerprogram, CAP Remedial Title I, andMigrant Youtt..

Analysis in PPB

Once the structure of a programbudget is formulated, starting withthe objective and then breaking itdown into the categories and sub-categories, the next important in-gredient is analysis. You cannot

3 State-Local Finances Project of TheGeorge Washington University. Planning forEducational Development in a Planning, Pro-gramming, Budgeting System. Prepared forthe Committee on Educational Finance,Washington, D. C.' National Education Asso-ciation, 1963. p. 39-46. $1.00. #511-20830.

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answer the important questions aboutthe alternatives, the benefits, and thecosts without analysis. In the federalsystem, the major analytical device isthe program memorandum requiredannually on each program category.It explains the specific programs fora multi-year period, shov:s the totalcost of these recommended programs,and describes the program objectivesand expected accomplishments inquantitative turns. The programmemorandum compares alternativeprograms in terms of effectiveness andcost.

A program memorandum for a man-power training program might com-pare institutional training with on-the-job training, measuring the bene-fits and the costs of each one. It mightevaluate the groups to be trained interms of the benefits and costs derived:white versus nonwhite, old versusyoung, disadvz.ntaged, need for re-medial skills, etc. It would rank thealternatives according to some realisticcriteria, discuss nonquantifiableaspects of the problem, and makesome recommendations.

The analytical method, then, is totake a series of promising alternativesand rank them according to somecriteria: reliability, maintenance,power, supplies, communication, and

the like. Measuring the effectiveness(the pluses) and the costs (the minuses)makes it possible to rank these pro-grams in terms of their net benefits ortheir cost effectiveness.

Continuous Redesign Necessary

The system is a never-ending one.You formulate a problem. select someobjectives associated with the prob-lem, design some alternatives fordealing with those objectives, collectsome data, build some models to testthe data, weigh the cost against theeffectiveness, and test the model forsensitivity. You always have to makeassumptions in analysis, and if theassumptions are wrung, you want toknow what difference it will make inthe results. Therefore, by changingthe assumptions, you can find out howsensitive the results are to the assump-tions. Redesign the assumptions, re-examine the objectives, open u:-.) newalternatives, reformulate the problem,select some more objectives, and soon.

Since benefit-cost analysis is widelyused in the federal government, andby other of government as well,I shall give you a simplified exampleto illustrate how it works. Table 1shows the benefits and costs of severalalternative water resource projects de-

TABLE 1.BENEFIT COST ANALYSIS OF FLOOD CONTROL

PlanAnnual

cost

Without protection 0Plan A--levees $3,000Plan 6small reservoir 10,000Plan Cmedium reservoir 18,000Plan Dlarge reservoir 30,000

Averageannual

damage

Benefit Benefit(reduction of minus

damage) cost

$38,000 032,000 $ 6,00022,000 16,00013,000 25,0001,000 32,000

0$3,000

6,0007,0002,000

Source:Eckstein, Otte. Public Finr. ice. Second edition. Englewood Cliffs, N.J.: Prentice-Hall, 1967. p. 25.

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signed to deal with flooding in somearea of the country.' There are alter-natives being considered for dealingwith the problem. Plan Zero is to donothing; and if we do that, it will costnothing, and the annual average dam-age will be $38,000. Plan A is to buildsome levees, a ad that will cost $3,000and reduce the damage to $32,000.Plan B is a small reservoir that costs$10,000 and reduces the damage to$22,000. Plan C is a medium-size reser-voir that costs $18,000 and reduces thedamage to 113,000, and Plan D is abig reservoir that reduces the damageto $6,000, but it costs $30,000. In thissimple example the only measure ofbenefits I shall use is the reductionin flood damage. Plan A, then, re-duces flood damage by $6,000; PlanB reduces it $16,000; Plan C, $25,000;and Plan D, $32,000. In a sense, thebenefits to the public sector from aprogram of this kind can be thoughtof in the same sense as the revenuesflowing to a private producer, and thecost; are the same as the costs to theprivate producer; so the benefitsminus the cost are a kind of measureof profits in the public sector. Tomaximize profits (net beneks), wepick the point where benefits minuscosts are greatest and that is Plan C,the medium-size reservoir.

I am not saying that in all cases thedecision maker should pick Plan Cor that he would pick Plan C, butbased on the objective that I havedeveloped here, the objective beingto maximize benefits minus cost, PlanC is the best choice.

I have described what PPB is allabout. What do we expect from it?We expect to get a more explicit

4 Eckstein, Otto. Public Finance Secondedition. Englewood Cliffs, N. J.: Prentice-Hall, 1967. p. 25.

de...ision-making process, which assuresdechion maker of a valid set of

comparable alternatives. We hope toexpress the ingredients for decisions inconcrete quantifiable terms, and whenthey cannot be quantifies:, we want tobe explicit about that. And we wantto look at decisions in a future con-text, not just one year ahead, butmany years ahead.

Traditional budgeting, the kind weare now using for the most part, saysthis is where we are. Now where dowe go from here? PPB takes the baseas given and talks in terms of the nextyear's increment. Therefore, it en-visages a kind of smooth gradualchange over time. But PPB asks asomewhat different question. It sayswhere do we want to go and howdo we get there. It looks at the future,and asks what our objectives are andwhat alternatives there are to getthere. Therefore it permits a moreradical kind of change than tradi-tional budgeting currently permits.Under traditional budgeting, we usejustification for our budget requests.We need two new positions, but weneed them because our work toad hasgone up. PPB imagines the use ofanalysis rather than justification. Theuse of quantifiable techniques, systemsanalysis, and economics, tries to shedsome light on the problems that faceus.

What PPB is Not

We may know what PPBS is, but letus make sure that we know what it isnot. It is not revolutionary. Its ingi e-dients are largely not new except inthe way they are organized or pre-sented. It is not a substitute for judg-ment, opinion, experience, or wisdom,but all those things are brought intoplay. The decision maker still has tomake the decision, and he has to use

his intuition, knowledge, judgment,etc. It is not an attempt to computer-ize the decision-making process. Com-puters do not make decisions either;they are just useful tools. It is just notanother way to save money. As a mat-ter of fact, it will cost a great deal o:money to fully implement it.. It is not

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another budget, and it surely is notthe answer to every problem involvingevery issue. But if it is successful, itwill be successful simply in havingpresented a better format to decisionmakers, more information on whichthey can then make a more intelligentrational decision.

Planning-Programming-Budgeting Systems:Boon or Bane for Cost-Effectiveness Studies

Orlando F. Furno

REGARDLESS OF HOW school budgetsare prepared, all involve a budgetaryprocess. Surh proccssr:s differ through-out. the United State:;. With relativecertainty we can say that great troubleslie in st,are for those who willfullyshort circuit the democratic process ofpublic and staff involvement in thebudgetary process. Everyone wants toget into the act and he should. Democ-racy requires that our citizens beheard on school matters and that theiropinions be respected. This is whatmakes budgeting a complex process,and this is what also makes it so in-teresting.

We are concerned here about pr('lems associated with computerizing afinancial accounting system and withmeasuring costs. In the first instancewe are concerned principally withplanning - programming - budgeting(PPB) systems, particularly with de-fining programs, activities, and sub-activities as well as with delineatingspecific goals, aims, and objectives. Inthe second instance, we are concernedwith a system approach to capturing

Dr. Furno is Assistant Superintendent, Di-vision of Research and Development, Balti-more City Public Schools, Baltimore, Mary-land.

financial and personnel statistics, par-ticularly with respect to costs asso-ciated with specific programs, activ-ities, and subactivities defined in PPBsystems.

A PPB system should mean preciselywhat it implies; namely, planning abudget in terms of program needs. APPB system does not itself ensure thatplanning will occur or, more impor-tantly, that such planning will beefficient arid effective. I cite as evi-dence several large school districtswhich have prided themselves on hav-ing instituted new and novel PPB sys-tems but nevertheless have or willclose down their public school systemsbecause they ran out of funds. If infact planning did take place, surelysuch planning was inefficient and in-effective.

A PPB system implies that programscan be identified, program goals canbe enumerated, and program costs canbe properly allocated and posted. Ifresources to do this are not availableRhen needed, the school district can-not undertake meaningful cost-effec-tiveness studies. What the system hasis a paper PPB system. Cost-effective-ness or cost-quality studies cannot beanything but shallow, and certainlyno administrator should be so fool-

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hardy as to base management decisionsupon such cost-effectiveness studies.

We know that cost is affected bymany variablessocial, psychological,and political. We know that effective-ness is difficult to measure and subjectto many different interpretations, bothsubjective and objective. Each analy-sis of cost-effectiveness in public edu-cation raises more questions than itdoes answers. This presentation is noexception. Keeping these factors inmind, I shall discuss the cost-effective-ness relationship in terms of PPB sys-tems. To do this requires discussion ofschool expenditure, educational Are.-ues, PPB systems, use of computers infinancial accounting, problems asso-ciated with the measurement of schoolcosts, and problems associated withthe measurement of educational val-ues or effectiveness.

Problems Associated with theGoals and Objectives of Education

It is one thing to talk about schoolquality, and another thing to define,develop, and delineate the goals andobjectives of education. Over theyears, the aims of education have beeneloquer tly stated but poorly defined.Terms such as school quality, dynamiccurriculum, life education, cognitivedomain, affective domain, or realiza-tion of each child's true potential arenot easily subject to measurement.Costs-effectiveness relationships can-not be correctly determined when thegoals and objectives of education arestated so vaguely.

Clearly, the principal objective ofpr)gi am budgeting is to secure theattninment of education's goals andobjectives. If programs std activitiesare not meaningfully deted and ifperformance statistics are not devel-oped, program budgeting will nothelp school administrators any more

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than present school accounting pro-cedures. In fact, program budgetingcould even result in making cost com-parisons more difficult to secure.

According to Hirsch 1 some of thekey characteristics of a useful programbudget are:

1. Programs should directly and effectivelyrelate to the nation's major educational ob-jt ctives.

2. Programs should lend themselves tomeaningful breakdowns and into programelements hat can be readily related to eachother.

3. Programs should have administrativerelevance and provide for administrativeeffectiveness.

4. Programs should directly relate to sourceof funds and facilitate viable intergovern-mental fiscal relations.

Burkhead 2 considers the followingto be some of the key objectives of aprogram budget:

1. It should describe accomplishments, notjust objects expenditures or things bought.

2. It should reflect meaningful work pro-grams to all centers of decision making au-tt:ority.

3. Program budgeting requi:es substantialdecentralization within an organization bothfor the preparation of the budget and for itsexecution.

Program budgeting objectives statedthus sound quite impressive, but mostof these educational goals are not sub-ject to measurement and quantifica-tion. Even the few goals that are, forexample, national testing and assess-ment, raise more heat than light. Over

1 Hirsch, Werner Z. "Education in the Pro-gram Budget." Program Budgeting: ProgramAnalys:s and the Federal Budget. (Edited byDavi,' Novick.) Cambridge, Mass.: HarvardUniversity Press, 1965. p.

2 Burkhead, Jesse. "The Theory andApplication of Program Budgeting to Edu-cation." Trends in Financing Public Edu-cation. Proceedings of the Eighth NationalConference on School Finance Sponsored bythe Committee on Educational Finance.Washington, D.C.: National Education Asso-ciation, 1965. p. 180-90.

:he years values change. What ourforefathers regarded as touchstones,we have discarded as irrelevant fortoday's world. What we regard astouchstones today, our children willcast out tomorrow. Such is the prob-lem we encounter when we try to de-fine what our values, goals, and aimsshould be.

Are we to be left with the dilemmaof developing elaborate cost statisticsthrough PPB only to find out that wehave amassed these costs without re-gard to criterion values of effective-ness? Clearly, PPB systems are to beuseful in cost-effectiveness studies, theproblem of defining, developing, anddelineating the goals and objectivesof education must be resolved.

Problems Associated withPPB Systems

Purpose ofProgram Budgeting

Program budgeting seeks to mea-sure performance and hold those re-sponsible accountable. In theory thisreads well, but in practice, programaad performance cannot be so clearlydefined as to be understandable orto affix accountability. Program budg-eting will not in and of itself elimi-nate the s-hool admi9istrator whomust approve the expenditure forevery postage stamp; program budg-eting will not hold solely accountablethe school administrator whose natureis such that he bucks every decisionelsewhere. Yet, if program budgetingis to serve its useful purposes, respon-sibility must be decentralized, and per-sons must be held accountable forperformance. Responsibility for jus-tifying and accomplishing the work tobe done with the money made avail-able should be defined. Developmentof management-oriented financial pat-

terns and encouragement of improvedpublic services at acceptable cost levelsshould be encouraged. The programbudget presents to operating depart-ment heads opportunities and latitudein the allocation of monies appro-priated so as to best secure theirmissions in the public interest.

Program budgeting is a policy tool;it emphasizes what is to be accom-plished with requested funds; itshould outline program goals and pro-pose a plan for their accomplishment.Performance budgeting should pro-vide the necessary data which indicatehow far program goals were attained.Program budgeting will not quantifyeducational objectives, be a good sub-stitute for inefficient managers, reduceschool costs, or automatically increasethe options available to school admin-istrators.

Legal Basis forProgram Budgeting

A program budget should delineatethe legal basis which prescribes thebudget process, schedule, composition,and responsibility for its developmentand administration. To my knowl-edge, no state expressly forbids pro-gram budgeting. Some states prescribehow a budget is to be developed, butthis represents no bar to the schooldistrict which desires to develop pro-gram budgeting. Actually, whether aschool system prepares its budgets inaccordance with Handbook II or inaccordance with program budgetingprocedures, the legal basis upon whichthe budget is prepared should bedelineated in the budget document.

Budget Calendar

The budget calendar should indi-cate when budget forms and manualsme to be distributed; how the districtis to prepare its budget requests; when

143

various interested agencies, staff,teacher organizations, and individualsare to have their say; when the budgetis to be reviewed by the school board;and when it is to be approved bythe electorate in independent districtsor by the municipal authorities infiscally dependent school districtssuch as Baltimore City. In short, thebudget calendar reflects the orderlylogical processes through which thebudget is approved.

Defining Programsand Activities

To fully understand program budg-eting, certain terms must be under-stood. Programs, activities, sub-activities, chart of expenditure ac-counts, chart of revenue accounts,coding of expenditures, and objectsof expenditures must be made clear.ior those familiar with the HandbookH of the U.S. Office of Education andschool accounting in general, only pro-grams and activities should representnew concepts.

For purposes of this paper, the ma-jor divisions of the PPB system arecalled programs. Programs (ideallymutually exclusive) are divided intoactivities. Each program's activitiesshould be mutually exclusive subsetsof their respective programs. Activi-ties are further subdivided into sub-sets called subactivities and should bemutually exclusive subsets of theirrespective activities. On the expendi-ture side, then, the budget is slicedinto three layersprograms, activities,and subactivities. Once a subactivityis defined, its activity program auto-matically follows because each divisioncontains mutually exclusive subsets.Unfortunately too many PPB systemsare confusing hodgepodges when itcomes to meaningfully defining theirmajor sets and minor subsets.

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Designing a program, activity, andsubactivity structure for PPB systemswhich will enable school systems tocompare themselves with other schoolsystems represents a most formidableproblem. Failure to achieve this prin-ciple of uniformity will hinder cost-effectiveness studies considerably.

Comparison of MajorFunctions and Programs

Table 1 compares Handbook IImajor accounts with PPB systems pro-grams. Insofar as major account classi-fications in Handbook II and programin PPB Systems are concerned, theydo not differ greatly, except for thelogical concept that all costs associatedwith a given program be posted to thatprogram. For example, traditionallyfunds expended for equipment areeither posted to the 700 Plant Main-tenance Account if considered re-placement equipment or to the 1200Current Capital Outlay Paymentsaccount if considered additional newequipment.

Comparison of MinorFunctions and Activities

In program budgeting, programsare subdivided into activities. Activi-ties then can be compared with Hand-book II subaccounts. While time doesnot permit a program-by-programcomparison of activities with Hand-book II subaccount, let us examinethe program called Instruction. Table2 contains the data for this compari-son.

Clearly, what we quickly see hereis the confusion between objects ofexpenditure and activities. HandbookII is costing out a program of instruc-tion in terms of objects of expenditurerather than in terms of meaningful in-structional activities. Program budg-eting still costs out objects of expend-

TABLE 1 .--COMPARISON OF HANDBOOK II ACCOUNTING CLASSIFICATIONSWITH PROGRAM BUDGET CATEGORIES OF THE CITY OF

BALTIMORE PUBLIC SCHOOLS

Handbook IIcategories

Program budgetprograms

100 Administration 400 Administrative Direction and Control20C Instruction 401 Instruction300 Attendance Services 402 Pupil Personnel400 Health Services 403 Pupil Transportatiol500 Pupil Transportation 404 Operation of Plant600 Plant Operation 405 Maintenance of Plant700 Plant Maintenance 406 Food Services800 Fixed Charges 407 Student Body Activities900 Food Services 408 School Community Relations

1000 Student Body Activities 409 Miscellaneous Programs and/or Private Grants1100 Community Services 410 Special ProjectsFederally Aided1200 Current Capital Outlay Payment. 411 Debt Service Management1300 Debt Service Payments 413 Special ProjectsState Aided1400 Outgoing Transfer Accounts

iture but in terms of programs andactivities rather than by principal ac-count functions only. For example,Table 3 contains a list of objects ofexpenditure actually used in programbudgeting.

Whereas the concepts of programbudgeting may be easily grasped, tome the terms utilized in programbudgeting, the programs and activitiesas defined, do not communicateclearly. For over a century educatorsliave worked on costing out educa-tional programs. If it were an easytask, program budgeting would havelong ago 'o,:en an accomplished fact.

Problems Involving theStructure of ProgramCosts

What the structure of program costsbe, no one really knows. Some

ways that have been proposed are:(a) grade level, (b) subject matter, (c)organizational categories, (d) servicesprovided, and (e) project orientedcategeries. Some people think thatschool districts, particularly the largesystems, should seek to attain the

ideal - -in other words, program costsfor subject matter by grade level, withcosts assigned to each school in thesystem. The literature abounds withsuch proposals, particularly by collegeprofessors. Before anyone takes hisschool system down this primrosepath, he should weigh seriously thebenefits to he derived against the costsinvolved. Program costs by subjectmatter by grade level by school involvea vast amount of work because itnecessitates the gathering and manip-ulation of numerous cost items. Fewsystems can easily absorb the greatcosts involved in costing out programsby subject matter by grade level.

Problems Involved in the Installationof a PPB System

To convert from a particular ac-counting system to a PPB system in-volves a series of steps fraught withproblems. If you desire to install a13 system, here an the seven steps

should follow:1. Inventory all of your school district's

educational activities.2. Develop a workable number of programs

and define them meaningfully.

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TABLE 2.COMPARISON OF HANDBOOK II EXPENDITURE SUBACCOUNTSWITH PROGRAM BUDGET ACTIVITIES OF THE CITY OF

BALTIMORE PUBLIC SCHOOLS

Handbook 11Expenditure subaccounts Program budget activities

200 Instruction210 Salaries

PrincipalsConsultants or SupervisorsTeachersOther Instructional StaffSecretarial and Clerical Ass'tsOther Salaries for Instruction

220 Textbooks230 School Libraries and Audiovisual Materials240 Teaching Supplies250 Other Instructional Expenses

401 Instruction401.01 Administration and Supervision

401.02 Elementary Education401.03 Secondary Education401.04 Adult Education401.05 Summer School401.06 Special Education, Elementary401.07 Special Education, Secondary

3. Subsum under each program its relatedactivities and subactivities.

4. Develop a chan, of objects of expendi-tures and corresponding, codes.

5. Develop a chart of revenue accounts andcorresponding codes.

6. Develop performance measures for eachprogram and its related activities and sub-activities.

7. Develop a data-gathering and data-pro-cessing reporting system for these perform-ance measures.

Everyone familiar with school fi-

nance knows the work that is involvedin successfully completing these tasks.

Program Budgetingarid Computers

Some people rushed into programbudgeting because they were led tobelieve that the computer would re-solve program-budgeting problems.They naively believed that the com-puter would facilitate the diffusion ofprogram budgeting. While a -_.om-

puter can do much, it has to operatewithin the constraints of time andwork allotments. The computer can-not do everything instantaneously. Infact, generally manual systems aremore flexible and adaptive to changethan are computer systems. If thecomputer system devised for program

146

budgeting is programmed to developreports on too many subaccounts, thesystem will be too expensive and toounwieldy. For example, in one greatcity school district some 60,000 ac-counts are kept. Each month thisschool district prepares status reportson the various accounts showing bothappropriations and expenditures. Ifprogram, activities, and subactivitiesstatements and performance statisticswere required, this alone would be aHerculean task. For a superintendentto evaluate the effectiveness of eachaccount appears to be impossible.Surely, for those who wish to embark

TABLE 3.CODES FOR EXPENDITURESBY OBJECT IN THE CITY OF BALTI-

MORE PUBLIC SCHOOLS

Coat Expenditures by object

01-15 Salaries and Wages16-25 Other Personnel Costs26-50 Contractual Services51-65 Materials and Supplies66-75 EquipmentReplacement76-85 EquipmentAdditional86-88 Grants and Subsidies89.91 Debt Service92-94 Land95-97 Buildings98.95' Improvements Excluding Buildings

on the path toward program account-ing, only an absolute minimum ofprograms and activities should becosted out. And what is equally im-portant is that they should be costedout on an accrual rather than a cashbasis.

Too Many orToo Few Data

To list the steps for the installationof program budgeting is one thing;to implement them successfully is an-other. Program budgeting must givetop school administrators the datathey need at the time they need it ifthey are to make wise rather than poordecisions. Too many unnecessary datawill hamper those who are in decision-making roles just as much as too fewdata. Moreover, the axiom, too fewdata too late, holds true in schooladministrations as it does in war orcorporate life.

Timely Reports

If the practicing school adminis-trator is to administer his programand activities wisely, he needs to knowat stipulated times his appropriationlevel, what funds have been encum-bered, the amount of funds actuallyexpended, and the amount of fundsstill available for use. As noted be-fore, both revenue and expenditureaccounts should operate on an accrualrather than a cash basis, althoughrevenue ledgers should be posted ona cash basis as receipts are received.To do the work involved here, re-quires a staff that most: districts areunwilling or unable to finance, evenif competent persons could be found.

Position Control Systems

As systems get larger and larger, itis impossible for one person to knowall the individuals who wzirk for the

district and what they do. Positioncontrol systems are seriously lackingin large city school districts. And thelarger the school district, the less likelyis it able to supply needed personneldata. To determine how many per-sons were employed on a certain datewithin a few days of this date is analmost impossible task for very largeschool districts. Yet sound programbudgeting requires that an efficientposition control system be developed.Such a system must not only providefor timely reports on personnel counts,but also be programmed to providea wealth of personnel data requiredfor local use and for state and federalreports.

Salary related dataIn a survey ofschool costs by School Managementmagazine, it was found that salariesrepresented 85 percent of the currentoperating budget.3 Clearly, w1._..n youhave licked the problem of a practicalposition control system, you havesolved most of your financial account-ing problems. To gain an understand-ing of the job involved in maintaininga position control system, here are afew of the items needed:

1. Social security number2. Name: last, middle, first3. Marital status4. Pension number5. Payroll number6. Degree status7. Years of teaching d-xperi ce8. Salary step9. Salary track

10. Full-time equivalent11. Biweekly or monthly salary12. Annual salary13. Program budget account to which salary

is to "lie charged14. Position classification15. Whether position is state-aided at not16. Maiden name

3 Computed from basic data in "10thAnnual Cost of Education Index, 1058-69."School Management, January 1969.

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17. Present address: street number, streetname, city, state, zip code

18. Amount of salary reimbursed by state.

Of course, these are not all the per-sonnel data needed, but they shouldgive you an idea of what data areneeded. Because of staff turnover,keeping such a fila current is not aneasy task.

Nonsalary related dataTo obtaintimely reports requires a systems andprocedures approach. Practically anysystem can ensure the safeguarding offunds. While this represents a worthygoal, too often this goal has renderedaccounting systems inefficient for man-agement purposes. Over-concern forsafeguarding a few pennies has toooften led to the inefficient use andwaste of thousands of dollars. Whereasnonsalary items represent only 15 per-cent of the current operating budget,the number of different transactionsalmost invariably exceeds those forsalaries.

Some specialists in budgeting oftencall for the categorization of too largea number of equipment, materials,supplies, and other such items thancan be reasonably handled even withlarge-scale computers. The result isa neat program budget in theory buta breakdown in timely reports in prac-tice. Here again prudence dictatesthat only those nonsalary items bebrought into the program budgetingsystem that can actually be handledat the time. Each year the systemcan be expanded to yield more andmore data. Such an approach will inthe long run be more successful andmore efficient than the all-or-nothingapproach.

Nonsalary related data reflect prin-cipally objects of expenditures. Lackof trained business officials and clerksto properly codify nonsalary data byrevenue account, fund, program, ac-

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tivity, subactivity, and project accountrepresents the most lerious drawbackto apportioning direct costs. When itcomes to apportioning indirect costs,the problems with respect to cost-ef-fectiveness statistics increase exponen-tially. For example, Research andDevelopment is a service orienteddivision. Not only must its costs becodified to cost out its own programsand activities, but also its services toother programs such as Instructionand to other service divisions such asPayroll and Accounting must also becosted out. Rare indeed is the PPBsystem which can do this.

Problems of Accountabilityand Revenue Assignments

Anther major problem with re-spect to program budgeting lies in therealm of program structure and or-ganizational responsibility. It doesnot necessarily follow that a programstructure for reporting and account-ing purposes is most efficient for aschool organizational structure. Yetthe accountability goal for each pro-gram and activity is a worthy prin-ciple, and program budgeting seeks toachieve this objective whereas pre-vious budget systems did not. Unlessbetter measures of performance foreach program and activity can be de-veloped and the pertinent statisticsgathered, accountability will repre-sent more a dream than a reality.

While there are more problems thatcould be enumerated with respect toprogram budgeting, let us considerone last problem--this involves reve-nues for education. Supposedly,program budgeting enables not onlyschool administrators to weigh moneychoices between respective programsand activities, but also those who payfor education. This represents fantasyrather than reality. Regardless of how

efficiently schoolmen allocate schoolfunds, regardless of how prudentlyschool administrators expend schoolfunds, regardless of how many per-formance statistics school people pro-duce to support education's needs,money will be hard to come by. Pro-gram budgeting per se will not in-crease aid to education one whit. Inthe budgetary process emotional ap-peals and subjective value judgmentswill continue to be the best avenuesto achieve greater school expenditures.

Summary and ReviewClearly, the pursuit of program

budgeting takes on significance onlywhen related to the goals and objec-tives of education. That we havesought better ways to relate cost andquality in education should be ap-parent, even from the cursory histor-ical overview developed here. Thatprogram budgeting is no panacea to

our financial woes in education shouldalso be apparent. Many more majorproblems, both in conceptual designand in execution, than discussed hereabound with respect to the installa-tion of program budgeting systemsand the benefits to be derived there-from. Regardless of the financial ac-counting procedures school districtsuse or plan to use, education mustcompete in the market place of ideasfor its financial support.

Neither program budgeting nor anyother system of budgeting should beprepared in a vacuum, for educationalbudgets must reflect society's goals.Yet society's goals are all too oftenaffairs of the heart rather than thehead and not easily measured andquantified. Too many of us are march-ing to the beat of too many differentdrummers. Cost-effectiveness studiesshould benefit from PPB systems butnot by very much.

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Financing the School Food Service Programat the State Level

Thelma G. Flanagan

IT IS UTTER FULLY, from the point of view oflearning, to have a compulsory school lawwhich compels children, in that weak physi-cal and mental state which results frompoverty, to drag themselves to school and tosit at their desks, day in and day out. . . learn-ing little or nothing. If it is a matter ofprinciple in democratic America that everychild shall be given a certain amount of in-struction, let us render it possible for themto receive

Does that sound like a quote from a1969 war-.m-poverty statement? It wasreally said in 1904. The need for aschool food service program was recog-nized at the beginning of the 20th cen-tury. Public attention was focused onthe social and economic consequencesof undernourishment and the effectof malnutrition on the ability ofchildren to learn.

In 1906, Spargo, reporting thatHunter estimated there were at leasttwo million underfed children in thepublic schools of the United States,recommended that the United Statescopy Europe by attacking malnutri-

a Hunter, Robert. Poverty. New York:Macmillan Co., 1904. p. 217.

Mrs. Flanagan is Director, School Food Ser-vice, Florida State Department of Education,Tallahassee, Florida.

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tion through school feeding pro-grams?

Early Goals, Guidelines,and Beliefs Sound

Many of the earliest school lunchprograms had sound goals and wereconcerned with good nutrition. Per-haps the most comprehensive state-ment of goals as made by Smedleywho asserted:

1. School food service programsshould meet the entire school daynutritional needs of all pupils, in-cluding lunch, and in addition, break-fast and supplemental nourishment,where needed.

2. All economically needy pupilsshould be fed without being made tofeel themselves an object of charitywith funds coming from governmentsources.

3. The program should be non-profit, school -board operated, andstaffed by professionally trained per-sonnel.

4. Teachers should enrich the cur-riculum through school lunch experi-

2 spargo, John. Underfed School Children:The Problem and the Remedy. Essays on theApplication of Socialism to Particular Prob-lems, No. 1. Chicago: Charles H. Kerr and Co.,1906. p. 26.

ences and the offering of career train-ing in food service work.3

Those goals are as sound for theSpace Age as they were when firstexpressed by Smedley in 1920.

Over the years, more and more edu-cators think of school food service asan integral part of the educationalsystem. For example, in 1926, Fordsaid:

The high school cafeteria offers one of themost important opportunities for educationof any of the new practices which have beenadded to the high school since 1900. This isa type of educational opportunity whichconforms to the modern theory of method.The students may be taught through actualexperience under conditions which arc en-tirely under the control of the school au-thorities. The situation is not an artifical onebut one which is practical and real in everysense.

Student leadership and civic responsibilitymay be developed in the use of the cafeteria?

Clyde Irwin, State Superintendent,in 1951 described school food service"as necessary as a library to building awell-rounded school program," andKenneth E. Oberholtzer, Superintend-ent of Denver City School System,in 1955 in an address at the AmericanSchool Food Service Association Con-vention, said school food service is "asimportant to education a. algebra."

From then until now, various seg-ments of the educational establish-ment, including school food service,have had vigorous opponents, as wellas staunch supporters. It is the normalrole and responsibility of school fi-nance leaders to help identify and in-terpret needs, and to advocate pro-

3 Smedley, Emma. The School Lunch: ItsOrganization and Management in Philadel-phia. Media, Pa.: the Author, 1920 p. 143-45.

4 Ford. Willard S. Some AdministrativeProblems of the High School Cafe, -,ria. Con-tributions to Education, No. 238. New York:Teachers College, Columbia University, 1926.p. 109, 110.

grams and funds to meet the totalschool day needs of children. It issad but true that many school financeleaders are less knowledgeable aboutthe history and development, havebeen less responsible for, Iess involvedin, and had less influence on schoolfood service finance than on otheraspects of the education program.Among those who have had the great-est influence on the tax funds providedfor education, have been far too fewstaunch supporters of adequate taxfunds for the school food service pro-gram. As a result, legislative bodieshave been slow in providing a properlegal framework or adequate tax fundsfor the program. There has neverbeen a period in school food servicehistory when most programs were notbes with financial problems.

An early supporter William H.Maxwell, Superintendent of Schoolsin New York City. He saw manyschool children spending their lunchmoney on pushcart and candy storedelicacies, and urged school officialsto provide nourishing meals forpupils. In 1908, a 3-cent lunch wasbegun in two elementary schools. Af-ter two years of operation, the boardof education nave permission for in-stallation of similar programs in otherschools.

Military leaders were early advo-cates of a tax-supported school foodservice program. Selective Servicefigures, following the 1917 draft, in-dicated that one-third of all menrejected for military service werephysically unfit owing to nutritionaldeficiencies, and Selective Service Di-rector Lewis Hershey reported to theCongress that the United States suf-fered 155,000 casualties as a resultof malnutrition. A major stimulus forthe advancement of the school lunchprogram was provided by these shock-

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ing statistics, together with SurgeonGeneral Parran's emphatic statement:

In our educational system we are wastingmuch money trying to teach children withhalf-starved bodies and minds. We shallspend tomorrow on the care of their sick-nesses many times over that we save todayon food which would prevent it .5

School finance experts who have ad-vocated adequate tax support for theprogram include Morphet and Johns.Morphet was Executive Se retary for acomprehensive study of Florida's eau -cation needs, completed in 1947.Through his leadership, the Commit-tee recommended:

The county board of each county shouldarrange to make available for each child anadequate lunch for the cast of the food.This means that county boards should in-dude in their budget sufficient funds to coverpersonnel, facilities and other expenses con-nected with the school lunch program .°

Also, as Executive Secretary of theSouthern States Work-Conference, hepromoted a school lunch project andthe development of a Southern StatesWork c;onference bulletin, SchoolLunchroom Policies and Standards,that recommended that all schoollunch personnel be employed in thesame manner and paid on the samebasis as other school personnel andthat they be specifically trained forthe services they were to render.

Johns, while addressing the firstconvention of the American SchoolFood Service Association in 1947, saidthat all states should include the fi-nancing of the school lunch programin their plans for financing education

5 Parran, Thomas, Jr. "Nutrition and Na-tional Health." Technology Review, June1940, page 325.

Morphet, Edgar L., Executive Secretary.Education and the Future of Florida. Reportof the Comprehensive Study of Education inFlorida. Tallahassee: Florida Citizens Com-mittee on Education, March 1947.

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and finance at least the non-food costsof the program.?

Before the Congress passed a perma-nent school lunch bill, some statespassed appropriations for school foodservice appropriations. For example,in 1939, the Louisiana legislaturestarted passing annual state appro-priations for the school food serviceprogram. Other early state aid pro-grams included a Utah bill enactedin 1942, which set up a tax of 4 per-cent on wines and liquors to help sup-port the School Food Service Program.South Carolina, in 1943, appropriatedfunds to provide one supervisor foreach county in the state. A few otherstates (e.g., West Virginia, Minnesota,New York, and Massachusetts) beganproviding state funds during the yearsjust a'er the Work Projects Adminis-tration was liquidated. In Louisiana,Massachusetts, and New York, thestate appropriation supplemented fed-eral aid at a rate: to guarantee a mini-mum of 9/6 reimbursement per lunch.

National School Lunch Act

The Congress, recognizing the mul-tiple benefits of school food serviceprograms, brought the federal govern-ment into permanent partnership withthe states and local schools by passingthe National School Lunch Act, whichwas approved by the President onJune 4. 1946. Payments were to bemade to states upon the condition thatthey would be matched on a dollar-for-dollar basis during the fiscal years1947-1950; for the period 1951-1955,$1.50 for each dollar of federal funds;thereafter, $3 for every federal dollar.'sin interpretation by the Secretary of

Agriculture enabled states to include

7 Johns, F. L. "Financing the School LunchProgram." Nation's Schools 41: 43-44; April1948

not only direct appropriations, butdonations and gifts, and also themoney derived from the sale oflunches to children.

The Congress was critical of thisinterpretation, as evidenced by theHouse of Representatives Report No.450 on the Agricultural Appropria-tion Bill for the fiscal year 1948, whichstated:

An interpretation by the Secretary of Agri-culture of the provisions of Public Law 396enables the states to include not only directappropriations but donations and gifts of allkinds and also the money derived from thesale of lunches to the children for the pur-poses of this program. The committee be-lieves that while the Secretary of Agriculturedoes possess such authority under the per-missive provisions of the School. Lunch Act,it was never the purpose of Congress thatfunds derived from the children should beincluded for matching purposes. . . . Thecommittee believes tLat the states should bydirect appropriations march the money pro-vided by the Federal Government. . . .

However, the federal agency re-tained, the liberal interpretation anddid not emphasize state responsibilityfor supporting the program from taxfunds.

Financial Dilemma Increased EachYear

It has always been, and no doubtalways will be, difficult to secure allof the tax funds needed to adequatelyfund all segments of the nation's edu-cation programs. Increasing costs andmounting enrollments have kept stateand local governments hard pressedto secure needed funds. On more thanone occasion the Council of ChiefState School Officers and the SchoolLunch Advisors Committee to theSecretary of Agriculture recommendedthat additional federal cash assistancebe provided to prevent further reduc-tion in the reimbursement rate. Theyalso recommended that state and local

governments be encouraged to con -tini'e their efforts to provide increasedfinancial assistance to the School FoodService Program. Even so, sufficientfunds have not been provided.

When appearing before a Congres-sional committee in August 1960, Ed-gar J. Fuller, Executive Secretary,representing the Council of ChiefState School Officers, pointed out thatfederal funds were available to buildup staffs of state departments of edu-cation in other federal aid areas. Stateshad to pay the entire cost of admin-istering the School Lunch Program,while federal funds eased the way fortheir competitors. Just this year, forthe first time, states have received asmall amount of federal aid to helpmeet state administrative expenses.The funds were released to states solate that many cannot fill the posi-tions created because competentpeople are already under contractfor the year.

Generally those programs which re-quire specified federal matching findit relatively easy to secure needed stateand local tax funds. Other assets insecuring adequate tax funds are: (a) awell-informed and interested publiccontinuously promo t' ng adequatefunds, (b) school finance leaders whoare committed to the program, and(c) an adequate staff of knowledgeablestate and system level school foodservice personnel responsible for ad-ministering the program.

The school food service programhas suffered on all three scores. TheU.S. Department of Agriculture hasnever required or even urged states toappropriate funds for the program.Federal publicity has led the publicto believe the program is well financedthrough commodities and reimburse-ment. Federal public information re-leases have never emphasized that the

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program was growing and costs wererising faster than was the federal ap-propriation, and that it was becomingmore iinder-funded with each passingyear. For example, reimbursementrates were originally 90 per lunch,when food cost averaged 180 perlunch. Now reimbursement rates aver-age less than 50 per lunch, while foodcosts have almost doubled. At bothstate and local school system levels,too few school finance leaders havepromoted the provision of tax fundsto support the program. Furthermor..at state and focal levels, the schoolfood service programs have been sounderstaffed that school food serviceadministrators have had no time toconduct studies to determine unmetneeds, to keep the public informed,or to promote legislative appropria-tions.

With the federal government's "waron poverty" and the civil rights move-ment placing increased emphasis onthe plight of the poor, the Congressin 1965 passed the Elementary andSecondary Education Act. In planningthe projects under which ESEA Title 1funds were to be disbursed, manystates and districts budgeted moniesto supplement their inadequate Na-tional School Lunch funds. An analy-sis of some 500 Title I projects re-vealed that more than 100 providedfor breakfasts or expanded school foodservice programs.

Other recently enacted federal aidlaws designed to help the poor, in-cluding funds secured through theEconomic Opportunity Act, have beenused to supplement inadequate schoolfood service appropriations. Only asmall portion of the most inadequatelyfunded school food service programsreceived help from such sour ces. Ac-counting problems were increased andmost programs were still unable to

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meet all of their funds obligations.Some results of such uncertain andinadequate funding have been: (a) Alleconomically needy pupils have notbeen served. (b) Many schools in areasof high economic need have hot initi-ated programs. (c) Lunches are oftensubstandard. (d) Sale prices have beenincreased with a resultant decreasein participation. For example, inFlorida. participation increased from67 percent in 1963-64 to 73 percent in1965-66. Then sale prices began to goup, and participation for over 1,500schools dropped to 66 percent in1967-CiS. By contrast, in about 200Special Assiftance schools in areas ofhigh economic need, where sale priceswere low and I50 reimbursement rateswere paid, participation averaged 87percent.

Other bad effects of underfundinginclude understaffing and employ-ment of undertrained personnel. Fol-lowing the 1966 Amendment to theFair Labor Standards Act, which re-sulted in minimum required pay ratesfor school food service personnel, pay-roll costs skyrocketed. For example,in many areas a 50 per year hourly payincrease was considered good forschool food service personnel. Nowfor the next two years, the minimumrequired rate of increase is 150 perhour.

The Congress, in continuing its con-sideration of ways and means to allevi-ate hunger among 'he poor, passed theChild Nut, :tion Act of 1966. It pro-vides funds for pilot programs to helpclose the nutrition gap for economi-cally needy pupils and for pupils whocome to school without breakfast be-cause they have long bus rides. It alsoprovides a token appropriation forequipment essential to extending ormaintaining school food services inareas of high economic need. As is

the case with the school food serviceprogram, the funds are inadequateand the requirements are so restrictivethat often the school in greatest needof a breakfast program cannot affordone. For example, some breakfast pro-grams have such a high percent offree meals, that they cannot make endsmeet. In January, one school inFlorida served an average of 256pupils per day, 249 of whom wereserved free. Receipts were:

Pupil Payments $ 35.75Reimbursements 569.50

TOTAL $605.25

Costs were: Purchased Food 569.50Labor 283.50Non-food Supplies 68.53

TOTAL $921.53

Commodities: $320.15DEFICIT ($316.28)

The School Lunch Program is riot fi-nancially able to underwrite the laborand non-food costs of the breakfastprogram. Such schools will be forcedto discontinue their breakfast pro-grams unless they can receive reim-bursement to cover more than the costof purchased food.

Another result of war on povertyhas been a revision of USDA regula-tions regarding services for economi-cally needy children. The Secretaryof Agriculture estimated that 2.5 mil-lion economically needy still are notbeing served. As states implement thenew requ;rements, the number ofeconomically needy will increaserapidly, the sch iol lunch balances willdisappear just as rapidly, thus increas-ing the need for greater state and localtax support.

Congressman Perkins, Chairman ofthe House Coramittee on Educationand Labor, last year asked the 50 statedepartments of education to deter-mine their unmet needs and how

much it would cost to assure that allthe economically needy children inthe nation could receive a free orreduced price breakfast and lunch.State school food service directors re-ported a need for $100 million. TheSecretary of Agriculture reportedstates could use only $50 million. TheCongress appropriated an additional$50 million, earmarked for breakfasts,lunches, and equipment for feedingeconomically needy. Some states arenow over-encumbered and will haveto discount final claims for the year.

There has long been a need forsound research to determine the totalschool day nutrition needs of pupils,and how much it would cost to meetthose needs. I am delighted to report,therefore, that the USDA has justtentatively approved a grant of fundsto be used in conducting a SchoolFood Service Finance Research Proj-ect, as a satellite project to the Na-tional Education Finance Project.Your help and that of many otherschool finance experts will be needed,and is solicited.

Concerned Outsiders Aid Program

As the public became more con-cerned over hungry children, theylearned of the school food servicefinancial dilemma. In the April 1966issue of Ladies Home Journal, thereappeared an article entitled "TheScandal of Our School Lunch Pro-gram," which criticized schools fornot meeting the school day nutritionneeds of all the pupils and recom-mended that parents rise up and de-mand that facilities and other assist-ance needed to correct this deficiencybe provided from tax funds.

Bard summed up the situation, say-ing that the school lunchroom isstarved for facilities and funds to serve

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the proper food to the children whoneed it.8

Their Daily Bread, a report of anational school food service study con-ducted by five prominent nationalwomen's organizations, recommendedthat lunch sale prices be reduced to amaximum of 20¢, that federal taxfunds equal 9¢, and state tax fundsalso equal 9¢; and that "The Con-gress, USDA, Boards of Education,state legislators, school lunch admin-istrators should begin planning nowfor a universal free school lunch pro-gram as part of a coordinated plan forbetter nutrition for all children."

The support of such groups is ap-preciated and continues to be neededeven though some of their recommen-dations may be controversial or analternate plan may be better. Forexample, adequate matching require-ments need to be developed and im-plemented, but a formula that takesinto consideration the v: 'ying abilitiesof states would be better than onethat required all states to make thesame matching efforts.

At a recent seminar, Jean Fairfax,Chairman, Committee on SchoolLunch Participation which prcducet,the report, Their Daily Bread, chal-lenged us when she said;It is to be regretted, I think that the initia-tive for the changes have not come from theprofessional group closest to the chiloren andthe groups which really should be the con-tributors to children's needs and advocatesof program to meet these needs. I'm speakingabout the school administrators, principals,teachers and school food service personnel.

8 Bard, Berna -d. The SchoG! Lunchroom:Time of Trial. New York: John Wiley andSons, 1968. p. 77.

9 Committee on School Lunch Participa-tion. Their Daily Bread. Atlanta, the Com-mittee, 1968. p. 125.

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The war on hunger and the effortof outside groups have placed theschool fond service program in the na-tional limelight.

Despite this current limelight situa-tion, too few education leaders seem torealize that the climate is right andthat school food service is on the brinkof a major breakthrough. With thehelp and encouragement of school fi-nance experts, the scales will tip infavor of an adequately funded schoolfood service program. On the otherhand, foot-dragging indifference, oropposition on the part of school fi-nance leaders just now can do irrepa-rable damage to the program. Shouldschool food service finance policies bechanged? What would it cost to pro-vide tax funds to cover the non-foodcost of the program?

Johns, in a return appearance at the20th annual convention of the Ameri-can School Food Service Associationin 1967, said that

evidence is clear that we need a major re-vision in our politic, for financing the schoolfood service progran .

What revisions should be r de in ourpolicies for financing the school lunch pro-gram? Most authorities or the school foodservice program have advoc..ted for sometime that all non-food costs of the schoolfood service program be financed entirelyfrom public funds. This is certainly the min-imum support that should be provided frompublic funds. I consider this to be a con-servative recommendation. . . . There isconsiderable evidence available in support ofproviding for the entire cost of the schoolfood service program from public funds.

What would be the present cost of financ-ing the non-food costs of the school foodservice program? It would probably costsomewhere between fifteen and twenty centsper lunch to finance the operating non-foodcosts of the school lunch program. This wouldtotal only a over one billion dollars an-nually, less than two-tenths of one percent ofour gross national product. Certainly a nationthat can afford to spend several billions ofdollars annualty to place a man on the moon

can afford a billion to one and one-half bil-lions of dollars to assist in providing 50,000p00children a decent lunch each school day.

Since then, costs have continued tospiral, and so has the gross nationalproduct. Therefore, it is estimatedthat the cost of the program Johnsrecommenced would still not exceed.2 pf 1 percent of our gross nationalproduct, an infinitesimally small costcompared with the values of the pro-gram M building healthy bodies, de-veloping good food habits, enrichingthe curriculum in many areas, in-.

creasing and stabilizing the agricul-ture industry, and aiding the generaleconomy.

Conclusion

In most states, state legislatures andlocal boards of education have notcontributed their fair share toward thesupport of the program.

One of the greatest needs is forschool food service directors andschool finance officials to work to-gether to cooperatively develop soundschool food service finance objectivesto commit themselves to an adequateschool food service finance plan, whichwill take into consideration the in-equities in school district ability to fi-nance the program.

If adequate funds are provided,breakfast programs will be initiatedwhere needed and there will be fewertardy pupils. The many pupils whohave been coming to school withoutbreakfast will be teachable all dayrather than just in the afternoon. Ade-quate lunches will reduce absences,delinquency, and dropouts, and savethe cost of many grade repeaters. Thepupils' potential contribution to so-

ciety will be improved. In addition,the agriculture industry will be fur-ther expanded and stabilized, and thenation's general economy will bestrenghtened.

Recommendations

Hungry children do not learn muchat school. To be sure there are to beno hungry children at school, it isrecommended that jointly we workaggressively to achieve a school foodservice program that will:

1. Provide nutritionally adequatelunches for pupils, and where needed,supplementary food services, includ-ing breakfasts, and morning and after-noon nourishments.

2. Establish sale prices not to ex-ceed- the cost of food for loth pupilmeals and supplementary nourish-nents.

3. Provide free and reduced pricemeals for economically needy chil-dren.

4. Receive sufficient tax support toassure program excellence.

5. Receive increased federal, state,and local tax contributions sufficientin amount to cover:

a. All costs of administration,operation, payrolls, fringe benvllts,and staff development.

b. All casts of facilities, equip-mem, replacements, and repairs.

c. All other non-food costs.d. Cost of serving free and re-

duced price meals to economicallyneedy pupils.6. Effect economies through cen-

tral!zation of purchasing, personneladministration, and funds control;and mergers of small, ineffective units,to provide more adequately sized ad-ministrative and operational units.

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Financing the School Food Service Programat the Local Level

Irene Y. Ponti

SCHOOL LUNCH programs have beenand are now progressing through atransitional stage and are emerging asschool food services and assumingtheir full stature and potential in theeducational complex, dedicated tomeeting the needs of all pupils, allday long, all year Long, and for allmeals. Today school food services areinvolved in serving breakfasts, mid-morning snacks, lunches, afternoonsupplements, and suppers and dinnersto paying and nonpaying pupils,school personnel, and preschoolci.ildren, and even meals to retiredpersons.

In the United States, the acceptedprevailing policy is for school foodservice programs to be operated on aself-sustaining basis. Cash paymentsfor meals and the national average ofless than 5¢ cash federal subsidy perpupil lunch represent total incomefrom which all bills for labor, fringebenefits, food equipment repairs andreplacements, cleaning supplies, andpaper goods must be paid. As with allsegments of our economy, costs arespiraling alarmingly. In addition toinflation, there are specific reasons forthese escalating expenditures result-

Mrs. Ponti is Director, School Fc.od Services,New Canaan Public Schools, New' Canaan,Connecticut.

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ing from new developments in theAmerican way of life.

Food allocations from the U.S. De-partment of Agriculture have not in-creased concomitantly with programexpansions. Futhermore, the costs ofstoring and delivering these "free"commodities have more than doubledin the past few years. When smalleramounts of donated foods are avail-able, more food must be purchased atthe local level, thus adding to costs.Another related factor is the gregari-ousness of modern youth who are con-stantly traveling, eating in drive-insand fast food establishments whichcater to students. In school, modernday students are demanding morechoices and better choices of foods,especially meats, which are increas-ingly costly.

Currently, the introduction and ex-panding use of convenience foods,labor shortages, and high wages arechanging equipment requirements(e.g., potato peelers are obsolete).

Eventually, with increasing accept-ance, appropriate design, and re-duced costs, the use of disposables willphase out dishwashing equipment, tobe replaced by giant disposal 1.Ls.This equipment reduces disposableitems to an odorless pulp approxi-mately one-fifth of its former volume

and suitable for land fill operations.Such a system is now in use in QueenAnne's County High School in Mary-land.

To offset the spiraling costs of food,labor, and equipment, centralizationof administration and consolidation ofdistricts has been recommended forincreasing efficiency and reducingcosts. Centralization of administrationin a school district implies more thanthe management of the departmentfrom a central office by the school foodservice director. It means that theschool food service department is in-tegrated into the central office of theschool system. Many departmentsoperate under this policy, but toomany function autonomously. In-come, payrolls, and bill paymentsshould be processed by the appropri-ate school personnel. With the intro-duction of data processing, computers,and automation, these functions canbe more efficiently performed in thecentral office. The ,financial controlof the food service department mustremain the responsibility of the foodservice director. With relief from cer-tain bookkeeping and clerical chores,the latter can devote all his skill tosolving the complex problems of oper-ating a modern school food servicedepartment--menus, food service, per-sonnel, purchasing, equipment, facili-ties planning, training, publicity, nu-trition education, and classroomvisitations.

Purchasing methods in a school dis-trict, if not constantly evaluated, maylead to costly inefficiencies. Central-ized purchasing and bid buying areuniversally recommended, but notpracticed in many areas. In centralpurchasing, schools, districts, and eventhe state may be involved in a con-solidated purchasing unit. For ex-ample, in Connecticut, annual con-

tracts are made by school districts forbread. Flour, shortening, and driedmilk are donated directly to the suc-cessful wholesale baking company, re-sulting in a 25 percent to 30 percentsaving in the price of bread to schools.Annual contracts are fairy commonfor such items as milk, bread, and icecream. Grocery items, cleaning sup-plies, paper goods, and disposableitems are also suitable to: annual con-tract purchasing. State supervisors ofschool food service programs can ren-der greater service in this area by seek-ing prices directly from manufacturersand packers and submitting approvedspecifications and price lists to localdistricts for their use.

Spiraling wages probably contribuiemore to the financial dilemma facingschool food service programs than anyother operational cost. In 1966, thefederal minimum wage law was ex-tended to cover school food serviceworkers. At the present time, thisminimum wage is $1.30 per hour; nextyear it will increase to $1.45; and in1971 will reach $1.60 per hour. At thetime of enactment, in certain x:eas ofthe United States, school food serviceworkers were earning as little as 650per hour. Local programs payingworkers less than minimum wageswere forced to seek additional fundsor dose down programs.

In addition to the minimum wage,consideration must be given to theprevailing wage in the area, whichmay be even higher than the federaland state established minimums. In-dustry is competing with school foodservice departments for employees.Help wanted advertisements feature"hours adjusted for mothers withschool age children." A well devel-oped plan for employee recruitment,with increasing wage and increasingfringe benefits for employees, is one of

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the newest and most challenging de-velopments in the school food servicesegment of the food industry.

Even as teachers are joining unions,so too, are food service personnel inschools. Recent changes in collectivebargaining laws permit municipal em-ployees to belong to a bargaining unit.Unions with their experience, knowl-edge and sophistication have pres-sured school boards to approve stag-gering wage increases and fringe bene-fits. Two school districts in Connecti-cut are in serious financial difficultiesbecause of approval of union con-tracts without adequate provision forfunding the wage commitments in thecontracts. The school business ad-ministrator and the food service di-rector must be involved in the collec-tive bargaining process to avoid suchfinancial difficulties.

In a recent study of seven schooldistricts in six states, it was found thatthe actual cost of productive labor wasthe hourly rate, plus a 50 percentadditional cost to cover such items asfringe benefits, sick time, and downtime. A nationwide study of fringebenefits for school food service workersmight well indicate that the fewerfringe benefits, resulting in a higherwage might attract more and betterworkers. School food service em-ployees, like teachers, should have theoption of choosing more benefits ormore take-home pay.

To solve the critical financial sit-uation, with which school food servicedepartments are confronted, the localschool district must appropriate fundsfor all salaries and wages of supervi-sory and food service personnel as forall other school employees. Today,communities are underwriting thewages for such newly created positionsas bus matrons, teacher aides, andlunchroom monitors. Only the school

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food service department payroll is ex-cluded from the local budget. JohnStalker, Massachusetts State Directorof School Lunch Programs and Nutri-tion Education, "believes firmly th-tthe trot of all school. food service laborshould be budgeted in the schoolbudget. School food service employeesare city or town employees and shouldnot be set apart or singled out as agroup, to receive their salaries andbenefits from funds provided by thechildren who participate in the lunchprogram." In Massachusetts, approxi-mately 70 percent of all communitiespay the entire cost of the centralsupervisor, and 67 districts providefunds for total labor costs from appro-priations.

With the publication of such booksand studies as Hunger, U.S.A.,1 TheSchool Lunchroom,2 Their DailyB "ead,3 TV programs, and newspaperarticles on hunger and malnutrition inthe United States, the inadequacies of.day's school food service programsa documented by authors not di-rectly involved in food services inschools. Only 36.5 percent of the na-tion's children received a nutrition-ally adequate lunch in fiscal. 1968,primarily because of insufficient fi-

nancial support, lack of facilities, andsubstandard operational procedures.

Increasing prices to offset escalat-ing expenditures compound the fi-

nancial problems of school services.Decreased participation and over-staffing result. Also, the program

1 Citizens' Board of Inquiry into Hungerand Malnutrition in the United States. Hun-ger, U.S.A. Washington, D.C.: the Board,1968. 100 p.

2 Bard, Bernard. The School Lunchroom:Time of Trial. New York: John Wily andSons, 1968. 190 p.

Committee on School Lunch Participa-tion. Their Daily Bread. Atlanta: McNelleyRudd Printing Service, 1968. 185 p.

serves only the affiL2nt, not the major-ity, and certainly not those whoseneeds are greatest.

Where no facilities or inadequatefacilities exist, a comprehensive, i;3-depth study must be made of presentfacilities and space, food service in.adequacies, and future school feedingrequirements. All possible solutionsmust be examined and evaluated. Cen-tral kitchens, satellite kitchens, cen-tral commissary, convenience foods,hot food systems, cold food systems,tray pack lunches, bag lunches, andeven stand-up counters offer possiblesolutions. No one system can be rec-ommended as best for school districtsof similar size, socioeconomic popu-lation, and geographic location. Therecently completed School LunchStudy 4 recommends a central kitchenproviding food for all Boston schools,including those without facilities. InNew York City, the central kitchen isbeing discontinued, being replaced bysingle unit kitchens.

Authorities in school finance, lead-ers in school food services and recom-mendations from recent publications,all are in agreement that feasiblesolutions to financing are available.Advance and adequate funding fromfederal, state, and local sources is man-datory. The planning-programming-budgeting (PPB) system design caneffectively be applied to school foodservices. At the present time, a PPBSresearch project is being developed bythe Research Corporation of the Asso-ciation of School Business Officials andthe Board of Public Instruction ofDade County, Florida, funded by theU.S. Office of Education, and admin-istered by William H. Curtis as Proj-ect Director.

4 Boston Public Facilities Commission.School Lunch Study. Boston: Gantea.ame andMcMullen, 1968.

Recommendations for solutions toexpansions of school food service pro-grams dedicated to meeting the needsof a target population of 80 percentor higher are as follows:

1. Sale prices to pupils not toexceed cost of food. Free lunchesmust be available for needy pupils.This policy has been approved as a"basic belief" by the Board ofDirectors of the Association ofSchool Business Officials and theExecutive Board of the AmericanSchool Food Service Association, whoare currently sponsoring a project todevelop a "Guide for FinancingSchool Food and Nutrition Pro-grams."

2. Establish a maximum sale priceof 20¢, as recommended in Their DailyBread. Needy pupils to be served freemeals.

3. Provide free school lunches forall children, advocated by such au-thorities in school finance as R. L.Johns, by Their Daily Bread, and byleaders in school food service as along-range goal.

Tax support funds must be budg-eted to meet the increasing financialneeds of school food service programs.To reach the goal of no hungry childin America as mandated by the Con-gress, school food services must beadequately financed, as education it-self is, from increased federal, state,and local sources.

Recommended Procedures1. Local school districts must de-

termine the target population to beserved lunches and supplementarymeals.

2. Sale prices must be those thetarget population can afford.

3. Local tax support funds must bebudgeted to supplement income in-adequate for financing necessary ex-penditures.

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National Educational Finance Project

R. L. Johns, Kern Alexander, and Richard A. Rossnziller

THE NATIONAL Educational FinanceProject (NEFP) is a cooperative en-deavor, funded under Title V, Sec-tion 505, of the Elementary and Sec-ondary Education Act, involving statedepartments of education, univer-sities, and the U.S. Office of Educa-tion in the study of contemporaryproblems in financing education.1The project represents the first sys-tematic effort to study comprehen-sively all state systems of school fi-nance and to critique them in the lightof current educational needs andtrends.

The project is designed to accom-plish three major objectives: (a) iden-

1 Support for specific satellite researchprojects within the NEFP also is being pro-vided under titles IV and VI of the Ele-mentary and Secondary Education Act. Inaddition, negotiations with the U.S. Depart-ment of Agriculture for the funding of astudy of school food services are in progress.(Editor's note: After this paper was presented,the Department of Agriculture funded theresearch project on the financing of schoolfood services.)

Dr. Johns is Professor of Educational Admin-istration, University of Florida, and Director,National Educational Finance Project; Mr.Alexander is Associate Profe.ssor of Educa-tional Administration, University of Florida,and Associate Director, National EducationalFinance Project; and Dr. Rossmiller is Pro-fessor of Educational Administration, Uni-versity of Wisconsin, and Finance Specialist,National Educational Finance Project.

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tify, measure, and interpret devia-tions in educational needs amongchildren, school districts, and states;(b) relate variations in educationalneeds to the ability of the school dis-trict and state to finance appropriateeducational programs; and (c) con-ceptualize various models of school fi-nance and subject them to consequen-tial analysis to identify the strengthsand weaknesses of each model.

Need for NEFPThe NEFP is being undertaken at a

time when conventional approaches tofinancing education are under sharpattack, Legally and historically the50 states bear primary responsibilityfor establishing and supporting a sys-tem of free public education for theircitizens, although in many states muchresponsibility for the day-to-day opera-tion of public schools has been dele-gated to local school districts andboards of education. Decentralizationof the organization for education tra-ditionally has been accompanied by aheavy reliance on local property taxesto support public elementary andsect .,dary schools which, as Cubberleynoted long ago, leads to great dis-parities in the quality of local edu-cation programs. Since the beginningof the present century, authorities insthool finance have attempted to con-ceptualize and implement school fi-

nancing programs which will equalizeeducational opportunities for all chil-dren within a state and, at the sametime, allocate equitably among thetaxpayers of the state the taxes re-quired to finance such programs. To-day, however, state programs for fi-nancing public education increasinglyare proving inadequate to meet thedemands generated by the pressure ofcontemporary expectations for theschools. Among the factors contribut-ing to this disarray are:

1. A growing awareness of the im-portance of providing an adequateeducation for all citizens; for example,population mobility makes the poorlyeducated in any state a potentialconcern of citizens of all other states.

2. An increasing recognition of theneed for differentiated educationalprograms for individuals and groupshaving special learning needs; forexample, the emotionally malad-justed, culturally deprived, or intel-lectually gifted learner.

3. A developing understanding ofthe importance of human capital tothe well-being of a "brain-intensive"economic system..

4. A burgeoning use by the federalgovernment of appropriations ear-marked for educational programs, thatis, categorical aids designed to ac-complish specific purposes deemed tobe in the national interest; for exam-ple, programs to offset disadvanatagesresulting from cultural and/or eco-nomic deprivation.

5. A growing disparity betweer. therevenue available to the schools Fromtraditional sources and the amount ofmoney needed to mount programswhich satisfy societal demands; forexample, property taxes, the onlymajor source of revenue available atthe local school district level, notonly are reaching their limit in many

school districts, but are not wellrelated to the sources of income in anindustrialized urban society.

6. An e spanding population to beeducated in the public schools result-ing both from population growth andfrom the rapid extension of free pub-lic education at both ends of the tra-ditional age range, that is, to theearly childhood and the post-high-school years.

7. A complex of population shiftswhich has produced a flight to sub-urbia from the cities by relativelyaffluent, middle-class Americans and amovement to core cities by poorlyeducated and unskilled members ofminority groups so that cities are facedwith a great influx of "high cost"citizens (in terms of their consump-tion of public services) at the sametime that their revenue potentials aredeclining.

Indicative of current dissatisfactionwith existing programs for financingeducation are equal education oppor-tunity suits claiming that the statesupport. program is unconstitutionalin that it denies to pupils in varioustypes of school disti icts equal pro-tection under the law as guaranteedby the Fourteenth Amendment. Alsonoteworthy are the proposals ad-vanced recently by such noted edu-cators as Conant and Allen that thestate abandon local property taxes foreducation and assume complete re-sponsibility for financing its publicschools. It is against this backgroundand within this context that the NEFPhas been launched.

AdmInistrative Structure ofthe NEFP

The project is administered by theFlorida State Department of Educa-tion. The director of the project isR. L. Johns, Professor of Educational

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Administration, University of Florida;the associate director is Kern Alex-ander; and the finance specialist isRichard Rossmiller. Three commit-tees have been organized to establishpolicy for the project and to provideadvice and counsel to the director andcentral staff. These are:

1. The Project Committee whichserves as a policy board and as con-sultants for the technical design ofthe project: Edgar L. Morphet of theUniversity of California, Erick L.Lindman of the University of Cali-fornia at Los Angeles, William Mc-Lure of the University of Illinois, J.Alan Thomas of the University ofChicago, and James A. Kelly of Co-lumbia University.

2. The Advisory Committee whichadvises the director concerning proj-ect design and operation: HenryCone of the Education Commission ofthe States, James Gibbs of the U.S.Office of Education, Eugene P. Mc-Loone of the National EducationAssociation, and Will Myers of theAdvisory Council on Intergovern-mental Relations.

3. The Coordinating Committeemade up of the chief state schoolofficers (or their representatives) ofnine of the cooperating states: FloydT. Christian, Florida: Ira Polley,Michigan; Duane J. Mattheis, Min-nesota; Newell J. Paire, New Hamp-shire; James Allen, Jr., New York;Dale Parnell, Oregon; J. W. Warf,Tennessee; J. W. Edgar, Texas; andT. H. Bell, Utah.

The over-all plan of the NEFP in-corporates two significant concepts inprogrammatic research directed to-ward the solution of contemporaryeducational problems. First, in theinitial plan of the project adequatetime and sufficient funding were pro-vided to develop comprehensive and

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detailed plans for the specific researchto be conducted. Second, the projectrepresents a unique approach to pro-grammatic research in education inthat "satelliLe" studies will be con-ducted by researchers in a network ofuniversities across the nation in co-operation with state departments ofeducation. This approach has made itpossible to assem'ale a research teamcomposed of recognized authorities inschool finance, regardless of wherethey are located.

Design of the Study

The NEFP comprises four separatebut interrelated and overlappingphases. Phase I of the project (June10, 1968, to January 31, 1969) was de-voted primarily to planning and de-veloping a comprehensive project de-sign. The design of the projectinvolved a joint effort by school fi-nance consultants from universities,state departments of education, andother agencies and organizations in-terested in school finance. In addi-tion, legislative leaders in all statesreceived questionnaires asking them toidentify what they believed were themost serious problems in financingeducation in their respective states.Drawing upon these authorities andresources, the central staff completedthe project design in January 1969.

Parameters of Educational Need

Phase II of the project, which ex-tends from February 1, 1969, to May31, 1970, will draw upon systems anal-ysis concepts, particularly Planning-Programming-Budgeting Systems, todelineate the parameters of educa-tional need. A major obstacle to thedevelopment of financial support pro-grams which will provide equitablyfor the needs of persons in all school

districts is the proclivity to equateeducational need with the gross num-ber of pupils to be served, tl,t is,the failure to differentiate betweenthe varying educational needs of iden-tifiable target populations which theschools either are now serving orshould be serving. By identifying thetarget groups to be served by variouseducation programs, and the uniqueeducational needs of each targetgroup, this phase of the research willfacilitate planning, programming, andbudgeting to meet these needs, as wellas provide a format within which itwill be possible to perform meaning-ful operations analysis.

To accomplish tl,e objectives ofPhase II, several authorities in schoolfinance will conduct satellite researchprojects designed to establish theparameters of educational need of thetarget groups served by each of the fol-lowing programs:

1. Programs for regular elementaryand secondpry school pupilsWilliamP. Mc Lure, University of Illinois

2. Programs for early childhood ed-ucation (pre-first grade)William P.Mc Lure, Jniversity of Illinois

3. Programs for exceptional chil-dren (gifted or behaviorally disabledchildren) Richard A. Rossmiller,University of Wisconsin

4. Programs for compensatory edu-cation (culturally handicapped chil-dren)Arvid J. Burke, State Univer-sity of New York at Albany, and JamesA. Kelly, Teachers College, ColumbiaUniversity

5. Programs for vocational andtechnical educationErick L. Lind-man, University of California at LosAngeles

6. Programs for junior college edu-cationJames L. Wattenbarger, Uni-versity of Florida

7. Programs for adult and continu-ing education (non-college)J. AlanThomas, University of Chicago

In each of these satellite projectsthe investigators will seek to (a) iden-tify or develop criteria for identifyingthe target population to be served, (b)develop accurate estimates of the num-ber of persons in each target group, (c)indicate the nature of the educationalprograms needed to meet the needsof each target group, that is, how theydiffer from the regular educationalprogram, and (d) determine the costdifferentials in such programs.

The first step toward accomplish-ment of the objectives above will bethe preparation of papers which ex-plore the parameters of educationalneed in each of the program areasabove. Each paper will be preparedby a member of the central staff orthe project committee in collaborationwith a recognized authority in theprogram area. In preparing thesepapers the literature concerning eachprogram area will be reviewed to as-certain the ortent to which data areavailable concerning target popula-tions, educational program ;, and costdifferentials, and to identify the addi-tional research needed to accomplishthe objectives of Phase II. Investi-gations designed to provide theneeded data will then be conducted.To obtain these data, each investiga-tor will select a sample of states inwhich may be found exemplary pro-grama for the target population understudy. (Exemplary programs are de-fined as those programs which havebeen demonstrated by empirical eval-uation to be effective or, where em-piri:al evaluation is not available,which are advocated by authorities inthe field as being most likely to beeffectiv....) An attempt will be madeto include in the sample states which

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are representative of particular prob-lemssuch as sparkly populated anddensely popv'ated states, states hav-ing concentrations of culturally oreconomically disadvantaged personsor minority groups, states having highand low per-capita incomes, and thelikeand to provide geographic dis-persion of the sample (insofar as thesecriteria are compatible with obtaininga sample of states which have exem-plary programs).

Data concerning the general char-acteristics of exemplary educationalprograms for the target populationunder study, and the costs associatedwith such programs, will be obtainedfrom records maintained by the statedepartment of education and inter-views with state department of edu-cation personnel. To obtain specificdata concerning characteristics of ex-emplary programs for the target groupunder study, a sample of local schooldistricts will be drawn in each state.An attempt will be made to includein the sample, school districts of vary-ing size and varying social, economic,and demographic characteristics. On-site visits will be made to the schooldistricts included in the sample to(a) describe explicitly the nature andcharacteristics of the program; (b)identify the criteria for participationin the program, the number eligible toparticipate in the program, and thenumber actually participating; (c) de-termine the specific additional costsincurred in providing the program;(d) establish the relationship betweenthe cost of the special program and thecost of the regular school program;and (e) obtain any empirical evidencewhit la may be availabl concerningthe efficacy and benefits of the pro-gram under study.

It should be noted that an identi-cal sample of states and school dis-

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tricts will nc, be employed in eachinvestigation. Rather, the primarycriterion employed in selecting thesample for each study will be the exis-tence of exemplary educational pro-grams for the target group understudy. It also should be noted thatthe primary concern in these investi-gations is for the cost differentials be-tween special and regular educationalprograms, not for the absolute dollaramounts expended for such programs.While it is recognized that expend-itures per pupil for both regular andspecial programs vary from one schooldistrict to another, it is assumed thatthe cost differentialthe ratio of thecost of the special program to the costof the regular programfor specialeducational programs for various tar-get groups will not vary significantlyfrom one district to another. Thevalidity of this assumption, of coursewill be tested in the course of theseinvestigations.

The data obtained from the sampleof states and the sample of schooldistricts will be analyzed to deter-mine the general nature and charac-teristics of exemplary programs for thetarget population under study, withparticular attention directed to sim-ilarities and differences in the pro-grams. Additional costs attributableto each program will be aggregated,cost differentials will be computed foreach program category in relation tothe cost of the regular educationalprogram, and a range of differentialcosts will be established. Programneeds will be projected to 1980, basedon standard population projections,trends in the population in the targetgroup, and costs associated with edu-cational programs for such persons.In summary, these in vestigations willprovide a framework within whicheducational needs may be expressed

in a programmatic format, bothquantitatively and qualitatively.

Educational Facilities

A satellite research project dealingwith provisions for financing the con-struction of educational facilities alsowill be undertaken during Phase IIby W. Monfort Barr, Indiana Uni-versity. This studl, will provide de-tailed data concerning current pro-visions for financing schoolhouse con-struction in the various states and willidentify the problems implicit in theseprovisions.

Concurrent with the Phase II activi-ties outlined above, the central staffwill undertake research which willdelineate the objectives served by statesupport programs, describe the modelsof state support now in use, and indi-cate the extent to which existing statesupport programs satisfy contempo-rary educational needs. These studieswill include the following:

1. Identification and classificationof state school funds

2. Identification and analysis of pro-visions which tend to either discrim-inate against or favor certain typesof school districts

3. Trends in the use of local non-property taxes

4. Equalization effect of federal pro-grams of school support

5. Extent of equalization achievedby existing state support programs.

The result of these studies will beused to assist in conceptualizing andformulating models of school finance.

Fiscal Capacity of SchoolDistricts and States

Phase III of the project (July 1,1969, to October 1, 1970), whichoverlaps Phase II, will be directedtoward examining the relative fiscal

capacity of states and school districts.Two satellite research projects will beconducted in this phase: (a) a studyof fiscal capacity among states andschool districts and (b) a study of theimpact of school district reorganiza-tion on state support programs.

The first investigation will be con-ducted by Richard Rossmiller at theUniversity of Wisconsin and will ex-amine the fiscal capacity and taxeffort of states, hypothetical regionaltaxing jurisdictions within states, andlocal school districts. A sample ofapproximately eight states will be uti-lized. The states comprising the sam-ple will be selected to obtain widegeographic dispersion; to include atleast one state in each quintile (byrank) on distributions based on per-capita income, income per person age5-17, and state-local taxes as a percent-age of per-capita personal income;states with large urban centers andstates primarily rural in character;and states which have a large numberof local school districts and stateswhich have a small number of localschool districts.

Within each state a sample of ap-proximately 15 to 25 school districtswill be selected for interkive study.The sample will be stratified to in-clude core city, suburban, indepen-dent city, and rural school districts.Consideration also will be givenwealth (as measured by personal in-come and/or property value) in se-lecting the sample of districts. Thedata to be gathered for each schooldistrict will include information con-cerning both educational services andall other public services. Compari-sons of fiscal capacity and tax effortwill be made, using property valueand personal income as bases andusing expenditures for education, forall other public services, and for edu-

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cation and all other public servicescombined.

School District Structure

The second satellite study, to beconducted by Clifford Hooker at theUniversity of Minnesota, will focusupon the relationship of school dis-trict organization to state aid dis-tribution systems. State support pro-visions concerning school district re-organization and other statutory pro-visions which affect school districtreorganization will be identified bya survey of the 50 states. This surveywill provide data which will be util-ized to select a sample of states whichprovide a range of situations withregard to provisions for school districtreorganization. From states in alissample will be obtained various dataregarding the interaction between fis-cal provisions and school district re-organization, and various hypothesesconcerning this relationship will betested.

Concurrent with these two satelliteprojects the central staff will examinesupport programs for pupil transpor-tation, particularly the transportationneeds of pupils in urban areas,and current provisions for financingretirement programs for public-schoolpersonnel. In addition, three back-ground papers will be prepared. Thefirst, will provide general economicprojections and revenue estimates, adiscussion of the role of educationin the economy, and an analysis of thevarious tax sources from which reve-nue for the support of educationmight be obtained. The second willexamine the financial implications ofthe adoption of collective bargainingor professional negotiation proceduresin education. The third will explorethe implications for financing educa-tion of private sector activity in edu-

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cation; for example, the cost of con-tracting certain service activities, suchas transportation and feeding, or ofcertain instructional activities, suchas behind-the-wheel instruction fordriver education, as well as the costof providing various types of aid, suchas textbooks, for pupils attending pri-vate schools.

Analysis of EducationalFinance Models

Phase IV (June 1, 1970, to June 30,1971), which culminates the project,requires the integration and synthesisof knowledge and insights acquiredin the preceding phases to con-ceptualize, develop, and test educa-tional finance models which will har-ness the fiscal resources of local schooldistricts, states, and the federal govern-ment so as to adequately fund the edu-cational program needed to serve hediverse needs of all citizens. It is notthe objective of this phase of the pro-ject to identify a single "best" modelfor financing edqcation. Rather, theobjective is to test several feasiblemodels against a common set of cri-teria so that policy-makers may becognizant of the explicit strengths antiweaknesses of various models as theyconsider alternative models of schoolsupport. In conducting the con-sequential analysis of each educationalsupport model, answers will be soughtto such questions as:

1. To what extent will the model enableevery child to have access to an educationalprogram which will facilitate maximum de-velopment of his human potential, that is,to achieve equalization of educational op-portunity defined in terms of meeting van-ing individual needs?

2. To what extent the mode] providefor equity among taxpayers in distributingthe financial burden of supporting educa-tion (and other local government services)?

3. To what extent will the model providefor equitable treatment of local scho,J1 dis-

tricts of widely varying socioeconomic, demo-graphic, and geographic characteristics; forexample, densely populated urban areas andsparsely populated rural areas?

4. To what extent will the model encour-age efficiency in the use of the resources allo-cated to education?

5. To what extent wi'.1 the model stimu-late or inhibit experimentation and innova-tion in the schools?

6. What effect will the model have on thelocus and quality of various types of educa-tional decisions, for example, curriculum,personnel, facilities, and the like?

The specific models to be testedcannot be identified at this juncture,since the data developed in Phase IIand Phase I:nx will strongly influencethe models which r:re identified andanalyzed. However, it is expected thatseveral of the educational tTnancemodels currently in use in the variousstates will be subjected to analysis.These would include such models asthe Strayer-Haig and the Morphet-johns foundation program model!;incentive models employing proce-dures advocated by Updegraff suchas are now in use in Wisconsin andRhode Island; flat-grant models; andmodels utilizing both general andcategorical aid. It should be empha-sized that the listing above is illustra-tive, not exhaustive; that other modelsnow extant, proposed, or yet to bedevised will also be tested.

Conceptually, educational financemodels can be viewed as consistingof two distinct though interrelatedcomponents, revenue models and allo-cation models. Implicit in practicallyall revenue models currently em-ployed in educational finance pro-grams is the notion of a state-localpartnership in which a significantportim of the total revenue is derivedfrom locally levied taxes, primarilytaxes on property. Embedded in eachrevenue model is a value judgment,arrived at through the political proc-

ess, concerning the share of revenuewhich should be provided by each"partner"the state and the localschool district. In recent years a third"partner," the federal government, hasbecome increasingly active in financ-ing education, although debate con-cerning the propriety of the new part-ner's involvement has not completelyabated. Thus, several possible revenuemodels will need to 1-,e considered inPhase IV. These includ, for example,the possible use at the ."ederal levelof revenue sharing, block grants, cate-gorical aid, or some coml.:nation ofthem. At the state-local level, thepossibility of complete state financingmust be considered, as well as the pos-sible use of local non-property taxes,either levied and collected locally oras supplements to taxes levied and col-lected by the state. It is expectedseveral revenue mot, els will be sub-jected to consequential analysis.

In the matter of allocation models,most educational finance models cur-rently in use purport to base the dis-tribution of funds to local districtson their educational need visa vistheir ability to meet their need. Typi-cally, distribution models deal witheducational need in terms of such vari-ables as pupils (weighted or un-weighted), classroom I ts, milestransported, and the like. Allocationmodels may consist of general aid forall or most school purposes, categori-cal aid for specific purposes, or a com-bination of them. They may providethe same number of dollars for eachpupil or differentiated amounts basedon various categories of pupils (e.g.,elementary and secondary). They mayrequire matching contributions bylocal districts with or without regardto their fiscal capacity, or they maybe provided without regard to localcontribution. Thus, several allocation

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models will need to be considered andsubjected to consequential analysis.

Computer programs will be writtenfor each of the educational financemodels to be tested, and simulationprocedures will be employed to testeach model. A number of hypo-thetical school districts will be con-structed to reflect the various programand fiscal variables identified andquantified in Phase II and Phase III.

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These hypothetical school districtswill be employed to demonstrate theeffect of various educational financemodels on school districts havingvarying economic and demographiccharacteristics. The computer pro-grams for the various educational fi-nance models will be available for useby individual states that wish to ana-lyze the effects of the adoption of var-ious models on their school districts.

Long-Range Planning for PublicEducationA Texas Example

Glenn H. Ivy

BY MOST STANDARDS of interstate com-parison, Texas ranks near the bottomin educational effort and achievement,in part because it usually stands about34th in per-capita income. Despitethese hard facts, the Texas Legislaturein 1965 authorized the establishmentof a 15-member Governor's Committeeon Public School Education and gaveit a mandate to prepare a definitelong-range plan for national leader-ship. To prove it was serious, theLegislature appropriated $250,000 fora three-year study, with no strings at-tached, and gave the Committee per-mission to seek additional funds fromfederal and private sources. Morethan a million dollars has been in-vested in the project from all sources.

So far as we could determine, nostate has ever adopted a specific long-range plan for public education, eventhough it represents the largest ex-penditure item in nearly all stateand local budgets. Perhaps this lackof ...tate planning can be traced to thedecentralized nature of most state-wide public education systems. Orperhaps it is because legislative bodiesare notoriously reluctant to adoptlong-range financial commitments,

Mr. Ivy is Director, Governor's Committeeon Public School Education, Austin, Texas.

particularly if they are accompaniedby painful short-range reforms. What-ever the reason, we found few land-marks to follow.

The Texas ContextTo provide perspective for the pro-

posed long-range plan, it may be use-ful to sketch in the outlines of thestate-wide public education systemand program in Texas. Some of thesalient characteristics include:

1. OrganizationApproximately1,200 local districts enroll about twoand a half million pupils, but morethan two-thirds have fewer than 1,600pupils each. There are 43 districtswith more than 10,000 pupils each,and about 700 districts with fewerthan 500 pupils each. There are still144 elected county school superintend-ents (out of 254 counties). Twentyregional educational service centers,operating under autonomous boards,were established in 1967. The 21members of the State Board of Edu-cation are elected from districts basedon the 1930 census. They appoint theCommissioner of Education.

2. ProgramTexas has a definedMinimum Foundation Program whichhas had no basic changes since itsadoption in 1949. Personnel are allot-ted on formula ratios to average

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daily attendance, and the ratios areweighted in favor of small districts.Operating funds are based on teacherallotments, pyramiding the subsidy forsmall systems. Transportation formu-las generally exclude city school chil-dren. Textbooks are furnished free bythe state under a state adoption sys-tem.

3. Staff benefitsTexas has a lib-eral state minimum salary schedule,and local districts are reimbursed interms of the degrees and experienceof personnel employed under thefoundation program. The state bearsthe full cost of an attractive retire-ment plan.

Conducting the StudyThe Committee employed approxi-

mately a dozen full-time professionalstaff members, recruited primarilyfrom the public school system. Threeprincipal consultants were retained:Erick Lindman, FinanceUniversityof California, Los Angeles; Alex Fra-zier, ProgramOhio State University;and Herbert LaGrone, StaffingTexas Christain University.

Extensive data were collected fromquestionnaires and field interviewsand from a wide variety of reports reg-ularly filed by local districts with thestate education agency. Contract re-search included: (a) testing of 67,000high-school seniors (half of the statetotal) by the American College Test-ing Program, Inc.; (b) a study ofactual property values in all local dis-tricts; (c) opinion polls of 500 teachersand 1,000 other adults; and (d) exten-sive data processing and analysis.

The Research Findings

Enrollment and ResourceProjections

Early background research for ourstudy turned up a study by Mushkin

172

and McLoone forecasting a nation-wide stabilization of school enroll-ments.1 A careful projection of school-age children, college graduates, andpersonal income for Texas led us tothe conclusion that the 1970's offereda once-in-a-lifetime opportunity tomake major improvements in thequality of our state-supported educa-tional program. The projections indi-cate that we will have fewer pupils ingrades 1-12 in 1979 than we have thisyear, even if we achieve a Committeegoal of a 20 percen. increase in high-school graduation rates. At the sametime, the products of the post-WorldWar II "baby boom" will be enter-ing the labor market and contributingto an expected 60 percent increase inpersonal income. They will also swellthe pool of professional talent avail-able to the schools to the extent thatwe can expect a net surplus in thesupply of teachers for most of thenext decade. (See Tables 1 and 2.)

Factors Affecting EducationalAchievement

Other research findings were a gooddeal less encouraging. Texas has aboutthree million undereducated adultsbetween the ages of 14 and 49. Ourstate ranks 44th in adult literacy and42nd in school holding power. Onlysix of ten beginning students gradu-ate from high school, and many of thegraduates score at the ninth-gradelevel (or below) on senior tests. Wefound there were no accurate recordson either dropouts or graduates afterthey left the public school system.

Using dropout rates and ACTscores as primary yardsticks of pe..-formance, we made an extensive re-

Mushkin, Selma J., and McLoonc, EugeneP., Local School Expenditures: 1970 Projec-tions. Chicago: Council of State GovernmentsNovember 1965. 84 p.

TABLE 1.-PROJECTED PUBLICSCHOOL ENROLLMENTS INTEXAS, 1967-68 THROUGH

1979-80

Estimated public school enrollment(thousands)*

Years Elementary Secondary Total

2 3 4

1967-68 1901.7 715.9 2617.61968-69 1914.3 738.3 2652.61969-70 1912.8 755.5 2673.31970-71 1915.7 770.3 2686.01971-72 1898.7 787.8 2686.51972-73 186u.8 804.3 2671.11973.74 1834.9 813.6 2648.51974-75 1797.2 828.6 2625.81975-76 1764.4 842.3 2606.61976-77 1750.2 P50.3 2600.51977-78 1740.7 852.3 2593.01978.79 1744.6 844.3 2588.81979.80 1758.9 836.4 2595.3

Source: Estimates by staff of Governor's Corn-mittee on Public School Education.

* Based on goal of BO% graduation by 1980.

gression analysis in an attempt to dis-cover what inputs to the educationalsystem might have a significant influ-ence on its productivity. The inputfactors included most of the tradi-tional measurements associated witheducational quality such as pupil-teacher ratios, teacher qualifications(degrees and experience), per-pupil ex-penditures, and number of coursestaught in the high school. To thesewe added a number of student andcommunity characteristics includingthe ethnic composition of the schooland school district, the average incomelevel of the community, the averageeducational level of the community,and the market value of property perpupil in the district. The income andeducational levels of the communityproved to be the most reliable per-formance predictors. Of course, theethnic composition of the district wasclosely associated with these socioeco-

nomic characteristics. None of theother factors was statistically signifi-cant.

In a separate evaluation, ACT re-ported that size of graduating classwas directly related to average scoreson senior tests. This finding corre-sponded with the results of a previousstudy by the Oklahoma State Regentsfor Higher Education, using ACTresults which also found that studentsfrom small districts scored signifi-cantly lower on the tests.'

Effectiveness of StateFinancial Equalization

Although most of the high riskpupils (with educational handicapsbased on family background) are con-centrated in the metropolitan areasof Texas, the large school districts areseverely penalized in the distribution

2 Oklahoma State Regents for Higher Edu-cation. In and Out of College. Report 1:The First Year. Oklahoma City: OklahomaState Regents for Higher Educat;on, October1964. p. 31.

TABLE 2.-PROJECTED LABOR FORCEAND TOTAL PERSONAL INCOME

FOR TEXAS, 1969-1978

Estimatedlaborforce

Years (thousands)

Estimated income(in billions)

In constant1958

dollarsActual

level

1 2 3 4

1969 4,551 $26.8 $31.41970 4,670 28.0 33.31971 4,797 29.2 35.41972 4,928 30.6 37.61973 5,065 32.0 40.01974 5,207 33.4 42.51975 5,355 35.0 45.21976 5,495 36.6 48.01577 5,640 38.2 51.019 3 5,788 40.0 54.1

ource: Estimates by staff of Governor's Com-mitoe on Public School Education.

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of state school aid. We found, for ex-ample, that districts with more than10,0000 pupils have an average of$32,500 of taxable property at marketvalue per pupil, compared with anaverage of $65,000 per pupil for therest of the state. Yet the large districtsget an average of $30 less per pupil instate aid.

State financial discriminationagainst the urban districts comes intwo forms: (a) the defined minimumprogram does not cover the personneland operating expenses of a modernschool system, and (b) the formulaswhich are supposed to produce anequalized local financial effort n rebadly skewed in favor of rural areas.Texas is one of four states which stillcling to an Economic Index as thebasis for determining property taxpay-ing ability among its 254 counties.Within each county, the share as-signed to each local district is basedon its percentage of the county tax rollas reported by an elected county taxassessor. We found, for example, thatthe assessor for Tarrant County wasreporting about 7 percent more tax-paying ability for the Fort WorthSchool District than its actual valueswould justify. This difference alonemeant more than a half million dol-lars in lost slate aid each year. Athreatened lawsuit immediately pro-duced some relief for Fort 'Worth.

Staffing analysisDuring the yearsof rapid enrollment increases, Texas,like most states, faced a chronicteacher shortage. Low salaries wereblamed for the shortage, and everysession of the Texas Legislature facedpopular demands for increasing thestate mandated minimum salaryschedule, with the state paying about80 percent of every increase.

Our research indicates that at leastin recent years, the shortages of per-

174

sonnel have been concentrated largelyin a fairly limited geographical areaamong a relatively small number ofdistricts. These districts were groupedin South Texas, particularly along theMexican border, and they were char-acterized by high percentages of Mexi-can-American pupils, low propertyvalues, and minimum salaries. Theywere isolated from the major teacher-training centers and most of the urbanattractions. By contrast, most of themajor systems pay from $500 to $1,000a year above the minimum, and pres-sures from local teacher organizationsforce them to maintain that differen-tial whenever the state schedule israised. Across-the-board increases inthe minimum schedule have littleeffect on these concentrated teachershortages unless they create a surpluslarge enough to force some teachers toaccept undesirable positions at theminimum scale.

The teacher opinion poll conductedfor our Committee indicated thatwork load is the primary issue of con-cern for most teachers, with salariesrunning a distant second. (Inciden-tally, this finding has recently beenreplicated in a poll conducted by theNEA Research Division.3) We foundthat most men teachers (nearly 9 in10) would be glad to work on a year-round schedule in return for an ade-quate annual salary, but about halfof the women prefer the long summervacation.

More than 98 percent of the teach-ers and other professionals in Texashave at least one college degree, and34 percent have a master's degree. Yeta substantial number do not take anyfurther formal training after receiving

3 National Education Association, ResearchDivision. "Teachers' Problems." NEA Re-search Bulletin 46:116-17; December 1968.

a permanent teaching certificate. Wealso found that most of the teachertraining institutions in Texas werelagging behind in the development ofnew instructional systems techniques.

The Long-Range PlanOur Committtee proposed a long -

range plan containing three majorcomponent parts: (a) a Basic Founda-tion Program, (b) a State Supple-mental Aid Program, and (c) a StateDevelopmental Program. The plancalls for scheduled expansion of exist-ing formulas and addition of new pro-grams over the 10-year period from1969-70 through 1978-79. We estimatethat the total cost of all state-sup-ported public education programs(from combined state, local, and fed-eral sources) would exceed $2 billiona year at the end of he decade, com-pared with $840 million in 1968-69.This would represent a cumulativeincrease of about $7.5 billion overpresent spending levels in the 10-yearperiod, not counting constructionand debt retirement. With the stu-

dent population stabilized, the per-pupil expenditure would more thandouble.

Basic Foundation ProgramBy 1978-79, the proposed Basic

Foundation Program for districts withmore than 2,600 average daily attend-ance would include the followingfeatures:

1. One academic or vocationalteacher for each 24 pupils

2. One supporting professional andone paraprofessional aide for each100 pupils

3. An operating allowance of $55per pupil, with a bonus allowance of$400 for each vocational teacher

4. Reimbursement of up to $60 pereligible pupil for actual transporta-tion expenses.

County-wide districts with 1,600pupils could operate on the same pro-gram, with a minimum guarantee of33 high-school teachers. The 33-teacher minimum is designed to pro-vide 50-55 secondary courses on a 24-to-1 pupil-teacher ratio with a limit of

TABLE 3.PROPOSED EXPANSIONS IN PERSONNEL ANDOPERATING ALLOWANCES

Schoolyear Teachers'

Supportingprofessionals °

Paraprofessionalaides'

Operatingallowance b

1968.69 ' 1/24.7 ADA 3.5/1,000 ADA None 523.00/ADA1969-70 1/24.7 ADA 3.5/1,000 ADA None 23.00/ADA1970.71 1/24.7 ADA 3.5/1,000 ADA 1/500 ADA 25.001971.72 1/24 1/250 1/500 ADA 27.001972-73 1/24 1/250 1/200 27.501973.74 1/24 1/167 1/125 28.001974-75 1/24 1/143 1/100 28.501975-76 1/24 1/143 1/100 39.001976-77 1/24 1/125 1/100 44.501977-78 1/24 1/125 1/100 50.001978.79 1/24 1/100 1/100 55.00

Additional personnel unit for major fractions.b Transportation allowance formulas not included. Present transportation reimbursement based on

type of road, length of route, size of bus, and number of pupils transported would be replaced by per-pupil reimbursement formula in 1971-72. Textbooks are furnished by the state.

Present averages. Formulas are graduated by size of district and generally tied to teacher allotments.

175

three separate course preparations.This would ordinarily require a highschool of about 800 students and atotal enrollment of about 2,600 in 12grades. All other county-wide districts(with less than 1,600 ADA) would op-erate under a program and budget ap-proved annually by the State Board ofEducation at a cost not to exceed$1,000 per pupil. Every effort wouldbe made to provide a comprehensive,individualized curriculum for smalldistricts in sparsely settled areas of thestate by using mobile laboratories andconsultants, modern communicationstechnology, programmed instructionalmaterials, etc. Regional offices of theState Department of Education wouldsupervise those programs.

Table 3 shows the proposed sched-ule for expanding current featuresand adding new components of per-sonnel and operating costs to the basicprogram for comprehensive districtsduring the decade.

TABLE 4SCHEDULE FOR INSTALLA-TION OF STATE-SUPPORTED KINDER-

GARTEN AND SUMMER SCHOOLPROGRAMS UNDER THE BASIC

FOUNDATION PROGRAM

Schoolyear

BasickiEdergartenqualifying

age

Basic summerschool state

appropriationlimit

1968.69 None None1969-70 None $ 4 million1970.71 None 17 million1971.72 None 30 million1972-73 None 41 million1973.74 5 yrs., 7 mos. 52 million197475 5 yrs., 7 mos. 63 million1975.76 5 yrs., 4 mos. 63 million1976-77 5 yrs., 4 mos. 63 million1977.78 5 yrs. 63 million1978-79 5 yrs. 63 million

`Includes appropriation for "educationallyhandicapped" pupils from deprived backgroundsas a priority feature.

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Provision of paraprofessional aideswould receive priority in personnelformula expansion to permit early re-lief in teacher work loads, the numberone issue for most teachers. By 1971-72, each teacher would be guaranteed10 hours per week free from instruc-tional assignment to provide time forlesson preparation, conferences, grad-ing papers, inservice training, andother professional purposes.

The Basic Foundation Programwould also be expanded by the addi-tion of state support for kinder-garten and summer school programs,according to the schedule in Table 4.

The basic foundation kindergartenprogram is scheduled to be initiatedin 1973-74 to correspond roughly withthe projected decline in elementary-school enrollments. A priority pro-gram of preschool education for"educationally handicapped" childrenfrom non-English speaking and/orlow-income families would be initi-ated in 1969-70, as discussed under theSupplemental Program.

Coupled with the expansion of per-sonnel formulas would be some majorchanges in the- statutory restrictionson personnel classes and qualificationsand in the state minimum salaryschedule. State law now limits founda-tion program personnel to five broadcategories: (a) teachers, (b) principals,(c) counselors or supervisors, (d) spe-cial service units (including physi-cians, nurses, visiting teachers,itinerant teachers, and librarians) and(e) superintendents. Formula ratiosare provided for each of the classesexcept superintendents. Of course,local districts shuffle these classifica-tions around to fit other personnelrequirements such as assistant super-intendents, business managers, andtax administrators. By the same token,there is constant pressure to expand

TABLE 5.-TEXAS STATE PUBLIC EDUCATION COMPENSATION PLAN

Pay PercentBase salary Annual salary by years of experience

Month Annual' 1 2 3 4 5 6 7 8 9 10grade of base Key job

1 50 Aide I $ 300 $ 3,000 $ 3,150 $ 3,310 $ 3,480 $ 3,650 $ 3,830 $ 3,930 $ 4,030 $ 4,130 $ 4,230 $ 4,3402 60 Aide II 360 3,600 3,780 3,970 x.170 4,380 4,600 4,720 4,840 .4,960 5,080 5,2103 75 Aide III 450 4,500 4,730 4,970 .,,220 5,480 5,750 5,890 6,040 6,190 6,340 6,5004 80 Teach. Tine. I 480 4,800 5,040 5,290 5,550 5,830 6,120 6,270 6,430 6,590 6,750 6,9205 90 Teach. Trne. II 540 5,400 5,670 5,950 6,250 6,560 6,890 7,060 7,240 7,420 7,610 7,8006 95 Nurse, R.N 570 5,700 5,990 6,290 6,600 6,930 7,280 7,460 7,650 7,840 8,040 8,2407 100 Teacher, B.A 600 6,000 6,300 6,620 6,950 7,300 7,670 7,860 8,060 8,260 8,470 8,680B 110 Teacher, M.A 622 6,620 6,950 7,300 7,670 8,050 8,450 8,660 8,880 9,100 9,330 9,5609 115 Teach. Spec. Duly 690 6,900 7,250 7,610 7,990 8,390 8,810 9,030 9,260 9,490 9,730 9,970

Instrudioud, Administrative and Service Personnel

10 120 Grade I 720 7,200 7,560 7,940 8,340 8,760 9,200 9,430 9,670 9,910 10,160 10,410

11 125 II 780 7,500 7,880 8,270 8,680 9,110 9,570 9,810 10,060 10,310 10,570 10,83012 130 III 780 7,800 8,190 8,600 9,030 9,480 9,950 10,200 1 0,4 60 10,720 10,990 11,26013 140 IV 840 9,240 9,702 10,186 10,692 11,231 11,792 12,089 12,386 12,694 13,013 13,343

14 150 v 900 9,900 10,395 10,912 11,462 12,034 12,639 12,958 13,277 13,607 13,948 14,300

15 175 VI 1,050 11,550 12,133 12,738 13,376 14,047 14,751 15,125 15,499 15,884 16,280 16,687

16 200 VII 1,200 13,200 13,860 14,553 15,279 16,038 16,841 17,259 17,688 18,128 18,579 i9,04117 301 VIII 1,800 19,800 20,790 21,835 22,924 24,068 25,267 25,894 26,532 27,192 27,874 28,567

LIMITATIONS ON THE PERCENTAGE OF PERSONNEL BY PAY GRADE FOR STATEREIMBURSEMENT

Paygrade

Special teachersSupporting professionals

(10/1000 ADA)1971.72 1972-73 1973-on

9 e 10% 15% 20% 20%6-7 208 20

10 2511 512 ' 5 10 15 513-17 5

Total 15% 25% 35% 100%

" Basis for annual salary amounts for pay grades 1-12 would be 10 months; pay grades 13-17 would be 12 months."Special duty teachers" such as school publication supervisors, awl speech and drama instructors.

V "Teacher leaders" such as department heads, team leaders, and other specialists.-4

the formula provisions to includethese additional classes.

The proposed new formulas wouldprovide only the broad statutoryclasses of teachers, supporting profes-sional and paraprofessional aides. TheState Department of Education wouldbe empowered to authorize a widevariety of professional classes and setthe qualifications in keeping with theresponsibilities. In addition, localdistricts would be able to classify 15percent of their teachers as "teacherleaders" and 20 percent as "specialduty teachers," both at higher payscales. The only statutory restrictionswould be on the level of state reim-bursement.

The proposed pay schedule is in-dexed on a base salary of $60 permonth for beginning bachelor's de-gree teachers. The present schedule istied to a nine-month term. It wouldbe lengthened to 10 months in 1970-71, providing a two-step pay increaseduring the next biennium. The pro-posed salary schedule includes 10 an-nual increments for experience (5 per-cent for each of the first five years, 2.5percent for the next five), as shown inTable 5.

The objective of the proposed newcompensation plan is to provide theflexibility needed for differentiatedteaching staff within the context of adefined state program. It is patternedon a pay plan for other state em-ployees which has been in effect inTexas for several years.

To offset the factors producingteacher shortages, we have proposedthat the State Department of Educa-tion be permitted to give local dis-tricts authority to hire at one or twogrades above the minimum salary towhich an rnployee would otherwisebe entitled. This authority might beextended to entire isolated districts, to

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schools in core city areas, or even towhole personnel classifications such asscience teachers. The amount whichcould be expended for this recruitingwould be limited to 1 percent of totalpersonnel costs under the state pro-gram.

One further proposal would permitadditional latitude under the definedprogram concept. Up to 10 districtsper year would be granted authorityto experiment with any kind of inno-vative program, provided the cost didnot exceed the average per-pupil costfor the rest of the state. To cite anextreme example, a district might con-tract with a private educational corpo-ration to take over the entire instruc-tional program.

The Basic Foundation Programwould be financed from a joint state-local effort. Each district would berequired to raise an amount equiva-lent to a rate of 200 times each $100of actual market value of propertywithin the district. The beginningrate would be graduated 10 per yearuntil it reached a maximum of 30cents per $100 in 1979-80. No districtwould have its local share raised bythe equivalent of more than 50 per$100 of value in any one year. (Thecurrent range is from 20 to 350 per$100 among the 1,218 districts.) Thestate would pay all of the remainingcosts of the guaranteed programs fromits various resources.

In technical terms, the local con-tribution to the state-financed pro-gram could be called a state-imposed,locally collected property tax. Theestimates of market value would bemade by the State Department of Edu-cation, using assessment -sales ratiostudies and sample appraisals forproperty not regularly exchangedsuch as oil refineries. Current localshares would be based on market

value two years earlier, providing leadtime for local financial planning. Amarket value index for 1969-70, basedon 1967-68 tax rolls, was prepared asa part of our study.

Supplemental State Aid Program

Beyond the Basic Foundation Pro-gram, we have proposed the establish-ment of a package of state finances:supplemental programs. Their pri-mary objectives would be dropout pre-vention and adult educational recla-mation, and the state would use bothits own resources and applicable fed-eral assistance to funl the projects.

The Supplemental Program forchildren from deprived backgroundswould include:

1. Priority in preschool programsfor five-year-olds and eventual pro-grams for four-year-olds

2. Priority in summer school pro-grams

3. An additional allotment of onesupporting professional, one parapro-fessional aide, and $1,500 for each 100children in elementary grades of desig-nated schools.

In a sense, the proposed Adult Edu-cation Program is a part of the coordi-nated effort to reduce the number ofdropouts. Our research indicates thatthe average level of education within acommunity is the single most relevantfactor in school holding power. Wereasoned that a program of adult edu-cation might help to reinforce paren-tal interest in preventing their chil-dren from dropping out.

Texas is one of several states whichnow face federal court suits designedto overturn their state school aid pro-grams under the 14th Amendment tothe Constitution. A group of Mexi-can-American parents from the SanAntonio area have filed a complaintagainst the Governor, the State Corn-

missioner, and the State Board of Edu-cation, charging that the present pro-gram is discriminatory because it doesnot provide equal opporton Ity interms of individual ability. We be-lieve the proposed Supplemental AidProgram would help meet this charge,and may be essential to the preserva-tion of the broader foundation pro-gram.

Developmental Program

A number of state-financed pro-grams to encourage school district re-organization, decentralization of ma-jor metropolitan systems, cooperationby districts in joint projects, and im-proved personnel training have beencombined under the heading of de-velopmental programs:

1. Reorganization Incentive AidOperating savings under theBasic Foundation Program formulasachieved by more efficient-size operat-ing districts would be returned to thereorganized systems for 10 years. It isestimated that these funds would ap-proximate $20 million a year for in-vestment in new facilities or retire-ment of existing capital debt.

2. Severance PayAny professionalemployee displaced by reorganizationwould be entitled to a year's pay atstate expense.

3. Instructional Support AllotmentsDistricts with more than 50,000pupils which adopted an approvedplan for decentralization into com-munity education systems of at least10,000 pupils each would be eligiblefor a state allowance of $10 per pupil.Districts which entered into coopera-tive agreements for services, such asdata processing and computer-assistedinstruction, summer school programs,and educational television networks,would be eligible for a state allotmentof $10 per pupil. These funds would

179

probably be administered through re-gional service centers.

4. Development LeavesProfes-sional personnel would be eligible fora paid leave equivalent to a collegesemester at four- or five-year intervals(depending on the length of their con-tract year). This program would startin 1974 coinciding with projected per-sonnel surpluses.

5. Personnel Training ProgramsUp to 25,000 un-lergraduates, begin-ning at the sophomore level, would begiven the opportunity to work as paidteacher aides and assistants as a partof their professional preparatory pro-gram. Up to 100 interns would alsobe trained at state expense, with pri-orities on preparation of specialists towork in core city schools.

6. Examination and EvaluationProspective teachers N. ould be re-quired to take the National TeacherExamination (or a similar test) at state2xpense as a part of their certificationrequirements. A comprehensive pro-gram of student testing and follow-upwould also be funded by the state.

As in the case of the SupplementalProgram, the state would apply avail-able federal funds to the financing ofthe developmental programs. Ourbasic objective was to outline a com-prehensive program of public educa-tion to be guaranteed by the state, re-gardless of the availability of federalaid.

Structural Reorganization

To make possible a comprehensiveprogram of public education through.out the state of Texas at a reasonablecost, our Committee proposed a planfor establishing a system of competentlocal districts. The plan would re-quire that all districts have 2,600pupils or be county-wide in size by

180

1971. Using these standards, the Com-mittee staff drew up a set of reorgani-zation maps which would reduce thecurrent 1,200-plus districts to about350. We proposed that the legislatureadopt these maps as tentative guidesand authorize the establishment ofcounty-wide study committees whichwould have about a year to considerthe proposals and suggest alternatives.Most of the program expansions rec-ommended in the long-range planwould be postponed until after 1971,the target date for completion of reor-ganization.

Status of the Proposals

The long-range plan proposed bythe Texas Committee on PublicSchool Education would provide amassive transfusion of state aid for thelarge school districts, particularlythose with high percentages of disad-vantaged children. It would requirea major increase in the contributionsof rural districts to the state program.

As might have been predicted, therural areas have united in a near solidfront of opposition to the reorganiza-tion and tax equalization features,and .heir elected representatives holdkey positions in the Texas Legislature.The urban electorate has been slowto recognize or understand the issues,despite a concerted effort on the partof our Committee to explain the long-range plan. A 30-minute color movie,prepared in about 50 copies, has beenshown nearly a thousand times. Mostof the major television stations haveused it at least once. A digest of Com-mittee recommendations was distrib-uted through he Texas Outlookmagazine to 140,000 educational per-sonnel by the Texas State TeachersAssociation. An additional 30,000copies of the Digest and 15,000 copies

of the full report have been distrib-uted to service groups and individuals.There have been dozens of endorse-ments by major school boards, cham-bers of commerce, and other influen-

tial groups. Despite this broad-scalecampaign, the most favorable thingwe could say about the prospects foradoption of the proposed long-rangeplan is that the issue is still in doubt.

181

Revision of State Support Programs

Vernon Sletten

MONTANA HAS had more than theusual number of studies, commissions,and committees, and has tried, since1963, a semi-automatic association be-tween support schedules and costs.This may give some insight into thecomplex role of property taxes in sup-port programs.

From Crisis to CrisisMontana's "foundation program"

was enacted in 1949 and substantiallyrevised in 1963. The studies, commis-sions, committees are a familiar storyin any state. Following is a chronol-ogy of events prior to 1963:1945Establishment of a "Governor's Com-

mission" (Paul Mort was a consultant)1947Failure of district reorganization and

foundation program legislation1947-1949State and county committee or-

ganization for study1949Failure of reorganization legislation

and passage of a foundation program(combination of the fixed unit andvariable equalizing grant; general pur-pose allocation; a pupil-unit base;moderate county levy only partiallytied to distribution of state monies; apermissive area ahead of voted levies;a floor or minimum cost base; millageand participation limits)

1957-1959Legislation and appropriationfor a Tax-Education Commission witha full-time executive secretary ("Pea-body Study"; William McClurkin,Erick Lindman, and others)

Dr. Sletton is Professor of Education, Uni-versity of Montana, Missoula, Montana.

182

1957No legislation passed1959-1961Another state commission1961Failure of reorganization legislation1961-1963Governor's 50member state

study committee1963 Basic legislative revisions of foundation

program.

By 1961 the program was inshambles. Schedules bore no relation.ship to cost. But some lessons hadbeen learned.

The Bureau of Educational Re-search and Services at the Universityof Montana, given the task of prepar-ing models for the state committee,drafted legislation. This legislationwas the result of 18 months of closeworking relationships involving keymembers of the state committee, thestate budget director, the Governor'soffice, the Department of Public In-struction, the Montana Taxpayers'Association, the Montana EducationAssociation, and legislative leaders ofboth political parties. The legislation,a complete package of tax change forfunding and disbursement design, waspassed by the legislature withoutchange.

I should like to draw one inferenceat this point: The political processdictates integrated planning such asenvisaged by the recommendations ofthe Advisory Commission on Inter-Governmental Relations and encour-aged by the present availability of fed-eral grant money for these purposes.

I believe our 1963 legislation hadsome characteristics not commonlyfound:

1. A maximum budget per pupil(ADM) based on median budgeted ex-penditures of school systems (size cate-gories) of the current legislative year

2. A county levy tied in with stateequalizing grants providing 75 percent(not 80 percent) of the maximumbudget

3. An automatic permissive rangeof the remaining 25 percent (now 20percent) of the maximum budget

4. Abolishment of all millage andparticipation limits

5. No limits on voted levies6. A statutory provision that the

Department of Public Instructionwould present new schedules based oncurrent median budgeted expendi-tures to subsequent legislatures andthe budget director

7. Deficiency county levies in lieuof insufficient state appropriations.

The program is in deep trouble inthe current legislature. The 1965Legislature threw out the statutoryprovision in item 6 above. Financingthis "Reuther" type of cost-of-opera-tion change brought about by votedleviesa local decisionbecame thekey issues in 1967 and 1969. In 1967,schedules were made current, but onlyby using heavy county deficiencies.The first day of the 1969 LegislativeAssembly saw the introduction ofschedule changes, and the unusual in-troduction of the companion appro-priation bill the second week. Thiswas partly to bring out fiscal problemsearly in the session and partly the re-sult of Republican party actionassociated with the defeat of a Repub-lican governor who ran on the issueof Montana's joining the ranks ofsales tax states. The Democraticvictor made effective use of the slogan,

"Pay more? What for?" In our statethere is little resemblance betweenstate and national postures by party.

The probabilities are strong thatthe Montana Legislature will rejectthe automatic schedule adjustmentfactor used since 1963.

Hagen, senior economist at theMIT Center for International Studies,drew the conclusion that "economictheory has rather little to offer towardan explanation of economic growth,and that broader social and psycho-logical considerations are pertinent." 1

There is irons in our current fiscalcrisis in Montana. We are a primaryindustry state, with httndreds of smallElementary districts shielding indus-trial, oil, and mineral tax havens.Associating increased county tax lev-ies with available state monies wouldcreate only minimal property tax in-creases in our towns and cities. Thisis known to and understood all toowell by tax lawyers representing theseinterests. But Hagen's psychologicalconsiderations are paramount and Isuggest a few inferences:

1. Montana people in general andnewspaper editors and reporters inparticular have litLA understandingof tax problems. This cannot be ex-pected of the first group without moreactivity on the part of the secondgroup.

2. School professionals avoid thefunding problems on the absurdpremise of "keeping education out ofpolitics."

3. The simplistic cry of educatorsfor more state aid has minimizedstudy of the role of the property taxin state taxation programs. There isvirtually no understanding that collec-

1 Hagen, Everett E. 9n the Theory of SociaiChange: How Economic Growth Begins.Homewood, 111.: Dorsey Press, 1962. 557 p.

183

TABLE 1.-DISTRIBUTION OF PROPERTY ASSESSED VALUATIONS

Residential(non-farm)

Acreageand

farms

Commercialand

Industrial

Stateassessed

andother

1 2 3 4 5

United States 47.1% 8.6% 19.3% 25.0%Arizona 41.9 4.2 12.9 41.0California 46.9 7.4 17.8 27.9Idaho 17.0 20.2 19.0 43.8Iowa 29.2 35.2 10.2 25.4Montana 20.7 16.9 11.4 51.0New Hampshire 64.4 2.3 23.2 10.1New Jersey 66.8 2.4 22.3 8.5Washington 43.0 12.6 16.7 27.7

Source:Computed from: U.S. Department of Commerc3, Bureau of the Census. Taxable Property Values.

1967 Census of Governments, Vol. 2. Washington, D.C.: Government P-4-,ng Office, September 1968.Tables 2 and 5.

tion points do not define and that alocally collected tax may be a de factostate tax. By the usual definitions weare a 25 percent state-aid state. Bypragmatic, de facto tests we are a 70percent state-aid state.

Some Property Tax ConsiderationThe Advisory Commission on Inter-

governmental Relations has statedthat our chief sources of state-localrevenue represent "something morethan a three-legged stool, but less thana sturdy four-legged structure." 2 TheCommission's 1966 data give theseapproximations of state-local revenue:

Property taxes-$26 billionConsumer levies-$21 billionFederal conditional grants-$17 bil-lionIncome taxes-$7 billion 3

I suggest that we give more atten-tion to the varying patterns of prop-

2 Advisory Commission on Intergovern-mental Relations. Fiscal Balance in theAmerican Federal System. Vol. 1. Washing-ton, D.C.: Government Printing Office, Octo-ber 1967. p. 1.

3 Ibid.

184

erty distribution state by state and re-gion by region. For example, on thebasis of derived data from the 1967study of Taxable Properly Values bythe Bureau of Census, such disparitiesas those shown in Table 1 occur.Surely this table suggests differenti-ated patterns of the use of the prop-erty tax. In Montana, residentialproperty comprises one-fifth of thestate property tax base and the usualone-half of the base in our large citiesand carefully restricted large schooldistricts.

Per-capita property tax collectionsor property taxes as a percent c per-sonnel income seem highly mislead-ing. Table 2 illustrates this.

Montana is always a high state inproperty taxes per capita, a low statein property tax-rate studies, and ahigh state in revenue or expenditureswhen these are related to income.Montana has no sales tax, a moderateincome tax and only 20 percent ofits taxable property is in residentialhousing.

I suggest that in future revision ofsupport programs we look more care-

fully at state and regional differencesin property taxation. Systems of col-lection by school districts and munic-ipalities largely divorced from statetax balance result in needlessly widedifferences in property tax effort.

Some Factors Impinging on FutureModifications of State Support

Programs for PublicEducation

Galbraith and others have spokenand written about an affluent societychoosing an increasing percentage ofgoods and services most effectivelyproduced in the public sector. Intime of war there is a semi-forced al-location of this sort.

The data in Table 3 indicate theaccelerating allocation of resources to

the public sector, particularly thestate-local level.

Surprisingly, expenditures on pub-lic elementary and secondary educa-tion seem to have lagged slightly be-hind the general state-local increasesdespite enrollment pressures. For1957-1966 he state-local expendituresrose 115 percent, and public elemen-tary and secondary education expend-itures rose 106 percent.4 Employeeincreases indicate a similar pattern inallocation of resources (Table 4).

But there is a disturbing pattern infunding that suggests a strong reluc-tance for deferred gratification in theprivy e consumption area. The expo-

4 Advisory Commission on Intergovernmen-tal Relations, op. cit., p. 278.

TABLE 2.----PER ..:APITA PROPERTY TAX ESTIMATES AND OTHER MEASURES,1966-67

State-localrevenues forpublic schools

as a percent ofpersonal income

Propertytaxesper

capita

Rateper $100marketvalue

$1.00rate

per $100per capita

Relativeproperty

tax atuniform

rate

2 3 4 5 6

United States 4.3% $132.81 $1.60 $ 83.01 100.0%California 4.8 215.62 1.70 126.84 152.8Colorado 5.4 161.39 1.80 89.66 108.0Idaho 4.6 107.90 .90 119.89 144.4Louisiana .4 52.51 .70 75.01 90.4Maine .-: 2 130.32 2.10 62.06 74.8Michigan 4.3 144.78 1.60 90.49 109.0Moniana 5.8 167.15 1.20 139.29 167.8New York 4.8 179.45 2.20 81.57 98.3Oregon 5.1 148.54 1.60 92.84 111.8Washington 4.7 T10.17 .90 122.41 147.5Wyoming 6.0 206.81 .80 258.51 311.4

Sources:Col. 2: National Education Association, Committee on Educational Finance. Financial Status of the

Public Schools, 1968. Washington, D.C.: the Association, 1969. p. 71.Col, 3: U.S. Department of Commerce, Burr -u of the Census. Governmental Finances in 1966.67.

GF67 No. 3. Washington, D.C.: Government Printing Office, 1968, p. 45.Col. 4 was computed from: U.S. Department of Commerce, Bureau of the Census. Taxable Property

Values. 1967 Census of Governments. Washington, D.C.: Government Prinli7ig Office, September 1968.Table 9, p. 42-47. Governmental Finances In 1966-67. GF67 No. 3. Washington, D.C.: GovernmentPrinting Office, 1968. Table 17, p. 31.33.

Col. 5 was derived from cols. 3 and 4.Col. 6 was computed.

185

TABLE 3.-ALLOCATION OFRESOURCES TO THE

PUBLIC SECTOR

Increases, 1958.1968

Item

Implicitprice

deflators,1958 = 100

Withoutdeflators

2 3

Gross National product 21.8% 92.4%Personal consumption ex-

penditures 18.4 84.0Government purchases of

goods and servicesFederal 26.1 86.6State and local 38.8 139.2

Source:91st Congress, 1st. Session. Economic Report of the

President, House Document No. V1 -28. Washington,D.C.: Government Printing Office, 1969. p. 227, 230-31.

nential character of deferred obliga-tions private and public is certainlyassociated with taxpayer revolt, stateand local fiscal crises, inflation, andvoluntary inability to fund more ofthe public sector expansion on a cur-rent basis (Table 5).

I have examined certain relation-ships between expenditures per pupilas set forth in Financial Status of thePublic Schools, 1968 and support de-signs of states as found in the 1961State Programs for Public School Sup-port. No relationship, or only a neg-ligible relationship, exists betweenstate rankings in expenditures perpupil and design factors such as inclu-sion of teacher salaries, teacher orclassroom unit, pupil unit, fixedgrants, variable equalization grants,and amount of state aid.

A high relationship exists betweenstate ranking in expenditures perpupil and the state rank in personalincome per capita. This seems to sug-gest an undue emphasis on the designof distribution and an insufficientemphasis on funding design and taxbalance.

186

TABLE 4.-INCREASES IN NUMBEROF PERSONS IN LABOR FORCE,

1958-1068

Type ofestablishment

Increase,1958-1968

1 2

Totul nonagricultural 32.7%Manufacturing 23.8Wholesale and retail trade 31.3Services 54.3Gov' rnment

Federal 24.9State and local 67.5

Source:91st Congress, 1st Session. Economic Report of

the President. House Document No. 91.28. Wash-ington, D.C.: Government Printing Office, 1969.p. 258.

May I summarize some suggestedimplications for revision of state sun -port programs.

1. Subdue the simplistic emphasison state aid and emphasize the neces-sity of adjusting to wide differences instate and regional characteristics ofthe tax base.

TABLE 5.-NET PUBLIC AND PRIVATEINCREASES, 1958-1968

TypeIncreases,1958-1968

2

GovernmentTotal 101.4%Federal 26.6State and local 143.4

PrivateTotal 129.2Corporate 125.8No ncor porate

Farm 115.5Mortgage (nonfarm) 122.9Consumer 150.1

Source:91st Congress, 1st Session. Economic Report of

the President. House Document No. 91-28. Wash-ington, D.C.: Government Printing Office, 1969.p. 296.

2. Little work is available on thesubject of "export of state xes" andwhere the consumer is really locatedas a final resting place for the tax.This seems to be highly associatedwith questions of equalization fromfederal sources.5

3. Property tax collection and usemay be local, but rate fixing and taxbalance are state obligations.

4. Foundation program design withemphasis on disbursement of fundsmay have some of the futility Gal-

5 McLure, Charles E. "The Interstate Ex-porting of State and Local Taxes: Estimatesfor 1962." National Tax Journal 20: 49-77;March 1967.

braith ascribes to the esoteric modelsof some economists. The emphasisshould be placed on appropriate taxpatterns for particular states andregions.

5. There seems to be reason to be-lieve that the only appropriate centerfor this coordinating kind of functionis the planning center concept asso-ciated with a governor's office. Withfederal support available, every legis-lature is considering expansion of thisfunction. This is the essence of the1967 Advisory Commission Report,Balance in the American Federal Sys-tem. Apparently this was the essenceof Governor Rockefeller's recent pre-sentation to President Nixon.

187

The Determinants of Educational Expendituresin New York State

Lloyd L. Hogan andFred H. Bentley

THROUGHOUT THE STATE, expendituresfor education are compounded of thespecific decisions of more than 730 in-dividual school districts which differwidely with respect to many impor-tant characteristics. Differences inthese characteristics appear to be asso-ciated with differences in level of ex-penditures. During the 1967-68 schoolyear, per-pupil operating expendi-tures among school districts rangedfrom $380 to $1,553; exclusive of thesix largest cities these expendituresaveraged $834 per district. The dis-tribution of these expenditures isshown in Table 1.

Such wide differences in expendi-tures have great implications for thequality of education available to pu-pils in different parts of the state. It isa well-documented fact that adequatefinance is a necessary (if not a suf-ficient) condition for good qualityeducation. While high expendituresdo not guarantee good quality educa-tion, it is almost impossible to pur-

Mr. Hogan is Assistant Director, Urban Edu-cation, and Mr. Bentley is Senior ResearchAnalyst, Bureau of Educational Finance Re-search, State Education Department, Albany,New York.

188

chase good quality education with in-sufficient funds. To the extent, there-fore, that differential spending amongthe various districts is indicative ofdifferential quality education, it be-comes imperative to isolate those fac-tors which are associated with differ-ences in expenditure patterns.

Another important implication ofthe wide differences in expenditurelevels is the effectiveness of the statefinancial plan of school support. Thestate aid formulas in New York Statestress tiie so-called equalization prin-ciple, under which an attempt is madeto insure equal and adequate qualityeducational opportunity to pupilsthroughout the state.

TABLE 1. DISTRIBUTION OF PER-PUPIL OPERATING EXPENDITURES,

NEW YORK STATE SCHOOLDISTRICTS, 1967-68

Operatingexpenditures

Percent of Cumulativedistricts percent

2 3

$ 380-671 10% 10%672-707 15 25708-764 25 50765.869 25 75870-1,044 15 90

1,044-1,553 10 100

The Expenditure Model

Previous Studies of ExpenditureVariations

A 19C6 study I analyzed the effectsof certain factors on expenditurelevels of school districts. The mainconclusion was that two factors, localresources and location inside or out-side the New York City MetropolitanArea, are significant in explaining .r-

iations in expenditure levels. Thestudy also suggested that the patternof expenditures hi small school dis-tricts and in the six largest cities dif-fers somewhat from that of other dis-tricts in the state.

A 1967 study 2 confirmed the pre-vious findings, but suggested the pos-sible operation of other importantfactors. It concluded that the mostimportant characteristic is the level oflocal fiscal resources available to thedistrict. Second in importance are lo-cation inside or outside the Ne r YorkCity Metropolitan Area, the level oflocal tax rate for school purposes, andthe professional staff -pupil ratio. Themethod used, however, did not givethe numerical impact of the two latterfactors.

Hypotheses To Be Tested

Based on the conclusions of pre-vious studies, this study postulatedthat variations in the level of per-pupil expenditures can be explainedby variations in four factors: (a) local

1 Hogan, Lloyd L. Toward a System ofClassification of School Districts in New YorkState. Albany: University of the State of NewYork, January 1966.

2 Hogan, Lloyd L. "Financial characteristicsof High-Expenditure Districts in New YorkState." The Challenge of Changc in SchoolFinance. Proceedings of the Tenth NationalConference on School Finance Sponsored bythe Committee on Educational Finance.Washington, D. C.: National Education Asso-ciation, 1967. p. 97-107.

property tax base per pupil (X1), (b)local tax rate for school purposes (X4),(c) size-location index (X,), (d) pro-fessional staff -pupil ratio (X3).3

In practically all studies the localproperty tax base has been found trbe the most important determirof expenditure levels even thoughstate aid formulas attempt to neutral-ize much of its eiiects. The hypothesisabove asserts that this factor in con-junction with the other three, is stillsignificant in explaining expendituredifferences. In 1967-68, the per-pupilpropel ty tax base ranged from $5,000to over $224,000. Exclusive of the sixlargest cities, the average was approxi-

ately $25,000. This factor, of course,is not subject to local discretion.

The local tax rate for school pur-poses is measured by the ratio of localschool tax levies to full value of tax-able real property. Where nonprop-erty taxes are levied for school pur-poses, they are included in the mea-sure. This factor is subject in largepart to the control of the local schoolboard. Given the level of state aid,federal aid, and other nontax reve-nues, the local hoard's decision to setthe tax rate is a decision about thelevel of expenditures and conse-quently the type of educational pro-gram to be provided to the pupils.

During 1967-68, local school taxrates varied between 0.6 percent and3 percent, ^ veraging 1.7 percent.

The size-location index is a devicefor measuring three types of districtswhose expenditure patterns appear tobe different. Districts outside the NewYork City Metropolitan Area appearto spend a significantly smalleramount than districts inside the NewYork City Metropolitan Area. This

3 The X's in parentheses refer to variablesas indicated in model and reported in thedata tables.

189

may very well be a measure of differ-ent economic market conditions. Ithas been found that small districtstend to have expenditure levels in be-tween the two groups mentionedabove. For purposes of this study thisfactor identified small districts asthose having fewer than 1,000 pupils,no matter where they were located.Among the remaining districts thisfactor identified districts in the NewYork City Metropolitan Area andthose outside the New York CityMetropolitan Area. This factor, alsois completely beyond the control oflocal decision-making agents.

The professional staff-pupil ratio,also highly variable, measures thelargest single item in the per-pupiloperating expenditure budget. Forexample, in 1967-68, the .. sessionalitaff per 1,000 pupils ranged from 31to 98; exclusive the six largest cider,the average v,-as 59. Included in thismeasure weic teachers, administrators,and other certified supporting person.nel.

This factor is a strategic one indecisions about the types of educa-tional programs to be provided to pu-pils. Indeed, it is a partial indicatorof the quality of education. It wouldbe a better indicator if it could be sub-jected to differential weights based onthe qualitative characteristics of theprofessional staff component. In anycase, it is subject to local discretion.

The data used in the study werebased on a sample of 50 school dis-tricts representative of the majorschool districts (exclusive of the sixlargest cities) with respect to manyimportant financial characteristics.4Once the basic parameters were esti-

4 Bentley, Fred H. An Experimental Sampleof the Major School Districts in New YorkState, unpublished discussion paper. May1966.

mated, the study applied them to allthe major school districts in the statewhich maintain a full K-12 program.

The statistical technique commonlyreferred to as a multiple regressionanalysis was used to isolate the specificnumerical effect of each of a numberof independent factors which jointlyexplain (or describe) variations insome one dependent variable.

The dependent variable is the per-pupil operating expenditure (Y), ameasure defined by the statutes forpurposes of state aid distribution.However, in most cases it measures thedirect educational expenditures onpupils attending school in the districtfrom kindergarten through grade 12.It is current expenditures exclusive ofsm. auxiliary and highly variablecomponents as school bus transporta-tion, debt service on school buildings,inter-district expenditures, and fed-eral revenues.

The measure of pupils used to de-flate the expenditures was the numberof pupils in weighted average dailyattendance (kindergarten attendanceweighted by one-half, first-through-sixth-grade attendance weighted byone, and seventh-through-twelfth-grade attendance weighted by oneand one-quarter).

Formal Statement of the Mode;

A formal statement of the expendi-ture model is given by Y. aiX,a.,X2+ aaX34 a4X4+.-.5X5-1- ao + errorwhere the "error" term is independentof each variable and normally distrib-uted with a mean of zero and a finitevariance. The a's are to be estimated.

The fifth factor included in themodel is tor statistical completeness.It is the reciprocal of the number ofpupils or the ratio obtained by divid-ing 1.0 by the number of pupils, andaccounts for some of the residual ef-

fects (on gross expenditures) of pupilswhich were not completely eliminatedby the per-pupil data. Justification forits inclusion is a technical matter be-yond the scope of this paper.

These assumptions describe a linearregression in which ordinary leastsquares technique yields maximum-likelihood estimates of the parameters(a1). However, some of the limitationswhich inhere in this type of modelshould be noted.

Limitations of the Model

The postulate of a linear relation-ship connecting the dependent vari-able with the independent variables isquite heroic. Very few processes canbe described accurately by such amodel. At best it is an approximationto rea!ity and was assumect merely forits simplicity and the ease of computa-tion it generates.

The assumption of a normal distri-bution of the error term does not pre-sent great difficulties. indeed, such adistribution can be used to approxi-mate a wide class of other distribu-tions. Making use of this assumption,however, provided for computationalsimplicity.

The assumption that the error isdistributed independently of the inde-pendent variables is equivalent to thestatement that the line of causation(antecedence) runs in one directiononlyfrom the independent variablesto expenditures. This may be true ofthe property tax base and the size-location index. Staff-ratio or tax rate,however, appears to depend on ex-penditures.

For example, if the decision of localboards is ,)timarily an educationalprogram decision, a given programdetermines an expenditure level. Butgiven the expenditures (under exist-ing systems of state-school financial

support), a corresponding local taxrate is implied. Under these circum-stances the level of expenditures maybe said to "cause" the level of tax rate.Similar possibilities hold with respectto the interaction between staff -ratioand expenditures.

The problem here is obviously oneof interdependence, suggesting thatthe appropriate model should be asimultaneous equation model consist-ing of at least three equations. Theone-equation model postulated here isthus to be taken as an initial probeof reality which gives a broad descrip-tion of expenditure variations ratherthan a cause-and-effect relationship.

The Model as Testable HypothesesThe major hypothesis underlying

the model was that the four factors,taken together, were significant in ex-plaining variations in per-pupil ex-penditures among the major schooldistricts.

A secondary set of hypotheses pos-tulated that the specific numericaleffect of any given factor on expendi-tures was significantly different fromzero, when the effects of all otherfactors were held constant.

Estimate of the ExpenditureModel from Sample Data

General Properties of the EstimatedModel

Table 2 shows the estimated regres-sion coefficients as well as other re-lated measures.

The chief result of the estimates ofthe model was that the five factorsjointly accounted for 87 percent ofthe variation in operating expendi-tures among the districts in thesample.

The 13 percent unexplained varia-tion is still of practical importance.I implies a standard error of estimat-

191

TABLE 2.-REGRESSION EQUATIONS RELATING PER-PUPIL OPERATING EXPENDITURES TO FIVE EXPLANATORYFACTORS, NEW YORK STATE SCHOOL DISTRICTS, 1963-64 TO 1967-68

rJctor Symbol

School yearStandarderror of1967-68

estimatesStudentT-test

196344 1964-65 1965.66 1966-67 1967-68

Regression coefficient

1 2 3 4 5 6 7 8 9

1. Property tax base per pupil X1 3.60 3.21 4.63 3.76 3.99 0.68 5.802. Size-location index X2 42.51 45.65 40.61 49.59 51.74 12.06 4.293. Professional staff-pupil ratio X., 7.19 8.14 4.55 7.19 6.42 1.47 4.294. Local school tax rate X, 4.20 * 4.59 * 8.04 8.15 8.28 2.39 3.465. One-pupil ratio X5 -23,556 -30,087 -14,635 * -30,372 -34,075 8,821 -3.866. Constant term 1 109,29 94.88 164.63 148.30 163.06 52Index of determination le 0.86 0.82 0.84 0.86 0.87Standard error cr 40 50 49 51 52

* Not significant at the 5 percent level of significance.

ing operating expenditures from thismodel of $52 per pupil. For New YorkCity, for example, this could mean anerror of estimating the school budgetby as much as $51 million; similarly,for a school district like Buffalo thiscould imply an error in estimating theschool budget by as much as $3.5million.

Undoubtedly some of the unex-plained variation might be the resultof errors in measurement of operatingexpenditures, or the existence ofhighly peculiar local circumstances, orsimply random and unpredicable be-havior of those responsible for theconstruction of school budgets. How-ever, further research needs to be con-ducted to test for the systematic opera-tion of one or more additional factorsnot now included in this model, sincethis is probably the main source of theunexplained variation. A factor suchas the quality of the staff readily :ug-gests itself as a candidate for inclusionin the model.

Table 3 shows the actual and esti-mated expenditures for the sample of50 districts.

The Specific impact of theFactors in the Model

One of the questions raised by thisstudy was whether each of the indi-vidual factors was significant inexplaining expenditure variationsamong school districts. A relatedquestion concerned the order of im-portance of the factors.

The conclusion to be drawn fromthe estimated model is that each of thefive factors is statistically significant.The last column of Table 2 shows thatthe calculated value of the student T-ratio for each of the parametersvaries in absolute value from 3.5 to5.8; i.e., greater than 2.7 required for1 percent level of significance.

The magnitude of this ratio givessome indication of the relative impor-tance of each of the factors. Table 2suggests that the property tax base isthe most significant; the professionalstaff ratio is the second most impor-tant although all of the remainingvariables are not too far behind.

Temporal Stability of the ModelThe usefulness of a model of the

type developed in this study is the ex-tent to which it can predict the ex-penditure le ',el of any given schooldistrict from estimates of the values ofthe independent variables. Since themodel is based on cross-sectional datafor a given year, its prediction of fu-ture expenditures will require that thenumerical values of the parametersremain constant over time (or at leastvary according to some systematic pat-tern) and that the same independentvariables are operative from year toyear. This is what we mean by thestability of the model.

Five Estimates of the Model,1964.1967

In addition to the estimates for1967-68 the same model was estimatedfrom sample data for 1963-64, 1964-65,1965-66, and 1966-67. These estimatesare shown in Table 4.

Over the five years the same fiveindependent variables jointly accountfor 86 percent, 82 percent, 84 percent,86 percent, and 87 percent, respec-tively, of the variation in per-pupiloperating expenditures; the corre-sponding implied standard errors are$40, $50, $49, $51, and $52. Further-more, all five regressions are signifi-cant at the 1 percent level based onthe F test.

In all of the years the direction ofinfluence of each of the factors on per-pupil operating expenditures is tiie

193

TABLE 3.-COMPARISON BETWEEN ACTUAL AND ESTIMATES OF OPERATING EXPENDITURES BASED ON FIVECHARACTERISTICS FOR THE 50 SAMPLE. DISTRICTS, NEW YORK STATE, 1967.68

Schooldistrict

Operating expenditures per pupil

Expenditure estimators

Propertytax baseper pupil

Size-locationindex

Professionalstaffpupil

ratioSchool

tax rate PupilsActual Estimated Error Rating

1 2 3 4 5 6 7 8 9 10

Green Island $935 $941 $ 6 0.86 $35,393 0 82.9 $16.86 410Alfred 1 665 597 -68 -0.97 14,860 -1 49.7 12.32 1,086Bolivar 1 685 641 -44 -0.63 10,773 0 52.1 13.89 941Dickinson 1 818 736 -82 -1.17 19,201 -1 58.0 19.14 3,776Vestal 1 732 685 -47 -0.67 18,870 -1 55.4 15.97 8,057Olean 806 648 -158 -2.26 21,194 -1 50.6 13.78 4,152Salamanca 748 613 -135 -1.93 11,343 -1 52.3 14.15 2,449Clymer 1 678 624 -54 -0.77 13,709 0 55.4 9.84 867Dunkirk 741 776 35 0.50 52,088 -1 51.2 11.65 3,397Hancock 6 725 603 -122 -1.74 15,117 -1 51.9 11.84 1,292Kenmore 702 709 7 0.10 32,492 -1 48.6 15.14 22,690Moriah 1 751 670 -81 -1.16 13,467 -1 60.2 14.91 1,363Saranac Lake 806 749 -57 -0.81 33,755 -1 53.7 15.98 1,696Broadalbin 1 645 619 -26 -0.37 15,269 -1 50.0 13.97 1,219Stratford 1 760 804 44 0.63 12,609 0 67.3 21.01 327Catskill 710 730 20 0.29 41,414 -1 53.9 10.99 2,170Windham 1 766 757 -9 -0.13 30,173 0 61.3 12.04 522Ilion 716 656 -60 -0.86 17,050 -1 54.5 14.59 2,605Avon 1 694 669 -25 -0.36 23,554 -1 49.3 15.14 1,258Lima 9 784 749 -35 -0.50 16,640 0 60.6 17.33 578Brookfield 9 844 848 4 0.06 7,768 0 70.5 25.50 227DeRuyter 1 785 '21 -64 -0.91 11,712 0 53.2 20.01 790Pittsford 839 816 -23 -0.33 37,609 -1 56.1 19.22 5,400Levittown 851 819 -32 -0.46 14,994 1 54.2 23.75 17,611Roosevelt 993 898 -95 -1.36 24,136 1 65.8 21.97 3,736Oyster Bay 1,209 1,036 -173 -2.45 57,938 1 68.2 18.78 2,698Niagara Falls 809 724 -85 1.21 25,592 -1 56.6 16.02 19,038Bridgewater 1 661 620 -41 -0.59 11,040 0 46.1 14.43 282Camden 1 695 607 -88 -1.26 11,158 -1 53.6 13.06 2,838Rome 678 616 -62 -0.89 16,833 -1 54.1 11.36 11,719Liverpool 768 740 -28 -0.40 22,019 -1 59.7 17.66 7,132Richmond 1 714 723 9 0.13 26,229 0 52.8 14.24 853Kendall 7 762 640 -122 -1.74 11,743 -1 55.6 14.91 1,222Albion 2 783 568 -215 -3.07 11,326 -1 50.2 11.11 1,493Springfield 1 ... ....... 640 670 30 0.43 19,735 0 50.8 13.19 354Schaghticoke 'I 675 618 -57 -0.81 13,014 -1 49.3 15.11 1,459Gouverneur 811 743 -68 -0.97 "175 -1 58.6 22.14 2,868Morristown 1 677 656 -21 -0.30 15,::9 0 47.8 15.07 628Bath 1 600 531 -69 -0.99 8,949 0 46.2 7.50 649Babylon 921 882 -39 -0.56 30,135 1 56.6 21.83 2,579

TABLE 4.-COMPARISON BETWEEN ACTUAL AND ESTIMATES (X OPERATING EXPENDITURES BASED ON FIVECHARACTERISTICS FOR THE SIX LARGEST CITIES, NEW YORK STATE, 1967-68

Schooldistrict

Operating expenditures per pupil

Expenditure estimators

Propertytax baseper pupil

Size-locationindex

Professionalstaffpupil

ratio taxSchool

rate PupilsActual Estimated Error Rating *

1 2 3 4 5 6 7 8 9 10

Buffalo $ 671 $657 $-14 -0.20 128,145 -1 50.1 $11.84 72,204Albany 785 792 7 0.10 43,520 -1 62.4 12.02 11,922Rochester 876 780 -96 -1.37 39,603 -1 56.6 14.97 44,003Syracuse 718 705 -13 -0.19 33,069 -1 53.4 12.58 30,058Yonkers 743 839 96 1.37 43,781 1 54.1 13.40 29,797New York City 912 926 14 0.20 47,390 1 63.8 15.42 1,024,762Huntington 1 937 856 -81 -1.16 20,775 1 56.5 23.55 3,891Huntington 1,051 952 -99 -1.41 29,483 1 60.2 26.72 8,595Groton 1 737 706 -31 -0.44 10,819 -1 59.7 19.37 1,356Marlboro 1 995 846 -149 -2.13 47,260 -1 59.3 16.39 1,772Bolton 1 877 875 -2 -0.03 42,566 0 62.7 16.50 415Granville 1 682 584 -98 -1.40 10,049 -1 53.3 11.70 1,971Mt. Vernon 1,401 898 -103 -1.47 32,718 1 60.7 20.44 11,848Ossining 997 931 -66 -0,94 34,837 1 59.9 22.76 5,307Pelham 1,058 949 -109 --1.56 44,980 1 61.3 19.45 3,163White Plains 1,167 987 -180 -2.57 57,775 1 63.2 16.60 6,895

*Rating is based an the number of standard errors that the actual operating expenditures per pupil deviate from the estimated expenditures. The scale is:

Very Low

-3Low 1 Normal Normal High Very High

-2 -1 0 1 2 3

c.n

TABLE 5.SIMPLE INDEX OF DETERMINATION BETWEEN PAIRS OFSELECTED VARIABLES NEW YORK STATE, 1967-88

Variables x, x2 X4 Xs MeanStandarddeviation

1 2 3 4 5 6 7 8 9

0.465 0.423 0.415 0.399 0.059 802 1390.098 0.124 0.016 0.071 23,412 13,321

X2 0.423 0.098 153 0.299 0.013 0 1

Xs 0.415 0.124 0.153 0.268 0.049 56 7X4 0.399 0.0 i 6 0.299 0.268 0.0002 16.42 4.28Xs 0.059 0.C71 0.013 0.049 0.0002

same. In particular the property taxbase, size-location index, professionalstaff -pupil ratio, and local tax rate areall positive in their impact on operat-ing expenditures.

Summary and Conclusions

The Expenditure ModelIn this study we postulated the ex-

istence of a linear expenditure modelwhich could describe the variations inper-pupil expenditures in any givenyear. The model used four basic fac-torsproperty tax base, local schooltax rate, size-location index, and pro-fessional staff-pupil ratioas variableswhich in combination could describeexpenditure patteins. A fifth vari-

196

able was introduced merely for tech-nical statistical reasons.

The model was estimated from asample of 50 districts based on datafor 1967-68. It was concluded that themodel as a whole as well as each ofthe independent variables was sta-tistically significant in explaining vari-ations in expenditures.

As a test of the stability of themodd over time an additional esti-mate was made for each of the years1963-64, 1964-65, 1965-66, and 1966-67.In general over the five years theparameters appear to be relativelystable.

Table 5 gives some additional datafrom the study.

Bond Issue Election Defeats:Selected Western States, 1966-67

W. Montfort Barr and A. T. Lindley

THE NUMBER of school bond and taxelections going down to defeatthroughout the nation is increasing.The U.S. Office of Education re-ported a national total of 543 defeatsin 1,625 school bond elections duringthe 1966-67 school year.1 The 543 de-feats comprised proposals totaling$944 million of the $3,063 million sub-mitted to the voters. Time raised aquestion regarding the plethora ofschool bond and tax rate defeats. Isthere a school tax revolt in the UnitedStates?

Flak'igan,2 in a rebuttal, pointed outthat an ilicreased number of bond is-sues, larger dollar amounts, and in-creased school tax rates were the rulein many districts throughout the na-tion.

Barr, RichRrd, and Flynn, Edith. BondSales for Public School Purpose, July 1, 1966--June 30, 1967. U. S. Department of Health,Education, and Welfare, National Center forEducational Statistics. Washington, D.C.:Government Muting Office, January 1968.8 p.

2 Flanigan, Jean M. "Is That. a Tax-payers' Revolt?" Phi Delta Kappan 43: 88-91;October 1967.

Dr. Barr is Professor of Education, IndianaUniversity, Bloomington, Indiana. Mr. Lind-ley is Associate Secretary of Indiana SchoolBoards, Bloomington, Indiana.

Admittedly, the voters often say,"No." A growing body of research hasexamined the reasons advanced forthe "No" votes. This report is pri-marily concerned with the perceptionsof voters and of school officials as tothe reasons for the "No" votes. Bondissue election defeats were selected asthe focus for the study because of theavailability of data, the familiarity ofthe investigators with school facilitiesfinancing, and the realization thatmany of the problems resulting fromsocial change ;nay be examined withinthe framework of school bond elec-tions.

Table 1 illustrates the growingtrend toward an increase of schoolbond issue defeats in California. Thereferendum of November 5, 1968, re-sulted in defeat of the state bond issuefor college and university facilities aswell as defeats of local school bondissues.

A series of studies concerned withthe instigation of social change haverecently been conducted at Iowa StateUniversity for the Department of De-fense, the Department of Agriculture,and the Office of Education. Thestudy for the last mentioned agencyconcerned the perception of schoolsuperintendents as to the major rea-

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TABLE 1.SCHOOL BOND ISSUE DEFEATS IN CALIFORNIAIN RECENT YEARS

Schoolyear

Numbersubmitted

Defeated Amountsubmitted(millions)

Defeated

Amount(millions) PercentNumber Percent

1 2 3 4 5 6 7

1961-62 171 56 32.7% $ 548 $215 39.2%1962-63 245 85 34.7 498 134 26.81963-64 252 96 28.1 515 143 27.81964-65 235 82 34.9 673 105 15.71965.66 202 101 50.0 569 260 45.71966-67 167 95 56.9 455 141 31.0

Total 1,272 515 40.5% $3,258 $998 30.6%

Source: Data for 1965-66 and 1966-67 from the California State Department of Education, Divisionof Public School Administration, November 16, 1967. Data for prior years from Bond Sales for PublicSchool Purposes, an annual publication of the Natinal Center for Educational Statistics, Office ofEducation.

sons for passage or defeat of schoolbond issues. Beal concluded that fu-ture investigators might well analyzethe perceptions of voters as well asthose of superintendents.

It was in accordance with this sug-gestion that a regional pilot study wasdesigned to investigate the possibilitythat school officials and voters mightwell differ in their perceptions of thereasons for a local bond issue defeat.

Beal's simplified social actionmodel a was selected as a theoreticalframework for analysis of the socialaction in the school district which re-sulted in defeat of a bond issue elec-tion. In accordance with this model,five stages are or should be encoun-tered in each bond issue election.

1. Characteristics of the community2. The long-range school facilities

plus the financial plan and its ea_nomic implications

3. Involvement of the communityin planning, in the timing of the cam-

3 Beal, George M., and others. Iowa SchoolBond Issues, Data Book. A cooperative re-search project with the Office of Education,Ames, Iowa: Iowa State University, Depart-ment of Sociology and Anthropology, 1966.

198

paign, and in communications regard-ing the election

4. Analysis of voter turnout andelection returns

5. Evaluation of the many variableswhich contributed to the election re-sults.

The major purpose of this study wasnot to ascertain merely why a bondissue was defeated in the election. Farmore important, in the opinion of theauthors, was analysis of the perceptionof school and community leaders asto the reasons for the defeat. Con-sequently an evaluative guide wasprepared for each of the districtswhich was being studied. Objectivemeasures of many variables in eachstep of the social action model weredetermined. Interviews were thenconducted with school and comm unityleaders, and their perceptions as tothe reasons for a bond issue defeatwere compared with the validatingcriteria.

From a careful review of the litera-tore concerning bond elections achecklist of 50 key items was devel-oped and utilized as a guide in theinterviews.

Districts school superintendents, asa group, were very cooperative in set-ting a definite time for the interviewteam to come to a local school systemand in identifying local communityleaders who were familiar with thelocal school system and the localschool bond campaign. Approxi-mately 80 percent of the local schooldistricts in the five-state area whichhad suffered bend election defeatschose to participate in the study.Junior college districts were not in-cluded.

The tuciv involved only a few largeurban school systems but many urban-rural and small rural school systems.Characteristics of the districts may beseen h. Table 2.

Frocedures

The two investigators conducted in-terviews with the school superintend-ent, staff members and school-board

members in each school district whichparticipated in the study. An equalnumber of informed voters i71 thesame districts were interviewed. Thelatter were selected after consultationwith community leaders. Interviewswere private, nonstructured, andopenended.

A checklist of factors consideredgermane to the election defeat wasgradually developed. Results of theinterviews were transferred to theopenended checklist as soon as pos-sible after the interviews. Each sug-gested factor was rated highly signifi-cant, of some significance, or of littleor no significance to the outcome ofthe bond election.

A validating checklist was also pre-pared for each school district. Thischecklist reflected the consideredjudgment of the investigators basedon their examination of local mu-nicipal and school data, campaign

TABLE 2.ENROLLMENT GROUP, ORGANIZATION, AND NATURE OFECONOMIC BASE, BY NUMBER OF SCHOOL DISTRICTS IN THEWEST :MAST STUDY OF SCHOOL BOND ELECTIONS DEFEATS

Number of school districts

Item California Idaho Nevada Oiegon Washington Total Perc:..it

1 2 3 4 5 6 7 8

ENROLLMENTLess than 1,000 12 1 4 17 25.0%1,000.4,999 22 3 2 28 41.25,000.9,999 10 1 11 16.2

10,000.14,999 7 7 10.315,000.19,999 2 2 2.920,000. 24,999 2 2 2.925,000 and over 1 1 1.5

Total 55 4 7 1 68 100.0%

DISTRICT ORGANIZATIONElementary 13 14 20.6%Elementary union 9 9 13.2High school 1 1.5High school union 17 2 1 20 29.4Unified 15 2 5 24 35.3

Total 55 4 7 68 100.0%

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liter are, reports of hearings andmeetings, editorial opinions, electionreturns, and press releases. Many ofthe districts had a wealth of material,both pro and con. Usable returnswere obtained from 68 participatingdistricts.

Analyses were made of the percep-tions of school officials and patrons re-garding the most significant items.Correlations, chi-square analyses ofsignificance, and the agreement or thedivergence of each group of respon-dents were computed for each categoryof responses, situational. the bondissue, and the bond campaign. Thisprocedure was also followed for eachitem within the categories when thenumber of responses permitted. Thesmall number of interviews in eachdistrict precluded any opportunity ofsignificant analysis of data for indi-vidual districts.

Data for 55 school districts in Cali-fornia were analyzed separately. Data

for a total of 13 districts in Idaho,Nevada, Oregon; and Washingtonwere analyzed as a group.

Table 3 shows the rank attributedto 15 major factors in the opinion ofCalifornia voters, and the rank giventhese factors by administrators andschool-board members. A weightedmean response of 2.0 or higher wasregarded as an indication that theitem was regarded as a major factorwhich contributed to the bond elec-tion defeat. A weighted mean of 1.50to 1.99 was regarded as indicating thatthe factor contributed to some extentto the defeat but was not of majorconsequence. k weighted mean of les-,than 1.50 was regarded as of little orno importance to the defeat.

After each interview the perceptionsof those interviewed were classified bythe investigators as of major impor-tance to the defeat, a weight of 3;some importance to the defeat aweight of 2; little or no importance

TABLE 3.-FACTORS MENTIONED MOST FREQUENTLY AND HAVING THEHIGHEST WEIGHTED MEAN, CALIFORNIA ONLY

Rank

Selected variables

Weight( d mean

Voters Officials Voters Officials

1 2 3 4 5

1 1 Percentuge of vote required for passage 2.7215 2.92502 2 Level of the local school tax rate 2.6329 2.43753 4 Level of the local over-all tax rate 2.5949 2.37504 3 Unification election scars 2.5571 2.45335 6 Inflationary trends in school costs 2.4324 2.23086 5 Conflict between elementary and secondary district

bond or tax elections 2.3529 2.37297 12 Nature of the proposed construction program 2.3077 1.9250

9 Economic level of the community 2.2208 2.t3P029 DissatisfacC4n with the administrative staff 2.2151 1.6296

10 25 Criticism of schools 2.2152 1.716011 11 Inclusion of the bond issue in an omnibus propo-

sition 2.2075 1.981512 8 Geographic area included id the district 2.1688 2.050613 13 National political, social, or economic problems 2.1190 1.713014 7 State political, social, or economic problems 2.1169 2.160015 10 Percentage of citizens age 65 or older 2.1139 1.987716 14 State required election procedures 2.1039 1.910325 15 Lack of interest in local public schools 1.9114 1.9048

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TABLE 4.ECONOMIC BASE, AREA, LEVEL OF TAX BASE, AND LEVEL OFSCHOOL TAX RATE, BY NUMBER OF SCHOOL DISTRICTS IN THE WEST

COAST STUDY OF SCHOOL BOND ELECTION DEFEATS

Item California Idaho Nevada Oregon Washington Total Percent

2 3 4 5 6 7 8

ECONOMIC BASERural 30 3 6 39 57.4%Urban 20 1 1 23 33.8IndustrialResort 5 5 7.4Mining 1 1 1.4

Tonal 55 4 7 1 68 100.0%

AREACompact 14 1 2 17 25.0%Diverse 30 1 4 1 36 52.9100-400 square miles 6 2 9 13.3Over 400 square miles 5 6 8.8

Total 55 4 7 1 68 100.0%

LEVEL OF TAX BASEBelow average 17 1 1 19 27.9%Average 32 4 6 42 61.8Above average 6 7 70.3

Total 55 4 7 00.014

LEVEL OF SCHOOL TAX RATEBelow average 11 2 14 20.6%Average 37 ..t 5 1 47 69.1Above average 7 7 10.3

Total 55 4 7 1 68 100.0%

to the defeat, a weight of I. Resultsof this analysis for factors not in Table3 for California districts appear in thelist at the end of this paper.

Situational FactorsThe perceptions of respondent

groups, school officials and patrons,as to major reasons for bond issue de-feats, were generally in close agree-ment regarding certain situationalvariables.

In some mixed communities withan area where Mexicans, Spanish-Americans, Negroes, and whites arethrown together, the support ofschools is largely determined by howthey relate to each otherhow theymanage their problems, especially insuch areas as health, welfare, recrea-

tion, housing, and politics. In com-munities where one of the ethnicgroups largely controls the manner inwhich the community needs are met,the schools do not have the supportthey need. Some ethnic groups tendto blame what they call the systemfor not meeting their needs. Schoolshave much better support in com-munities where the various ethnicgroups have learned to work together.Specific areas of human need areidentified, and there is a united ap-proach by community leaders in seek-.ing a solution to specific problems.

Voting Requirements and TaxationThe percentage of votes required

for passage (662/s percent in Californiaand Idaho) was regarded as a major

201

reason for defeat of bond issues inthese states. General resistance tohigher property taxes was a signifi-cant item, almost invariably men.tioned. A state can double the incometax rate, the nation can increase thesocial security rate and add a sub-stantial income surtax, many mu-nicipalities and authorities can taxand bond with little regard for theopinion of the individual voter. Aschool bond or tax election is oneopportunity for the voter to registera protest against high taxes.

State Fiscal PolicyCalifornia has an effective state loan

plan for local school construction.With the exception of Washington,state support for school constructionwas not available to local districts inthe states included in the study. Thislegislature policy places the burden ofconstruction costs on the local tax-payer and on the property tax base.Studies in states having adequate statesupport, from nonproperty taxsources, of capital outlay and debt ser-vice indicate that voter resistance tobond issues is not as pronounced asin states having little or no state sup-port for this purpose.*

Unification and MobilityUnification elections, whether suc-

cessful or unsuccessful, have left scarsin many West Coast school districts.These scars often may be the reasonfor "No" votes in bond referendums.Changes in attendance areas, locationof proposed building sites, and

4 Barr, W. Montford, and Wilkerson,William R. "State Participation in FinancingLocal Public-School Facilities." Trends inFinancing Public Education. Proceedings ofEighth National Conference on School Fi-nance Sponsored by the Committee on Educa-tional Finance. Washington, D.C.: NationalEducation Association, 1965. p. 224-32.

202

changes in the vertical organizationwithin the new district were fre-quently mentioned by patrons andschool officials as major reasons foropposition to a school bond issue.

The rapid change taking place inthe general popuhtion, with migra-tion both into the district and out ofthe district, leads many citizens to be-lieve that future changes in the pop-ulation will not justify tne buildingof additional facilities. In some com-munities where there has been arapid in-migration that has necessi-tated school construction, there is adeep feeling of resentment concerningthe tax burden that local communitymust bear. Rapid increase in popula-tion through in-migration compoundsthe local community problem whenthere are ethnic differences.

Reference was frequently made to"our" school, the nearby elementaryschool, or to "their" school, the highschool attended after unification. Feel-ings seemed to be as intense in dis-tricts where unification had been de-feated as in those where it had beenlegally enacted, but often only grudg-ingly accepted. Conflict betweenelementary and secondary districts inareas where unification had not oc-curred (44 of the 69) was a major fac-tor in bond issue defeats in these dis-tricts in the opinion of both schoolofficials and patrons.

Inflation and the Economy

Inflation in operating as well asconstruction costs was regarded as amajor factor in bond issue defeats inmany districts. References to marblepalaces were not as frequent as tolush administrative offices, carpeting,space for fads and frills, and luxuriousjunior high and middle schools. Gen-eral agreement by both groups on theimportance not only of inflation but

also of changing standards of schoolconstruction was evidenced.

The economic level of the com-munity was advanced both by votersand by officials as a major factor inbond referendum defeats, apparentlywith some justification, since onlyseven of Ele 68 districts had a tax baseper pupil whicn was above the countyaverage.

Citizens 65 and Older andMilitary Personnel

One result of migration is a con-centration of citizens 65 and older inthe West Coast states, many of themretired and on a fixed income. Votersand school officials alike recognizedthe probability that their bond de-feats were attributable to some extentand in certain areas to a major extentby negative votes of some of the el-derly citizens, whom they believedwere voting against tax increasesrather than against bond issues.

Residents of military bases also wereregarded as a problem in a few areaswhere it was believed that there wasa reluctance to register as well as tovote.

National and State ConditionsThe effect of national problems,

such the Viet Nam conflict, the coldwar, increasing federal budgets, civildisturbances, and youthful unrest,were mentioned by only about one-half of the respondents but were re-garded as of major importance toschool bond defeats by those who didmention them.

State political, social, or economicproblems were mentioned by almostall who were interviewed and were re-garded as ranging from some to majorimportance as factors which often ledto a negative vote. A voter weigheddown with national and state concerns

may register a negative vote as a resultof general frustration.

Geographic Areas

Closely allied to the aftermath 'ofunion and unification elections wasthe troublesome aspect of geograph-ical area. School officials and patronsalike recognized the difficulty of main-taining unity in a district which em-braced, for example, a famous seasideresort, a new industrial area, and asprawling military installation. Schoo'districts several hundred square milesin area, such as in some desert. areasof California aad county school dis-tricts in Nevada, often had severaldistinct and diverse community cen-ters within the district.

Differences in PerceptionsMany of the situational variables

which lead to bond issue defeats havebeen perceived alike by school officialsand by the electorate. A number ofothers, some relating to the educa-tional climate in the district, werevaryingly perceived.

Community Relations

For some factors the voters saw sub-stantial effect on bond issue defeats,but school officials regarded the samefactors as having had little effect.Among these factors were generalcriticism of the schools, dissatisfactionwith the administrative staff, and dis-appointment with the school board. Acredibility gap seemed to exist inmany school districts, not only inrelation to the specific bond election,but also antedating the election andinvolving many school procedures.

Voters also tended more stronglythan school officials to attach importance to impatience with teachers asa factor in bond defeats. Teachingmethods, lack of teaching dedication,

203

growing teacher militancy, commut-_ing teachers, and salaries were fre-quently mentioned by citizens as be-ing somewhat responsible for negativevotes. Voters and school officials alikebelieved that a lack of pride in localschools and comparisons with neigh-boring schools had some but not ma-jor importance in election defeats.

Concern was expressed by a numberof California voters regarding studentconduct, student militancy, and stu-dent demonstrations in some highschools, colleges, and universities. Thefeeling was often expressed that theschools condoned "permissiveness"and that a backlash of resentment ac-counted for some negative vote onschool fiscal matters.

School officials, board members, andsuperintendents reported lack of in-terest in public school as a factor indefeats. Voters ranked lack of inter-est as having only a minor effect.

Mobility

The West Coast is a modern melt-ing pot of people from many statesarid many parts of the world. Thesocial problems resulting from a mo-bile population, the presence of manyethnic and racial groups, and differ-ent social and economic backgroundsof citizens were mentioned by bothvoters and school officials. Admin-istrations tended to attach more im-portance to this group of factors asa reason for negative votes than didthe voters.

Voters stressed, for example, theunwillingness of the Spanish-Ameri-cans to register and vote, since thismight lead to jury duty which theycould ill afford. However, even in thefertile California and Oregon Valleys,having large numbers of migrantstoop laborers, ethnic and racial in-fluence was not considered a major

204

element contributing to bond electiondefeats.

Voters stressed the idea that schoolsupport has increased substantially.When building programs that requiregreatly increased financial effort bythe community are proposed, somegenerally opposed the construction,irrespective of need. Voters recog-nired that inflation affected the thingsthey brought, but they were quiteconcerned over why the cost of schoolfacilities was so great. When evidencewas given that the financial costs ofthe proposed construction would notraise tax rates drastically, communityleaders were more willing to evaluatethe need Er the proposed buildingprogram.

Voters also seemed to be concernedover the great differences that ex-isted among different communities interms of the financial effort in supportof public schools. The socioeconomiccondition of various communities af-fected their ability to support schoolsand indirectly determined the tax rate.When one community needed to votefor both a tax over-ride and a bondissue, while a near-by community didnot fleet; to vote for a tax over-ride,community leaders seemed to be con-cerned. In communities where theincome per capita or per family washigh, increased school expenditureswere looked upon more favorably.

What was the real problem regard-ing the bond issue? The respondentsoverwhelmingly perceived dissatisfac-tion with the construction programfor which the proposed bond issuewas to provide the real culprit.Voters attached even more weight tothis factor than did school officials,although both groups of respondentsregarded dissatisfaction with the con-struction program as a major factorin many of the West Coast defeats.

The nature of this dissatisfactionwas often discussed at length, and itprovides much of the substance of theconcluding section of this paper whichdeals with the specifics of the bondissue campaign.

The Bond Issue

Research has shown that the plan-ning of the bond issue has importantconsequences for its eventual passageor defeat by the electorate. Evidentlyschool officials on the West Coast werefamiliar with the te:hnical aspects ofplanning bond issues and had -,,midedmany of the pitfalls which lead to al-most certain defeat. Findings of re-search studies by the major univer-sities and research agencies werefrequently mentioned, both by officialsand by voters.

No attempt was made to identifyand/or evaluate the power structuresin the various communities studied.However, certain factors, such as (a)tenure of board members, (b) tenureof the superintendent, (c) viableteacher organizations, (d) fiscal in-dependence, and (e) general opera-tional information, constantly cameup in interviewing citizens.

In school districts where bond issuesreceived approval of over 50 percentof the voters but not the necessarytwo-thirds vote, there seemed to be afeeling that (a) the administration wasproviding good leadershin, (b) individ-ual members of the board of educationwere held in respect, (c) the citizensunderstood the needs of the schools,(d) there was satisfaction with theteaching staff and the educational pro-gram, and (e) many community lead-ers wished to help improve the edu-cational program. In communitieswhere the bond election vote was wellbelow 50 percent favorable, citizens

frequently expressed dissatisfaction inone or more of the areas listed above.

Some pitfalls were avoided becausestate school codes, rules, and regula-tions do not permit certain practicesin the states where the interviews wereconducted. Retirement of temporaryindebtedness from the proceeds of aproposed issue, inclusion in the issueof funds to complete trior construc-tion, and blanket approval for futureundetermined construction were fre-quently mentioned by officials and in-formed citizens alike as dubious prac-tices which were not involved in thelocal referendum defeats. Apparently,misinformation was sometimes spread,implying that perhaps such practiceswere being employed, but this misin-formation was perceived by pro-ponents of the issue as attempts todraw red herrings across the trail byindividuals who actually had othermajor objections to the issue.

Special elections were the rule. Ap-parently, everyone concerned wasaware of the dangers pointed out byMurphy 5 and others. A larger turn-out may be expected in general elec-tions, and large turnouts often invitenegative votes for specific school pro-posals.

Respondents in some districts thathad experienced elections which in-cluded omnibus school proposals,bonds, tax-over-rides, unification,school-board elections, and municipalcapital projects were almost unani-mous in their feeling that this canlead to certain defeat in a bond elec-tion. Incidentally, informed citizenspointed out that the formidable legallanguage required on the ballot in

a Murphy, Edward V. Selected Variables inthe Success of Bond Elections in CaliforniaSchool Districts. Doctoral Dissertation. LosAnrles: University of Southern California,1966. 287 p.

205

some states often confused the votersand probably was responsible forsome negative votes.

Time intervals between bond ref-erendums were not regarded as im-portant by either group of respon-dents, possibly because, as the evidenceshowed, reasonable time seemed tohave been allowed if a second referen-dum was needed.

The amount of the proposed bondissue, as a factor in defeat, was rankedas of some importance both by schoolofficials and by voters. The amount ofthe rejected issue was almost invari-ably mentioned, but was regarded asan excuse and not as a major deter-minant of defeat. Just as any propertytax is often deemed too high, so abond issue of almost any amount maybe criticized as too large.

The Election Campaign

Detailed presentation of the edu-cational needs of the community pre-ceding a bond election was the excep-tion rather than the rule. Whenelaborate, detailed plans were devel-oped, tile plans included the needs asseen by (a) industry, (b) professionalsand nonprofessionals, (c) retailers, (d)commerce, and (e) sometimes agricul-ture. These detailed plans usually in-cluded a published list of the com-panies and businesses that hadparticipated in the survey, includingsuch organizations as the Chamber ofCommerce, service organizations, andother community organizations as wellas school-related groups.

It was interesting to note how manycitizen groups developed definite edu-cational goals, presented the tax im-pact, and showed the economic valueof the proposed educational needs ina package that was understandable tothe average citizen in the communities

206

when local leadership was really con-cerned about the educational needsof the community.

School districts where bond electioncampaigns had been organized andconducted in a sophisticated manner,following every known rule of effec-tive political action, identifying votersin favor of the proposition, and sup-ported by brochures, block meetings,and involvement of local civic groupswere visited. The only di.-turbingaspect was that the referendum failed.

In some of these instances the manysituational factors beyond control ofschool officials and voters favoringthe proposition may have been di-rectly responsible for the failure. Inother instances the camp, 'gn itselfmay have been weak and ineffective.

Many voters were concerned aboutthe tendency toward unilateral actionby the board and the auperintendent.As one astute civic leader remarked,the location of sites had been made,the construction program had beendetermined, and the public had beeninformed through news releases, pub-lic meetings, and the usual parentchannels. Si ate requirements hadbeen met, specifications had beent.,-awn up, and the financing planshad been completed. All of thesesteps, often over a period of twoor more years, having been taken,the board finally appointed a localcitizens group to wage the final phaseof the campaign.

Brochures were printed, captainsand leaders formed speakers bureaus,factual information was released bythe school central-office staff, sketchesof the proposed facilities were madeavailable, the election was held, andto the surprise of those immediatelyinvolved, the proposition failed, per-haps for the first time in a specificschool district since the depression.

Our analyst believed that the com-munity has been involved only on thesurface and only during the final pre-election weeks. All decisions had beenmade, perhaps not in "smoke-filled"corridors, but only semi-publicly. Thepublic had not really been involvedin key decisions regard;ng the razingof buildings not earthquake-resistant,the relocation of buildings, and themany implications of changing designto implement curricular changes.

Letters to the editor had often beenconveniently forgotten; occasionalprotests over the months had beenregarded as of little consequence; thebitterness of some of the teachers overthe proposals had really never cometo the surface; the considered objec-tions from certain neighborhoodgroup:, tax protest groups, and mu-nicipal officials had been discountedby the militant sponsors of the officialpolicy.

Many who wanted to take part inthe action were overlooked, ignored,or bypassed. Finally, the day camewhen these many dissident groupswere actually involved. They werepermitted to vote Yes or No. In somecommunities the dissident citizens hadfinally organized, sparked a suddencountercampaign, and interjectedmany items .vhich proponents be-lieved were not pertinent. Even whenthe opposition campaign had not sur-faced but was merely a growingground swell, trouble was in the off-ing. A bond issue must pass by a twoto one majority in California andIdaho. If 20 percent of the registeredvoters cast a vote and 7 percent wereopposed, the issue failed.

What were the major factors in Cueconduct of the campaign which in-vited defeat? According to the inter-views, most significant in a number ofthe districts was dissatisfaction with

the site or sites, failure to understandthe long-range construction plans,misunderstanding of the tax impactof the debt service attendant on theproposed bond issue, failure to usesketches of proposed construction,and failure to get out the favorablevotes. These factors were perceivedby both the official and the votergroups in 'bout equal numbers, butwere regard %I by the voters as havinga degree of importance.

Communication can exist withouttrrte understanding. Understandingcan often exist without actual accept-ance of the proposed course of action.

It became more and more evidentas the interviews progressed that. arecurrent theme was prevalent. In-formed community leaders perceivedthat decision making had often takenplace with little or only token involve-ment of the citizen and patron. De-cisions had been announced after dis-cussions in which the citizen had notbeen involved. Channels of communi-cation too often were one-way streets.Decisions of the board and the admin-istration presumably (lowed throughthe press, through school meetings,and through civic meetings. Oftenquestions indicating lack of under-standing, considered objections to acourse of action, or consideration ofalternatives to a course of action eitherdid not flow back to the board or, inthe opinion of many respondents, didnot receive appropriate consideration.

Official spokesmen ah registeredthe same perceptions but in a differ-ent way. We have carefully kept thepublic informed of the need for re-placing buildings, the nece.sity ofmoving to a larger site, and the con-struction needed in the district inaccordance with our long-rangefacilities plan. We have held openmeetings to which the public was wel-

207

come. Yet, the attack in pre-electionweeks indicated that the voter was notlistening or failed to understand.Actually, we have leaned over back-ward to involve the public in allpolicy decisions in orr systems.

Often a period of dissatisfactionin a community had led to a changein the board and the administration.An entire long-range school facilitiesplan had been modified and the voterswere suddenly faced with a new one.Voters in such communities wereoften thoroughly confused, Was itcredible that the former program wasactually wrong and that the new pro-gram was the best solution?

Another group of factors was con-sidered as of some but not major im-portance. Obviously no two districtshad identical problems, but strongsimilarities seemed to exist.

Many boards and administrativestaffs had turned the campaign over toa citizens committee and kept handsoff, but believed that the committeehad not adequately got out the vote.Several impartial observers believedthat they had gotten out the vote,but not. necessarily the right vote.The vote that is needed ii an electionis to carry is the affirmative vote. Onlyan occasional district had made a realattempt at voter identification as ameans of obtaining the desired votes .°

A number of other factors in theconduct of the bond election werementioned. Although some were ofmajor importance ir some districts,they were no, of concern in others.

6 Carter, Richard F. Voters and TheirSchools. U.S. Office of Education, CooperativeResearch Project No. 308. Palo Alto, Calif.:Stanford University, 1960. 311 p.

TABLE 5.SIGNIFICANCE OF DIFFERENCES IN PERCEPTION OF CALIFORNIAVOTERS AND SCHOOL OFFICIALS REGARDING 1HE EFFECT OF

SELECTED FACTORS ON BOND ISSUE DEFEATS

Rank ItemSignificant

at 5%Not significant

at 5%

79

10

The nature of the proposed construction programDissatisfaction with the administrative skiffCriticism of schools

9.889029.8200!3.0000

11 Inclusion of the bond issue in an omnibus proonsition 3.634613 National political, social, or economic problems 2.193215 The percentage e citizens age 65 or older 5.003216 Criticism of location site 5.344017 Dissatisfaction with the school board 23.569018 Inadequate understanding by the voters of school construction

plans 8.027319 Organized opposition to bond issue 3.252020 The amount of local school indebtedness 2.893321 State school construction requirements 3.891522 Organized local opposition to construction plans 1.934023 Inadequate understanding by the voters of capital financing

plans 6.093037 Failure to involvs local civic groups 3.712038 Failure to involve a citizens bond issue advisory committee 2.232039 Divided support by the board of construction plans 9.364140 Inadequate utilization of parents' meetings 1.611141 The trend in bond interest rates 8.951042 Inadequate utilization of radio aud television 3.9576-43 Divided support of ''-le bond inure by the board 2.207045 Poorly utilized telepnone campaign .2900

208

Significance of Differencein Perceptions

As discussed above and as shown inthe listing at the end of this paper,the voter group and the school officialgroup in California differed in theirperception of the effect of specificfactors on the bond election defeat.Although these differences existed,they may or may not have been of sig-nificance.

Table 5 lists the items on which thetwo groups differed in their responses.Statistical significance, as indicated byapplication of the chi-square test, isshown for several items. Among fac-tors regarded by the voters as havingmajor effect on the defeat were dissat-isfaction with the board and the ad-ministrative staff, inadequate under-standing of construction and financingplans, and dissatisfaction with con-struction plans. Board members andschool officials regarded these items ashaving only a moderate effect.

Two others approached significance.These were the percentage of citizens65 and older and criticism of the citelocation. Voters regarded each ofthese as having major effect on thedefeat of the bond issue; schoolofficials and board members regardedthese factors as having only moderateeffect on the defeat of the issue.

Opinionnaire

Since the voters repeatedly stressedthe existence of general and specificdissatisfaction with the local schoolsystem, an opinionnaire 7 which wasdesigned to determine feelings of thevoters regarding the teaching staff,

7 Adapted from: Stimeling, George. Demo-graphic and Aspiration Analytis Throughthe Use of the Jommunity Action Process.Doctoral Dissertation. Bloomington: IndianaUniversity, 1966.

:-.drninistration, the Board of SchoolTrustees, and the quality of instruc-tion was utilized.

I. My age to the nearest birthday is:21 to 35 18.0%36 to 50 52.751 and over 29.1

2. An achilt member of our family attendsschool functions:

8.3%.3%O ionally ,±7.2Frequently 44.4

3. I/we vote at school-board elections:Never 4.1%Occasionally 36.1Frequently 59.7

4. I/we feel in comparing the teachingstaff in our schools with those of otherschools, they would compare:

Poorly 20.8%Average 58.3Excellent 20.8

5. I viewed my teachers in school as:PoorAverage 56.9%Excellent 43.1

6. In comparing the administration ofour school with the administration ofother schools, it would compare:

Poorly 20.8%Average 55.6Excellent 23.6

7. I /we feel that the school district is:Too small 11.1%About right 52.8Too large 36.1

8. I/we feel that the ethnic interest ofdifferent groups affects our schools:

Little effect 47.2%Some effect 30.5Major effect 22.3

9. I/we feel that minority groups have:Little effect 5 i .4%Some effect 33.3Major effect 15.3

10. In the past, when I/we have hadoccasion to visit the school, I/we havebeen received in a welcome, graciousmanner:

Does not apply 18.0%Never 1.4Occasionally 47.2Frequently 33.4

209

11. I/we have a tendency to vote in elec-tions where we know the candidatepersonally:

Never 4.2%Occasionally 44.5Frequently 51.3

12. Over the years, I/we feel the efforts ofthe petsonnel to keep me/us informedof change within. the school have been:

Poor 44.5%Average 36.1Excellent 19.4

13. I/we feel the quality of ibctructionalpersonnel is:

14. Of the teachers I/we know personally,I/we view them as:

Does not apply 1.4%Poor 23.6Average 58.3Excellent 16.7

15. I view the quality of decisions made bythe board of education as:

Poor 36.1%Average 47.2Excellent 16.7

16. i feel the quality of the administrationis:

Poor 20.8% Poor 27.8%Averai 2 62.5 Average 48.6Excellent 16.7 Excellent 23.6

SCHOOL BOND ELECTION DEFEAT INQUIRY

Selected variables * Effect on bond issue defeat

Littleor no Some Majoreffect effect effect

Variables 1-15, 25, and 28 are listed in Table 3.16. Criticism of location of site A V17. Dissatisfaction with the school board A V18. Inadequate understanding by the voters of

school construction plans A V19. Organized opposition to bond issue A V20. The amount of local school indebtedness. A V21. State school construction requirements A V22. Organized local opposition to construction

plans A V23. Inadequate understanding by the voters of

capital financing plans A24. The amount of the recently defeatee bond is-

sue proposal V-A26. Inadequate use of sketches of proposed con-

struction V-A27. Dissatisfaction with teachers' performance V-A29. Poorly organized "get out the vote" cam-

paign V-A30. Failure to consider objections by local groups V-A31. Lack of pride in schools V-A32. Failure to utilize long-range plan ning for

school construction V-A33. Inadequate explanation of the fiscal implica-

tions of the proposed issue V-A34. Comparison with neighboring schools V-A

210

I

35.36.

Ethnic or racial biasFailure to involve a citizen's construction ad-

visory committee

V-A

V-A37. Failure to involve local civic groups A38. Failure to involve a citizens' bond issue ad-

visory committee A V39. Divided support by the board of construction

plans A V40. Inadequate utilization of parents' meetings A V41. The trend in bond interest rates A V42. Inadequate utilization of radio and television A V43. Divided support by the board of the bond is-

issue A V44. The time interval between this and your last

previous school bond issue V-A45. Poorly utilized telephone campaign V A46. Inadequate utiFzation of the press V-A47. Inadequate utilization of school publications. V-A48. The amount of local governmental debt V-A49. Inadequate central office study of facility

needs V-A50. State provisions for utilization of local current

funds for school construction V-A51. Percent of state support received by your dis-

trict V-A52. Conflict between school and civil bond issues. V-A53. Provision for immediate construction V-A54. State imposed school debt limit V-A55. State assistance in planning the school con-

struction program V-A56. Voting at a special election V-A57. The bond rating of your district V-A5.. The accreditation of your schools V-A

* L, ed in the weighted order of importance, according to interviews withvoters. V refers to voters, A to board members and administrators.

Other factors occasionally mentioned were:State school construction loans or grantsInclusion of tax override and bond issue at the same electionProposed retirement of temporary indebtedness from bond proceedsInclusion in the issue of funds for prior construction which had exceeded esti-

mated costsFailure to utilize a consultant. in planning the construction programFailure to use a public relations firmFailure to use a public opinion poll prior to organization of the bond election

campaign.

211

Understanding Local Budgets

Thomas J. Northey

ONE OF THE major purposes of theCommittee on Educational Financeof the National Education Associationis the increasing of understanding ofschool finance. School budgets, docu-ments of public record, provide a re-port to the public on funds raisedand funds spent as well as an indica-tion of the sources of funds and theitems for whic4 the budgets werespent. Citizens and teachers have aninterest in understanding schoolbudgets.

The following presentation briefsthe content of school budget schoolsconducted in three sessions by theMichigan Education Association. Theoutline may assist both state and localeducation association which attemptsimilar budget schools, and may alsoassist h. lividual teachers and citizensseeking to improve their understand-ing of school budgets.

The task of increasing understaring of school budgets is a constanteffort of local citizens, teachers, andlocal, state, and national associations.Comparisons of revenue and spendingwith a district's past history providesthe basis to make meaningful com-parisons with state and national data.

Mr. Northey is Research Consultant, Michi-gan Education Association, East Lansing,Michigan.

212

Preparing for a discussion of schoolfinances requires an awareness ofthree basic documents:

1. The budgeta plan adopted bythe board of education as a guide tosources of income mid expenditures.In reality, the budget is an estimateof income and expenditures.

2. The auditor's reporta verifica-tion that proFer accounting proce-dures have been used in the handlingof funds. The report is usual.y ac-companied by recommendations toimprove procedures.

3. The annual financial reportaform which is deposited with thestate department of education. Thisform may list signatures of the properlocal officials indicating they havereviewed and accepted the contentslisted on the form.

As the first step, every effort shouldbe made to secure all three documents.However, the most important docu-ment is the annual financial report.Only with this official report can aschool district's financial condition beproperly reviewed and evaluated.

It is assumed that each state hassome kind of official reporting formwhich must be deposited with thestate department of education. (InMichigan, the annual financial reportis referred to as Form B). Copies ofthis form should be available at the

office of the local school superin-tendent, the intermediate office, andat the state department of education.There may be a charge for the cost ofhaving copies reproduced.

Do not obtain only the most recentform. Review at least a four-yearperiod to get a proper historical pic-ture of the school district's financialcondition. This will prepare you forthe next step in the processdialoguewith the administration or board ofeducation.

As a rule, there are three majordifficulties in the ensuing dialoguewith the administration or board ofeducation: (a) agreement on sourcesof information, (b) agreement onavailability of Cite data source, and(c) definitions.

By using the official form, theseproblem areas generally can be re-solved. The form is official, it is state-wide, it has a due date set by theofficial body of the state, and it hasaccompanying manuals with descrip-tive definitions.

For a basic text we shall be relatingour discussion to Financial Account-ing for Local and State School Systems,Standard Receipt and ExpenditureAccounts,'

Sources of Revenue

For comparison purposes, care mustbe taken to keep the collected datacomparable with other K-12 districtsin the state. If your district has acommunity college which is a partof the K-12 district, the property and

I Reason, Paul L., and White, Alpheus L.Financial Accounting for Local and StateSchool Systems: Standard Receipt and Ex-penditure Accounts. U.S. Department ofHealth, Education, and Welfare, Office ofEducation, Bulletin 1957, No. 4, and StateEducational Records and Reports Series:Handbook II. Washington, D.C.: Govern-ment Printing Office, 1957. 235 p. $1.

nonproperty taxes, tuition, or othersources of revenue used for that com-munity college must be subtractedfrom the total revenues.

The state and national revenue re-ceipt accounts are as follows:

CodenumbersMichigan

100200300

310320

400500600

610620

700710720

0000

LocalIntermediateStateStateState-federalFederalGifts and bequestsTransfersother districtsIn stateOut stateTransfers--other fundsDebt retirementBuilding and site fundTotal

CodenumbersFederalManual

10

2030ab

4014f808090

50-70

The school finance discussion be-fore a Michigan audience combinesvisual and oral presentations on thestate-aid formula. In addition, eachparticipant is given a copy of the cur-rent edition of Easy Lessons in SchoolFinance.2 This booklet contains ac-tual samples of each of the four for-mulas used. It also contains workpages so that each reader can applythe formula to his own school districtand determine the state aid for thecurrent year.

General Fund ExpendituresWhile we shall continue to use the

Michigan form (Form B), the AnnualFinancial Report, as the basis fordiscussion, the same principles canbe applied to your state and to yourschool district.

2 Hecker, Stanley E.; Meeder, John; andNorthey, Thomas J. Easy Lessons in SchoolFinance, 1967-68. Revised edition. East Lan-sing: Michigan Education Association, 1967.31 p. 25¢

213

First, let n get t general pic-ture of the various areas of expendi-tures for a school district:

CodenumbersForm BAnnual

FinancialReport

1000

21002200230024002500260027002799

Instruction1100 elementary1200 secondary1300 special education1400 summer school1500 adult education1600 community college1900 unclassifiedAdministrationAttendance ServicesHealth ServicesTransportationOperationMaintenanceFixed ChargesTotal Current Operating

Expenditures (day-byday-operating expendi-tures)

2800 Capital Outlay 12002900 Community Services 11003000 Student Services 900-10003099 Total General Fund Ex-

penditures (excludingtransfers)

3300 Outgoing TransfersIn State 1410Out State 1420

3400 Transfers (in district)Debt Retirement 1300Building and Site Fund

3499 Total

Returning to the Annual FinancialReport, we shal! review the eight gen-eral categories of exi:t-nditures.

Payment for salaries and wages forpersonnel is the major expense ofschool operation (83 percent). Wecan determine not only the percentageused for this purpose but also theper-pupil expenditure.

Under instruction, specifically ele-mentary instruction, each category isgiven a code number based on itsfunction. For example, a principal

CodenumbersHEWFederal

200

100800400500600700800

214

is coded as 01, consultants and super-visors as 02, teachers as 03. If weadd all of these code numbers relatingto elementary personnel, the totalis coded 1190. Doing the same withsecondary personnel, we have a totalof 1290. For special education, it is1390. If we add the total of the 90'sin the instructional category (ex-cluding 1690 for community college),we arrive at the total cost of person-nel engaged in K-12 instruction.

We have now identified two instruc-tional expenditures:

1000'sTotal cost for instruction

90'sTotal cost for instructionalsalaries $

Let us now identify the cost forteacher's salaries. To get a broad defi-nition of teacher's salaries, we mustsubtract from the total instructionalsalaries the dollar amounts in eachof the following coded categories:01Principals' salaries02Consultants' and supervisors'

sakries28Secretarial and clerical salaries29Other salaries for instruction

The remainder is the number ofdollars used only for teachers' salaries.

By dividing the dollar amount ineach of the three categoriestotalinstructional expenditures, instruc-tional salaries, and teachers' salariesby the total dollar amount in totalc u r r en t operating expenditures(2799), we obtain the percentage ofthe budget spent in each category.

If we divide the dollar amountsof each of these three categories bythe number of pupils, we have theper-pupil expenditure for each cate-gory.

To the dollar amount in instruc-tional salaries (total of 90's) add thesame code numbers in each of the

others (administration, 2190, throughmaintenance, 2690) and we have thetotal dollar amount spent in all sal-aries and wages. If this amount isdivided by the dollar amount in totalcurrent operating expenditures(2799), we get the percentage of the

budget spent for all salaries and wages.When we add the dollar amounts

for the total in instruction (1000), ad-ministration (210P), through fixedcharges (2700), we come to total cur-rent operating expenditures (2799).Dividing the dollar amount in 1000,2100, 2200, etc., by the total dollaramount (2799) gives us the percentageof the budget spent in each of thesecategories, and dividing by the num-ber of pupils gives us the per-pupilexpenditures by category.

In Michigan, by referring to anannual publication called Analysisof Michigan Public School Revenuesand Expenditures, Bulletin 1011, wecan compare any district, not only ona state-wide basis, but also with com-parable districts.

Such comparisons, although help-ful, must be tempered by a knowledgeof the peculiarities of a particular dis-trict or by the program offered by thedistrict.

The total dollars expended in 2799,total current operating expenditures,represents the day-by-day operatingcosts only. There are additional ex-penses which must )e considered.

Let use add three additional ex-penditures:

2800Capital Outlay2900Community Services3000Student Services

When comparing one district withanother in each of these three categories, we must make sure that thereare identical elements in the expensesinvolved.

Outgoing transfers to other districtsor to other funds are additional ex-penditures.

The tol.al of all expenditures, totalgeneral fund expenditures plus out-going transfers, represents the totaldollar amount expended.

This car. be compared with totalrevenue t' indicate whether, at theend of the fiscal year, there are eitherexcess revenues or excess expendi-tures.

In working with our units in Michi-gan we place more emphasis on com-parisons within a school district thanwith other districts. We recommendat least a four-year review in orderto get a proper perspective on thefinancial health of the school district.

To assist the local district, the MEAResearch Division provides each withthe following:

1. Michigan Public Schools, AnAnalysis of the Revenues and Ex-penditures (Bulletin 1011, MDE)

2. Ranking of Michigan HighSchool Districts by Selected FinancialData (Bulletin 1012, MDE)

3. An Analysis of Operation Ex-penditures (Bulletin 1011, summarized1963.64 through 1967-68 by the typeof district)

4. An Analysis of Operation Ex-penditures by Functional Categories(1967-68 both by percent and per-pupil state-wide and by type of districtwithin the state)

5. Capital outlay worksheets.

215

Awards in

School Finance Research

:2_16 / 217

The investment of Idle Funds byLarge Public School Systems

Bobby D. Anderson

THE LACK OF FUNDS to provide an ade-quate educational program is a prob-lem constantly faced by officials oflocal school systems. To meet therising costs of public education andto receive maximum benefit frommoney provided by taxes, any possiblesource of additional revenue, withoutthe increase of taxes, should be care-fully investigated. The investmentof otherwise idle balance constitutesa significant potential revenue sourcewhich is often overlooked completelyand is frequently under-utilized.

Purpose of the Study

The purpose of the study was toinvestigate and describe the status ofidle funds invested by large publicschool districts for the 1966-67 schoolyear, and to present possibilities forinvesting idle school funds to provideadditional revenue.

Method of Research

In February 1967, there were 651school districts in the United Stateswith an enrollment of 10,000 or morepupils. A questionnaire was mailed

Dr. Anderson is Associate Professor, Uni-versity of Southern Mississippi., Hattiesburg,Mississippi.

218

to each of these large school district:Three hundred fifty-seven school dis-tricts, or 55 percent, responded andwere included in the study. The dis-tricts were grouped into four classes,based on enrollment.

Dr is requested in the questionnairewere related to nine aspects of theschool districts investment activities.

Findings

These findings were drawn from thetabulation of the responses to thequestionnaire items made by theschool districts in this study:

I. Thirty-seven states permitted in-vesting in savings accounts, and 42states permitted investing by purchas-ing securities.

2. Officials of 254 school districtsbelieved that state statutes allow thedegree of freedom necessary to makeinvestments which have the greatestrevenue potential.

3. A total of 188 school districts,or 53 percent, reported investing idlefunds in savings accounts.

4. A total of 236 school districts, or66 percent, reported investing idlefunds by purchasing securities.

5. A total of 171 school districtsreported an average annual interestrate of 4.47 percent received by in-

vesting in savings accounts during1966-67; the range was from 2 percentto 5.5 percent.

6. A total of 192 school districtsreported an average annual interestrate of 4.58 percent received by pur-chasing securities during 1966-67; therange was from 2 percent to 5.8 per-cent.

7. The 300 school districts that re-ported the amount of interest earnedduring the 1966-67 school year hadtotal investment earnings of $54,341,-216; the range was from $227 to$4,540,000.

8. The total amount of interestearned represented 0.93 percent of thetotal annual budget.

9. The responsibility for the invest-ment process had been delegated to anappointed officer by 275 school dis-tricts. This officer had authority tomake investments within prescribedguidelines established by state statuteand/or the local board of education.

10. General operating funds wereinvested by 261 districts, bond fundsby 216 districts, and capital outlayfunds by 174 districts.

11. Of the 357 respondents, 257believed the state department of edu-cation furnished insufficient infor-mation concerning investments.

Conclusions

The following conclusions weredrawn by analysis of questionnaireresponses and mathematical computa-tions:

1. Interest from the investment ofschool district funds is an importantsource of additional revenue for manyschool districts.

2. Practically all of the school dis-tricts that invest in securities purchasethose issued by the U.S. Treasury.

3. The distribution of interest ratesearned during 1966-67, especially in

U. S. securities, indicated a loss ofpotential revenue to those school dis-tricts earning less than 3;y percent oninvestments.

4. The school districts with enroll-ments of over 50,000 are more efficientand earn more money from the invest-ment of idle funds.

5. The taxpayers of many schooldistricts have been deprived of largeamounts of additional revenue be-cause of the lack of investments. Fifty-seven districts reported no interestearned during the 1966-67 school year.Had these districts invested money asefficiently as the ones that did invest,they would have had total potentialearnings of $21,980,000.

Recommendations

1. Each state legislature shouldexamine statutes related to the legalityof school districts' investing money.Appropriate action should be taken topermit local school districts to investin U. S. government issues, state gov-ernment issues, and insured savingsaccounts.

2. University and college depart-ments of Educational Administrationshould assume responsibility for edu-cating prospective superintendentsand business managers concerning thepossibilities for earning revenue byinvesting idle school funds.

3. Each state department of educa-tion should establish and publishguidelines to be used by local schoolofficials for making investments. Theguidelines should contain an explana-tion of the statutes related to the typesof investments allowed.

4. Each local board of educationshould study the possibilities for in-vestments and then develop policie.iand procedures to make investmentsthat will provide the greatest amountof revenue possible.

219

5. Boards of education should dele-gate the administrative authority andresponsibility for the investment pro-gram to one official, who is thoroughlyacquainted with the fiscal policies ofthe board of education and with in-vestment procedures. He should haveauthority to make investment transac-tions within the written policies ofthe school board. He should investi-gate investment possibilities andchoose investments which will pro-duce the greatest possible yield.

6. The U. S. Office of Educationshould collect and publish informa-tion concerning how much interestschool districts earn by investing idlefunds.

Possibilities for Investment

The U. S. Treasury issues four typesof securities: Treasury bills, certifi-cates, and notes, generally considered

220

to be short-term investments andTreasury bonds, generally consideredto be long-term investments instru-ments.

Iii addition to the securities issueddirectly by the Treasury, certain fed-eral government agencies have author-ity to issue obligations. Those havingthe authority to issue obligations guar-anteed by the U.S. Government in-clude the Federal Housing Adminis-tration and the Tennessee Valley Au-thority; those issuing obligations notguaranteed by the U.S. Governmentinclude Banks for Cooperatives, Fed-eral Home Loan Bank Systems, Fed-eral Intermediate Credit Banks,Federal Land Banks, and the FederalNational Mortgage Association.

Local banks offer investment oppor-tunities through savings accounts. Cer-tificates of deposit and time depositsare examples of this type.

Local Determinants of Per-Pupil Expenditurein Suburban High School Districts

Dale E. Fisher

THOUGH EDUCATION in the UnitedStates has become the largest singlestate and local governmental functionin terms of money spent, the localschool system has retained its uniquerole in American rovernment. Thishas stimulated the search, since the1923 publication by Strayer and Haig,for a formula to equalize expenditurefrom district to district, but as recentlyas 1965-66, high school districts inCook County si.burbs of Chicago hada range of current expenditures perpupil in average daily attendance(ADA) from $686 to $1,113. Thatdiffering amounts are spent on achild's education among contiguousareas in a given year is baffling, andas yet no adequate explanation forthese differences is available. If lowexpenditure per ADA means lack ofeducational opportunity, substandardeducation, and poor preparation forfurther training, it is of serious con-cern to students planning their ca-reers, to colleges and industry, andto many governmental agencies.

The problem of this study was toinvestigate the local determinants of

Dr. Fisher is Assistant Superintendent ofSchools, Mound, Minnesota.

This paper is based on a doctoral dis-sertation, University of Chicago, 1967.

expenditures per ADA. It asked whatcauses suburban high-school budgetsto differ from district to district in ex-penditure. The approach borrowedheavily from the city study of James,Kelly, and Garms, from the metro-politan study of Sacks and Hellmuth,and from tIle local-district studies ofboth Hirsch and Miner.i The meth-odology was the same as in their fourstudies, the use of in: tiple correla-tion and regression teclarl'ques. Theindependent variables incorporatedinto the study were already mentionedin one form or another in previousstudies. The dependent variable. ex-penditure per ADA, was based solelyon local revenue, a technique alreadyused by Miner. The model of char-

James, H. Thomas; Kelly, James A.; andGarms, Walter I. Determinants of Educa-tional Expenciilures in Large Cities of theUnited State:. U.S. Office of Education Coop-erative Research Project #2389. Stanford,Calif.: Stanford thliversity, School of Educa-tion, 1966. 198 p.

Sacks, Seymour, and Hellmuth,F., Jr. Financing Government in a Metro.politan Area. New York: Free Press of Glen-coe, 1961. 387 p.

Hirsch, Werner Z. "Determinants of PublicEducation Expenditures." Nai ional Tax Jour-nal 13:29-40; March 1960.

Miner, Jerry. Social and Economic Factorsin Spending for Public Education. Syracuse,N.Y.: Syracuse University Press, 1963. 159 p.

221

acteristics of the local area constructedby Hirsch, and the adaptation of theeconomic theory of supply and de-mand to school finance by Miner sug-gested a model of educational demandfor this study, based on the theory ofconsumer demand and additionalconcepts. Several instances of statis-tical circularity in related researchshowed the need for more carefuldefinition of concepts and selection ofvariables to avoid the kinds of circu-larity which can occur in regressionanalysis.

Theoretical Framework

The basic logic of the market econ-omy is that price is a function of sup-ply and demand. This theory reducesthe behavior of a vast number ofindividual consumers and suppliers toa small number of general laws. Arelated theory is that consumer de-mand is a function of ability to buy,prices of commodities, and tastes orpreferences. With this theory theeconomist has created an abstractsystem out of the total aggregate ofconsumer behavior. An attempt wasmade in this study to construct ananalogous theory which would ex-plain the collective educational de-mand of citizens who support theirlocal school system through the edu-cational tax levy.

The positions of consumers and tax-payers are only analogous, since con-sumers operate in the free market inwhich supply and demand governprices of commodities and indirectlythe consumers' response to price inthe private sector. Taxpayers operatethrough the ballot box and the legisla-tive and administrative delegates ofthe citizenry, through proceduresprescribed by law for the allocationof resources in the public sector. Thedistinction has obvious in:pi:cations

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for a theory of educational demand.The consumer is engaged in the allo-cation of his own personal and in-dividual resources while the taxpayerhas a voice in the allocation of thecollective resources of the school dis-trict. The consumers' preferences arelikewise individualistic, while the tax-payers' preferences are expressed col-lectively through a majority vote orthe formation of pressure groups. Thekey determinant of consumer behavioris the price of commodities, sinceprice modifies both ability and prefer-ence at the point of purchase. Butthe prices of individual educationalgoods and services are a function ofsupply and demand and the discretionof the school board, and per-pupilexpenditure is a function of prices,collective ability, collective prefer-ence, and societal pressuresfactorsover which the taxpayers of a district,either individually or collectively,have little control and to which theyhave little freedom of effective re-sponse.

Just as government intervenes inthe market economy through taxationand legal controls, it can be theorizedthat the school board and the super-intendent intervene to affect the levelof expenditure through formal andinformal powers which accrue to theirdelegated positions. Their use of posi-tinn and power can be termed inter-vention.

Another concept for the theory ofeducational demand is growth of theschool district. The effect on con-sumer behavior of changes in the sizeof the household suggests that growthis a hidden element in the theory ofconsumer demand. In educational fi-nance, growth in attendance consti-tutes a short-term load factor, andindicates longer-term relationshipsbetween the sociological and demo-

graphic structures of the communityand the functioning of ability, pref-erence, and intervention as determi-nants of expenditures. These rela-tionships can also be tested by useof specific demographic measures.=

In summary, educational demand,which is indexed by current e.tpendi-ture per ADA, is a function of abil-ity, preference, prices, intervention,and (with appropriate reservations)growth. Expenditure per ADA on thebasis of local revenue is analyzed interms of local determinants. Abilityis indexed by assessed valuation perADA and by median family incomefrom which property taxes are paid.Preference represents expectations forlevel of services and is indexed bythe educational background of adultswho have completed 13 or more yearsof school. Prices are assumed to becontrolled by choosing a sample ofcontiguous suburban high-school dis-tricts. This variable is not opera -tion-slized in the main body of theresearch. Intervention is indexed bythe expenditure per ADA of nonlocalrevenue for c.river, special, and voca-tional education. Growth is the rateof increase in ADA for a five-yearperiod, and substitutes for the loadand demographic implications of in-creased enrollment. Growth also sug-

2 For the reasons given, growth was in-cluded in the initial model and in the em-pirical analyses suggested by it. This wasadmittedly an original conception notattempted by other researchers in the field.Major conclusions of the research have notbeen affected by the inclusion of this variable.However, there is every reason to questionwhether growth in attendance can be in-cluded in a cross-section analysis, and whetherthe nature of this variable with its complexrelationships to other variables does not ruleout its inclusion in an abstract model. Sincethis research does not resolve these reserva-tions about the growth variable, and untilfurther research produces their resolution, itseems safer to admit that the inclusion ofgrowth in the model was an error.

gests specifi,: demographic measuresof the age and working characteris-tics of the community, with which topredict expenditure.

Sample, Data, and Methodology

The sample was taken from thethree Illinois counties which makeup the suburbs of Chicago. Of 52high-school districts in the threecounties, 42 were selected because theycomprise the high-density suburbansprawl in Cook County immediatelyaround the city, to the north in LakeCounty, and to the west in DuPageCounty. The districts of the sampleare independent and are part of theIllinois dual-district system, in con-trast to districts within the city ofChicago which are part of a unit dis-trict and are dependent on the citycouncil for revenue. Contiguous sub-urban high-school districts are as-sumed to be homogeneous in termsof prices for goods and services, butheterogeneous enough in other re-spects to account for difference, inper-pupil expenditure.

Many kinds of data were assembledfrom the 1960 U. S. census and fromeducational records for the 1960-61school year lodged in the state archives in Springfield, Illinois. By sub-tracting state and federal revenueirom total current expenditure, ex-penditure per ADA from local reve-nue was derived as the main de-pendent variable (X1). A seconddependent variable was salaries perADA or total salaries for administra-tors, teachers, and librarians dividedby ADA (X2). Independent variableswere opera tionalized from remainingdata.

Five separate ability variables wereconsidered: assessed valuation ofproperty per ADA, median family in-come, family income per ADA, me-

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dian value of owner-occupied housing,value of owner-occupied housing perADA. Of these, two were selected,assessed valuation per ADA (X3) andmedian family income (X,), becausethey represent the legal base for theeducational tax levy and the currentincome from which taxes are paid.

Twelve inter-related preference in-dicators suggesting educational ex-pectations were considered from cate-gories of social class indicators:occupation, educational background,college enrollment of children, in-come, and housing. Of these 12, thepercentage of adults with 13 andmore years of schooling (X5) waschosen to represent the educationalexpectations of the community foreducational services in the public highschool.

The selected indicator of admin-istrative intervention was per-pupilexpenditure per ADA of federal-staterevenue for driver, special, and voca-tional education (X6). This measurewas preferred over administrativestrategies and decisions involving costcomponents or implications, whichwould have tended to induce circu-larity with the dependent variable.

The measure of growth was he rateof increase in ADA for the five-yearperiod from 1955-56 to 1960-61 (X7).

Twenty-five additional demographicmeasures were tested for significance,and two were ultimately selected foruse in an extended model: the ratioor families to secondary-school-agechildren, and the ratio of civilianworkers to school-age children.

The introductory ai alysis of datawas based on the zero order correla-tion matrix of all variables, scatterdiagrams, and mean expenditures forquartiles of districts distributed interms of all variables. Table 1 con-tains zero -order correlations of vari-

224

ables X, to X. The purpose was todiscover the degree and nature of thecorrelations be,ween expenditure onthe one hand, and individual vari-ables of ability, preference, interven-tion, and growth on the other. On theassumption that determinants of sal-aries are also determinants of expendi-ture, the same kind of analysis wascarried out for this variable, X,. Thisintroductory analysis laid the ground-work for subsequent use of multiplecorrelation and regression techniques.

The regression analysis of data uti-lized step-wise regression techniques.Equations and individual variableswere tested for their prediction of thedependent variable, their confidencelevel as compared with a normaldistribution, and their explanatorypower in relation to the dependentvariable. Two models were used, asimplified model (Model A) involvingthe independent variables of assessedvaluation (X3), preference (X5), in-tervention (X6), and growth (X7); andan extended model (Model B) involv-ing the independent variables in thesimplified model, plus a second abilitymeasure, median family income (X4),and two demographic measures (X8and X9). Finally, estimates were de-rived for the whole sample, as well asfor 10 subsamples, with emphasis onthe subsamples of residential and in-dustrial districts. The regressionanalyses were supplemented by specu-lations concerning residual variab'es,and interview-analyses of deviate dis-tricts.

Research Findings

1. The hypothesis that when priceis controlled, expenditure is a func-tion of ability, preference, interven-tion, and gro,:th is acceptable on thebasis of the multiple correlation co-

efficients for the whole sample forModels A and B.

2. The determinants of expendi-ture per ADA are also determinantsof salaries per ADA. The substitu-tion of salaries per ADA for expendi-ture per ADA as the dependent vari-able converts the model of educationaldemand into a model of salary de-mind. More of the variation in sal-aries from district to district is ex-plained than in expenditure per ADA.It may be that a given set of factorsis more likely to affect the level ofa single type of expenditure, such assalaries per ADA, than the whole ag-gregate of factors making up expendi-ture per ADA.

3. Holding the nonability variablesconstant (preference, intervention,and growth), the ability variables incombination (assessed valuation andmedian family income) explain 47.0percent of variance in expenditure,and only 28.7 percent of variance insalaries. The nonability factors incombination explain 18.2 percent ofthe variation in expenditure, as com-pared to 48.0 percent of variation insalaries. Therefore, expenditure perADA is predicted much less by thenonability factors than are salaries perADA.

4. Preference variables indicatingeducational expectations of the corn-

munity took 12 inter-related forms inthe research. In the selection of apreference indicator, those represent-ing income or housing were rejectedbecause of their ability connotation.White-collar workers in percent, col-lege enrollment of children, and high-school graduation of adults explain,individually, the same amount of var-iation in per-pupil expenditure. Thepercentage of adults with 13 or moreyears of school (X5) correlates higherwith expenditure than the variablesabove. and seems to be a useful indi-cator of the educational expectationsof the community. If X, picks up thecorrelation between expenditure andability, it is also true that the adultsin question have at least one year ofcollege as proof of their interest ineducation.

The relationship between prefer-ence (X5) and expenditure is cur-vilinear. Mean expenditures for pref-erence quartiles occur in this orderfrom highest to lowest: $800, $673,$637, $718. Curvilinearity exists be-cause the lowest quartile contains dis-tricts which are industrial in charac-ter and have high expenditure basedon the presence of industrial propertyas a tax base.

5. The relationship between inter-vention (X0) and expenditure (X1) iscurvilinear. Mean expenditures for

TABLE 1. ZERO ORDER CORRELATION MATRIX FOR KEY VARIABLES

Variables PPOE3 PPM, MFI SC13MY GADA PPSFSR RFSSAC RCLSAC PPS

Xi PPOE3X3 PPAVXi MFIXs SC13MY7r GADAXe PPSFSRXe RFSSACXe RCLSACX2 PPS

1.000.7230.4980.322

-0.1570.154

-0.2300.3350.834

1.0000.3810.321

-0.0090.027

-0.1270.3310.624

1.0000.7750.126

-0.115-0.055

0.0360.645

1.0000.2600.0230.128

-0.0350.560

1.000-0.077

0.170-0.390-0.137

1.0000.155

-0.0600.321

1.000-0.119-0.210

-1.0000.287 1.000

Key: PPOE3, per-pupil operating expenditure from local revenue; PPAV, per -pupil asse3sed valuation ofproperty; MFI, median family income; SC13MY, percentage of adults completing 13 or mi.re years of school;GADA, growth in ADA over a five-year period; PPSFSR, per-pupil selected federal-state revenue; RFSSAC,families per secondary-school age child; RCLSAC, civilian workers per school age child; PPS, per-pupil salaries.

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intervention quartiles occur in thisorder, from highest to lowest: $755,$684, $670, $704.

The correlation between interven-tion (X0) and assessed valuation (X3),preference (X,), and growth (XT) isvirtually zero for the whole sample.(See Table 1.) There is a negativecorrelation between median family in-come (X,) and intervention (X6) andfor the whole sample and for the high-and low-income subsamples, which isgreater in low-income districts.3 Thismeans that administrative diversifica-tion of educational programs is morelikely in higher-income districts. How-ever, X3 and X, are decidedly positivecorrelated for low-ability districts, anddecidedly negative for high-ability dis-tricts, both significant at the .05 level.The corr.lation of X, and X, is smallbut positive, 0.137, for the high-pref-erence subsimple.° The correlation ofX, and X, is closer to zero in thehigh-growth districts than in the low-growth districts where the correla-tion 5 is negative, 0.246. This showsthat growth in attendance is a short-term depressant on intervention andthat initially the development ofdriver, special, and vocational educa-tion does not keep pace with atten-dance increases.

6. The correlation between growth(X7) and expenditure (X,) is negative,probably because growth has its initialimpact primarily as a load factorwhich conceals longer-term relation-ships behind cycles in the crowdingand expansion of facilities. The rela-tionship is erratic, as is evident frommean expenditures for growth quar-tiles, going from highest to lowest:$679, $732, $639, $672. Since growth

3 Significant at the .20 level.4 Significant only at the .50 level.5 Significant only at the .30 level.

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is a very complex variable with rela-tionships to all other variables, it islikely that its erratic performance ona scatter diagram is the effect of theinteraction of growth and other deter-minants of expenditure, rather thanthe direct effect of growth on ex-penditure.

The initial negative effect of growthin attendance conceals longer-termrelationships between growth inattendance and other independentvariables. The correlation betweenX3 and X, is negative and virtuallyzero for the whole sample and forhigh-growth districts, and negative,0.396, for the low-growth districts .°In low-growth districts, or in districtsinitiating a growth cycle, increases inassessed valuation do not keep pacewith increases in attendance. Thecorrelations of X, and X, with growthare virtually zero for the wholesample, positive in high-growth dis-tricts, and negative in low-growth dis-tricts. Though the correlations arenot significant, growth seems to havea short-term negative relationship toincome and preference, becomingposnive as the growth cycle reachesits peak. As previously mentioned,growth is a short-term depressant onadministrative intervention.

7. If median family income (X,) iseliminated from the Model B equa-tion for expenditure per ADA (X,),civilian workers per school-age child issignificant at the .01 level, demonstrat-ing the relationship between the vari-able and ability. The elimination ofgrowth (X7) from the equation resultsin no changes in the significance levelof variables, demonstrating that in thecase of X, there is no significant rela-tionship between other variables andgrowth in attendance.

6 Significant at the .10 level.

TABLE 2.-LEAST SQUARE COEFFICIENTS

Constantterm Xa Xs Xs XO X7 XS Xo

Multiple MultipleR R2

PER-PUPIL EXPENDITURE (Xs)-WHOLE SAMPLEA 450.71 0.0040. 148.45 2.1855 - 67.020' 0.761. 0.579B 286.43 0.0033. 0.0310 -144.33 3.8615 -34.969 -21.577 29.349 0.819. 0.672

INDUSTRIAL SUBSAMPLEA 384.50 0.0044. 146.16 3.5180 --61.371 0.793. 0.630B 458.48 0.0041. 0.0209 -105.57 5.3705 -17.958 -44.972. -30.014 0.072 0.761

RESIDENTIAL SUBSAMPLEA 494.92 0.0039 112.59 1.00'6 -76.156 0.701" 0.492B 127.24 0.0028" 0.0729 -295.31 2.5157 -139.39. -22.878 62.175 0.840" 0.705

PER-PUPIL SALARIES (X2) -WHOLE SAMPLEA 288.27 0.0016 247.19 2.8567 -47.100. 0.0030 0.689B 217.63 0.0011 0.0170 92.077 3.9144 - 25.783' -18.353. 20.045 0.899 0.807

INDUSTRIAL SUBSAMPLEA 234.88 0.0018 282.64 4.2819 -46.131. 0.851. 0724B 115.79 0.0003 0.0255' -3.0972 6.5480 37.149d -33.815. 51.165" 0.955 0.912

RESIDENTIAL SUBSAMPL'A 323.93 0.0021 63.198 1.6227" -51.601 0.854 0.728B 228.62 0.0018 0.0183" 47713 2.1722" -63.574. -11.917d 33.396c 0.922 0.850

Significant ay .01 level.b Significant at .05 level.c Significant at .10 level.d Significant at .20 lever.

8. If median family income is elim-inated from the Model B equation forsalaries per ADA (X,), preference (X5)is significant at the .01 1 vel. If X3and/or X7 are eliminated from theequation, civilian workers per school-age child is significant at the .01 level,demonstrating the relationship of thisvariable to ability and growth.

9. The demographic measures offamilies per secondary-school-age child(X8) and civilian workers per school-age child (X5) together explain 2.0percent of the variance in X, and 4.0percent in X2. X8 tends to be higherin districts with a majority of youngfamilies, as is the -se in fast-growingdistricts, and this concuton has a nega-tive effect on both X, and X2. X9tends to be higher in slow-growing dis-tricts, and this condition has a positiveeffect on both X, and X,. Stating thisin other words, the greater the num-ber of school-age children per civilianworker, that is, the greater the load,

the lower are both expenditures andsalaries in high schools.

10. In some counties of Illinois, theweight of personal property tax lawsfalls mainly, if at all, on business andindustry. Those districts which arcabove the median in percentage ofpersonal property tax valuations canbe called industrial districts, and thosebelow the median can be called resi-dential districts. What distinguishesthese two subsamples is the mix of in-dustrial, commercial, and residentialkinds of property which comprise thetax base for the educational levy. Thekind of property has important conse-quences for the functioning of thetheories of educational demand an-Isalary demand.

The models of educational andsalary demand are stronger in indus-trial districts than in residential dis-tricts. (See model B in Table 2.)

The ability and nonability deter-minants operate differently as pre-

227

dictors of X, and X2 in the twosubsamples. In Models A and B, X,predicts X, better in industrial districtsthan in residential districts, and X2better in residential than in industrialdistricts. The three nonability varia-bles, X5, X and X predict X2 betterin industrial districts than in residen-tial, and X, in residential rather thanin industrial districts. X, predictsboth X, and X2 better in industrialthan in residential districts. X, pre-dicts X, better in industrial districts,and X2 in residential districts.

To summarize, the models of educa-tional and salary demand are usefulinstruments for predicting either ex-penditure or salaries per ADA in boththe industrial and residential subsam-ples. However, the models explain

228

more of the variation of X, and X, in'the industrial districts. As determi-nants of X X3 is stronger in indus-trial districts, and nonability factorsin combination (X5, X and X7) arestronger in residential districts. As de-terminants of X X, is stronger inresidential districts, and nonabilityfactors in combination are stronger inindustrial districts. The significancelevels of particular determinants bothof X, and X2 change with the type ofdistrict. The conclusion is that themodels of educational and salary de-mand are valid for the suburban sam-ple, but that before application to aparticular district, the mix of indus-trial, commercial, and residentialproperty which comprises the revenuebase must be taken into account.

Property Tax Determinants of Educational Expenditures

Laurence E. Harvey

THE STUDY OF public-school financeshould logically represent inquiry intoa specific area within the broader fieldof public finance. In recent years thishas not always been true. Much of theinvestigation of public-school financesince the turn of the century has be-come irrelevant to the broad field ofpublic finance. This is attributable toa study in 1905 by Cubberley whichled to the systematic application of thecriterion of equality to state schoolfund apportionments.) Following thissame tangent, Cubberley's ideas werefurther developed and refined in thework of Strayer and Haig into generalpurpose equalizing grants providingequal dollars per pupil among dis-tricts of variable property taxpayingability. These fixed unit type grantshave been adopted in various states,largely through the influence of Mortand his students.2 Subsequent studies,following this line of inquiry into ef-

1 Cubberley, Ellwood P. School Funds andTheir Apportionment. Contributions to Edu-cation, No. 2. New York: Teachers College,Columbia University, 1906.

2 Strayer, George D., and Haig, Robert Mur-ray. The Financing of Education in the Stateof New York. Educational Finance InquiryCommission, Vol. 1. New York: MacmillanCo., 1923.

Mr. Harvey is Instructor of Data Processing,De Anza Junior College, Palo Alto, California.

forts not only for equalizing dollarsbut also equalizing services, and thedegree to which the criterion of equal-ity was met by such plans, have at-tracted little general interest amonginvestigators in the field of publicfinance.

In contrast to the efforts to makeschool finance programs consistentwith the equalitarian ideal of whatshould be, empirical studies of therealities of public spending for educa-tion began to appear in the literatureof school finance as early as 1936,when Co Im reported the results of aninvestigation of the influence of den-sity, urbanization, industrialization,and per-capita income on state per-capita expenditures for education,highways, relief, and total expendi-tures.3 Data were drawn from the1932 Census of Governments. Sincethe study to be reported here. is in thetradition of finding out what is, ratherthan proposing what ought to be, thefollowing section reports in some de-tail on the important empirical stud-ies following Colm's work.

Investigations of the realities ofpublic-school expenditures havesought to identify those characteristics

3 Co lm, Gerhard, and others. "Public Ex-penditures and Economic Structure in theUnited States." Social Research 3:57-77; May1936.

229

which can explain in quantitativeterms the differences in expenditurelevels between school districts, coun-ties, cities, or states. These character-istics, or determinants of educationalexpenditure as they have come to beknown, were traced in the chronologi-cal order of their most significant in-vestigation and then synthesized intothe variables selected for use in thisstudy.

A Rationale for School Finance

A recent series or studies at theStanford University School of Educa-tion, devoted to ordering the field ofschool finance in theoretical terms,has produced a rationale which postu-lates three major determinants of edu-cational expenditures in the publicsphere:

1. A set of shared expectations for educa-tional services. We have called this conditionexpectations.

2. The availability of wealth from whichfunds for schools can be allocated. We havecalled this condition cltility.

3. A political system that allows the ex-pression of demands, and access to the ability.We have called this condition governmentalarrangements for decision-making.4

These determinants, expectations(or demands), ability, and governmen-tal arrangements for decision-makingare intangibles, not readily measura-ble on a quantitative scale. Empiricalwork with the rationale has requiredthe use of measurable variables thatcan be used as proxies for the abstrac-tions.

4 James, H. Thomas; Kelly, James A.; andGarms, Walter I. Determinants of Educa-tional Expenditures in Large Cities of theUnited States. U.S. Department of Health,Education, and Welfare, Office of Education,Cooperative Research Project No. 2389. Stan-ford, Calif.: Stanford University, School ofEducation, 1966. p. 24.

230

Socioeconomic FactorsPrior studies have used a wide range

of socioeconomi:. factors in investiga-tions of variations of public expendi-tures, including expenditures for pub-lic education. Per-capita income,density, and degree of urbanizationhave explained as much as 63 percentof the variation in expenditures forpublic-school education.

Voting OharacteristicsVarious aspects of the governmen-

tal arrangements for educational deci-sion-making have been investigated inearlier studies, with a considerableconcentration on state aid arrange-ments and fiscal dependence or inde-pendence. This study included con-sideration of voter registration andpatterns of voting in school-board gov-erning elections as possible determi-nants of public-school educational ex-penditures.

Assessed Property Valuation

Taxable property valuation wasfound to be positively related to ex-penditures for education in four ofthe five states in the Five State study.The computed Pearson product-mo-ment correlation was .83 in Cali-fornia.'

In summary, recent studies havedemonstrated that public-school edu-cational expenditures per pupil inaverage daily attendance (ADA) arepredictable to as much as 71 percentgiven values of proxies for ability-de-mand variables. One of these varia-bles with high predictive capability isassessed property valuation per ADA.

James, H. Thomas. School Revenue Sys-tems in Five Stales. 'U.S. Department ofHealth, Education, and Welfare, Office ofEducation, Cooperative Research Project No.803, Stanford, Calif.: Stanford University,School of Education, 1961. p. 47.

This study stratified the assessed prop-erty valuation per ADA by propertyuse category, included selected socio-economic factors and voting charac-teristics of constituents of elementaryschool districts, and investigatedfurther.

Purpose of the Study

The purpose of this study was toidentify specific variables from a setof property classification measures, so-cioeconomic factors, and voting char-acteristics which have the greatestability to account for variations incurrent expenditures for public-schooleducation for every elementary schooldistrict in one county.

This study analyzed assessed valua-tion per parcel of property accordingto a classification by use of the prop-erty. Property value data for each ele-mentary or unified school district inthe sample were collected accordingto the property use classification. Eachof the resulting dollar amounts (someof which were zero) were divided bythe ADA for the school district. Thesum of the resulting quotients for eachschool district thus equals the "as-sessed valuation per ADA" in thedistrict.

Variables Used in the StudyDependent variable

D Total Current Expenditure perPupil (TE/P)

Independent variablesI-I Total assessed property valua-

tion per pupil (PV/P)1-2 Assessed valuation of residential

properties per pupil (RES/P)I-3 Assessed valuation of commer-

cial properties per pupil (COM/P)

1-4 Assessed valuation of industrial

properties per pupil (IND/P)1-5 Assessed valuation of agricul4,,,

tural properties per pupil(AGR /P)

I.6 Median family income (MFI)1.7 Percent of families with income

of $10,000 or more (TEN +)1.8 Percent of children under 15

(CHILD)1-9 Median years of education (ED)I-10 Percent nonwhite (NON-W)141 Percent Mexican-American

(MEX-A)1-12 Percent of housing owner-occu-

pied (H00)1-13 Density (DEN)1-14 Percent unemployed (UNEMP)1-15 Percent of multiple-residence

units (M-R)1-16 Percent of registered voters

(REGIS)1-17 Percent of registered voters vot-

ing in school-board governingelection (VOTE)

1-18 Logarithm of number of pupilsin average daily attendance(LOG)

Units of Data

Measures of the dependent variableand each of the potential predictorvariables were obtained for the 24 ele-mentary and 5 unified school districts(the elementary portion) in SantaClara County, California. These mea-sures represent the status of each dis-trict during the 1966-67 school year.

Statistical Procedures

Five regression equations were com-puted for this investigation, the inde-pendent variables available for selec-tion and entry into the computationsbeing those listed above.

In each case the dependent variablewas total current expenditure perADA in elementary education.

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TABLE 1.ORDER OF ENTRY OFVARIABLES INTO REGRESSION

EQUATIONS

Analysis 29 data cases 28 data cases

1 li II2 154 12 19, 154 15

3 11 h, 6, 10, ha4 15, 12 le, 6, f&5 18, 117 18, 19t 110, 113

Analysis of the DataThe results of the analyses are re-

ported as regression weights in stan-dardized form, and multiple correla-tion coefficients.

The Five. Analyses of DataIn all five analyses the dependent

variable was the total current expendi-ture per ADA (D). The first analysisused 1-1 as the only independent varia-ble. The second analysis used four in-dependent variables, 1-2 through I-5.The third analyses I-1 and 1-6 through1-18. The fourth analysis used 1-2through 1-18 as independent variables.The fifth analysis used 1-6 through1-18.

Table 1 presents a composite of thefindings of the five basic regressionmodels as they were computed firstwith the full set of 29 data cases,and second excluding the anomalousMontebello district. Only variablessignificant at least at the .05 level areshown.

With data points from the 29 dis-tricts in Santa Clara County, 83 per-cent of the variation in D is explainedthrough the use I-1 alone in the firstanalysis.

In the process of gathering the data,an a...omalous situation became appar-ent since 25 of the 29 districts in SantaClara County had total assessed prop-erty valuatims per ADA that did notexceed $20,000, three districts had val-

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uz...tinns in excess of $20,000 but lessthan $55,000, and one district (Monte-bello) had assessed valuation of almost$86,000 per ADA. In addition, while28 of the districts spent less than $800per ADA, Montebello spent $1,760 perADA. Were this situation to exist be-cause the residents of this district hadchosen to provide this level of servicesfor children in their school, this wouldbe considered to be a fully validthough exceptional data case. Monte-bello had only 10 pupils in ADA forthe 1966-67 school year. Additionalattendance by very few pupils wouldhave sharply reduced the relative levelof both expenditure and assessedproperty valuation since both are per-pupil amounts. Even though the datafor the Montebello district appearedto be anomalous when compared withthe other elementary districts in SantaClara County, the data were not er-roneous. For this reason the data per-taining to the Montebello districtwere not discarded for the remainderof the study.

To determine the extent of the ef-fect upon the regression equation bythe extremely variant Montebello dis-trict, the first analysis and all subse-quent analyses were made by using theremaining 28 districts. The resultingmultiple correlation coefficient of .766for the first indicated that 59 percentof the variation in D was now ex-plained through the ine of I-I.

Summary of Findings

1-1 Total Assessed PropertyValuation per Pupil

This variable, as hypothesized, wasa significant predictor in every regres-sion equation for which it was en-tered. In each case, total assessed prop-erty valuation per pupil was the mostsignificant predictor of all the inde-

pendent variables, receiving a beta co-efficient about two tim,s the weightfor any other variable. In the case ofthe first and third analysis, when theentire set of 29 data cases was used,this variable accounted for 83 percentof the variation in total current ex-penditure per pupil in the elementaryschools of Santa Clara county.

1-2 Assessed Valuation ofResidential Properties per Pupil

This variable was found to be sig-nificant in the second and fourthanalyses when the 29 data cases wereused, and in the second analysis when28 data cases, excluding Montebello,were used.

It was hypothesized that major ele-ments of the total assessed propertyvaluation per pupil would be moresignificant determinants of educa-tional expenditures than would totalassessed property valuation as a singlevariable. This is confirmed by thefindings of the first and second analy-sis for the set of 29 data cases and alsofor the set of 28 data cases. The multi-ple r's of .912 compared with .941 for

29 data cases, and .766 compared with.811 for 28 data cases result in in-creases in the coefficient of determina-tion of 6 percent and 7 percent, re-spectively.

1-3 Assessed Valuation ofCommercial Properties per Pupil

This variable was significant in onlythe second analysis when the 28 datacases, excluding Montebello, wereused. The fact that it was the firstvariable entered into the regressionequation shows that it had the highestsimple correlation with the dependentvariable. The beta weight of .3244assigned to assessed valuation of com-mercial properties per pupil in thefinal equation as compared with .5118and .4221 for the other independentvariables indicated that there was ahigh intercorrelation between thesevariables, with the others being moreindependent predictors.

1-4 Assessed Valuation ofIndustrial Properties per Pupil

This variable was significant in onlythe fourth analysis when the 28 data

TABLE 2.SUMMARY OF VARIABLES FOUND TO BE SIGNIFICANT PREDICTORSOF CURRENT EDUCATIONAL EXPENDITURE PER PUPIL

29 data casesVariables

used Analysis 1 2 3 4 5

1 .9119*

a4

5

1a

11

10

f1Aultiple r .912

*.3077

.9379.

.S41

.9119*

.912

.3077

.9379.5603 b

.3303..941 .682

% ofvarianceexplained 83 89 83 89 46

28 data cases

Analysis 1 2 3 4 5

.6148,.5118b.3244.

* .3895..4221. *

* 2991* .3336" .4129e* .2593.* .3271

.56121.5186"

.2546.

.3155.*.811 .897 .835 .855

59 66 80 70 73

Not used.Significant at .011 level.

b Significant at .01 level.. Significant at .05 level.

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TABLE 3.-SIMPLE COEFFICIENTS OF CORRELATION, ALL VARIABLES, 29 CASES

VariablesDepend-

ent Ii l 13 It Is Is Ir le 19 lie In 122 In In In 115 117 118

Dependent 1.0001 .912' 1.0002 .163 .167 1.0003 .178 .385 485" 1.0001 .163 .377 .197 .867, 1.0005 .891" .908" .154 .003 .052 1.000a .003 -.092 .531b -.149 -.187 -.176 1.0007 .167 .086 .484, -.175 -.237 .046 .935, 1,000a -.597k -.681" .484b .665b Ana -.460 .125 -.040 1.000e .134 .086 .739, .121 -.015 -.109 .890, .796" .153 1.00010 -.123 .014 -.033 .620" .673, .190 -.467" .601" .099 -.308 1.00011 -.275 -.296 -.358. -.034 .021 -.233 -.473, .619, .350 -.468" .442 1.000is -.190 -.162 -.107 -.028 .0B2 -.160 .385' .305 .361' .188 .018 .049 1.000is -.348' -.384' .047 -0.63 -.216 -.362' --.016 -.043 .238 -.155 -.088 .008 -.010 1.00015 -.146 -.077 -.274 .312 .264 -.104 -.668" .711" .093 -.520' .579, .739, .100 -.085 1.000to -.126 -.205 .415' .17... .021 -.331. -.226 -.265 -.208 -.075 .120 .061 -.64 -" .347 .084 1.00018 .002 .004 .348 .026 -.124 -.062 .714" .768" .083 .593b .390' -.436. .5:0" .020 -.344' -.486b 1.00017 .393 .309 -.311 - -.316 -.3Z .502' .029 .154 -.112 .027 -.332 -.211 -.049 -.308 -.172 -.473" .108 1.00015 -.601" -.725" .206 -.081 -.110 -.789 .256 .053 .513 .139 .072 .244 .309 .407 .053 .364' .076 -.607 1.000

Significant at .05 level.b Significant at .01 level.

cases, excluding Montebello, wereused. Although the third of the threeindependent variables was used in thefinal regression equation, the betaweights of the variables were approxi-mately equal, indicating equivalentcontributions to the net prediction ofthe dependent variable.

1-5 Assessed Valuation of Agri-cultural Properties per Pupil

This variable was significant in thesecond and fourth analyses when the29 data cases were used. A portion ofthe s:gnificance found in these caiescan be attributed to the high agricul-tural property valuation per pupiland the very high current expendi-ture per pupil in the Montebello Ele-mentary School District. That this isnot the total case, however, may beseen in the second analysis whenMontebello was excluded, and totalassessed valuation of agricultural prop-erties per pupil was the third of threevariables entered into the regressionequation, each with approximatelyequivalent contributions to the com-bined ability to predict variations inthe dependent variable.

1.6, 1-7,1-10,1-11,1-12 1.14, and 1-18

These variables were not entered asindependent variables in any of theregression equations developed forthis study. Either these variables cor-related poorly with the dependentvariable or were highly correlated with

variable that has already entered theregression equation (see Table 2 forzero-order correlations for the 29 cases)

1-8 Percent of Children Under 15

This variable was a significant pre-dictor in the fourth and fifth analyses,when 28 data cases were used, and inthe fifth analysis, when 29 cases wereused. The respective beta weights of

the variable in these analyses indicatea contribution of about 33 percent, 34percent, and 53 oercent of the abilityto predict the dependent variable.

1-9 Median Years of Education

This variable was a significant pre-dictor in the third, fourth, and fifthanalyses, when 28 data cases were used,with a beta weight indicating a re-spective contribution of about 22, 34,and 31 percent of the ability to predictthe dependent variable.

1-13 Density

This variable was a significant pre-dictor at the .05 level in the third anal-ysis, when 28 data cases were used,with a beta weight indicating a con-tribution of about 17 percent rf theability to predict the dependent vari-able, and in the fifth analysis, when28 data cases were used, with a betaweight indicating a contribution ofabout 15 percent of the ability to pre-dict the dependent variable.

The findings of this study run con-trary to those of Miner. The relation-ships with the dependent variable wereconsistently nega twe in sign, whilethere were no significant relationshipswith any measures of income, educa-tional level, minority groups, or unem-ployment.

1-15 Percent of Multiple-ResidenceUnits

This variable was significant predic-tor at the .01 level in the third analy-sis, when 28 data cases were used, witha beta weight indicating a contribu-tion of about 21 percent of the abilityto predict the dependent variable.

The hypothesized direct relation-ship between this variable and thedependent variable was not supportedby the findings of the study. There isa lack of permanency indicated by the

235

findings on voting and voter registra-tion. The sign of simple correlationswith income measures was consistentlynegative although none was si,;aifi-cant, indicating a slight tendency to-ward smaller incomes for occupants ofmultiple-residence dwelling units thanfor those who own their homes.

1-16 Percent of Registered Voters

This variable was a significant pre-diction at the .05 level in the fifthanalysis, when 28 data cases were used,with a beta weight indicating a contri-bution of about 20 percent of the abil-ity Lo predict the dependent variable.

!-17 Percent of Regis+. ared VotersVoting in School-Board Election

This variable was a significant pre-dictor at the .05 level in the fifth anal-ysis, when 29 data cases were used,with a beta weight indicating a contri-bution of about 37 percent of the abil-ity to predict the dependent variable.

The hypothesis of a negative rela-tionship between the level of educa-tional expenditures and the percent ofeligible voters who actually voted in aschool -board election was not sup-ported by the findings of the study.The simple correlations, although notsignificant, were all positive.

Inter-Relationship of Variables

With the exception of 1-13, and forthe 28 data case set 1-17, every variablein the study is encompassed by a setof interlocking simple correlations sig-nificant at the .01 level. When thelevel of significance of the simple cor-relation is changed to .05, every vari-able in the study is included in thenetwork.

Conclusions and Recommendations

This study investiga ed the abilityof 18 measures of assessed property

236

valuatio4, socioeconomic factors, vot-ing characteristics, and school districtsize to serve as determinants in theprediction of expenditures for currentcosts of elementary education in SantaClara County, California.

Assessed property valuations werethe most significant determinants ofelementary educational expendituresfor the 29 elementary school districts.The separate classifications of resi-dential, agricultural, and commercialproperties were jointly able to explainfrom 66 to 89 percent of the variationin the current costs of elementary edu-cation for the school year 1966-67.;lino- simplicity is me of the desiredcharacteristics of a determinant thatis to be used for predictive purposes,it should be noted that the single vari-able, total assessed property valuationper ADA, was able to explain from 59to 83 percent of the variation in totalcurrent expenditure per ADA.

The reason for the range of findingsis that the study, drawing data from alimited number of d .stricts, found oneof these districts to appear to be ananomalous case. To determine the im-pact of this apparent anomaly, allanalyses were made twice, once forall 29 districts, and again for the 28more homogeneous districts.

Total assessed property valuationper ADA remained the most signifi-cant single determinant of elementaryeducational expenditures. The sep-arate classifications of residential, agri-cultural, commercial, and industrialproperties were not as significant pre-dictors for the 28 case data set, largelybecause of the absence of the heavilyagricultural property-oriented Monte-bello district. As a matter f fact,the set of four significant predictors,drawn from socioeconomic factors andvoting characteristics, was slightlymore predictive, able to explain 73

percent of the variation in currenteducational expenditures, than wasthe set of three significant propertyclassification measures, able to explain66 percent of that variation.

Santa Clara County, which com-prises the San Jose Standard Metro-politan Statistical Area, is the secondfastest growing county in California.Its estimated population of 893,000 in1965 is projected to increase to 1,830,-000 by July 1, 1985.° The transitionfrom an economy and society basedupon 3Triculture to an economy andsociety keyed to research and develop-ment and L-.2search-based manufacture,although starting some 50 years ago,has beconlc important only since theend o the Korean War and continuesat a rapid pace.? The population hasshifted from one in which agriculturalworkers comprised 10 percent of thelabor force in 1950 to one in whichthey comprised only 3 percent in 1960,with more than 50 percent of all em-ployees classified as white-collar.8 Over10 percent of the labor force (3,500)hold Ph.D. degrees.°

This shift is reflected in the statis-tical findings of the fourth analysiswhen for 29 districts assessed valuationof agricultural properties per pupilis the most significant predictor ofelementary educational expenditure,while for 28 districts the variables,assessed valuation of industrial prop-

California Department of Finance, Fi-nancial and Population Research Section, Pre-limir.ary Projections of California Areas andCounties to 1985. Sacramento: the Depart-ment, April 20, 1967.

7 County of Santa Clara, California, Boardof Supervisors. A Study of the Local Impactsof Research and Research-Based Manufac-turing: Santa Clara County, California. SanJose: the Board, March 1967.

8 San Jose Mercury, March 15, 1968.City of San Jose Planning Department,

Advanced Planning and Research Section.Industry in San Jose. San Jose, Calif.: theDepartment, October 1967.

erties per pupil, percent of childrenunder 15, and median years of educa-tion, are co-predictors of elementaryeducational expenditure, with equiva-lent regression weightings. Thus, thefindings for the 29 districts representthe current socioeconomic conditionswith some vestiges of an agriculturalheritage, while the findings for the28 districts may well be more indica-tive of the future.

A basic assumption implicit in moststate aid formulas is that total assessedvaluation of property may be equatedwith local ability to pay for the costsof public education. Thus, most statesu.,e total assessed valuation of prop-erty as a criterion in determining theamount of aid to be provided to alocal school district. While this studyfound total assessed property valua-tion per ADA to be the most signifi-cant single predictor of total currentexpenditure per ADA, measures ofmajor components of assessed propertyvaluation, classified according to prop-erty use, increased the coefficients ofdetermination from 83 percent to 89percent for 29 data cases and from 59percent to 66 percent for the 28 morehomogeneous data cases. These find-ings indicate that a distribution ofstate aid on the basis of total assessedproperty valuation may violate theegalitarian ideal upon which mostsuch formulas are predicated.

State aid has an insignificant effectin equalizing educational expendi-tures between districts in Santa ClaraCounty, where variations in level ofexpenditure for public education werefound to be most closely related toassessed property valuations. James,Kelly, and Garms found the same tobe true in the Large Cities Study. Theegalitarian goal appears more likelyto be achieved through a change instate policy that would allow local

237

districts to levy upon resid,mtial andagricultural propel ties; the state, tolevy upon public utility, commercial,and industrial properties with the re-sulting funds to be distributed to localdistricts according to an index of need.

Summary

In testing the rationale of schoolfinance which postulates ability anddemand as major determinants ofeducational expenditures, it has beenrecognized that measurable variables

238

must be used as proxies for the ab-stractions. This study has investigateda group of measurable variables,chosen because they were consideredto represent either the ability to payfor educational services, or a demandfor such services. The rationale hadpreviously been tested in states orlarge cities. This study applied therationale to the elementary schools ofthe 29 districts of Santa Clara County,California, and found the deter-minants to be excellent Predictors ofeducational expenditures.

An Analysis of the Relationship Between SocialCharacteristics and Educational Voting Patterns

Wilson K. Jordan

THE PURPOSE of this research was toascertain the relationship between thesocial characteristics of the residentsof a metropolitan community andtheir voting patterns in a schoolfinancial election. Specifically, theurban sub-populations within the LosAngeles Unified School District wereanalyzed in relation to the percent ofaffirmative vote and the percent ofeligible voters who voted in the 1963school bond election.

An attempt was made to answer thefollowing questions:

1. What was the percent of favorable votegiven to the school bond election by thepopulations of the census tracts within thedistrict?

2. What was the relationship between thepercent of favorable vote of the populationsof the census tracts and the percent of votersactually voting?

3. What was the relationship between per-cent of voters actually voting and thosesocioeconomic characteristics defined as socialrank, urbanization, and segregation?

Many reasons may be advanced forthe success or failure of an electioneffort: the amount of voter turnout,the number of issues on the ballot,or even weather conditions on election

Dr. Jordan is Secondary AdministrativeCoordinator, Los Angeles City Unified SchoolDistrict, Los Angeles, California.

day. Ecolog7ral correlations, whereinthe political, social, and economic con-texts of an election are analyzed, arerelatively uncommon in education,maybe because school district electionsare classified as nonpartisan and everyattempt is made to view the resultsin that framework. In addition, theremay be a tendency, when dealing withelection results on school issues, tominimize or overlook the role of socialclass. This is an understandable over-sight since the benefits and effects ofeducation are expected to reach allpeople regardless of economic or socialstatus.

Whatever the reason, there is none-theless a dearth of studies in educa-tion which have sought to analyzevoter behavior patterns in terms ofsocioeconomic characteristics. In ametropolitan complex the size of LosAngeles, it appeared reasonable toassume that a greater diversificationof backgrounds and consequently ofattitudes would exist than in smaller,more homogeneous population areas.A city of three million residents shouldprovide considerable variation ineconomic status, family status, andethnic status. These community char-acteristics might be among the factorsthat determine voter response in elec-

239

tions. If degrees of social rank, urban-ization, and segregation in a com-munity are reflected in the votingpatterns of school elections, these pat-terns can be used to predict voter be-havior.

ProcedureThe hypothesis of this research was

that in a metropolitan area therewould be a definite relationship be-tween those social categories definedas social rank, urbanizati n, andsegregation and (a) the percent ofaffirmative vote, and (b) the percent ofeligible voters who voted in a schoolbond election.

The popula 'ion unit was the censustract because it is a fixed geographicalunit whose boundaries follow In

defined highways and topographicalfeatures, and as part of a StandardMetropolitan Statistical Area it is con-sidered almost permanent in its form.Therefore, the 709 tracts within theboundaries of the Los Angeles UnifedSchool District were selected for analy-sis.

The use of the Shevky-Bell typologywas considered desirable in this studybecause it provided a standardizedmethod of urban analysis and offeredan opportunity to view social statis-tics, not as independent factors, butas part of a wider system of social re-lationships.

Shevky and Williams 1 made a socialarea analysis of the census tracts ofLos Angeles County based on anoriginally designed typology. In 1955,Shevky and Bell 2 revised the typologyand used 1950 census data to analyze

1 Shevky, Eshref, and Williams, Marilyn.The Social Areas of Los Angeles: Analysisand Typology. Berkeley: University of Cal-ifornia Press, 1949. 172 p.

2 Shevky, Eshref, and Bell, Wendell. SocialArea Analysis. Stanford, Calif.: StanfordUniversity Press; 1955. 70 p.

240

census tracts of the San Francisco Bayregion.

The revised typology was con-structed on three dimensions and wasconsidered to be one of the bettermethods of empirically differentiatingthe social characteristics of a contem-porary city. The three vales were:(a) social rank, which was based onoccupational and educational levels ofthe residents of an area; (b) urban-ization, which was based on variationsin life styles and a 2asured in termsof the number of children, workingmothers, and the type of housing inan area; and (c) segregation, whichwas based on the percentage ofresidents of an area who were mem-bers of designated racial and ethnicgroups. Shevky and Bell believed thatthese indicants of behavior patternsfor urban populations best reflectedthe social statistics of our modernsociety.

The analysis of the relationship be-tween social characteristics and edu-cational voting pattern- required thattwo types of data be used in this study:(a) the election results for the LosAngeles Unified District bond electionof May 28, 1963; and (b) the socio-economic characteristics of the popu-lation of that school district.

The election returns by precinctwere available from the Los AngelesCounty Registrar of Voters, and theschool district had analyzed them inrelation to the elementary-school areasbecause these had been used as zonesfor the election.

For this study it was more usefulto establish the results by census tractsso that the data would be comparableto other information which was to beused. Also important in this decisionwas the fact that elementary-schoolboundaries and precinct boundarieswere not coterminous. In many in-

stances this required that portions ofa precinct vote be assigned to dif-ferent elementary schools. By usingcensus tracts, this was not necessarysince the precinct boundaries weredesigned within the boundaries of thecensus tract.

In November 1964, the Los AngelesCounty Registrar of Voters had pre-pared for the first time a bookletwhich listed all of the census tracts forLos Angeles County and showed theprecincts within each census tract. Byusing this booklet and by includingonly those precincts (5,328) in whichvotes were recorded at the May 28,1963, election for the Los AngelesUnified District, a voting record wasestablished for each of the 709 censustracts within the district.

The primary source for the socio-economic characteristics of the resi-dents of the census tracts of the schooldistrict was a study made by Correll 3in which the Shevky-Bell typology wasused to compile a sociological rank foreach of the 1,297 census tracts in LosAngeles County. An index rank foreach of the 709 census tracts of theschool district was thus determined.This index rank represented a com-posite evaluation of each census tractbased on the three scales of social rank,urbanization, and segregation.

The social rank construct repre-sented a scale determined largely byeconomic elements. The componentswere educational status and occupa-tional status. Educational status wasmeasured by the number of personswho had completed six years or lessin school in relation to the number ofpersons 25 years old and older. Occu-pational status was measured by the

3 Correl, Vincent I. The Effect of SchoolDistrict Size upon Citizen Interest in Schools.Doctoral Dissertation. Los Angeles: Univer-sity of California, 1963. 1'74 p.

number of craftsmen, laborers, andoperatives in relation to every 1,000employed persons. An average of thestandard scores of these two variablesestablished an index of social rank,and percentile scores were determinedin relation to the range of this index.Zero represented lowest ztatus vand 100, highest. A low index in-dicated many craftsmen, laborers, andoperatives, and many persons whohad completed grade school only.

The urbanization construct repre-sented an attempt by Shevky and Bellto use an economic base while viewingthe - organizational structure of thefaim'y.4 To measure differences infamily structure and social behaviorthree variables were used: (a) fertilityas measured by the number of chil-dren under five years of age in rela-tion to every 1,000 females of child-bearing age (15-44); (b) the number ofwomen in the labor force for every1,000 females 14 years of age andolder; and (c) the number of singlefamily dwelling units of all types inorder to determine a ratio. An aver-age of the standard scores for thesethree elements represented an urban-ization index. When converted to per-centile scares, a low index representedhigh fertility, few women in the laborforce, and many single-family dwell-ing units--low urbanization. A highindex showed low fertility, manywomen in the labor force, and fewsingle-family dwelling unitshighurbanization.

The segregation construct permit-ted an evaluation of ethnic and cul-tural variations and consequent inter-action patterns. The variable usedwas the number of persons in highlyisolated population groups in relation

4 Shevky, Eshref, and Bell, Wendel, op. cit.,p. 68.

241

to the total population. Groups wereconsidered to be highly isolated iftheir average proportion in the popu-lation of neighborhoods where theylived was equal to three or more timestheir respective proportion in thepopulation of the county. The popu-lation groups included were Negroes,Mexicans and Mexican-Americans,Orientals, and persons born in Russia,Italy, Poland, Austria, and Hungary.Census tracts were considered to besegregated if the combined racial andnational groups exceeded 26.1 percentof the total population of the tract.

The decision to use the two-by-twocontingency tables as the mathemat-ical model was based on a number ofreasons. The number of cases (709)and the inclusion of the total pop-ulation required a format whichwould assimilate the data. A packageFortran II computer program wasavailable and would establish highlyadequate distribution scales and com-putational outcomes. A quartile anal-ysis of the data could be done quitesimply and would correspond to theShevky-Bell categories of high, high-medium, low-medium, and low.

The statistical result, based on thedata and method described, repre-sented the electorate opinion of votersin a large metropolitan school district.The introduction of socioeconomiccharacteristics considered relevant tothe distribution of that opinion pro-vided a basis for the resulting surveyanalysis.

Through the use of the contingencytables, the census tract data estab-lished under the Shevky-Bell con-structs could be compared with theelection results for the school district.The dependent variables of percent offavorable vote and percent of turnoutwere compared to social rank, urban-ization, segregation, and the composite

242

of these three elements, index rank.The statistical method of correlationalanalysis provided a technique for in-dicating the magnitude of the relation-ship between the variables. The rela-tionships were described as weak,modest, strong, or very strong. Cor-relations which varied either positiveor negative, between 0 and 10 wereconsidered weak; those between 11and 25, modest; between 26 and 50,strong; and above 50 as very strong.In addition to this empirical asso-ciation expressed by the degree ofrelationship between variables, theknowledge provided permitted certainpredictions about the dependent vari-ables.

Findings

The comparison of social rank withthe two dependent variables, percentof favorable vote and percent of turn-out, showed that the potential for thedefeat of the bond proposition existedin the low-middle range on the socialrank scale. Not only did the largernumber of tracts in this group fail topass the bonds, but it was also withinthis group that the lowest voter turn-out occurred. Higher turnout mightvery well have tipped the scale suf-ficiently to defeat the issue through-out the school district.

The support shown in the upperand upper-middle brackets of socialrank, while not as overwhelming asthat in the lowest bracket, was none-theless quite favorable (68 percent)and was assisted by a high degree ofturnout within those tracts with thehighest social rank. This was coupledwith 86 percent support of the bondproposal by those tracts in the lowestrange on the social rank scale, andsubstantiated the hypothesis that thetracts with high and low educationand income indexes would be most

prone to vote affirmatively at a bondelection.

Also significant was the fact thatwithin those tracts with the lowestsocial rank there was no evidence oflow turnout, as had been expected.In fact, 85 tracts had a turnout be-tween 40 and 72 percent and only 92tracts out of the total of 177 wererecorded with turnout below 40 per-cent. The district mean for turnoutwas 39.66 percent, so there was arefutation of the theory that a loweducational level and an uninformedelectorate would produce a low voterturnout. Much of the success of thebond issue stemmed from this source.

The urbanization analysis reflectedan even more pronounced evidence ofsupport by the high and low ends ofthe scale. The fact that 81 percentof the tracts in the lowest bracketof urbanization rank supported thebond proposal was confirmation of ahypothesis. It was believed that tractswith a high percentage of children,with few working mothers, and manysingle-family dwellings would tendto vote affirmatively. It was notnecessarily expected that those tractswith conditions exactly oppositewould also support the bond issue.

The support was minimized to somedegree when the turnout scattergramwas included in the analysis. Notonly was low turnout seen among thetracts which ranked lowest and higheston the urbanization scale but only 50percent support for the bonds camefrom the tracts in the lower middle ofthe scale. At the same time 55 percentof those tracts were in the top bracketsfor turnout, and thus represented themajor source of negative votes at theelection. The fact that the tracts inthe upper middle section of the scalealso had high turnout and low affirma-tive vote meant that the strong sup-

port provided by the tracts in theupper bracket undoubtedly preventedthe defeat of the entire issue.

The segregation status of the tractshad a very definite bearing on theirvoting patterns and undoubtedly re-flected low-income, low-homeowner-ship and low-education indexes.While segregation per se, therefore,would not necessarily predict highvoter support, it could be consideredan indicant. Banfield and Wilson'sstudy 5 failed to reveal a significantcorrelation between percentage ofNegroes and the strength of the "Yes"vote, but it was believed that this wasdue to the small number of Negrohomeowners in Cleveland at that time.The more highly segregated tracts inthe Los Angeles Unified School Dis-trict area showed an extremely highsupport of the bond proposal electionin 1963. In fact 80 percent of thesegregated tracts (327), as classified bythe Shevky -Bell scale, voted above therequired two-thirds majority. By con-trast only 46 percent of the non-segregated tracts (382) passed the bondproposal. Among those tracts whichwere the most highly segregated(above 56 percent) 96 percent passedthe bond issue. The most apparentevidence of this existed in the centralcity area which can be classified as con-taining a heavy density of Negroes.

There did not exist, however, amarked pattern in relation to turnoutamong the nonsegregrated and segre-gated tracts: 57 percent of the segre-gated tracts and 54 percent of thenonsegregated tracts were shown witha turnout below 40 percent. The mostnoticeable difference in turnout wasseen in the range between 40 and45 percent; 106 nonsegregated tracts

5 Banfield, Edward C., and Wilson, JamesQ. City Polities. Cambridge, Mass.)-13arvardUniversity Press, 1963. 362 p.

243

and only 58 segregated tracts werefound in this third quartile of theturnout scale. The hypothesis that thelowest turnout would occur in thosetracts which possessed a high percent-age of an isolated population groupwas substantiated only in this instance.

When the voting record of the cen-sus tracts of the school district wasanalyzed in terms of the compositesocioeconomic classification called in-dex rank, it was understandable thatthe greatest support was shown inthose tracts classified at the lowest endof the scale. The second strongestdegree of support, however, appearedin the upper middle bracket of thescale and not in the highest bracket asmight have been expected from thesocial rank and urbanization com-parisons.

In each instance, the poorest sup-port for the bond proposal wasevidenced in those census tracts whichwere classified in the lower middleraiige on all three scales of socialrank, urbanization, and index rank.On the social rank scale 43 percent ofthe tracts in the lower-middle bracketpassed the bond proposal. The urban-ization scattergram showed that 50percent of the tracts in the quartilepassed the bends, and on the indexrank scale only 39 percent of the tractsin the low-middle range showed anaffirmative vote above the requiredma,*(3*ty.

The application of the "public-regardingness" principle to these dataindicates that the voters in the lower-middle range of socioeconomic rankare most prone to attempt to maximizetheir family income. With a self-interest that is narrowly conceivedthese people are, as Banfield and Wil-son demonstrated,° the most likely to

6 Ibid.

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vote against a financial election issuewhich they believe will raise taxes.The high quartile on those samescales, where public-regardingnessbeen found to be considerably higher,showed the social rank scale with 64percent of the tracts passing the bonds,the urbanization scale with 65 percentof the tracts passing the bonds, and theindex rank scale with 50 percent of the178 tracts passing the bonds.

An even more vivid contrast ex-isted between the figures above andthose for the tracts in the lowest quar-tile range on those same scales. Onthe social rank scale 80 percent of thetracts passed the bonds and for theurbanization factor 81 percent ofthe a-acts in the lowest quartile, sup-ported the bond proposal. For indexrank 82 percent of the 177 tracts hada favorable vote sufficient to pass theproposal.

Table I presents a composite anal-ysis of these data.

Conclusions

It was evident, therefore, that thebasic question asked originally in thisresearch of whether or not there wasa relationship between a voter's socio-economic status, specifically in ametropolitan complex, and his votingtendency, specifically in a school fi-nancial election in the second largestschool district in the nation, could beanswered in the affirmative.

The conclusions which could bedrawn as a result of the analysis ofthis 1963 election were:

1. A concerted effort should bemade to secure the vote in the areasof the school district which are classi-fie, at the two extremes of the socio-economic scale.

2. The tracts whose ethnic andracial composition represents a higherproportion than the county popula-

TABLE I.PERCENTAGE OF TRACTS BY QUARTILE VARIABLEPASSING THE BONDS

Variable Quartile

Low Low-medium High-medium High

Social rank 80% 43% 65% 64%Urbanization 81 50 53 65Segregation 97 57 47 45Index rank 82 39 78 50Number of tracts (709) 177 177 177 178

tion figures should be encouraged toregister and to vote.

3. A high percentage of favorablevoter response can be obtained fromthose tracts in the low range on theeducation scale.

4. Low voter turnout can usuallybe expected to produce fewer negativevotes.

5. Tracts with a high percentageof children will provide better votersupport than those with many olderpeople.

6. The tracts most likely to sup-port a school financial election arethose classified on the Shevky-Bellscale respectively as:

a. Low-medium social rank, lowurbanization, segregated

b. Low-medium social rank, low-medium urbanization, segregated

c. High social rank, low urbaniza-tion, nonsegregated

7. The tracts most likely to defeata school financial election are those

classified on the Shevky-Bell scalerespectively as:

a. High-medium social rank, low-medium urbanization, nonseg-regated

b. High social rank, low-mediumurbanization, nonsegregated

c. High social rank, high-mediumurbanization, nonsegregated.

Lazarsfeld in his foreword to thework by Hyman 7 described such a re-search operation as this an "elabora-tion" process designed to uncover con-ditions, contingencies, spurious factors,and interpretations. It is to be hopedthat the description and explanationof these data, and specifically of theirinterrelationships, should provide cer-tain predictive information for boththe educator and the social scientistas the result of similar ecologicalstudies.

7 Hyman, Herbert. Survey Design andAnalysis: Principles, Cases and Procedures.Glencoe, Ill.: Free Press, 1955. p. xiv-xv.

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An Adequate Foundation Program and StateDistribution Formula for Indiana School Districts

Ralph L. Kelly

THE PURPOSE of this study was toanalyze current instructional costs andtheir relationship to that portion ofthe Indiana Foundatio .1 Program pro-viding state support for instructionalpurposes during the 1966-67 schoolyear.

During the past year3, superintend-ents in Indiana have discussed therecognized program for instructionalcosts in the Indiana Foundation Pro-gram distribution formula ($185 perpupil in resident average daily attend-ance (RADA)). They said that it wasunrealistic and did not meet the de-mands of the school districts. Thisis evidenced by a number of schooldistricts that advertised tax rates abovethe statutory limit in preparation oftheir 1969 budgets in July 1968.

Instructional costs are a major itemin school budgets and must be meteach year if schools are to maintainthe quality of education desired. Inrecent years, when additional staterevenue was appropriated for instruc-tional costs, the increased amount wason a RADA basis for each school dis-trict regardless of its assessed valua-tion. This seemed inequitable because

Dr. Kelly is Superintendent of Schools, Port-age, Indiana.

246

of the variation in the taxpayingability of local school districts. Theincreased costs due to inflation andgreater salary demands made therecognized program unrealistic.

Definitions of Terms

Foundation program: a basic educa-tional program that should be guar-anteed to all children of the state.

Instructional costs: All expt.nses inthe regular school budget that occurunder account "B" Instruction withthe exception of summer school andevening school.

Local chargeable tax rate: the taxrate of local adjusted assessed valua-tion which must be levied for the sup-port of a foundation program.

Local share per RADA: the resultof multiplying a qualifying rate of$.G5 times the school corporation'sadjusted assessed valuation and divid-ing the product by RADA. Thequotient is the local share per RADAin the present Indiana FoundationProgram.

State recognized program: anamount of $185 per RADA in theIndiana Foundation Program for in-struction.

State share per RADA: the differ-ence between the adjusted state

recognized program within the for-mula and the local share per RADA.

Taxpaying ability: a measurementof a school district's ability to supporteducation expless?,d as the adjustedassessed valuation per RADA.

A study of instructional costs useddata from 243 school districts inIndiana maintaining a high schooland having a RADA of 1,000 or morepupils in grades 1 through 14 for theschool year 1966-67. The local shareof instructional costs was 60.2 percent.The average instructional cost perRADA was $379.70. Fifty percent ofthe school districts had instructionalcosts less than $357 per RADA. Therange of instructional costs per ADAvaried from $207 to $531 per district.Fifty-five percent of the school dis-tricts, with 66 percent of the ADA, hadinstructional costs ranging from $340to $419 per pupil in ADA.

There was a tendency for school dis-tricts with greater adjusted assessedvaluation per RADA to have higherper-pupil instructional costs. Therewas less variation in the instructionalcost per ADA for those school districtswith an adjusted assessed valuationranging from $8,000 to $9,999 perRADA. There was a tendency forthe largo- school district to have agreat-3- per-pupil instructional cost.

The greatest perceitage of ADAwas in those school districts with anadjusted assessed valuation per RADAranging from $8,000 to $8,499. Theaverage instructional cost per ADAfor this group was $389.

An Analysis of State Support forInstruction As Provided by the

Indiana Foundation Program

The amount of state support re-ceived from the state recognized pro-gram varied from $22 per pupil to

$190 per pupil for the individualschool districts. However, 174 schooldistricts, representing 75.34 percentof the ADA, were receiving from $140to $169 per pupil in ADA, and 130school districts, representing 69.70percent of the ADA, were receiving30.0 to 44.9 percent of state support oftheir instructional costs. The adjusted?qessed valuation of these school dis-tricts ranged from $3,443 to $17,899per RADA.

There were 183 school districts, rep-resenting 78.28 percent of the ADA,receiving 65.0 to 79.9 percent of statesupport based on the state recognizedprogram of instructional costs. Theadjusted assessed valuation of these183 school districts ranged from $3,443to $10,796 per RADA.

The difference in the percentages ofreimbursement is due to the per-RADA allowance of $185 for the in-structional part of the IndianaFoundation Program.

The $185 per-RADA allowanceseemed unrealistic in determining theamount of state support in light of theaverage instructional cost per pupil it.ADA of $379.70. If a foundation pro-gram is to guarantee a basic educt-tional program to all children of tl.estate, the distribution formula shouldbe based realistically on instructionalcosts of the school districts. Theaverage amount of state support perpupil varied from a low of $138 to ahigh of $167 for 80 percent of theschool districts, with a range in theiradjusted assessed valuation of $5,500to $11,499 per RADA. The differenceof $29 per pupil does not seem pro-portionate to the wealth factor (ad-justed assessed valuation) of eachschool district. The amount of statesupport did not necessarily increasefor the poor school districts. Themethod of distribution does not seem

247

to serve as an effective method ofequalization based on the wealth fac-tor.

There seemed to be less variationin per-pupil expenditure for schooldistricts close to the median onassessed valuation. Every school dis-trict had an average per-pupil ex-penditure greater than the recognizedprogram of instruction as provided bythe Indiana Foundation Program.The differences between instructionalcosts and the recognized program forinstruction varied from $60 to $252per pupil in ADA in 21 selected dis-tricts.

Suggested Revision of theIndium Foundation Program

A major purpose of this study wasto formulate a foundation programthat would provide a more adequateper-pupil allowance for instructionalcosts based on current expendituresand that would result in the distri-bution of the state share in inverseproportion to local taxpaying ability.

Revision of the Indiana FoundationProgram began with determining theaverage taxpaying ability of selectedschool districts in Indiana. The me-dian school district was selected fromthe 243 school districts arranged inorder of their wealth based on theadjusted assessed valuation. Tenschool districts were selected on eachside of the median, and the averageper-pupil instructional cc 's of the 21school districts were computed. Theaverage instructional cost of $352 perRADA of these 21 districts became therecognized program for instruction(per-pupil allowance in the proposedfoundation program).

Selection of the Key DistrictMort offered a solution to the prob-

lem of determining the amount of

248

state aid necessary to support theminimum educational program. Hebelieved that the maximum local con-tribution is the tax rate necessary forthe wealthiest district of adequatesize to provide sufficient funds to sup-port the proposed program. A highertax rate results in the p3orer schooldistrict making a greater effort tosupport a minimum program. Thewealthier school districts are not re-quired to put forth as much effort asthat reci. ied of all districts to supportthe minimum program.

Determination of the amount ofstate support was in terms of Mort'skey district concept which consistedof selecting the wealthiest school dis-trict of adequate size. A school dis-trict of adequate size (9,507 pupils)and ranking first in adjusted assessedvaluation ($38,469 per pupil) gave thelocal chargeable rate of $.92 per $100of taxable property to support theproposed minimum foundation pro-gram. This local qualifying rate wasapplied to the valuation of all otherdistricts in the state; the differencebetween the cost of the minimumeducational program and the yieldof the local qualifying rate constitutedstate support. The use of this uniformlocal qualifying tax rate for all dis-tricts results in local shares directlyproportional to the taxpaying abilityof local districts and state shares whichare inversely proportional.

The local and state share of the pro-posed minimum foundation programwas determined for the 243 school dis-tricts comprising this study: `260,010,-721 state; $81,904,831 local.

The proposed minimum foundationprogram of $352 per-pupil allowancefor instructional purposes was morerealistic in terms of guaranteeing aminimum educational program basedon current costs.

The level of the foundation pro-gram is as equally important as themethod of distribution. Even thoughthe state share of a foundation pro-gram may be distributed in inverseproportion to the district's taxpayingability, little equalization results ifthe level of the foundation program isunrealistic.

Conclusions

1. Since the current foundation pro-gram was found to be unrealistic, anew distribution formula is necessary.

2. The foundation program shouldestablish a higher per-pupil allowanceand should provide a distribution ofstate funds inversely proportionate tothe district's adjusted assessed valua-tion.

3. A suggested formula provided aper-pupil allowance of $352 and alocal 7hargeable rate of $.92 per $100of adjusted assessed valuation basedon 1966-67 expenditures.

Recommendations

1. The state legislature should con-sider the adoption of a formula assuggested or modify it so that thecurrent available data can be utilizedin the future.

2. Since the wealth of districts, thecost of instruction, and the numberof pupils to be educated constantlychanges, provisions should be made toalter the per-pupil allowance and thelocal qualifying rate in accordancewith the method used in this studyprior to the appropriation of statesupport funds for each biennium.

249

Effects of Matching in Federal Aidson Selected Indiana School Districts

Alex C. Moody

TECHNOLOGICAL advancements, alongwith other social changes in theUnited. States, have produced a societywith an increased demand for edu-cation and skill. Such resultant factorsas industrialization and populationmigration have been oblivious togeographic boundaries or geographiclocation. The Committee for Eco-nomic Development has advanced theargument that states and localities canno longer finance, on an equitablebasis, the increase in educational ex-penditures that the national interestand welfare of the population de-mand from these sources.1

Burkhead reported educationalachievement to be interrelated withthe economic and civic progress of ageographic area.2 Because of highpopulation mobility, social and eco-nomic benefits from education cannot

accrued to a limited geographicarea or state. Thus, the matter of pro-viding equal educational opportunity

1 Committee for Economic Development.Paying for Better Public Schools. New York:the Committee, 1959. p. 31.

2 Burkhead, Jesse. Public School Finance:Economics and Politics. Syracuse: SyracuseUniversity Press, 1964. p. 267-71.

Dr. Moody is Assistant Professor of Educa-tion, Indiana State University, Terre Haute,Indiana.

250

for all youth has become of increasedconcern to educators, legislators, andcitizens.

The federal government has under-taken an active role in the finance oflocal educational programs during thepast decade; however, the role of thefederal government in these programsnever has been established clearly.Federal participation in the financeof local educational programs has beendirected toward specific national needsor interests which were thought to belagging. Such aid usually has beencategorical in nature and often con-tained provisions whereby the re-cipient of the aid was required tomatch the amount of the federal fundsin order to receive the federal aid.The intent of these federal programshas been to improve the educationalopportunity for youth of the nation;however, aid has been limited to sub-ject areas vital to national interest orwelfare.

Statement of the ProblemTo test the commonly accepted

theories regarding the effect of cate-gorical federal aid program withmatching provisions on local educa-tional finance, this research was de-signed to investigate the apparent in-fluence on school corporations in

Indiana of such fiscal output as ade-quacy, equity, and stimulation. Pre-liminary studies were undertaken toascertain whether there were differ-ences in expenditure levels for selectedprograms and organizational patternsbetween school corporations that par-ticipated in categorical federal aidprograms and those that elected notto participate (nonparticipants).

The following three general ques-tions were asked:

1. Is there a difference in adequacyas measured by per-pupil expendituresfor instructional apparatus and equip-ment between participant and non-participant school corporations?

2. Is there a difference in per-pupilfunds received from a categorical fed-eral aid program with matching pro-visions among participants?

3. Is there a difference in fiscalstimulation between participants andnonparticipants as reflected in the 1-3Budget Account, which includes ex-penditures for instructional materialand equipment? The 1-3 Account,used for many years in Indiana, some-what corresponds to the 1230-c Ac-count described in the universalaccounting system.3

Each of the three questions wasasked by four organizational charac-teristics: participation or nonpar-tic;pation, school corporation size(ADA), school corporation wealth,population, and geographic location.

Design of the Study andMethodology

Indiana school corporations partici-pating in Title III of the NationalDefense Education Act comprised the

3 U.S. Department of Health, Education,and Welfare, Office of Education. FinancialAccounting for Local and State School Sys-tems. Bulletin 1957, No. 4. Washington, D.C.:Government Printing Office, 1957. p. 93-94.

sample of participants. Nonpartici-pant Indiana school corporationsserved as a control group.

Since Indiana school corporationsmust include the amount of fundsexpected through participation in theTitle III program when preparingtheir budgets, the 1-3 Account re-flected a major portion of the ex-penditures encumbered for the federalprogram. By using the summary datafor a budget year, the exact amountof federal funds and the total ex-penditures in the 1-3 Account weredetermined. Thus, the data consistedof Title III expenditures and ex-penditures in the 1-3 Account for allschool corporations in Indiana for1965-66.

Only that part of Title III requir-ing matching funds of local schoolcorporations was included in thestudy. No attempt was made to studyfunds used to improve the supervisoryaspects of the State Department ofPublic Instruction or the funds spentfor remodeling projects during 1965-66.

A total of 355 school corporationsin Indiana were included in the study;29 were not included because no fundswere spent in the 1-3 Account; 59were deleted from the study becauseof school reorganization or other in-consistency in data.

Data were obtained from the In-diana Department of Public Instruc-tion; school corporation budgetarydata, from the Division of SchoolFinance; and Title III data, from theFederal Project Division. The 1965-66school year was selected because TitleIII personnel believed that year wasmost representative of Title III proj-ects in Indiana. The Title III pro-gram had been expanded to includenine subject areas, and all funds allo-cated by the federal government were

251

obligated by local school corporationsduring the 1965-66 academic year.Eleven remodeling of facilities proj-ects were approved by the Title IIIoffice during the year selected for thestudy, but since these funds did notappear in the 1-3 Account, they wereremoved from the allocations to localschool corporations.

All expenditure data used in thestudy were based on a per-pupil inADA basis.

Certain assumptions were made toprovide a basis and direction for thestudy as follows:

1. The 1-3 Account reflected a ma-jor portion of expenditures for equip-ment and instructional apparatus asallocated by Title III.

2. A majority of school corporationsanticipated the use of Title III fundsand made provisions for the receiptof these funds when determiningbudget allocations.

3. Indiana school corporations logi-cally can be stratified into discretecategories for the variables of size,wealth, population make-up, and geo-graphic location.

Factor A was the dependent vari-able: participation or nonparticipa-tion.

a 1Participationa,NonparticipationThe independent variables were:

School corporation size (ADA), Fac-tor B:

b,Large-2,000 and overb,Medium-1,000 to 1,999b3 Small-999 and under

School corporation wealth (adjustedassessed valuation per pupil ADA),Factor C:

c,High$9,500 and overc,Medium$7,000 to $9,499c3Low$6,999 and under

252

Population (1960 Census), Factor D:

d,Ruralover half of populationd,Urbanover half of population

Geographic location, Factor E:

e,Northern regione2 Central regione,Sou them region

The principal techniques employedwere the 2-way and 3-way factorialanalyses of variance. The data didnot lend themselves to designs of ahigher order because of small numbersof observations in certain cells. Un-equal cell frequencies were adjustedby "unweighted means analysis."

Where significant F ratios werefound, differences between means weretested. Profiles were plotted to giveadditional meaning to the F testresults.

A typical experimental design ispresented below for I-3 expendituresper ADA:

2

04

Size classificationb, b,

a, AB AB12

a, AS AB.,,

bABAB23

Similar designs were employed totest each of the independent variableswith the dependent variable. Thisdesign was employed for tests per-taining to adequacy and stimulation.

Expenditures in the I-3 Account ona per-pupil ADA basis were used totest hypotheses for each set of data.

To test the hypothesis regardingfiscal stimulation between participantsand nonparticipants, the 1-3 Accountamounts were reduced by Title IIIfunds received and compared with thetotal 1-3 Account amounts of non-participants.

A three-factor factorial design totest for equity only for participantsused Title III funds per pupil re-ceived.

Summary of Findings

Questions for which answers weresought were stated in the form ofnull hypotheses. In instances wheresignificant differences were denoted,the F comparison technique was em-ployed to determine which level of avariable was different.

The first three conclusions relateto expenditures on instructionalapparatus and classroom equipment.

I. Participation in a categoricalfederal aid program did not appear toprovide for substantially greater ade-quacy in terms of comparative dollarsexpended. Participants, however,tended to spend somewhat greateramounts than did nonparticipants.

2. Population make-up was foundto be related to differences in expendi-tures. Whether participants or not,urban school corporations spentgreater amounts_than did rural schoolcorporations.

3. Geographic location was relatedto per-pupil expenditures: (a) Schoolcorporations in the northern regionspent significantly greater amountsthan did school corporations in thecentral or southern regions. (b) Inthe northern region participants ex-pended significantly higher amountsthan nonparticipants.

4. The principle of equity wasfound to have been violated amongparticipants. Title III NDEA fundsreceived per pupil did not relate tothe factors of wealth and populationcomposition: (a) High-wealth schoolcorporations received significantlymore funds than did medium- or low-wealth school corporations. (b) Urban

school corporations received signifi-cantly more funds than did ruralschool corporations.

5. Title III NDEA did not appearto serve as a significant source ofstimulation for school corporationsto spend greater sums of money forinstructional apparatus and equip-ment; however, participants tendedto spend somewhat greater amountsthan did nonparticipants.

6. The factor of population com-position was related to the principleof stimulation: Stimulation wasgreater for urban school corporationsthan for rural school corporations.

7. The factor of geographic loca-tion was related to stimulation asnorthern geographically located schoolcorporations were significantly differ-ent from all other groups.

Implications

The lack of a clearly establisheddifference in dollar expenditure be-tween participating and noparticipat-ing school corporations warrantedspeculation as to cause. Funds re-ceived from Title III tended to con-stitute only a small part of the totalschool budget. Further, the degreeof involvement or participation mayhave varied because some school cor-porations received greater amountsthan others. Thus, a partial ex-planation for a lack of greater differ-ence might be an amount of federalfunds in the school corporation budgetinsufficient to show a difference. Somedifference might exist within eachcategory of stratification. No analysisfor difference within categories wasmade.

Increased awareness of and emphasison education by the American peoplealso has tended to increase expendi-tures for education by all school cor-porations regardless of participation

253

or nonparticipation. These increases,along with inflationary trends in theeconomy, in all probability accrued ata faster rate than did increases infederal funds; therefore, federal fundswould appear less significant in over-all comparisons of per-pupil expendi-ture by school corporations.

Dollar differences attributed toparticipation tended to border onstatistical significance. A lower levelof significance would have yielded agreater number of significant differ-ences. Although this study did notestablish clearly a significant differencedue to participation, it must berecognized that participation did infact account for some difference inexpenditures for teaching apparatusand equipment.

The significant difference attributedto certain organizational factorstended to suggest that other factorsmight be confounded with the orga-nizational factors included in thisstudy. For instance, the factor of popu-lation composition also might implythe degree of conservatism or liberal-ism of people in some other composi-tion groups. Similar implication mayexist in terms of political orientation,subculture reference groups, and otherforces which act upon a community orregion. It is possible that additionalvariables were confounded with theorganizational variables of geographiclocation and population composition.

The fact that high-wealth schoolcorporations received substantiallymore funds per pupil might tend toimply that these corporations had thepersonnel and other resources neces-sary to fill out forms and pursue theprocurement of federal funds to agreater extent than did other schoolcorporations. Similar suppositionsalso might apply to urban school cor-porations.

254

Further, several rural school cor-porations were still experiencingschool district reorganization duringthe time that the data were collected;consequently, changes in administra-tive structure and organization mighthave resulted in conditions which didnot permit complete utilization ofavailable funds.

The study provided certain impli-cations for federal and state authori-ties associated with administering theprogram. The fact that low-wealthand rural school corporations bene-fited to a lesser degree from the Actsuggests a need for further study ofequity considerations by legislators aswell as by those concerned with theadministration of the program.

In conclusion, this study was de-signed to examine some of the factorsmost commonly thought to bear uponthe problem of categorical federal aidwith matching provisions. The follow-ing recommendations are suggestedfor further research:

1. A study should be conducted todetermine the relationship betweenorganizational factors and other partsof the school corporation budget irre-spective of participation or non-participation in a categorical federalaid program.

2. Further study should be under-taken with school corporations ofother states to determine whethersimilar relationships exist betweenorganizational factors.

3. A study should be conducted toexamine differences between schoolcorporations at various levels of strati-fication to determine whether in-equities can be more specifically cate-gorized.

4. Studies should be conducted toexamine the federal allocation offunds by other federal aid programs tolocal school corporations.

5. A study should be conducted todetermine relationships which mightexist between other federal programsand organizational variables.

6. A study should be conducted to

ascertain whether participating in acategorical federal aid program divertssignificant funds from other programswhich are not supported by federalfunds.

255

Allocating Financial Re.,ources byUsing Legal Program Descriptions

Donald M. Wickert

THE SCHOOL DISTRICT has emerged as acomplex organization with multipleobjectives, programs, and activities.The program budget has been pro-posed as a means for apportioningfinancial resources among the schoolorganization's many activities and pro-grams so as t obtain the greatestprogress toward achieving stated ob-jectives. In view of the controls im-posed upon schools by the state, adelineation of the extent to whichlegal prescriptions will restrict or fa-cilitate the allocation of funds in theprogram budget is needed. This wasthe purpose of the investigation.

Because a review of the literaturerevealed a variety of concepts regard-ing the program budget, it was neces-sary to establish a point of view re-garding such elements as objectives,activities, subprograms, programs, andevaluations. These were the guidelines and principles utilized to estab-lish a program budget:

I. The major objectives of theschool organization should be defirldin pupil behavioral terms. To facili-tate evaluation, objectives need to

Dr. Wickert is Assistant Superintendent forBusiness Services, Rowland School District,California.

256

describe minimum level of achieve-ment desired, types and number ofchildren involved, behavior to be ac-cepted as evidence of progress, be-ginning behavioral status of pupils,and conditions under which evidenceis to be gathered.

2. The major objectives are sup-ported by a variety of subobjectiveswhich describe both instructional andnoninstructional activities. Subobjec-tives need to be stated to include adescription of what is to be done, andthe expected level of output. Thecapacity for making evaluations ofsubobjectives depends upon the de-gree to which they are clearly defined.

3. Human and physical resourcesas well as contract services need to beorganized and clustered according totheir contribution to specific subob-jectives. These clusters of informationare subprograms. In turn, subpro-grams need to be organized and clus-tered according to their contributionto specific major objectives or othersubprograms.

4. A cluster of information whichincludes major objectives and sup-porting subprograms is recognized asa program.

5. Proposed expenditures need tobe established by costing the human

and physical resources as well as con-tracted services. Where one of theseelements contributes to more than onesubprogram, a division needs to bemade by an appropriate factor convey-ing the extent of the contribution.For example, the salary of a custodianspending two hours cleaning class-rooms and six hours maintaining ad-ministrative offices might be appro-priately allocated by a ratio basedupon time. This same principle ap-plies if a subprogram contributes totwo or more other subprograms orprograms.

6. The district's decision-makingpotential is restricted by the statewhen it prescribes a level of perform-ance for expenditure. Therefore,state prescribed activities and expendi-tures make certain subprograms andprograms mandatory while that whichis subject to district decision makingneeds to be recognized as permissive.

7. State funding data need to beincluded in a program budget if it hasan impact upon the decision-makingpotential of the district.

A budget format was developed byorganizing legal prescriptions foundin the California Education Code andCalifornia Administrative Code ac-cording to the established guide linesand principles. Contents were con-fined to legal prescriptions in effecton or before September 11, 1967. Thiswas necessary to avoid the continualchanges made by the state legislatureand the board of education in the edu-cational program.

To develop an understanding of ex-penditure characteristics, the presentbudget of the Centralia School Dis-trict, California, was converted to theestablished program budget format.This was accomplished by analyzingeach line item in terms of its basiccontribution to the state-prescribed

subprograms and assigning it to theprogram budget accordingly.

The. established design and budgetdata resulted in a budget format il-lustrated in the excerpt below:

REMEDIAL SPEECH AND HARD OFHEARING CLASSES

1. Special Data

Personnel: special certification is required.Alternatives: district may contract with the

county superintendent of schools or anotherdistrict.

Program: children may be admitted at age 3.Class size: one teacher shall not instruct more

than 90 pupils in any one week.Teacher assistance: teachers may take special

courses to be reimbursed by the state at$50- per unit.

2. ActivitiesDistrict shall provide a program designed tocorrect speech disorders.

3. Direct Expenditures

Teachers

MANDATORY

Estab- Discre-lished tionary

$29,153Supplies $250Teacher conferences 2754. Applied Expense of Sup-

porting SubprogramsAdministration (dollar

value of salaries) $ 2,009 $2,444Custodial (square footage) . 96 368Maintenance (square foot-

age) 6 160General curriculum

(Number of teachers) 189 3,496

Total $31,453 $6,993

It should be noted that the illustra-tion is a mandatory subprogram, onethat is required by the state. Expendi-tures identified as "established" arethose over which the district haslimited control because of variousstatutes. For example, the $29,153figure for teachers cannot be greatlychanged because certification require.ments create a limited supply of quali-fied personnel who must be enticedto serve by providing a competitive

257

salary. Also, class size limits preventone or several teachers from shoulder-ing the whole load to save money.Expenditures that were placed in the"discretionary" column appeared tobe completely subject to the decision-making process of the district.

The subprogram used in the illus-tration included an appropriate al-location from other subprograms thatappeared to be supportive. The factorupon which the allocation was madeappears in the parentheses followingeach item listed in the applied expensecategory. The total cost estimated forthe remedial speech and hard of hear-ing classes was allocated in turn toother subprograms.

To conclude the study, the contentsof the entire budget, including thelegal prescriptions and expenditureallocations, were analyzed and evalu-ated to determine the impact of legalprescriptions upon the use of a pro-gram budget.

Conclusions

It appears that the use of a programbudget is a cooperative venture be-tween the state and the local district.A balance of power exists. The localdistrict is in a position to define objec-tives and to make appropriate evalua-tions while the state controls thesubprograms and the activities to beengaged in. The local district can ex-ercise power over the use of mostnoninstructional personnel and al-most all physical resources, but thestate establishes the minimum ex-penditures for classroom teachers.These factors in more specific detailare as follows:

1. The district appears to be rela-tively free to make evaluations neededto determine the contributions of theexpenditures proposed for the varioussubprograms, activities, and human

258

and physical resources to the achieve-ment of the objectives.

2. Objectives defined in pupil be-havioral terms have generally not beenestablished by the state. It appearsthat the district can establish theseobjectives, providing they can beachieved through state-defined activi-ties and resources.

3. There are 17 mandatory legalsubprograms to be used in achievingestablished objectives:

AdministrationCustodial and Other OperationsMaintenanceGeneral CurriculumChild Welfare and AttendanceGuidance and Mental HealthPupil HealthLunchRemedial and Speech and Hard of

Hearing ClassesKindergartenGrades One through Three for Regu-

lar PupilsGrades One through Three for Physi-

cally Handicapped pupilsGrades Four through Six for Regular

PupilsGrades Four through Six for Physi-

cally Handicapped pupilsEducable Mentally Retarded ClassesSeverely Mentally Retarded ClassesIntegrated Physically Handicapped

Classes

4. There is some evidence that dis-tricts expend the largest portion, 80percent, of their financial resources formandatory subprograms. There is fur-ther indication that about 60 percentof these expenditures cannot be effec-tively decreased by the district becauseof certain state prescriptions.

5. There are 16 permissive legalsubprograms which may be used inachieving the established objectives

and an additional three designed toachieve larger societal objectives:

EDUCATIONAL

LibraryTransportationOutdoor Science, Conservation, and

ForestryEducation in the HomeSpecial ClassesPart-TimeMentally Gifted ClassesPart-TimeLearning Disability ClassesRemedial Physical Education ClassesClasses for Home Bound PupilsSummer SchoolRemedial Reading for Grades One

through ThreeGrades One through Three for Edu-

cationally Handicapped PupilsGrades One through Three for Men-

tally Gifted PupilsGrades Four through Six for Educa-

tionally Handicapped PupilsGrades Four through Six for Mentally

Gifted PupilsSpecial ClassesFull-Time

SOCIETAL

Community ActivitiesCommunity RecreationChildren's Centers

6. The state exerts pressure uponthe district to select permissive sub-programs by offering certain financialincentives. This applies to all exceptLibrary; Outdoor Science, Conserva-tion, and Forestry; Education in theHome; Special ClassesPart-Time;Special Classes Full -Time; Commu-nity Activities, and Community Rec-reation.

7. There is some evidence that dis-tricts experience greater control overthe major share of expenditures madewithin permissive subprograms be-cause of fewer state prescriptions reg-ulating expenditures.

8. It appears that the state exertscontrol over the majority of direct ex-penditures made in subprograms de-sisoeu to involve children in full-timeor supplementary learning activitieswhile the district has greater oppor-tunity to control the major share ofdirect expenditures in noninstruc-tional subprograms.

9. A real element in the design ofa subprogram involves the determina-tion of the support to be contributedfrom other subprograms. For ex-ample, the decision to establish alibrary includes consideration of addi-tional expenditures for administrationand other supporting subprograms.This seems to be totally within therealm of the district's responsibilitysince the state does not generally de-termine the nature or degree of sup-port of one subprogram for another.

10. La utilizing the system of legalsubprograms, it appears that the dis-trict has the following options:

a. Reorganizing and merging certain sub-programs to suit the district's own objectivesand purposes. The loss of special financialincentives limit. the reorganization potentialof most subprograms designed to handle thehandicapped child.

b. Contracting for certain subprograms inpart or in toto.

c. Establishing special subprograms in co-operation with the country superintendent ofschools for pupils not making adequate prog-ress toward established objectives.

II. The activities to be engaged inby the district have been establishedby the state, but the need to provideinterpretation appears to be the dis-trict's operational latitude to integrateits objectives and activities into thestate's plan.

12. It appears that the district hasbroad authorization to obtain allphysical and material resources neces-sary to achieve objectives, but the stateeffectively directs 60 percent of the

259

current expense of education intosalaries for teachers; the district hasconsiderable discretion in the alloca-tion of the remaining expenditures.

13. While the codes include manydata that can be used in the estab-lishment of the program budget, it isquite apparent that certain areas ofinformation cannot be included inlegal codes,. To supplement code data,the district needs a complete inventoryof pupil and community characteris-tics for use in establishing objectivesand x,sessing progress made towardthe achievement of objectives. Also, thedistrict needs work loads and sched-ules for the various subprograms,activities, and resources as related tothe progress made toward the achieve-ment of objectives although certainminimum state standards dealing withsuch areas as pupil-teacher ratio- needto be recognized.

Recommendations

This study identified several areasopen to the district when structuringa program budget. They includeestablishing objectives and makingappropriate evaluation including thegathering of relevant information onpupils and community, measuringprogress made toward the achievementof objectives, and establishing workloads and schedules. These aspectsare in need of continual and extendedinvestigation.

One of the major purposes of a pro-gram budget is to direct the financial

260

resources of an organization so that itwill make the greate; t progress towardthe achievement of the defined objec-tives. In this study, there is some indi-cation that the legal constraints im-posed upon the operation of t'-.school organization by the state mayprevent these be,iefits from accruingto the district, either in whole or inpart. This aspect needs to be carefullytested through actual use of the pro-gram budget in school management.Unless improvement in achievinggoals is experienced, it may be difficultto justify the additional work neces-sary in establishing and utilizing aprogram budget.

An investigation is needed to deter-mine the potential of the programbudget in a school environment un-hampered by legal constraints. Theuse of the program budget may be aneffective substitute for certain legalprescriptions. Specifically, if the pro-gram budget an actually assist dis-tricts in achieving objectives, stateprescriptions may not be necessary.Through the district's use of a pro-gram budget the state could shiftemphasis away from establishing ac-tivities and subprograms and towardassisting districts in determining real-istic and purposeful objectives. Then,state support could be based upon thenature of the objectives and the dis-trict's capability of achieving them.An investigation of this type wouldhave to be conducted in cooperationwith the state.

Determination of the Need for Intra-CountyEqualization in Tennessee

Edward E. Williams

THE MAIN OBJECTIVE of the study wasto determine the need for intra-countyequalization in Tennessee. It wastreated under the following four sub-problems: (a) the relative pupil loadof the school districts, (b) the relativeability of the school districts to sup-port education at thy: local level, (c)the relative effoL of school districtsto support education at the local le ,T1,and (d) the effect of the allocation ofstate funds on equalization betweenschool districts within the samecounty.

All county school systems in Ten-nessee within whose boundaries o.' o.more city school systems were oper-ated during the 1965-66 school yearwere selected for the study. Therewere 31 county school systems inwhich 39 city school districts operated.The 70 systems were spread through-out the state, with the largest number,39, being in East Tennessee, 12 inMiddle Tennessee, and 18 in WestTennessee. The city districts rangedin size from Memphis ti ith an averagedaily attendance in 1965-66 of 113,533

Dr. Williams is Superintendent of Schools,Roane County Department of Education,Kingston, Tennessee.

to Trimble which had an averagedaily attendance of 335.

The following basic assumptionswere reclgnized:

1. Equalization of educational op-portunity is desirable.

2. Current expenditures per pupilin average daily attendance (ADA)and per weighted expenditure pupilunit (EPU) are reasonable measuresof educational opportunity.

3. The true value of property isa satisfactory criterion for determiningthe ability of local governments tofinance education, and can be ascer-tained to a reasonable degree.

ADA and EPU were used as mea-sures of the relative pupil loan of theschool systems. ADA has been themost commonly accepted statistic ofpupil load. It is used in Tennesseeas the basis for the allocation ofteaching positions in the MinimumFoundation School Program, for theallocation of transportation funds,for the allocation of r .aintenance andoperation funds, for the allocation oftextbook funds, for the division ofproceeds from bond issues, and forvirtually every aspect of educationalprogram in Tennessee.

The EPU is a less familiar statistic,designed to take into account the

261

higher cost of educating high-schoolstudents as compared with that of edu-cating elementary-school pupils. 1 EPUmakes it possible to compare costs indifferent areas and localities in a morerefined manner. The EPU weightsof the various districts were computedby multiplying high-school ADA by1.3 and elementary ADA by 1.0. Localschool district classification was usedto determine elementary grades.Junior high-school pupils were con-sidered as high-school ADA.

Because of the higher cost of oper-ating the very small school districts,a "sparsity" correction formula devel-oped by Mort was applied.

To determine the relative abilityof the school districts to support edu-cation at the local level, a comparisonwas made of the estimated true valueof property per pupil in ADA andEPU, the assessed value of taxableproperty was compared with the esti-mated true value of property; in addi-tion, 2 comparison was made of localrevenue receipts and effective taxrates. The amount required as eachsystem's share of the Tennessee Mini-mum Foundation School Program wasdetermined and compared with whatits share would have been if thosefunds had been allocated on the basisof estimated true value of taxableproperty.

If a school system with ability tosupport education is not making anadequate effort to do so, a programof quality of education is not likelyto be accessible to the pupils in thatdistrict. The following measures de-termine the relative effort that schooldistricts were making to support edu-cation at the local level:

I School Management. "The C-qt of Edu-cation." School Management 22m8; January1968.

262

I. The relationship of school ex-penditures to other governmentalexpenditures

2. The relation of the required con-tribution to the Minimum Founda-tion Program to local revenues.

3. The percent that local school reve-nues were of the total estimatedvalue of taxable property.

Tennessee's minimum foundationschool funds are allocated to individ-ual school systems. However, the localshare required to be raised by a schooldistrict is determined by an EconomicIndex for the County, which indicatesthe percentages of a state total to heraised locally. The local county shareis further apportioned between a cityand county school system by each sys-tem's percentage of ADA in thecounty. Local revenue from thecounty-wide property tax and countysales tax for schools, unless providedotherwise in the case of the sales taxby agreement between the city andcounty, is also apportioned betweencity and county on the basis of per-centage of total ADA.

If the cost for educating a high-school student is greater than thatfor educating an elementary-schoolpupil, the school system operatingonly elementary schools has some Pd-vantage in the allocation of funds ascompared with one operating both ele-mentary and high schools.

If there are variations in the re-sources available to school districtslocated in the same county for the sup-port of education at the local level,inequities in the allocation of statefunds would exist. To examine theallocation of these funds and the pos-sible effect upon revenues available toindividual school districts locatedwithin the counties studied, compari-son was made of each system's shareof the Minimum Foundation School 1

Program with what its share wouldhave been if it had been determinedon the basis of its percentage of esti-mated u ae value of property.

The following conclusions weredrawn from the study:

1. In some instances, an imbalancein the per-pupil tax load existed be-tween school systems located withinthe same county in Tennessee.

2. Very large differences ecist inthe local ability of school districtswithin the same county to supporteducation.

3. Conspicuous differences existamong school districts in the relativeeffort made to support education.

4. The procedure used to deter-mine each district's required localcontribution to the Minimum Foun-dation School Program was contrary tothe concept of equalization. In viewof the demonstrated differences inability of school systems within thesame county to support education,existing procedures for allocating alocal school system's required con-tribution to the Minimum Founda-tion School Program tended to in-crease differences in ability. On thebasis of the findings of this study itis recommended that:

1. Consideration be given to anadjustment of pupil load in the allo-cation of state and local funds toindividual school districts.

2. An attempt be made to find ameans of allocating each system's re-

quired contribution to the MinimumFoundation School Program on thebasis of its ability to support educa-tion, rather than on the basis of itspercentage of ADA.

3. In the event a state-wide propertyreassessment program is carried out inTennessee, and properties are assessedon a reasonably equal basis, the prop-erty value assessment be given con-sideration as a basis for determiningthe required local contribution to theMinimum Foundation School Pro-gram, and each system's taxpayingability be used rather than taxpayingability by county unit.

These recommendations tend tofocus attention on the importance ofdeveloping all our human potential.The problems facing our nation andthe world are many, and they arebecoming increasingly complex. ifthe person who might have discovereda cure for cancer or might have founda solution to some of our world prob-lems spent his life plowing cottonor cutting pulp wood simply becausehis potential was not developed, weare paying the price for this failuretoday. Our civilization is losing everyday because of past failures to developto the highest extent possible the hu-man potential which exists in theworld. So long as we continue to em-phasize short-term, individualizedgains as a primary motive for pro-moting free education, we shall con-tinue to lose and so will future gen-erations.

263

Roster of Participants

ABERNATHY, H. S., Director of Business Affairs, Virginia Beach School Board, VirginiaBeach, Virginia 23456

ALEXANDER, KERN, Associate Director, National Educational Finance Project, 1212 South-west Fifth Avenue, Apartment 5, Gainesville, Florida 32601

ALEXANDER, WILLIAM, Assistant Proiossor, Ontario Institute for Studies in Education,102 Bloor Street, West, Toronto 5, Ontario, Canada

ALFORD, ALBERT L., Assistant Commissioner for Legislation, U.S. Office of Education,400 Maryland Avenue, Southwest, Room 4161, Wo,hington, D.C. 20202

ALKIN, MARVIN C., Professor, Director, Center for the Study of Evaluation, 145 MooreHall, University of California, Los Angeles, California 90024

ANDERSON, BOBBY D., Associate Professor, University of Southern Mississippi, Hattiesburg,Mississippi 39401

ANDREWS, MORRIS, Division of Field Services, National Education Association, 1201 Six-teenth Street, Northwest, Washington, D.C. 20036

ASNARD, ROBERT R., Director of Research, California Teachers Association, SouthernSection, 1125 West Sixth Street, Los Angeles, California 90017

AUERBACHER, ERNST, Executive Secretary, Central School Study, Teachers College,Columbia University, New York, New York 10022

AVIS, CLIFFORD L., President, Illinois Education Association, 112 North Prairie Street,Batavia, Illinois 60510

BARR, RICHARD H., Specialist, U.S. Office of Education, 400 Maryland Avenue, Southwest,Washington, D.C. 20202

BARR, W. M., Professor of Education, Indiana University, 900 South High Street, Blooming-ton, Indiana 47401

BARTELL, ERNEST, Professor of Economics, University of Notre Dame, Notre Dame,Indiana 46556

BEATTIE, W. CHARLES, Secretary, Board of Education, 3902 Davenport Street, Omaha,Nebraska 68131

BELZ, PAUL H., Director, Professional Development and Welfare, Nebraska State EducationAssociation, Box 1428, Lincoln, Nebraska 68501

BENDIXSEN, MARIAN, Executive Associate, National Committee for the Support ofPublic Schools, 1424 Sixteenth Street, Northwest, Washington, D.C. 20036

BENNETT, ROBERT F., Senate Chamber, State House, Topeka, Kansas 66612BENTLEY, FRED H., Senior Economist, New York State Education Department, Albany,

New York 12224BILLS, HAROLD Y., Director, New Jersey Department of Education, 225 West State Street,

Trenton, New Jersey 08611BLACK, LAWRENCE, Executive Director, Pinellas County Classroom Teachers Association,

1701 Drew Street, Suite 5, Clearwater, Florida 33515BLACKMON, C. ROBERT, Associate Professor of Education, University of Southwestern

Louisiana, Lafayette, Louisiana 70501BOHNSTORFF, WILLIAM K., Director, Division of Adult Education, National Association

of Public School Adult Education, 703 CarondeIet Street, New Orleans, Louisiana 70130BOLLIGER, WILBERT V., Classroom Teacher, 695 West Phillips Boulevard, Pomona,

California 91766; Member, Committee on Educational FinanceBOWERS, ROLLAND A., Assistant Professor of Education, Curry Memorial School of Edu-

cation, 107 Peabody Hall, University of Virginia, Charlottesville, Virginia 22903BRAZZLE, DOROTHY, Director of Research and Salary Consultant, Iowa State Education

Association, Des Monies, Iowa 50312BRIGHT, JOHN IL, Consultant, California Teachers Association, 1705 Murchison Drive,

Burlingame, California 94010BRIGHTON, GEORGE W., Associate Superintendent, Washoe County School District, Reno,

Nevada 89502BRISTOL, STANLEY T., Superintendent, Yenilworth Public Schools, 542 Abbotsford Road,

Kenilworth, Illinois 60043BRYAN, FRED E., Professor of Education, 2817 C.L., University of Pittsburgh, Pittsburgh,

Pennsylvania 15213BRYAN, WILLIAM B., Associate Professor, School Administration, University of Alabama,

P.O. Box 5475, University, Alabama 35486BURKHOLDER, KENNETH, Professor, College of Education, University of Nebraska at

Omaha, 602 Dodge, Omaha, Nebraska 68101

264

CAMERON, EVERETT P., Comptroller, Charlotte-Mecklenburg Schools, Charlotte, NorthCarolina 28202

CANTRELL, EARL J., Director, Research and Data Processing, Texas State TeachersAssociation, 316 West Twelfth Street, Austin, Texas 78701

CAPUANO, ANTHONY J., Assistant Director, Educational Finance Division, New YorkState Education Department, Univer,sity of the State of New York, Albany, New York 12224

CARNAL, CLARK C., Lecturer, School Finance, Cornell University, Franklin AvenueOswego, New York 13126

C 'iRPENTER, DALE, Teacher, Valley Junicy. High School, 11905 South 2700, Riverton,Utah 84065

CASE, LEIGHTON, Senior Budget Analyst, Department of Finance, Library and CourtsBuilding, Sacramento, California 95814

CHAMBERLIN, GORDON L., Associate Superintendent and Business Manager, StocktonUnified Schools, 701 North Madison Street, Stockton, California 95202

COLE, STANLEY M., Assistant Professor of Education, Colorado State University, 513 WestDrake Road, Fort Collins, Colorado 80521

COLEMAN, ROBERT, Coordinator of Planning, Education Service Center, Region XII,P.O. Box 6428, Waco, Texas 76706

COLLINS, CHARLES R., Vice-Principal, Roger B. Tanby Junior High School, 19 EmpirePlace, Greenbelt, Maryland 20770

COLLINS, GEORGE J., Assistant Commissioner of Education, 182 Tremont Street, Boston,Massachusetts 02111

COLLINS, PURVIS W., Member, House of Representatives Joint Legislative Committee toStudy Public Education in South Carolina, Room 212, 1001 Main Street, Columbia, SouthCarolina 29201

CROOKSTON, JAMES S., State Supervisor of School Libraries, Department of Education,Baton Rouge, Louisiana 70804

COOPER, LLOYD G., Associate Professor, Department of Educational Administration,New Mexico State University, Las Cruces, New Mexico 88001

COOPER, SIDNEY B., Member of the Joint Legislative Committee to Study Public Educationin South Carolina, Room 212, 1001 Main Street, Columbia, South Carolina 29201

CORNICK, DELROY, L., Director of the Budget and Legislation, 415 Twelfth Street, North-we,t, Washington, D.C. 20004

COZINE, W. DEAN, 6433 Kenwick, Fort Worth, Texas 76116.CRONIN, JOSEPH M., Assistant Professor of Educational Administration, Harvard Univer-

sity, Cambridge, Massachusetts 02238CROSSON, FRED J., Director of Research, Tennessee Education Association, 598 James

Robertson Parkway, Nashville, Tennessee 37219CROWELL, KENNETH C., Superintendent, School District 108, 530 Red Oak Lane, Highland

Park, Illinois 60035DEEVER, MERWIN, Director, Bureau of Educational Administration, Arizona State Univer-

sity, 407 Aepli Drive, Tempe, Arizona 85281DEGOOD, KENNETH C., Associate Dean, College of Education, University of Toledo,

2801 Bancroft, Toledo, Ohio 43606DENNIS, DALE M., Director of Statistical Services, Kansas State Department of Public

Instruction, 120 East Tenth gtreet, Topeka, Kansas 66607DE ROSE, PAUL M., Chief, Financial Aids and School Business, Michigan State Department

of Education, 1232 Hitching Post Road, East Lansing, Michigan 4023DOMINAN, OTTO E, Professor of Education, University of Minnesota, 1595 Northrop

Street, St. Paul, Minnesota 55108DORMANDY, WILLIAM L., Associate, Educational Finance Research, The University of

the State of New York, The State Education Department, Albany, New York 12224DORSEY, JOHN, Director, Bureau of Economic and Business Research, University of

Maryland, College Park, Maryland 20740DOUGHERTY, GRACE M., Research Analyst, State Department of Education, St. Paul,

Minnesota 55101DLINCANSON, DON, iirofessor of Education, University of Idaho, 1217 East F, Moscow,

Idaho 83843EDGINGTON, 0. R., Associate Professor of Education, University of Dayton, 406 Rumson

Drive, Englewood, Ohio 45322ELLIOTT, EMERSON, Bureau of the Budget, Seventeenth and Pennsylvania Avenue, North -

we :'. Washington, D.C. 20006EVANS, LESLIE P., Direztor of Special Projects, School of Education, Texas Christian

University, Fort Worth. Texas 76129

265

EARNER, FRANK, President, Federal City College, Washington, D.C. 20001FAY, J. MICHAEL, Salary and School Finance Chairman, 2001 Cyril Avenue, Los Angeles

Association of Classroom Teachers, Los Angeles, California 90032FIEGER, PETER P., Second Vice-President, Canadian Teachers' Federation, 3049 Grant

Road, Regina, Saskatchewan, CanadaFIRMAN, WILLIAM D., Assistant Commissioner, New York State Department of Education,

Albany, New York 12201; Chairman, Committee on Educational FinanceFISHER, DALE E., Assistant Superintendent of Schools, Mound, Minnesota 55364FITZPATRICK, STANLEY, Assistant Superintendent, Division of Research, Planning, and

Construction Supervision, Orleans Parish Schools, 703 Carondelet Street, New Orleans,Louisiana 70130

FLANAGAN, THELMA G., Director, School Food Service, Florida State Department ofEducation, Tallahassee, Florida 32304

FOX, FREDERICK G., Assistant Superintendent, Budget, Los Angeles City Schools, 450North Grand Avenue, Los Angeles, California 90012

FRAILEY, CHARLES U., Director of Research, Wisconsin Education Association, 119 MononaAvenue, Madison, Wisconsin 53707

FRANKO, ALFRED M., Superintendent of Schools, Mount Vernon Public Schools, 165North Columbus Avenue, Mount Vernon, New York 10550

FURNO, ORLANDO F., Assistant Superintendent, Division of Research and Development,Baltimore City Public Schools, Baltimore, Maryland 21218

GAGSTETTER, NOEL, Finance Committee, Board of Education, 1104 Second AvenueSouth (District Office), Fargo, North Dakota 58102

GALLAGHER, JOHN, Assistant Director for Finance, Minnesota Public Schools, St. Paul,Minnesota 55101

GANTZ, RALPH M, Superintendent of Schools, P. 0. Box 1311, New Britain, Connecticut06050

GARVUE, ROBERT J., As-ociate Professor, College of Education, Room 401, Florida StateUniversity, Tallahassee, Florida 32306

GEISEL, MAURICE, Assistant. Principal, Apartment 50, Gullpepper Drive, Georgetown,New Orleans, Louisiana, 70126

GENTRY, HAROLD W., Professor of Education, College of Education, University of Georgia,Athens, Georgia 30601

GEREAU, MARY CONDON, National Education Association, Legislative Consultant, 1201Sixteenth Street, Northwest, Washington, D.C. 20036

GILMORE, LYNN Q., Executive Director, Broward Classroom Teachers Association, 351Northwest Fortieth Avenue, Fort Lauderdale, Florida 33313

GILMORE, RICHARD G., Executive Director of Finance, School District of Philadelphia,Twenty -first and Parkway, Philadelphia, Pennsylvania 19103

GIUSTO, LOUIS J., President, Central-Western Region, Pennsylvania State EducationAssociation, 1900 Graham Avenue, Windber, Pennsylvania 15963

GLASS, ROBERT E., Superintendent, Mansfield City Schools, 270 West Sixth Street,Mansfield, Ohio 44902

GOBLE, NORMAN M., Deputy Secretary-Treasurer, Canadian Teachers' Federation, 320Queen Street, Ottawa, Ontario, Canada

GOETSCHIUS, DONALD D., Associate Professor of Education, Central Washington StateCollege, Ellensburg, Washington 98926

GOLDBERG, IRVING, Deputy Superintendent, Yonkers Public Schools, 138 South Broad-way, Yonkers, New York 10701

GOLDSTEIN, EDWARD H., Director of Budget, Baltimore City Public Schools, 2519North 4:11arli s Street, Baltimore, Maryland 21218

GOODMAN, RICHARD, Executive Secretary, New England School Development Council,Cambridge, Massachusetts 02138

GORDON, JACK D., Secretary-Treasurer. National Committee for the Support of PublkSchools, 1701 Meridian Avenue, Miami Beach, Florida 33139

GOSNAY, ERNEST, Chairman, Financial Research Committee, East 26 Rich Avenue,Spokane, Washington 99207

GOUSHA, RICHARD P., Superintendent of Scho,is, Milwaukee Public Schools, 5225 WestVliet Street, Milwaukee, Wisconsin 53208

GRAHAM, LAWRENCE L., Administrative Director of Finance, State Department of Edu-cation, Lincoln, Nebraska 68509

GREMILLION, J. B., Associate Professor of Education, 129 Peabody College of Education,Louisiana State University, Baton Rouge, Louisiana 70803

GRIFFIN, W. S., Director, Administration and Finance, Mississippi State Department ofEducation, P.O. Box 771, Jackson, Mississippi 39205

266

GULBRANDSON, H. C., Assistant Superintendent, 1104 Second Avenue South, Fargo, NorthDakota 58102

HACK, WALTER G., Professor of Education, 29 West Woodruff, Ohio State University,Columbus, Ohio 43210

HALL, M. M., Associate Professor, College of Education, University of Georgia, Athens,Georgia 30601

HAMILTON, ALEX W., Consultant, Salary and Finance, Texas State Teachers Asso-ciation, 316 West Twelfth Street, Austin, Texas 78701

HANDY, GERALD, President, Granite Education Association, 4480 South 3600 West,Granger, Utah 84119

HARDER, JOSEPH C., Senate Chamber, State House, Topeka, Kansas 66612HARRIS, JAMES H., National Education Association Board of Directors for Iowa, 7215

Reite, Des Moines, Iowa 50311HARRISON, FORREST W., Specialist, Statistics of Educational Finance, U.S. Office of

Education, 400 Maryland Avenue, Southwest, Washington, D.C. 20202HARVEY, LAURENCE E., Instructor of Data Processing, De Anza Junior College, Palo

Alto, California 95014HARVEY, W. L., Assistant Superintendent, Shelby County Schools, 211 Courthouse, Memphis,

Tennessee 38103HAYES, MELVIN L., Division of Press, Radio, and Television Relations, National Edu-

cation Association, 1201 Sixteenth Street, Northwest, Washington, D.C. 20036HERBERT, WILLIAM H., Executive Secretary-Treasurer, Massariiusetts Teachers Asso-

ciation, 20 Ashburton Place, Boston, Massachusetts 02108HECKER, STANLEY, Professor, Michigan State University, 417 Erickson, East Lansing,

Michigan 48823HELSTAD, MERLIN, Field Representative, Wisconsin Education Association, 119 Monona

Avenue, Madison, Wisconsin 53703HENLEY, MARIAN, Research Assistant, Alabama Education Association, P.O. Box 4177,

Montgomery, Alabama 36104HINDMAN, JOHN P., Classroom Teacher, 1128 Walnut Drive, Casa Grande, Arizona

85222; Member, Committee on Educational FinanceHICKROD, G. ALAN, Associate Professor, Department of Educational Administration,

Illinois State University, Normal, Illinois 61761HILL, DONALD W., Vice Chancellor for Business Affairs, Chicago City College, 180 North

Michigan Avenue, Chicago, Illinois 60601HILTON, C. W., Head, Department of Education, Louisiana State University, Baton Rouge,

Louisiana 70803HOBSON, CAROL J., Chief, Elementary-Secondary Education Surveys Branch, U.S. Office

of Education, 400 Maryland Avenue, Southwest, Washington, D.C. 20202HOGAN, LLOYD L., Assistant Director, Office of Urban Education, New York State Edu-

cation Department, 36 South Allen Street, Albany, New York 12208HOLLAND, JOHN, Associate Professor, Ontario Institute for Studies i% Education, 102

Bloor Street West, Toronto 5, Ontario, CanadaHOUSE, JOHN H., Assistant Professor, Ontario Institute for Studies in Education, 102

Bloor Street West, Toronto 5, Ontario, CanadaHUDSON, C. CALE, Associate Professor, Eastern Michigan University, Ypsilanti, Michigan

48197HUMPHREY, J. C., JR., Business Manager, Robeson County Board of Education, Lumber-

ton, North Carolina 28358HUNT, EUGENE M., Dean of Business, Yavapai College, Prescott, Arizona 86301HURWITZ, Mark W., Director of Special Services, New Jersey State School Board Fed-

eration, 407 West State Street, P.O. Box 909, Trenton, New Jersey 08605HUTCHINS, CLAYTON, D., Specialist in Educational Finance, U.S. Office of Education,

6110 Wilson Lane, Bethesda, Maryland 20034IVERSON, IRVING L., Executive Secretary, North Dakota Education Association, Box J,

Bismarck, North Dakota 58501IVY, GLENN H., Director, Governor's Committee on Public School Education, P.O. Box

12356, Capitol Station, Austin, Texas 78711JACKSON, MARSHALL C., Assistant Director, School Finance and Statistics, Missouri

State Department of Education, 1507 Rosewood, Jefferson City, Missouri 65101JACKSON, PENROSE B., Office of Planning and Evaluation, U.S. Office of Education, 400

Maryland Avenue, Southwest, Washington, D.C. 20202JOHNS, O. D., Professor of Education, University of Oklahoma, 820 South Oval, Norman,

Oklahoma, 73069

267

JOHNS, R. L., Professor, College of Education, University of Florida, Gainesville, Florida32601

JOHNS, THOMAS L., Division of State Agency Cooperation, U.S. Office of Education,400 Maryland Avenue, Southwest, Washington, D.C. 20202

JOHNSON, DAVID L., Central Regional Director, Virginia Education Association, 116South Third Street, Richmond, Virginia 23219

JOHNSON, HERBERT F., Associate Commissioner for Educational Finance and M anage-ment Services, New York State Education Department, Room 571, Albany, New York12224

JOHNSON, RAY H., Associate SuperhAendent of Public Instruction, State Department ofEducation, 721 Capitol Mall, Sacramento, California 95814

JOHNSTON PAUL H., Supervisor of Research, Department of Public Instruction, Dover,Delaware 19901

JORDAN, JAMES L., Associate Professor, School of Education, Auburn University, Auburn,Alabama 36830

JORDAN, WILSON K., Secondary Administrative Coordinator, Los Angeles City UnifiedSchool District, 450 North Grand Avenue, Los Angeles, California 90012

JOSEPH, CHARLES B., Office of the Governor, Topeka, Kansas 66612JUNGERS, RICHARD P., Professor, 102 Gondersen, Oklahoma State University, Stillwater,

Oklahoma 74074KACEN, NORMA M., Administrative Assistant, Houston Teachers Association, 1209 Jackson

Boulevard, Houston, Texas 77006KEITHLEY, PERRY G., SAPEA Fellow, Department of Education, Washington State Uni-

versity, Pullman, Washington 99163KELLY, RALPH L., Superintendent of Schools, Portage Township School Corporation,

Portage, Indiana 46368KERNION, SID, 2520 Elise Avenue, Metairie, Louisiana 70003KERR, T. A., Director of Business Affairs, Board of Education, 415 West Eighth Street,

Topeka, Kansas 66603KISER, CHESTER, Faculty of Educational Studies, State University of New York at Buffalo,

Buffalo, New York 14214KOENIG, ADOLPH, J., Bureau of Research, Organization and Administration Studies,

Division of Higher Education Research, U.S. Office of Education, 400 Maryland Avenue,Southwest, Washington, D.C. 20202

KRAHN, DONALD E., Field Service Director, Wisconsin Education Association, 119 MononaAvenue, Madison, Wisconsin 53703

KURTZMAN, DAVID H., Superintendent of Public Instruction, Pennsylvania State Depart-ment of Public Instruction, 317 Education Building, Harrisburg, Pennsylvania 17126

LAHTI, TAIMI, Assistant Executive Secretary, Association of Classroom Teachers, NationalEducation Association. 1201 Sixteenth Street, Northwest, Washington, D.C. 20036

LANDRY, GEORGIANA M., Treasurer, Orleans Educators Issociation, 652 FarmingtonPlace, Apartment 145, Gretna, Louisiana 70053

LANDRY, JEROME R., Director of Research, Massachusetts Teachers Association, 20Ashburton Place, Boston, Massachusetts 02108

LAUVEK, PAUL H., Educational Statistics Supervisor, Pennsylvania Department of PublicInstruction, P.O. Box 911, Harrisburg, Pennsylvania 17126

LAW, KENNETH, National Education Association, Field Service, 6869 Springfield Boulevard,Springfield, Virginia 22150

LEBERKINGHT, CHARLES J., Teacher, 1018 Racine Street, Aurora, Colorado 80010LEVIN, HENRY, Associate Professor of Education, Stanford University, Palo Alto, California

94304LEVINE, LESTER, Assistant Superintendent, New Britain Public Schools, P. 0. Box 1311,

New Britain. Connecticut 06050LEWIS, ARTHUR M., Consultant, Administration and Finance; c/o Superintendent of

Public Instruction, Old Capitol Building, Olympia, Washington 98501LICHTENBERGER, ALLAN R., Chief, Educational Data Standards Branch, U.S. Office of

Education, 400 Maryland Avenue, Southwest, Washington, D.C. 20202LINDLEY, Aft P.ON T., Associate Secretary of Indiana School Boards Association, School of

Education, Indiana University, Bloomington, Indiana 47401LINDMAN, E. L., Professor, School of Education, University College of Los Angeles, Los

Angeles, California 90024LINK, A. D., Director, Research and Development, Region XIX, Education Service Center,

6501 C Trowbridge, El Paso, Texas 79905LOHMAN, MAURICE A., Assistant Professor, Division of Teacher Education, City Uni-

versity of New York, 535 East Eightieth Street, New York, New York 10021

268

LOKKEN, HARRY M., Research Consultant, State Department of Education, 5912 Twenty-Eighth Avenue, South, Minneapolis, Minnesota 55417

LONG, C. DARL, Professor, School of Education, University of Miami, Coral Gables, Florida33124

LYNCH, JOHN E., Executive Secretary, Nebraska State Education Association, 605 SouthFourteenth Street, Lincoln, Nebraska 68508

McCARTY, DARYL J. Assistant Executive Secretary, Director of Research, Utah EducationAssociation, 875 East 5180 South, Murray, Utah 84107

McCOY, JOHN A., Executive Director for Research and Special Services, West VirginiaEducation Association, 1558 Quarrier Street, Charleston, West Virginia 25311

McFARLAND, W. JOSEPH, Associate Executive Secretary, Kansas State Teachers Association,715 West Tenth, Topeka, Kansas 66661

McGREW, WILLIAM H., Chairman, Budget Analysis Committee, Tuscan Education Asso-ciation, 7715 East Seneca, Tucson, Arizona 85715

McLOONE, EUGENE P., Assistant Director, Research Division, Natio:n.1 Education Asso-ciation, 1201 Sixteenth Street, Northwest, Washington, D.C. 20036; Staff Contact, Com-mittee on Educational Finance

McLURE, WILLIAM P., Director, Bureau of Educational Research, University of Illinois,Urbana, Illinois 61801; Member, Committee on Educational Finance

McMULLEN, GEORGE E., Coordinator, Budget Administration, Los Angeles City Schools,450 North Grand Avenue, Los Angeles, California 90012

McWHERTER, E. M., Research Assistant, Illinois Education Association, Springfield, Illinois62704

MANEY, PATRICK H., Assistant Executive Secretary, Oregon Education Association, 1530Southwest Taylor Street, Portland, Oregon 97205

MANLEY, CHARLES A., Professor of Education, San Fernando Valley State College, 18111Nordhoff Street, Northridge, California 91324

MANNEN, LYNDEN, Senior Staff Adviser, Governments Division, Bureau of the Census,Washington, D.C. 20233

MARTIN, EVELYN B., Professor of Education, Florida Agricultural and Mechanical Uni-versity, Tallahassee, Florida 32307

MASSIE, DOROTHY C., Information Specialist, National Education Association, NationalCommission on Professional Rights and Responsibilities, 1201 Sixteenth Street, Northwest,Washington, D.C. 20036

MATTHEWS, JOHN A., Executive Secretary, Madison Teachers, Inc., 502 East Main,Madison, Wisconsin 53803, Member, Committee on Educational Finance

MEEDER, JOHN J., Consultant, Michigan Education Association, 820 West Pearl, Potter-ville, Michigan 48876

MENDENHALL, PAUL A., Director of Research, Indiana State Teachers Association, 150West Market Street, Indianapolis, Indiana 46204

MERRILL, FLOYD W., Superintendent of Schools, Melba Joint School District 136, Box 4,Melba, Idaho 83641

MIDDLETON, B. D., Illinois Education Association, Legislative Chairman, Superintendento f Schools, 113 South Rapp Avenue, Columbia, Illinois 62236

MIKKELSEN, E. C., Director of Research, South Dakota Education Association, Pierre,South Dakota 57501

MILLS, HAROLD E., Assistant to the Director, School Services Bureau, Southern IllinoisUniversity, Carbondale, Illinois 62901

MOAK, LYNN M., Governor's Committee on Public School Education, P.O. Box 12356,Capitol Station, Austin, Texas 78711

MOODY, ALEX C., Assistant Professor of Education, Indiana State University, Terre Haute,Indiana 47809

MORPHET, EDGAR L., Protect Director, Designing Education for the Future, 1362 LincolnStreet, Denver, Colorado 80903

MORRIS, BARRY, Assistant Superintendent for Finance, Fairfax County Public Schools,10700 Page Avenue, Fairfax, Virginia 22030

MOWREY, ROGER C., Assistant Superintendent, Administrative Services, Delaware Depart-mant of Public Instruction, P.O. Box 697, Dover, Delaware 19901

MUELLER, VAN D., Associate Professor, 211 Burton Hall, University of Minnesota,apolis, Minnesota 55455

MUNGER, BEN, Research Fellow, Michigan Education Association, Michigan State Uni-versity, 673 Kendale Boulevard, East Lansing, Michigan 48823

MUNSE, ALBERT R., Specialist, Federal Funds for Education, U.S. Office of Education,400 Maryland, Southwest, Washington, D.C. 20202

MURRAY, LAURIE, Treasurer, Duval Teachers Association, 2746 Adele Road, Jacksonville,Florida 32216

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MYERS, WILL, Advisory Commission on Intergovernmental Relations, 726 Jackson Place,Northwest, Washington, D.C. 20006

NELSON, M. B., Associate Professor of Educational Administration, East Texas State Uni-versity, Box 3043 East Texas Station, Commerce, Texas 75428

NEPHEW, CHARLES T., Assistant Executive Secretary, Committee on School Finance andLegislation, Western New York School Study Council, 27 California Drive, Williamsville,New York 14217

NEUSTADTER, GENEVIEVE, Teacher in Elementary School, 2412 La Harpe Street, NewOriec.ns, Louisiana 70119

NORTHEY, THOMAS J., Research Assistant, Michigan Education Association, Box 673,East Lansing, Michigan 48823

NOVAK, EDWIN L., Chairman, Michigan State Board of Education, Michigan State Depart-ment of Education, Lansing, Michigan, 48902

NOWELL, D. S., Buciness Manager, Metropolitan Public Schools, 2601 Bransford Avenue,Nashville, Tennessee 37204

O'FALLON, 0. KENNETH, Professor of Education, College of Education, Kansas StateUniversity, Manhattan, Kansas 66502

OKEDARA . JOSEPH T., Consultant, 2382 Patterson Drive, Apartment 4, Eugene, Oregon97405

OLDS, J. CASEY, President, Massachusetts Teachers Association, 20 Ashburton Place, Boston,Massachusetts 02108: Member, Committee on Educational Finance

ORAVETZ, ROBERT F., Associate Professor, Business Education, Shippensburg StateCollege, Shippensburg, Pennsylvania 17257

ORR, CLYDE L., Professor, Department of Education, East Tennessee State University,Johnson City, Tennessee 37601

OSIBOV, HENRY, Associate Professor of Education, 121 Hendricks, University of Oregon,Eugene, Oregon 97903

OSSMEN, ELVIN h., Specialist, Statistical Research, Utah State Board of Education, 136fast South Temple Street, Salt Lake City, Utah 84114

OVSIEW, LEON, Assistant Dean of the College of Education and Professor of EducationalAdministration, Temple University, Broad and Montgomery Avenue, Philadelphia,Pennsylvonia 19122

OWENS. ROBERT G., Professor, Education Department, Brooklyn College, Brooklyn, NewYork 11210

PARRES, JOHN G., Director Research, Wilmington Public Schools, 1400 WashingtonStreet, Wilmington, Delaware 198)9

PARRISH, WILLIAM, Director of Purchasing, Northeastern State College, 1211 JamestownDrive, Tahlequah, Oklahoma 744C4

PARSONS, JOHN M., Director of School Finance Ohio Department of Education, 65 SouthFront Street, Columbus, Ohio 43215

PARSONS, R., Doctoral Student, 714 West Hickory, Denton, Texas 76201PARTRIDGE, ARTHUR R., Professor of Educational Administration, Colorado State College,

Greeley, Colorodo 80631PATTON, DON C., Assistant Professor of Education, Purdue University, F-15 South Campus

Courts, Lafayette, Indiana 47907PEDERSEN, K. G., Ontario Institute for Studies in Education, University of Toronto, 102

Bloor Street, West, Toronto, Ontario, CanadaPELLEY, JAMES H., Professor of Educational Administration, McGuffey Hall, Miami

University, Oxford, Ohio 45056PERKINS, JOSEPH A., Peat, Marwick, *aitchell and Company, Certified Public Accountants,

1140 Connecticut Avenue, Northwest, Washington, D.C. 20036PERKS, HARRY M., Deputy Superintendent for Administration, School District of Phila-

delphia, Twenty-First and Parkway, Philadelphia, Pennsylvania 15103PETERS, ALFRED J., Birmingham Board of Education, Chester and Merrill Streets, Birm-

ingham, Michigan 48012PHILLIPS, FERMAN, Executive Secretary, Oklahoma Education Association, 323 Madison,

Oklahoma City, Oklahoma 73105POLLEY, JOHN W., Director, Division of Educational Finance, State Education Department,

Albany, New York 12224PONTI, IRENE Y., Director, School Food Services, New Canaan Public Schools, New

Canaan, Connecticut 06840REED, ROBERT S., Director of Research, Minnesota Education Association, 41 Sherburne

Avenue, St. Paul, Minnesota 55103RICHARDSON, GORDON, Assistant Professor, College of Education; University of Iowa,

2902 Brookside Drive, Iowa City, Iowa 52240

270

kiDEOUT, E. BROCK, Professor of Educational Administration, Ontario Iostitute forStudies in Education, University of Toronto 5, Ontario, Canada

RINGERS, JOSEPH, JR., Assistant Superintendent for Finance and Business Management,Arlington County Public Schools, 4751 North Twenty-Fifty Street, Arlington, Virginia22207

ROBBINS, JERRY, Associate Professor of Education, School of Education, The Universityof Mississippi, University, Mississippi 38677

ROBERTSON, MORRIS, Assistant Professor of Education, SoutIniestern State College,Weatherford, Oklahoma 73096

ROBILLARD, PAULINEA K., 3330 De Saix Boulevard, New Orleans, Louisiana ',0119ROBINSON, GLEN, Director, Research Division, National Education Association, 1201

Sixteenth Street, Northwest, Washington, D.C. 20036ROSE, JAMES, Assistant Professor, 216 Bailey Hall, University of Kansas, Lawrence, Kansas

66614ROSSMILLER, RICHARD A., Visiting Professor, University of Florida, National Educational

Finance Project, 1212 Southwest Fifth Avenue, Gainesville, Florida 32601ROWE, H. GERARD, JR., Assistant Professor of Education, School of Education U-32,

University of Connecticut, Stoors, Connecticut 06268RULE, DONALD W., High School Mathematics Teacher, Tucson Education Association,

Negotiations Research Commission, Budget Analysis Committee, 5356 East NineteenthStreet, Tucson, Arizona 85711

RYAN, JOHN J., Director of Finance, Delaware Department of Public Instruction, P.O.Box 697, Dover, Delaware 19901

SALISBURY, C. J., Professor of Educational Administration, College of Education, TempleUniversity, Philadelphia, Pennsylvania 19072

SAMPLE, MOLLY, Research Analyst, Florida Education Association, Tallahassee, Florida32304

SARTHDRY, JOSEPH A., Assistant Professor of Education, Division of Education, StateUniversity College, Geneseo, New York 14454

SCOTT J. LOWELL, Superintendent of Schools, Meridian Joint School District 2, Meridian,Idaho 83642

SHAMBERGER, MARVIN, Director of Research, Missouri State Teachers Association,Columbia, Missouri 65201

SHAW, MIKE H., Assistant Executive Secretary, South Dakota Education Association, P.O.Box 939, Pierre, South Dakota 57501

SHAW, ROGER M., Professor of Educational Administration, College of Education, KentState University, Kent, Ohio 44240

SHELTON, N. W., Associate Professor of Education, Department of Education, AppalachianState University, Boone, North Carolina 28607

SHORE, JOEL, Director of Egli? lization, Tennessee Department of Education, 125 CordellHull Building, Nashville, Tennessee 37219

SHOTWELL, RALPH, JR., Regional Director, Virginia Education Association, 5535 FloristRoad, Northwest, Roanoke, Virginia 24012

SHOWERS, JAMES D., Director, Research and Finance, Arizona State Department of PublicInstruction, 1700 West Washington, Room 165, State Capitol Building, Phoenix, Arizona85007

SIMMONS, WILLIAM, Deputy Superintendent, Detroit Public Schools, 5057 WoodwardAvenue, Detroit, Michigan 48202

SKARDA, PAUL J., Director, Administration and Finance, Department of Public Instruction,417 East Second Street, Ankeny, Iowa 50021

SLETTEN, VERNON 0., Professor of Education, University of Montana, Missoula, Montt.na59801

SMITH, HILDA, Associate Professor of Education, Loyola University, Box 104, New Orleans,Louisiana 70118

SORENSEN, KIRK M., Director of Research, Colorado Education Association, 5200 SouthQuebec Street, Englewood, Colorado 80110

SPIGLER, FRED H., JR., Assistant Executive Secretary for Legislation, Maryland StateTeachers Association, 344 North Charles Street, Baltimore, Maryland 21201

SPLAWN, ROBERT E., Department of Educational Administration, West Texas StateUniversity, Canyon: Texas 79015

STAFFORD, DAVID F., Research Director, Pennsylvania State Education Association, 400North Third Street, P.O. Box 1724, Harrisburg, Pennsylvania 17105

STETMEL, EDWARD J., Executive Director of Publi' Affairs, Research Council of Louisiana,300 Louisiana Avenue, Baton Rouge, Louisiana 70821

STEINHILBER, AUGUST, National School Boards Association, 1616 H Street, Northwest,Washington, D.C. 20006

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SI ELL, SAMUEL C., Associate Superintendent, Robeson County Board of Education, Lum-berton, North Carolina 28358

STEWARD, ROBERT C., Associate Dean, School of Education, Slocum Hall, SyracuseUniversity, Syracuse, New York 13210

STOCKTON, ROBERT W., State Aid Administrator, Office of Superintendent of PublicInstruction, State Capitol Building, Helena, Montana 59601

STOKES, MARSDEN B., Director of Bureau of Educational Research and Service, Collegeof Education, The University of Arizona, Tucson, Arizona 85721

STOLEE, MICHAEL J., Chairman, Graduate Studies, School of Education, University ofMiami, P.O. Box 6065, Coral Gables, Florida 33124

STOLLAR, DEWEY H., Professor, Educational Adminstration ar.d Supervision, College ofEducation, University of Tennessee, Knoxville, Tennessee 37916

STROUP, PHILLIP G., Classroom Teacher, 5515 Henderson Road, Southeast, Washington,D.C. 20031

STUMPF, EDWIN F., JR., Chairman, Department of Elementary and Secondary Educatioi.,Louisiana State University in New Or; tans, Lakefront, New Orleans, Louisiana 7'."..22

SWANSON, AUSTIN D., Associate Professor, State University of New York, 120 A 7osterHall, Buffalo, New York 14214

TAYLOR, HARRIS, D.retzur, Federal Programs, 415 Twelfth Street, Northwest, Washington,D.C. 20004

TAYLOR, SIMEON P. III, Assistant Director, Research Division, National EducationAssociation, 1201 Sixteenth Street, Northwest, Washington, D.C. 20036

THISTLE, EVERETT G., Assistant Commissioner, Massachusetts State Department ofEducation, 182 Tremont Street, Bostt.:1 Massachusetts 02111

THOMAS, J. ALAN, Director, Midwest Administration Centu, University of Chicago, 5835South Kimbark, Chicago, Illinois 60637

THOMPSON, JOHN A., Director of Graduate Studies, University of North Dakota, GrandForks, North Dakota 58201

THORNBLAD, CARL E., Associate Secretat-y, Illinois Junior College Board, 544 Iles ParkPlace, Springfield, Illinois 627:35

TJOMSLANL, ARNOLD, Professor of Education, Washington State University, 301 PioneerWay, Pullman, Washington 99163

TOSCANO, JOHN R., Associate Professor, Division of School Administration, BowlingGreen State University, Bowling Green, Ohio 43402

TROWBRIDGE, JOHN E., Associate Professor of Education, Trenton State College, 18Brainerd Drive, Cranbury, New Jersey 08512

TRUESDELL, WAYNE P., Associate Professor of Education and Executive Secretary, IowaAssociation of School Administration, University of Northern Iowa, Cedar Falls, Iowa 50613

TURO, LEO P., Supervisor in Education, Bureau of Research and Field Services, MassachusettsDepartment of Education, Olympia Avenue, Woburn, Massachusetts 01801

TURPEN, NOAH C., Deputy Superintendent, Albuquerque Public Schools, P.O. Box 1927,Albuquerque, New Mexico 87103

UXER, JOHN E., Executive Director, Region XIX, Education Service Center, 6501 CTrowbridge, El Paso, Texas 79905

VANDERWERF, LESTEL S., Dean, Graduate School of Education, Long Island University,Greenvale, New York 11548

VETRO, JAMES V., Assistant. Director of Research Services, New York State School BoardsAssociation, Inc., 1 1 1 Washington Avenue, Albany, New York 12210

VON BROCK, ROBERT C., Professor of Education, 243 Peabody, College of Education,Louisiana State University, Baton Rouge, Louisiana 70803

WARDLE, ORRIN D., Professor of School Administration, Fresno State College, Fresno,California 93726

WARNER, FRET) S., Administrative Assistant, Budget Planning, Tacoma Public Schools,P.O. Box 1357, Tacoma, Washington 98401

WATSON, CECIL E., Chairman, Department of Educational Planning, Ontario Institutefor Studies in Education, 102 Bloor Street Wat, Toronto 5, C atario, Canada

WEAVER, C. G., Director of Finance, Oklahoma State Department of Education, OklahomaCity, Oklahoma 73105

WEBB, T. B., Coordinator of Finance, Tennessee State Department of Education, 103Cordell Hull Brilding, Nashville, Tennessee 37219

WEBER: CHARLES, Director of Finance, Board of Education, State Capitol, OklahomaCity, Oklahoma 73105

WELLS, RICHARD, State Superintendent, State House, Indianapolis, Indiana 46204WHALEY, CHARLES, Director of Research and Information, Kentucky Education Association,

101 West Walnut Street, Louisville, Kentucky 40202

272

WHITE, T., Director of Administrative Education, Stephen F. Arlstin College, 2207 Dogwood,Nacogdoches, Texas 75961

WHITE, WARREN, President, Orleans Educators Association, 4025 Pressburg Drive, NewOrleans, Louisiana 70126

WHITLOCK, JAMES W., Associate Director, Divisioa of Surveys and Field Services, Pea-body College, Twenty-First Avenue South, Nashville, Tennessee 57202,

WICKERT, DONALD M., Assistant Superintendent, Rowland Elementary School District,Rowland Heights, California 91745

WILCOX, EDWARD F., Associate Commissioner, Department of Education, Office ofResearch and Planning, Room 200, Roger Williams Building, Hayes Street, Providence,Rhode Island 02908

WILKERSON, WILLIAM R., Assistant Professor, Indiana State University, Terre Haute,Indiana 47809

WILKINS, GEORGE T., Associate Professor of Educational Administration and Services,Southern Illinois University, Edwardsville Campus, 2611 Cleveland Boulevard, GraniteCity, Illinois 62040

WILLIAMS, EDWARD E., Superintendent of Schools, Roane County Department of Educa-tion, Kingston, Tennessee 37763

WILLIAMS, JAMES H., Director, Southeast Office, National Education Association, 1001Virginia Avenue, Suite 101, Atlanta, Georgia 30354

WILLINGHAM, F. E., Director of Research, Oklahoma Education Association, 323 EastMadison, Oklahoma City, Oklahoma 73105

WILLIS, CHARLES W., Superintendent of Schools, Board of Education of Harford County,45 East Gordon Street, Bel Air, Mary' old 21014

WILSON, LOIS, Director of Studies, New York State Teachers Association, 152 WashingtonAvenue, Albany, New York 12210

WISE, WILMER, Director, Research, Department of Public Instruction, Dover, Delaware 19901YOST, MARLEN, Coordinator of Research, 110 Walnut Street, Farmersville, Ohio 45325ZWERDLING, ABE L., Board of Education, City of Detroit. 3426 Cadillac Tower, Detroit.

Michigan 48226

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