ABSTRACT
No one funding formula or set of formulas is right for all states, given voter diversity, tradition, and interpretations of state constitutions with regard to education.
–Crampton and Whitney (1996)1
The Context of Funding Schools Our journey thus far has made the case that the context of funding public schools is highly complex, in large part due to the turbulent political environment in which education operates. In this environment, a multitude of governmental bodies compete for a finite pool of tax dollars. Unlike the private sector, governments generally have no way to engage a profit motive by which to stockpile resources, so while most organizations today are complex, by contrast people in business or industry have a much simpler task understanding their employer’s revenue needs. Simply stated, the survival of a business or industry depends upon offering products or services that consumers are willing to buy at a price that provides a reasonable profit. If there is insufficient demand or if the product or service is overpriced, the business will fail. In sharp contrast, most govern-
At the close of this chapter you will have reflected upon the following questions: ♦ What is the context of funding schools in America? ♦ What is the overarching tax system at federal, state, and local levels? ♦ What are state aid formulas? ♦ What is a fair funding formula? ♦ How do states fund schools? ♦ What funding improvements may be on the horizon?
