for low and medium wealth districts during this period while some lag in resource growth occurred among high wealth districts. Rural districts appear to have experienced a slight edge in the growth in school expenditures while changes among the SMSA districts were indistinguishable.

Texas retained its foundation aid program with significant modifications. A law enacted in 1975 substantially raised the level of foundation support. The wealth measure in calculating the local contribution shifted to assessed property valuations from an index of ability to pay. A uniform requirement of 30 mills was enacted as the local contribution to the foundation program. However, a hold harmless guarantee provision assures each district a minimum 1.04 percent of State aid received during 1974-75. A new program ($25.4 million) earmarked funds for compensatory education and a supplementary equalization program ($50.0 million) was also enacted.

As a result of these new features, the new Texas program was more equalizing. The share of education revenues derived from the State remained virtually unchanged between 1970-71 and 1975-76, going from 49.3 percent of total revenues to 50.1 percent in the latter year. However, some improvement did occur in average per pupil expenditures which rose from $636 or 74.1 percent of the national average to $1,094 or 78.8 percent of the national mean during this same period. Resource growth lagged for high wealth districts while expenditures in the SMSA districts outpaced slightly those for rural districts. Within the SMSAs, changes in expenditure growth pattern were barely discernible.

Wisconsin's program guarantees a wealth base per pupil, the size of which depends upon each district's grade level, with the guarantee level set at $1,405 per pupil in 1975-76. The guarantee varies for each district, reflecting actual district expenditures. A secondary equalization aid equal to a smaller amount is guaranteed for districts spending above the $1,405 level with the actual amount again depending on district grade span wealth and actual spending. In effect then, Wisconsin operates under a non-linear guaranteed yield program. Recapture provisons which were due to become effective were nullified by the State courts.

Transitional aid is provided to districts too wealthy to share in equalization aid, though the actual amount diminishes from year to year. A ceiling on the annual growth in district expenditures equal to 110 percent of the statewide average is also in effect.

Between 1970-71 and 1975-76, per pupil expenditures rose faster in Wisconsin than for the nation as a whole, rising from $977 or 113.9 percent to $1,618 or 116.6 percent of the national average. At the same time, the State share of school revenues rose modestly from 29.3 percent to 32.1 percent of the total. The pattern of expenditure disparities persist, however, and may be due as much to the modified hold harmless provision as well as to provision allowing generous district expenditure growth. The heavy reliance on local revenues may also be contributing to inter-district expenditure disparities.

Medium wealth districts showed the greatest gain in resources while high wealth districts were slowed. The expenditure limit was probably responsible for this differential growth. Expenditures grew fastest in SMSA center cities, while the lag appeared greatest in other SMSA districts. It is likely then that many of these latter districts are among the high wealth districts being affected by the expenditure limits.

IV. SUMMARY AND CONCLUSIONS

When disparity is measured by the ratio of expenditures in highspending districts to expenditures in low-spending districts (omitting the very highest and very lowest districts to account for possibly justifiable variations), 39 States exhibited disparities of 1.5 or more in 1970. That is to say, some children in a State received at least half again more than others. In 4 States, the disparity ratio was 2.0. or higher. These disparities were strongly related, in almost every State, to variations in property wealth among districts. Historically, the schools have been supported by the local property tax; districts with high property valuation per pupil not only can raise more money for education, they can do so with less tax effort. These inequalities have led to demands by State courts that disparities be lessened and that the link between expenditures and local wealth be weakened or

eliminated.

By 1975, disparities in the nation as a whole actually increased, with 40 States exhibiting disparities of 1.5 or greater. Only in 20 States did disparities appear to decrease at all. Low-wealth districts improved their status somewhat over this five-year period, although in most States they still spent considerably less than their State's average. These results are surprising in view of the fact that a school finance reform movement was under way in the 1970s, involving 20 States. Many of these States were those most in need of reform

them showed a disparity ratio less than 1.5.

in 1970, only two of

By 1975, 8 of the 20

States had substantially reduced disparities, but 6 exhibited greater disparity than in 1970. (Some States apparently set reform objectives

other than disparity reduction, most notably the relief of property tax burdens.) Even though, as a group, these States have made less progress in reducing disparity than might have been hoped for out of a reform movement, they were swimming against a national current towards greater disparity.

Central city districts are of particular interest in school finance reform, because such districts typically spend more per pupil and have higher property valuation per pupil. The study has not investigated the claim that higher spending is justified by higher costs for educational services and greater needs of many of its students. It has investigated the claim that property valuation per pupil fails to reflect the greater burden that cities bear in supporting municipal functions in addition to education.

When district wealth is calculated with

population rather than pupils as a base (an approximate way to account for total service burden), the advantage of central city districts considerably diminishes. These findings suggest that the impact of school finance reforms will depend quite strongly on the way in which costs, needs, and ability to pay are defined.

If the education system is to reduce core program disparities in the future, a decision must be made as to the extent of disparity that can be tolerated. As in most policy decisions, this one entails consideration of principles and practical constraints. Too loose a criterion might violate principles of equal educational opportunity; a very strict criterion could call for funds that might not, in practice, become

available. The costs of equalizing so that each State met a disparity

criterion of 1.25

a ratio employed in an Office of Education regulation

relating to Federal impact aid

-

would have been $5.4 billion in 1975.

Half that amount would have been required for all States to meet a 1.40 criterion. These are substantial amounts, but unless action is taken toward greater reform, the amounts in the future will apparently become greater - not only because of inflation but also because of an apparent trend toward increasing disparity in America's schools.

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