We found three common themes among their recommendations: (1) states should first clearly define equity goals in terms of the funding level needed to ensure adequate learning resources for all students or the funding needed to ensure a certain level of student performance, (2) states should link school finance reform to accountability, and (3) the reform process should be inclusive and encourage the participation of all groups affected by such reform. Clearly Define Goals of School Finance System

Officials in all three states suggested that states clarify the equity goals of a school finance system by defining such goals in terms of adequate learning resources or student performance standards. Legislative solutions have had to be sensitive to taxpayers’ concerns about increased taxes and to concerns of wealthy districts that want to maintain existing spending levels. Technical Appendix

The objectives of this study were to characterize, for each state reviewed, (1) the reforms to the school finance systems and the legal, budgetary, and political pressures the state legislatures faced in making the reforms and (2) the general impact of the legislative remedies, especially in addressing disparities in educational funding.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the experiences of three states that reformed their school finance systems, focusing on the: (1) reforms made to each school finance system; (2) legal, budgetary, and political pressures that state legislatures faced in making the reforms; and (3) impact of the legislative remedies in addressing educational funding disparities.

What GAO Found

GAO found that: (1) lawsuits prompted each state to address education funding disparities among school districts; (2) legislative solutions in all three states helped poor districts without harming the educational programs of wealthy districts and were sensitive to public sentiments concerning taxes; and (3) states undergoing similar education finance reforms should define the equity goals of their school finance systems in terms of the funding needed to achieve a certain level of student performance, link funding reform with greater accountability for student performance, and encourage all groups affected by education finance reform to participate in the decisionmaking process.