• Background
• Content of This Report
• Trends in Disparities
• Data Issues
• Summary
• References

There has been a continuing interest in measuring disparities between districts in public elementary and secondary education finances over the years. One major reason for this comes from the judiciary: many state courts determined that their state's constitution requires a more equal distribution of funds (Hickrod et al. 1997). In 1994, a second reason emerged: the U.S. Congress reauthorized Title I of the Elementary and Secondary Education Act as a part of the Improving America's Schools Act, in which one educational disparity measure, the coefficient of variation, was to be used in one formula to allocate funds.¹ No funds have been allocated using that formula. But just the existence of such legislation points to the interest that legislatures have in educational disparity measures. Legislative action and court decisions have ensured that the study of educational disparity measures continues to occupy a prominent place in the minds of policymakers and analysts.

This report examines disparity between districts in education expenditures in elementary and secondary schools for the period from 1979-80 to 1993-94. Included are results for each state and also for geographic regions and the nation as a whole. The report uses data on instructional expenditures per pupil in individual districts from the U.S. Census Bureau's "Annual Survey of Government Finances: School Systems" (F-33) for school years 1979-80 through 1982-83 and 1985-86 through 1993-94. The database was edited for such errors as the placement of school districts in incorrect states.

One factor that impacts any analyses concerning disparity is that there are various types of school districts, even among the regular school districts, which provide general classroom instruction. There are three types of regular districts: those that serve predominately elementary grades; those that serve predominately secondary grades; and those that are unified, serving both elementary and secondary grades. There are also other types of districts that provide administrative services or provide instruction for disabled students, or serve other specialized purposes. This report focuses on the most common type of district, the regular unified district.² It examines only disparity between districts and does not examine within-district disparity.

This report uses seven different measures of educational disparity, each of which evaluates distributions of expenditures by school districts differently: the coefficient of variation, the Gini coefficient, the Theil coefficient, the McLoone index, the federal range ratio, and two versions of Atkinson's index. These seven measures present a cross-section of the different educational disparity measures that are available.

A majority of the disparity measures indicated a decline in disparity in most states and in the four geographic regions between 1979-80 and 1993-94 but an increase in disparity for the nation as a whole.

For 27 of the 49 states with at least two unified school districts, the seven disparity measures unanimously indicated declining disparity (table A). For 11 other states, a majority of the measures indicated declining disparity. For only 1 state did all seven measures indicate increasing disparity. A majority of the measures indicated increasing disparity for 10 other states.

Regional differences among states. The results show clear regional differences among the states regarding increasing or decreasing disparity. Six of the states for which a majority of disparity measures indicated increasing disparity were in the Midwest, and four were in the West. Only one state in the Northeast and none in the South had a majority of the disparity measures indicating increasing disparity.

Table A.-Number of states indicating decreasing disparity, by region and the number of disparity measures: 1980 to 1994

Implications of declines in disparity. For each of the states for which the measures fell, the decline in disparity does not necessarily mean the state has a more equitable distribution of education expenditures, as the percentage and distribution of special needs students may have changed over that period. This report does not differentiate what policymakers and analysts may see as acceptable disparity (e.g., increased spending for special education or compensatory education) from those judged to be unacceptable (e.g., those that are simply from differences in districts' wealth).

When the seven disparity measures were calculated for each of the four geographic regions, the results were consistent with the results for individual states. For three of the regions (the Northeast, South, and West), all of the disparity measures indicated declining disparity. A majority of the measures also indicated declining disparity for the Midwest.

While the results indicated declining disparity in most of the states and all of the regions, six of the seven disparity measures indicated increasing disparity for the nation as a whole. Disparity between school districts increased for the nation as a whole in part because instructional expenditures per pupil increased at different rates in different parts of the country.

Some of the findings concern the difficulty in analyzing school district finance data.

Many problems were discovered in the database, especially for the earlier years; significantly fewer problems were found for the later years. Although considerable time was spent examining and correcting the database, it is probable that uncorrected problems still remain and that most of these problems are also for the earlier years. This might be a factor in the finding that disparity in a majority of states has fallen over time, as the problems are likely to increase the amount of disparity that is observed with the disparity measures.

In any particular year, some states had a small number of outliers-that is, districts with either extremely high or extremely low instructional expenditures per pupil. It is frequently impossible to determine which of the unusual expenditure data are correct and which are incorrect (i.e., result from errors in the database). Therefore, a small number of districts with very high or very low expenditures were excluded from the main analysis. In four case studies, however, the disparity measures were calculated both with and without outliers in order to illustrate the different impacts that outliers can have. In some instances, if outliers had been included in the analysis, they would have affected at least some of the disparity measures.

Four main conclusions arise from this study:

• First, disparity in instructional expenditures among school districts seems to have decreased within many, but not all, of the states between 1980 and 1994.
• Second, in a small number of states, disparity seems to have increased during the same period of time.
  
• Third, in a significant number of states, the disparity measures lead to inconsistent results.
  
• And fourth, disparity among school districts seems to have increased for the nation as a whole due, in part, to differences in the growth path for instructional expenditures per pupil in different parts of the country.

The other conclusions concern the database itself. Substantial problems with this database make financial analyses very challenging, particularly for the earlier years in the study. At a basic level, many districts were assigned erroneous codes that placed them in the wrong state, and there were other districts that had no state code at all. While a significant amount of editing was done, many problems remained. Another category of problems was the existence of outliers. districts with either extremely large or small expenditures per pupil. These outliers, even small ones, can have a substantial effect on the results.