An Analysis of Intradistrict Funding Equity in Rural and Urban School Districts

After a long process of judicial action, states have revised the education funding distribution systems to meet the legal requirement of providing both horizontal and vertical funding equity between districts (interdistrict) in the state. A major part of the judicially required reforms was a shift to weighted student funding or funding which provides differential amounts of education funding dependent on the estimated needs of students based on their individual characteristics. However, little research has been done to examine the equity of the funding distribution systems between schools within districts (intradistrict). Intradistrict funding inequities are likely to persist in districts today for numerous reasons. Primary among these is the ubiquitous use of step and lane salary schedules in US public schools and the historical use of full-time equivalency systems to assign faculty positions to schools. Under full-time equivalency systems, school districts assigned teaching positions to schools based on the number of students enrolled and then estimated the amount of funding per school based on the average cost for employing a teacher. The full-time equivalency system ignored both differences in the salaries of the teachers assigned to the schools and the characteristics of the students enrolled in the schools. Often under this method, schools with the least needy students ended up with the highest paid teachers as experienced and more expensive teachers tend to opt out of these schools. This was especially true in New York City (Lankford, Loeb, and Wychoff, 2002). Thus categorical funds provided by the state to fund additional services for students with exceptional needs ended up being spent on student without special needs while schools with high number of exceptional needs students actually had lower than average per pupil expenditures. While concerns over these types of unintended funding transfers have a great influence on intradistrict funding equity and have existed for many years, only recently has school-level spending data become available. With this improved spending data, this analysis will evaluate the level of funding inequities which exists within rural districts in Arkansas and also within a large urban district specifically New York City. Further, these differences have a great influence on intradistrict funding equity