Article Finds "Inequitable Equilibrium" in State Finance Systems

"Inequitable Equilibrium," a forthcoming article (Indiana Law Review 36, Spring 2003) by Jeffrey Metzler, a clerk for Judge Diana Motz of the U.S. Court of Appeals for the Fourth Circuit, examines the relationship between changes in school finance systems for the purpose of improving equity and the actual degree of equity achieved.

Using statistical analysis and voluminous data from all 50 states to determine such measures of equity as the wealth neutrality score, targeting score, coefficient of variation, and McLloone index, the author finds that the methods states normally use to try to improve equity only provide temporary solutions, if any. Even some states, such as Washington, that have adopted full state funding or guaranteed tax yield approaches, have gradually regressed into inequity. The reason for this, Metzler asserts, is that a typical state school finance system is characterized by an inequitable equilibrium. Due to advocacy efforts, legislators may move away from that equilibrium, but often later pass laws, such as limits on taxes, that effectively invalidate the laws designed to increase equity.

The author concludes that state education finance programs can be easily manipulated in ways that significantly impact the equitable distribution of resources. As a result, changes in legislation that are facially more equitable may, in practice, have little or no effect on the distribution of state aid to local school districts. Furthermore, because the distribution of resources often represents the balance of political power in the state, legislators and governors are often under considerable pressure to maintain the existing equlibrium, even if it is inequitable.

Thus, those interested in achieving meaningful reform must either find a way to change the political equilibrium, or rely on courts to impose solutions on resistant legislatures.

Prepared May 2, 2003