STATE AID GRANTS TO DISTRICTS

How do states provide for equalization? Each state’s constitution spells out how it proposes to fund education.

Basically, each state equalizes for local districts’ fiscal capacity through its method for funding localities. Each

state collects revenue and disperses it to districts, providing more funding to lower capacity districts and less funding to higher capacity districts. This funding usually comes through various types of grants. Alexander and

Salmon view state aid as a continuum from inequity to equity and show the types of grants as they move along the continuum from nonequalization, matching, flat, equalization, to full state funding.

States vary in how they write equalization grants, and this affects the local districts’ equity levels. Some

states do not equalize as much as others. Depending on the state’s level of commitment to equalization and

the exact legislative language, the grants may be more or less equitable. Some states are more committed to providing equity than others. The greater the variance between the state constitution’s language and the equalization formula, the greater the likelihood that the formula will face a court challenge.

Consider this example. State A’s constitution speaks to providing an effective education level for all of

its citizens despite their level of wealth. State B’s constitution writes of providing an efficient education to its

citizens. Therefore, State A might provide a method for collecting revenue sufficient to provide a substantial

funding level for all localities. State B, on the other hand, might be a low-tax state, happy to provide only some

limited (efficient) education level to its poorest citizens. This disparity of goals and values is apparent in each

state’s constitutional language. State B’s grants, although referred to as equalization grants, may well be

nothing more than matching or flat grants.