Does the Measurement Matter? Assessing Alternate Approaches to Measuring State School Finance Equity for California’s Local Control Funding Formula

Abstract

Scholars have not reached consensus on the best approach to measure state school finance equity. The regression-based approach estimates the relationship between district poverty rate and funding level, controlling for other district cost factors. A second commonly used approach involves estimating the weighted average funding level for low-income students or other subgroups. Meanwhile, policymakers have preferences for their own data systems and poverty indicators when reading reports and assessing progress. We constructed parallel, district-level panel data sets using data from the California Department of Education and the U.S. Census. We estimated changes over time in district-level school finance equity under California’s Local Control Funding Formula, using multiple school finance measurement approaches, with each of the two data sets. Our results show that different methods and analytic choices result in policy-relevant differences in findings. We discuss the implications for policy and future research.