Mr. BERKE. That's correct.

Senator MONDALE. And this is Federal and State and everything thrown in?

Mr. BERKE. That is right. And I think as you go down the other four columns, the patterns are regular. In each of these States, each of which would claim to have an equalizing State aid system, the high valuation districts end up with higher expenditures than the low valuation districts. The regularity of these figures would make them almost suspect and if I hadn't had a hand in the research and the preparation of these tables, I would ask to see the data behind them. Senator MONDALE. Yes.

Mr. BERKE. Now, in table 5, which follows, we do the same kind of thing for median family income. And, again, we find a pattern of higher school revenues the further up in the income scale one goes with only two small exceptions in the entire table.

RICH GET RICHER

In short, "them that has gets," when it comes to distribution of school resources in these five major metropolitan areas. Again, we need not labor on this table, but for those who feel that income is a better measure than property valuation of a community's wealth, we have put this table together, and, again, the same kind of fourfold ranging from high to low in income categories shows essentially the same pattern in school expenditures.

Now, these examples are not isolated instances. They are duplicated in countless studies and can be found in the official reports for virtually every State in the Nation. They are typical examples of the fiscal roots of inefficiency and inequality of education that characterize the financing of American public education. The immediate impact of educational finance occurs, however, in schools.

Senator MONDALE. On page 12, you sav, since the mid-1960s there has been evidence suggesting intradistrict discriminatory patterns are weakening or yielding to very mildly compensatory ones. In other words, intradistrict expenditures, in your opinion, are becoming more equitable.

Mr. BERKE. Mr. Chairman, again the data is elusive. There are now only a few places where there is good data within districts on school-by-school variations in spending. However, from the studies I have looked at and from studies we have completed ourselves for New York State's Commission on Cost Equality of Education, it would seem that there may well be a diminution of the differences between schools within a district, and largely the reason is Title I of the Elementary and Secondary Education Act.

Senator MONDALE. That may have had more value to schoolchildren than the money it actually delivered, right, because at one time there were rather dramatic intraschool differences within the same district. were there not?

Mr. KELLY. Of course, many of the same political forces that led to the passage and continuation and gradual increase of Title I were active at the local level. We are trying to smooth out the relative resources. But there was an interaction there.

PATTERNS OF DISTRIBUTION

Senator MONDALE. Would you care to say that phenomenon you found in New York is now a national pattern?

Mr. BERKE. I would not want to make any kind of definitive claim as that on the basis of such flimsy evidence. I am talking of a study of Chicago, and three districts in New York, and I believe there is some evidence in Detroit that suggests that as well. Fortunately, you will have Mr. Hobson to talk about the situation in Washington, of which I would not speak. I would not want to make any strong statement of what the situation is nationwide. However, I think one thing that we do see is that it is mandated programs like Title I, on which there are strong requirements as to where those moneys should be spent, that are causing this change where it is occurring.

In New York State we are able to separate out--and it is not easythe use of funds from unrestricted State sources and from local revenues as opposed to the Federal aid moneys and mandated State sources. We found that the equalization that is occurring in the districts, the mild compensatory pattern that is occurring, is coming entirely from the Federal funds and the State funds.

When you look at what local districts are doing with locally raised revenues and the State aid that comes to them, you still see patterns which are somewhat inverse to need.

Senator MONDALE. What is the best source of data on that, or is there one?

Mr. KELLY. The only people in the United States right now who are studying this as a matter of research, is the Syracuse University study directed by Mr. Berke. The Office of Education is trying to drag some information out of local districts, but the data are not now available.

Senator MONDALE, In other words, we are able to get precise data on interstate

Mr. KELLY. Interdistrict but not intradistrict. The reason for that is that school accounting practices over the past many, many years have not kept intradistrict data. The data do not exist in local school districts. Local districts are beginning to revise their accounting systems to allocate funds by school. Those processes of revision have begun, particularly in large systems which are experiencing a complicated political battle as to who is getting the money in the city, places like Detroit, for example, and Philadelphia.

Mr. BERKE. Senator, I will make one more comment on the intradistrict resource allocations and then close my part of the testimony. And that is that while we can see the somewhat heartening fiscal patterns-heartening in our view in comparison with the past-that about the same or even somewhat more funds go to the schools with the higher proportions of educationally disadvantaged, still, there are activities in those schools and staffing patterns and teacher assignment patterns which cut in the opposite direction. Our studies showed, and we can present some evidence to the committee on it, that in terms of inexperienced teachers, new teachers, and in terms of some other services, that schools with the most disadvantaged were still treated the most shabbily.

Senator, I think that, at least as far as direct testimony goes, I will close my section. I have dealt with the definition of equal educational opportunity, and the way the system of educational finance relates to that important goal. Mr. Kelly will turn to the causes of these inequities.

PREPARED STATEMENT OF MR. BERKE AND MR. KELLY

THE FINANCIAL ASPECTS OF EQUALITY OF EDUCATIONAL OPPORTUNITY

THE CALIFORNIA DECISION

The timing of these hearings could not be more opportune. The recent decision of the Supreme Court of California invalidating that state's system of educational finance has brought an unprecedented degree of attention to the ways by which we finance the public schools of this nation. What is most valuable about this new public concern is that it is focused not simply on the question of adequacy of financing, (i.e. is the total amount of school support large enough?) but rather it is addressed primarily to the equity of educational finance, (i.e. are the burdens and benefits of school support fairly distributed?). In short, by declaring that California's system of school support-a system that is fairly typical of school finance plans in other states-unconstitutionally discriminates against children who live in poor communities, Serrano v. Priest pointed a spotlight at a neglected national disgrace: the persistent patterns of inequity in school finance.

These financial inequities lie at the very heart of the problem which this committee is examining, for they guarantee that children who come from the most wealthy and prestigious communities will ordinarily be provided with the best education the public schools can give, while those who begin life with the disadvantages of impoverished family and neighborhood backgrounds will be relegated to second class schools. A better definition of inequality of educational opportunity would be hard to devise.

We are aware that this committee has scheduled a hearing devoted entirely to the legal implications of the California case for next week, and we will, therefore, not remain on that topic for long. But there is one point that must be emphasized above all others. Even if the California decision comes to be the prevailing law of the land, it will provide only an opportunity, not an answer, only a starting point for reform, not a solution to the unfairness and irrationality of the pattern of education in America. Justice Sullivan's opinion for the 6-1 majority says only that school finance systems [should not] "invidiously discriminate against the poor [by making] the quality of a child's education a function of the wealth of his parents and neighbors." How educational resources should be allocated is a matter for legislatures to determine, and the range of alternatives and their differing effects on equality of opportunity is broad indeed! Serrano v. Priest is a challenge-a challenge to state legislatures, to this committee, and to the Congress of the United States, to develop techniques and systems of public finance that help rather than hinder the quest for educational opportunity for children in all the states of this nation. And we take as our challenge the task of assisting this committee and other policymakers to understand the seriousness of the problem and some of the alternatives that may help to resolve it.

To that end our testimony today and the larger report we shall shortly be submitting to this committee will consist of four parts. First, as a means of providing clarity in an area often characterized by vagueness, we will begin by defining our understanding of the concept of equality of educational opportunity. Next we will describe the patterns of fiscal inequity that exist among and within school districts. Third, we will explain the reasons for these disparities, examining the role of local, state, and federal programs. And last, we will advance several suggestions for moving toward more equitable patterns of school finance.

UNDERSTANDING EQUALITY OF EDUCATIONAL OPPORTUNITY

Like democracy and justice, equality of educational opportunity has almost as many definitions as it does definers. Rather than simply adding our own preferences to those of our many predecessors, we would like to assist the committee to sort out the central themes in the differing approaches.

As a start, we would suggest two major distinctions. In the first category are those conceptions which emphasize equity in the distribution of educational services and their outcomes, educational achievement. The second major perspective sees equality in education primarily in terms of how the costs of education are distributed. Most conceptions of equality of educational opportunity suffer because they fail to concern themselves with both sides of the problem, equity in the distribution of education as well as equity in bearing their costs.

EQUAL EDUCATIONAL OPPORTUNITY AS EQUITY IN EDUCATIONAL SERVICES AND ACHIEVEMENT

ABSOLUTE EQUALITY IN SERVICES

We begin with what is probably-in our eyes unfortunately so-the most widely prevailing concept of equality of educational opportunity, absolute equality or identity in the level of educational services accorded all children. Such a view frequently measures the level of services in terms of equal per pupil expenditures or equal expenditures adjusted for cost differentials, or else by some crude index of the quality of education such as equal pupil-teacher ratios or the like. This view of the requirements of equal opportunity in education is frequently voiced by those who have been so impressed and distressed by the marked disparities in school services that they turn to its converse, absolute equality, as a ready remedy. Besides stressing its simplicity, those who favor this test also suggest it as a useful minimum step in moving toward full educational equality because it would serve as an immense advance over the current system which regularly works to the disadvantage of the poor and the minorities.

It is our view, however, that this is a case where "the better" is the enemy of "the best," and that acceptance of a definition of equal opportunity in terms of equal expenditures or services for all children flies in the face of what we know about the differential learning aptitudes of children or what we take to be a dominant goal of American education, i.e. furthering social mobility. To be meaningful, we would suggest, a theory of equal educational opportunity must take into account both (1) the purpose of education and (2) what little we know about how children from different backgrounds and with differing abilities learn.

SERVICES RELATED TO EDUCATIONAL NEED

A primary function of public education in America has been its role as a vehicle for social mobility. The goal has been to equip children of moderate means and meager status with the skills needed to compete on equal terms in the search for a good life with children of higher station and greater wealth. While as a personal matter education may well be seen as an end in itself, as a public service education is a means to a number of civic and economic ends, chief among them being equal opportunity in the competition of life. Equal educational opportunity should be intended to serve that larger goal, and as our society has come to place increasing emphasis on credentials, degrees, and technical training, the role of education has become even more important in determining life chances. Meaningful equal educational opportunity, therefore, must equip children from any background to compete on equal terms with children from any other level of society.

The implications for public policy that spring from this understanding of the goal of equal educational opportunity are clear: More services must be focussed on those with disadvantages in their ability to succeed in school so that when their basic education is completed, children from differing racial and economic groups, as nearly as possible, stand on an equal footing in terms of educational attainment with children who began school with greater advantages. Individual differences in achievement there must always be, but equal educational opportunity requires that educational resources should be distributed to offset societal and inherited impediments to success in life. In short, equal educational opportunity means that services and thus expenditure should be related to educational need as defined above.

Neither of the authors of this testimony would minimize the practical difficulties in implementing this view of equal educational opportunity. We are both aware of the questionable results of previous large scale efforts at compensatory education like Title I of ESEA and some of the large local programs like New York's More Effective Schools. We know that educating the children of the poor and of racial minorities is one of the things American schools do worst. We are not unaware either of the evidence of the apparent impotence

of schooling in comparison with out of school influences on children. And we have both had the opportunity in previous research of developing techniques for identifying educational need, both on the basis of admittedly imperfect achievement tests and on the basis of social and economic indexes of need. Yet with all the problems associated with it, allocating resources in proportion to educational need seems an indispensable part of a meaningful public policy designed to further equality of educational opportunity. We shall use this view as one of the tests by which we shall subsequently measure the degree of inequity in the financing of education in the United States.

EQUAL EDUCATIONAL OPPORTUNITY AS EQUALITY IN BEARING THE COSTS How the costs of education are distributed is another important theme in discussions of equality of educational opportunity. Indeed, much of the court's concern in Serrano v. Priest was directed to that question. Their finding that poor communities which taxed themselves at higher rates were frequently unable to support educational services at as high a level as richer communities taxing themselves at lower rates weighed heavily in the court's decision to find that system in violation of the equal protection clause of the Fourteenth Amendment.

EQUAL SERVICES FOR EQUAL TAX EFFORT

One possible outcome of the Serrano decision would be a system arranged so that communities making equal tax effort receive equal educational services. Perhaps the most persuasive spokesmen for this view are the two authors of the influential amicus brief in the California case, Professor John Coons and Mr. Stephen Sugarman, who are also the authors of an important new book on educational finance. They argue that the right of local school districts to opt for different levels of educational offerings should be maintained, but that each community should have equal opportunity to select any given level of educational expenditure. State aid would make up the difference between the yield of millage levels in districts with differing tax bases. Thus the state would guarantee that equal tax effort would produce equal education. The principle of power equalizing, as they call it, could theoretically be extended to the family level as well as to the school district, but the principle remains the same. In either case, the test of equity is the power of equal tax effort to purchase equal services. It is consistent, it would seem, with one of the familiar principles for judging the fairness of a revenue system: payments in proportion to benefits received.

TAXATION IN PROPORTION TO ABILITY TO PAY

While benefits in accordance with payments is one possible definition of equity, a criterion that seems far more in keeping with modern democratic ethics is taxation proportional to one's or a school district's—ability to pay. This criterion of equity underlies the graduated income tax, for example, and would be approximated by systems of state or federal aid for education which used a sophisticated measure of community wealth as the criterion for school aid allocations. Patently, for many school systems the amount of taxable property per pupil is an inadequate measure of their ability to pay. Income may be more realistic. In addition, a measure that takes account of the greater demands of a wider variety of public services in urban areas should also be used.

In short, in establishing a definition for equality of educational opportunity. the way in which costs of education are distributed is an important component to be considered. Our preference in developing such a definition is for a system which distributes the costs of education in proportion to a realistic measure of a community's or the individual's ability to pay. For educational finance, the adoption of this goal would call for new approaches to equalization in most states of the nation.

SUMMARY

In both the distribution of services and in the methods for supporting these services a number of definitions of equality of educational opportunity are available. While we have expressed our preferences among these competing criteria, what is probably most important for this committee to note is that regardless of which of these tests of equity one wishes to apply, the current system of financing public education in the United States fails to qualify. In short, there is no recognized test of equal educational opportunity which our current system of education finance is able to meet. In the next section of our testimony, we present examples of the evidence from which we drew that conclusion.