On setting the agenda for Pennsylvania school finance reform: An exercise in giving policy advice

Abstract

School finance reform has emerged as one of this decade’s most widely debated policy issues. Prompted initially by court decisions in California and New Jersey demanding a more equitable school finance structure,¹ most state legislatures in the U.S. have passed or are now considering significant changes in the way local elementary and secondary education is to be financed.² Yet in most instances, those who frame and decide the reform measures are travelling through virgin territory. New aid formulaes are being written and new taxes are being proposed. We are not simply making small changes in old programs to keep up with the changing times. The programs being proposed (or required by the courts) are likely to have short- and long-run implications which families, school officials, and legislators cannot easily anticipate. Exposing these unanticipated consequences of reform may be crucial to the choice of a preferred policy. Recent research has examined the likely implications of a broad range of reform proposals. The literature is long and thoughtful.³ This essay examines the question of what one might usefully do with all of this good research. Simply put, how should economists transmit their growing knowledge about an issue as complicated as school, finance reform to the busy and, for the most part, technically unsophisticated elected representatives who must select new policies?

This paper is a preliminary report of work in progress for the Governor’s Tax Commission of Pennsylvania. The paper has not been reviewed by the Commission: neither the approach to reform policy nor the specific conclusions presented have the formal endorsement of the Commission. The comments of Daniel McFadden, James Mirrless, and other participants of the U.K.-U.S. Conference on School Finance are appreciated, as are the comments of friends at Penn and Princeton who heard a preliminary version of this paper.