Measuring the equity of Indiana's school finance program, 1978-1987

During 1989 three states, Montana, Texas, and Kentucky had their state's educational funding program declared unconstitutional. Currently Indiana as well as seven other states have school funding formula suits pending. Using twelve different equity measures Indiana's General Fund school funding program was examined over the period 1978 to 1987. Since Indiana's General Fund support formula has been controlled by legislative action since 1973, rather than by local school boards, this study attempts to answer the question whether the biannual legislative changes in the funding formula have produced greater or less equity for Indiana's students over this period.;The following data was obtained from the Department of Education's Division of Educational Information Systems for each school corporation in Indiana: annual General Fund expenditures (Form 9 data); Average Daily Membership (ADM); Additional Pupil Count (APC); Regular, Special Education, and Vocational Education Basic Grants; and Assessed Valuation (AV). This data was used to determine the following: General Fund expenditures per ADM and per AADM (ADM plus APC); Regular Basic Grant per ADM and Regular, Special Education, and Vocational Education Grants per AADM; and AV per ADM and per AADM. General Fund expenditures per ADM and per AADM were tested with twelve different equity measures to determine whether legislated funding formula changes have led to greater or less equity. The twelve measures used were range, restricted range, mean, standard deviation, federal range ratio, McCloone index, relative mean deviation, standard deviation of the logarithm, coefficient of variation, Thiel's measure, Atkinson's index, and the Gini coefficient. In addition, Regular Basic Grant per ADM and Regular, Special Education, and Vocational Education Grants per AADM were correlated with AV per ADM and per AADM respectively.;For the most part the equity measures agreed and indicated Indiana's funding formula was most equitable in 1979 and least equitable in 1983. The measures indicate a steady improvement in equity since 1983 but the equity measures indicate there was still greater equity in 1979 than in 1987. The preferred equity measure which was consistent with the equity trends and intrepretable was the coefficient of variation. The correlations between state support per ADM versus AV per ADM indicated the lowest correlation in 1981 and the highest in 1988.