Department of Economics


Date of this Version

October 1979


Published by Nebraska Journal of Economics & Business 18:4 (Autumn 1979), pp. 5-25. Copyright © 1979. Used by permission.


As in most states today, serious legislative concern is being given to elementary and secondary educational finance reform in Nebraska.' Also as in most states, Nebraska's main reform concern is the equity of fiscal distributions among school districts. Although, as anyone who has attempted to keep up with court decisions regarding educational finance knows,' equity is an elusive enough concept in the abstract and even more so when applied in the concrete. In general, though, the concern with regard to school finance is one of interdistrict equity. Using recent decisions as the criteria for judgment, the results of this study indicate that the Nebraska state school finance system is inequitable. The methodology articulated in this article with regard to interdistrict equity in Nebraska found that:

1. The state system of financing schools is not an equalization system. In fact, it has just the opposite effect: it taxes the poor districts to provide school funds to the wealthy districts. Poor districts are made worse off because of the state financing system.

2. Even the one term in the state formula which is labeled an "equalization" term does not equalize.

3. Many formula terms are added to all districts' budgets by one statute and subtracted from all districts' budgets by another statute, thereby serving only to confuse.

4. In the final analysis, state Foundation Aid goes only to the more wealthy districts; the least wealthy receive no Foundation Aid.

5. All the monies from the original land grant set-aside for schools go to the more wealthy districts and none to the poorest districts.

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