An historical analysis of policy decisions and the fiscal equity of school funding in Ohio: 1980--2003

An ex-post facto approach was used to construct a history of Ohio school finance from 1980-2003 to show links between policy decisions and changes in the equity of the system. Through economic analysis, litigation analysis and review of literature, the effect of education funding policy changes in the state of Ohio between 1980 and 2003 were examined. The research began with determination of years of major policy changes and was followed by assembly of the database, including the Adjusted Current Expenditures (ACE) for school districts in the state of Ohio. Adjusted Current Expenditures (ACE) for each school district in each year was calculated using a formula similar to the formula used by Arbogast (2005). The measures of equity chosen were the Gini coefficient and the McLoone index. The Gini coefficient and the McLoone index values were analyzed to determine if the trends in those values changed between successive time periods of the four periods marked by FYs 1980-83, 1984-91, 1992-97, and 1998-2003. The analysis was conducted using multiple linear regression models. The findings suggest that the passage of the state income tax in 1983 increased equity levels, as measured by the by the McLoone index. In addition, in Period 3, the equity fund increased the equity trend, as measured by the Gini coefficient and, as measured by the McLoone index of per pupil spending for Ohio school districts.