DATE: Friday, November 21, 1997             TAG: 9711200031

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: OPINION 

SOURCE: BY RICHARD ROTHSTEIN 

                                            LENGTH:   82 lines

SCHOOL SPENDING: MAYBE WE'VE UNDERESTIMATED STATES

Liberals tend to believe that social programs thrive best in federal hands. Shifting responsibility to the states, they assume, will produce a ``race to the bottom'' as states try to attract business and keep taxes down by cutting expenditures and regulations. But in education, the experience of the past quarter century actually has been quite the opposite.

Since 1970, the race in public education has been to the top. With California the stark and sole exception, all states have dramatically increased what they spend on their schools. What is even more surprising, historically low-spending states have played catch-up, increasing their expenditures even more than the average.

It's difficult to make such comparisons. A dollar bought more in 1970 than in 1995, and it buys more in Mississippi than in New York. In addition, schools with children from more disadvantaged home environments have to spend more to provide the same quality of education. But dollar outlays can be indexed to account for these differences, and the result is a striking picture of real spending on education.

For the nation as a whole, real spending per pupil grew by 67 percent between 1970 and 1995. And in the lowest-spending regions, the Southeast and Southwest, real spending jumped by 100 percent and 85 percent, so it is now much closer to the national average than it used to be, even though the average itself is now much higher.

It might be supposed that school spending is a special case because public education benefits the middle class - compared, for example, to welfare, which helps only the poor. Perhaps state governments are willing to spend more money on the education of middle-class constituents' children, but still race to the bottom where the interests of politically less powerful groups are concerned.

Yet much of the new state investment in public education has been for special education for the handicapped and for compensatory education for minorities and the poor, programs which do not especially benefit the majority of middle-class voters. In fact, nearly two-thirds of the states now supplement federal funds for low-achieving students from poor families, even though they're not required to.

Can the same concern be mobilized in other social policy areas?

One early impetus for the burst in school spending was a raft of litigation about the inequality of school spending between districts within a state. In most states, school districts had relied heavily for funds on local property taxes, so the money available to any district depended on the property wealth within its boundaries. A district could make greater effort (a higher tax rate per dollar of assessed value) than its neighbor and still have more poorly funded schools.

This system began to change in 1971 when the California Supreme Court, in Serrano vs. Priest, found that property-tax-based school finance violated the state constitution. Similar decisions followed in 14 other states. And beginning with a New Jersey decision in 1973, state constitutions have been interpreted to require that all districts receive not only equal resources, but sufficient resources for an ``adequate'' education. Increasingly, constitutional equality is coming to mean that the state is required to spend more on low-income students than it spends on the average student.

Still, it's difficult to say whether a litigation strategy on the part of teachers, public-interest groups, and minority activists played the critical role in boosting spending, or whether a state-level political climate of increasing concern for equity and justice was more important. Of the three states that boosted school funds the most from 1970 to 1995, Arkansas and West Virginia acted after state court decisions found their property tax finance system unconstitutional. But Indiana acted without an adverse court decision.

Other states that more than doubled their real school spending over this quarter century include Connecticut and Kentucky, where courts overturned property-tax-based systems, as well as Michigan, Maine and Georgia, where court decisions to uphold the existing schemes did not dissuade leaders from reforming them. Alabama and Mississippi also enacted big increases in school spending without being ordered to do so.

For 25 years, as both liberal and conservative think thanks have focused almost entirely on the federal government, state and local policy has developed with little ideological coherence but great political creativity. And in education, nothing resembling a ``race to the bottom'' has been evident. Perhaps there is a lesson here. MEMO: Richard Rothstein is a research associate of the Economic Policy

Institute and teaches at Occidental College in Los Angeles. This article

is adapted from the January-February issue of The American Prospect

magazine.

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