Abstract
Central government education formulas for the distribution of funds to local public schools have a long history in numerous countries, with special importance at the state level in the United States. Such formulas have been formulated to express an array of concerns to include equity, ability to pay, adequacy, need, willingness to pay taxes, geographical sparcity, tax burdens, the political power to acquire more money for an area, and so forth. The differentiation and elaboration of school-aid formulas have led to the evolution of greater formula complexity and the emergence of very different kinds of school finance systems in different states. The social fabric matrix is utilized to articulate the Nebraska State system used for the distribution of financial aid to kindergarten- through- grade- 12 public schools. This demonstrates how states can model their systems in order to observe the interconnections through algebraic formula terms in order to determine the consequences of planned changes. The findings of the analysis are also drawn upon for conceptual conclusions about school-aid policy, rules, and systems.
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Notes
- 1.
Rules are delivered by institutional organizations, so, if possible, it is best to include the institutional organizations as the delivering and receiving components in the rows and columns of the SFM (as in Fig. 1) with the rules in the cells. This clarifies the row institutions that are responsible for the delivery of the rules and the column institutions with a 1 in the cells across the delivery row that help institute the rules. It is possible to list only the rules in the delivery rows of the SFM, but this does not explicitly indicate the source of rules, thus making it appear that rules stand alone. This is the way new institutional economists might use the SFM, or anyone who wants to emphasize the importance of a set of rules in a problem area without indicating the source of the rules.
- 2.
 All statutes cited, along with the relevant list of source laws, can be found at Nebraska legislative documents (2008) (see references).
- 3.
The next analytical function that should be completed is to apply calculus to the whole formula. Such a total formula analysis would allow for the determination of distributional and incentive impacts among school districts if different aspects of the formula were to change. The calculation of the derivative of the formula would reveal the change in state funding for the district as the various aspects of the formula change. For example, what is the effect on state financing of a change in local school expenditures, or, what is the distributional effect on all other districts as local expenditures change in one district? There are numerous questions that can be answered with the first derivative. The algebraic definition found from the SFM cells provides an opportunity for partial derivatives to be used to find the kinds of rewards, incentives, and distributional effects that the structure provides for individual districts and among districts.
- 4.
 Much of the legislation for equalization in the part of the formula not presented here fails because of the inclusion of hold harmless clauses in that legislation.
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Appendix: Abbreviation and Symbol Reference
Appendix: Abbreviation and Symbol Reference
- ADA:
-
average daily attendance
- ADM:
-
average daily membership
- AE:
-
adult education
- BAGR:
-
basic allowable growth rate for the school district
- C:
-
correspondent variable representing the percentage in the poverty factor
- CS:
-
community services
- FDKS:
-
Fall membership of the Fall prior to the state-aid payment year of full-day kindergarten through grade six students
- FDKSC:
-
Fall membership of the Fall prior to the state-aid payment year of full-day kindergarten through grade six students contracted out
- FM:
-
Fall membership
- FS:
-
formula students
- GFDSP:
-
General Fund debt service principal
- i:
-
the individual unit in a series
- ILT:
-
in-lieu-of transportation
- IndLandADA:
-
Indian Land ADA students
- K:
-
Fall membership of the Fall prior to the state-aid payment year of kindergarten students
- KC:
-
Fall membership of the Fall prior to the state-aid payment year of kindergarten students contracted out
- K-12:
-
Kindergarten through grade twelve
- LEP:
-
Limited English proficiency students
- LI:
-
low income students. Either the (1) number of students receiving free lunch, or (2) number of low income children in the school district as reported by the Nebraska Department of Revenue, whichever of the two is greater.
- MCCA:
-
receipts from Medicare Catastrophic Coverage Act of 1988
- n:
-
the final number in a series
- NDE:
-
Nebraska Department of Education
- NT:
-
Fall membership of the Fall prior to the state-aid payment year of grades nine through twelve students
- NTC:
-
Fall membership of the Fall prior to the state-aid payment year of grades nine through twelve students contracted out
- PRM:
-
pupil route miles
- RIP:
-
retirement incentive programs
- SBG:
-
growth rate allowed by special action of school board
- SDA:
-
staff development assistance
- SE:
-
Fall membership of the Fall prior to the state-aid payment year of grades seven though eight students contracted out
- SEC:
-
Fall membership of the Fall prior to the state-aid payment year of grades seven through eight students contracted out
- SFM:
-
social fabric matrix
- SpEdSchAge:
-
special education school age
- SS:
-
summer school
- StCat:
-
state categorical programs
- TEEOSA:
-
Tax Equity and Educational Opportunities Support Act
- TfOF:
-
transfers from other schools
- TGFOE:
-
total General Fund Operating Expenses
- TP:
-
tuition paid
- TPd:
-
Transportation Paid to Another District
- TRPT:
-
Total Regular Pupil Transportation
- Trans2:
-
transportation receipts 1-1-1310-000 and 1-1-1320-000
- TransPd:
-
transportation paid to another district
- TR2:
-
tuition receipts 1-1-1210-000 and 1-1-1220-000
- TS:
-
tuition students
- WrdsSt&Crt:
-
payment for wards of the state and wards of the court
- y:
-
year
- yo, y-1, y-2, y-3, y-4:
-
year zero, year minus one, year minus two, year minus three, and year minus four respectively, with yo being the state aid payment year
- δ:
-
delta; used in delta method for the poverty factor
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Hayden, F.G. (2009). Utilization of the Social Fabric Matrix to Articulate a State System of Financial Aid for Public Schools and to Derive Conceptual Conclusions. In: Natarajan, T., Elsner, W., Fullwiler, S. (eds) Institutional Analysis and Praxis. Springer, New York, NY. https://doi.org/10.1007/978-0-387-88741-8_10
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