Insights | School Finance Adequacy: The State Role | Determining the Cost of an Adequate Education

With the growing sense of urgency to ensure adequacy, how do policymakers go about determining what an adequate education costs, given their state standards and context? A logical tool to link the accountability system to the education finance system is the foundation level, used by most states to determine education funding, theoretically implemented to help equalize education resources. To make the foundation level meaningful, state policymakers must walk the tightrope between "specifying adequacy at so low a level as to trivialize the concept as a meaningful criterion in setting finance policy, or at so high a level that it encourages unnecessary spending," as the National Research Council warns (1999, p. 265). The consequences of failing to set an appropriate level of adequacy include the difficulty of raising new taxes if set too high, and the risk of not achieving goals if set too low.

This all sounds logical; however, adequacy as a concept is still relatively new. Currently, there aren't enough data to help policymakers be absolutely certain that the amount they determine will actually be adequate.

Four approaches have emerged to determine how much an adequate education costs:

• Professional judgment
• Successful school district
• Cost function
• Evidence-based

All of the approaches link spending and performance. The professional judgment and evidence-based approaches may also provide a framework for educational strategies that will help states meet performance standards (Odden, 2003).