Introductory concepts in funding equity


Equity is often touted, at least publicly, as the main goal behind a school district’s choice to implement a weighted-student funding approach or another innovation in their school funding. Equity, though, can have a few different meanings. In school finance specifically, equity can refer to:

  • Wealth neutrality
  • Horizontal equity
  • Vertical equity
  • Adequacy

District-level funding initiatives most often attend to horizontal and vertical equity concepts. Adequacy and wealth neutrality equity concepts are left primarily to state-level funding efforts.

What is horizontal equity?

Horizontal equity is the equal treatment of equals. That means, similar students (usually students within the same subgroup) receive similar resources. For example, a funding model that allocates English Language Learners in one school the same resources, per-pupil, as English Language Learners in another school, per-pupil, would be more horizontally equitable than a district where English Language Learners in those two schools receive different amounts of resources.


Introduction to school funding models
How school funding models are related to resource equity.

What is vertical equity?

Related but distinct, vertical equity is the unequal treatment of unequals. Here, for example, a school where English Language Learners receive more resources, per-pupil, than non-English Language Learners, may be vertically equitable (assuming English Language Learners cost more, on average, to educate than non English Language Learners).

Why does this matter?

Understanding the different concepts of equity helps a district think more clearly about its equity goals when allocating resources to schools and students. Districts can advance both horizontal and vertical equity concepts when they design and implement their funding models. Aspiring to do so requires that a district thinks more critically about “for whom” and “in what way” resources should be equitable.

This is never an easy question, but district goals and strategic plans are a great resource to first identify district priorities. The strategy here is thinking beyond traditional student subgroups and categories to differentiate student types for targeted resource allocation. Knowing which students, on average, cost more to educate than others is only helpful if a district can also identify the goals they want for those students and align resources equitably.


Further reading:

Malen, B., Dayhoff, J., Egan, L., & Croninger, R. G. (2017). The challenges of advancing fiscal equity in a resource-strained context. Educational Policy31(5), 615-642.

Berne, R., & Stiefel, L. (1984). The Measurement of Equity in School Finance: Conceptual, Methodological, and Empircal Dimensions. Baltimore, MD: The John Hopkins University Press; and Berne, R., & Stiefel, L. (1999). Concepts of School Finance Equity. In H. F. Ladd, R. Chalk, & J. S. Hansen (Eds.), Equity and Adequacy in Education Finance: Issues and Perspectives (pp. 7–33). Washington, DC: National Academy Press.