School finance: An overview

School finance is a broad and evolving field encompassing three resource-related functions - revenue generation, resource allocation, and resource utilization - all aimed at providing educational opportunities and producing educational outcomes. All of these activities occur in a broader context of educational goals and societal values that shape how finance systems are structured and executed. In this chapter, we provide an overview of school finance, emphasizing the enduring challenges and highlighting new ways of thinking about them. We begin by exploring contextual factors that influence school finance decisions; this includes a discussion of the goals and purposes of public education and the broader societal values that frame public finance. The next section describes traditional and contemporary mechanisms for raising revenue to support education systems, and examines the role of different levels of government in supporting public education. The section that follows discusses how resources are allocated across education systems, and emphasizes the evolution of equity and efficiency considerations in our allocation decisions. We conclude with a set of critical resource utilization issues that are at the center of current school finance policy deliberations.