Impacts of Outcome Targeting in School Aid on Equity in School Spending and Performance Scores

This paper applies outcome-based school aid to Ohio’s FY 2014 school district data to find systematic patterns between school aid parameters and outcome equity as well as fiscal equity. Empirical findings suggest that outcome-based power-equalizing aid improves both fiscal and outcome equity more than Ohio’s aid formula does, with partial outcome targeting enhancing the equity even more. Outcome-based foundation aid improves the equity more than Ohio’s aid does only when negative aid is allowed. This paper makes another contribution to the literature by providing a method to adjust the range of simulated aid within the current school aid budgets.