A Fiscal Perspective on the Analysis of School Finance Reform: The Case of City-Suburban Competition.

One way in which the analysis of educational finance reform might be broadened to include an analysis of the fiscal effects of such reform is to show fiscal competition between large cities and their suburbs. It is not possible to say that "most central cities" or "most suburban areas" deserve a greater share of State educational aid. Rather, there appears to be significant variation among metropolitan areas in the relative fiscal position of the central city. School finance reform is not the only State policy that has potentially significant fiscal effects. For instance, the issuance of nonproperty taxes -- especially "commuter" taxes -- might play an equally important role. Evidence suggests that State aid to local education is already a pro-suburban program. A reform of school finance is likely to make the program even more pro-suburban. There is probably no one single optimal school fiance reform plan which can be applied uniformly everywhere. (Author/DN)