Fiscal equalization can be seen as a continuum ranging from total equalization to no equalization. Each state
provides a method for equalizing school funding within its boundaries that lies somewhere on this continuum.
Because some states do this more effectively than others, more than two-thirds of the 50 states have faced
court challenges to their state funding formulae.14 Providing no fiscal equalization would be both immoral and
School finance scholars refer to concepts known as absolute fiscal equalization and approximate fiscal
equalization. Absolute fiscal equalization is more a theoretical goal than a practical achievement. Although
hypothetically possible, absolute fiscal equalization is virtually impossible to achieve politically. Alexander and
Salmon provide the best operational definition when they say that absolute fiscal equalization has been
achieved when three conditions are met: (1) variance in fiscal position among local school districts has been
neutralized, (2) variance in fiscal effort among local school districts has been eliminated, and (3) variance in
educational needs due to incidence of clients has been accommodated.15 In other words, absolute fiscal
equalization becomes possible when local school districts have equal resources, show equal effort to fund their
schools, and spend what is necessary to educate students, including those with special learning needs.
Absolute fiscal equalization means that a locality has achieved fiscal neutrality and has successfully addressed
horizontal and vertical equity. Although this is certainly a goal to strive for, it is rarely, if ever, achieved in the
Approximate fiscal equalization is a more practical concept. Alexander and Salmon determine that
approximate fiscal equalization has been met when (1) variance in fiscal position among local school districts
has been neutralized, (2) constrained variance in fiscal effort among local school districts is permitted, and (3)
variance in educational needs due to incidence of clients has been accommodated.16 In short, approximate
fiscal equalization becomes possible when local school districts have equal resources, schools have some
leeway in raising and spending funds for schools, and schools spend what is necessary to educate students,
including those with special learning needs.