Many states have implemented educational grant systems designed to provide more aid to school districts that are, by some standard, in greater need. Nevertheless, many if not most central city school systems continue to produce poor educational outcomes, as measured, for example, by test scores and dropout rates. Using data from New York State, this article asks why existing aid formulas fail to provide the assistance that central city school districts need to bring their educational outcomes up to reasonable standards. Two principal explanations are explored: the failure of existing aid programs to recognize the high cost of providing education in central cities and the possibility that aid simply makes central cities less efficient without raising educational outcomes. The article presents aid programs that account for costs, but shows that these revised programs will do little to help central cities without at least one politically unpopular provision, namely a large state budget or a high required local property tax rate. The article also estimates the extent to which increased aid to central cities leads to their less efficient operation, thereby undermining the objective of improved educational outcomes for central city students. The article concludes by listing the steps that a state can take to help central city schools and by discussing the yet unresolved problems that arise in helping these districts.
Despite decades of education reform efforts since the Serrano decision, school quality remains distressingly low in many central cities. In New York State, for example, educational outcomes in the three large upstate central cities, as measured by the test-score-based index we develop later in the article, are 60 percent below the state average. Advocates of more aid for central city schools argue that existing aid programs fail to recognize the unique features of these schools that make it expensive for them to provide education. Opponents argue that more aid will make central city schools even less efficient than they already are and will have little impact on educational outcomes. This article explores these two views. In particular, we estimate, for both central city and other