CHICAGO--Policymakers are on the verge of a "breakthrough" in school finance that will move the issue from what is efficient to what is effective, a panel of experts on school finance agreed during the annual meeting of the American Educational Research Association here.

The changes are affecting state court decisions as well as state finance systems, according to the panelists. The word that is becoming key to decisions is "adequate." Bruce Cooper of Fordham University said that defining adequate leads to a number of changes: from measuring inputs to deciding what is meant by success, from collecting data to organizing data into information useful for decisionmaking, from efficiency to effectiveness, from equity to quality, and from compliance to performance.

This change in attitude is appearing in state court decisions on school finance, said Deborah Verstegen of the University of Virginia. Calling the trend a "watershed" in legal terms, she said it is codifying into law the national goals effort. State courts, she said, "are moving from minimums to excellence." At the moment, the new wave of school finance litigation is "bifurcated," with slightly more decisions tending to be along the changing definition of adequacy, but less than 10 years ago adequacy was not even being considered by the courts. What sways the judges, she said, is the litigants' arguments for a new definition of adequacy.

Richard Laine, assistant superintendent in the Illinois State Department of Education, said his state was moving in the direction of the new court decisions. In Illinois, he said, the process is to define adequate. Rather than the old standard of comparisons among schools (a "norm-referenced" system), Laine said the state is organizing a "criterion-referenced" system of finance, basing decisions on what schools need to ensure a quality education for all students.

A research report on changes in finance in two districts in two states found that over the past 29 years, school expenditures for "regular" students increased only 1 percent a year. The modest increases in regular student achievement were matched by modest increases in expenditures, according to the researchers.