FINANCING PUBLIC EDUCATION

3 MAIN SOURCES OF FUNDING: 1) LOCAL 2) STATE 3) FEDERAL

FEDERAL STATE LOCAL

2000-04 8% 50% 42%

1) LOCAL

PROPERTY TAX (90% OF LOCAL REVENUES)

MAJOR DISPARITIES EG. WEALTHY SUBURBS VS. RURAL AREAS.

CITY SCHOOLS HAVE A MAJOR PROBLEM WITH FUNDING:

A)CITY SERVICES B)MOVE TO THE SUBURBS

2) STATE

SALES TAX, PERSONAL INCOME TAX.

LARGE VARIATION IN THE AMOUNT SPENT ON EDUCATION EG. Utah $4,331 PER STUDENT (2000-01) NJ $10,283.

HOWEVER NOT SIMPLY % OF STATE'S BUDGET SPENT ON EDUCATION - BUT VARIATION IN SIZE OF BUDGET

STATE AID TO LOCAL SCHOOL DISTRICTS -SEVERAL OPTIONS:

MOST COMMON APPROACH - FOUNDATION PLAN. GUARANTEES A MINIMUM AMOUNT PER STUDENT. HOWEVER THE MINIMUM IS USUALLY TOO LOW SO THAT WEALTHY DISTRICTS EXCEED THE MINIMUM.

REFORM ATTEMPTS: REFORM EFFORTS MET WITH MIXED RESPONSES FROM THE COURTS. SOMETIMES THE COURTS SUPPORT REFORM & OTHER TIMES THEY BACK LOCAL CONTROL. See Map

3) FEDERAL -SMALL

2 TYPES OF FUNDING:

· CATEGORICAL GRANTS - FUNDING FOR SPECIFIC GROUPS. THIS TYPE OF GRANT HAS BEEN REPLACED BY

· BLOCK GRANT - FUNDS FOR A GENERAL PURPOSE - GREATER FREEDOM TO LOCAL ADMINISTRATORS BUT GREATER HARDSHIP FOR CITY SCHOOLS.

Options for Reform: 1) Redistribute property tax revenues from richer districts to poorer districts 2) Replace property taxes with other taxes, usually sales tax and have the state assume a larger fraction of overall school spending 3) Redefine state aid so that fewer funds go to districts as flat grants regardless of need or local wealth and more go through foundation formulas which guarantee a base level of funding for each student (Funding for Justice, A Rethinking Schools Publication)

CONCLUSION

EQUAL EDUCATIONAL OPPORTUNITY IS NO LONGER THE FOCUS OF ATTENTION. THE KEY WORDS ARE ACCOUNTABILITY, EFFICIENCY AND PERFORMANCE STANDARDS. TAX PAYER REVOLTS ARE DEMANDING THAT EDUCATIONAL EXPENDITURE BE TIED TO OUTCOMES.

Resource: Money Matters. A Reporter’s Guide to School Finance