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Patterns for School Finance Systems

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1 Patterns for School Finance Systems
Chapter 4 Patterns for School Finance Systems This multimedia product and its contents are protected under copyright law. The following are prohibited by law: any public performance or display, including transmission of any image over a network; preparation of any derivative work, including the extraction, in whole or in part, of any images; any rental, lease, or lending of the program. Copyright © Allyn & Bacon 2008

2 Developing School Finance System Patterns
Varies from state to state and school district to school district Local, state and federal share in support of schools in all states Local district revenue primarily from property taxes State funds primarily from sales and income taxes Copyright © Allyn & Bacon 2008

3 Developing Patterns 50 states using flat grants percentage grants
foundations programs with or without local options power equalization full state funding any combination of above Copyright © Allyn & Bacon 2008

4 Three degrees of state participation
state operation of public schools complete state support foundation program Copyright © Allyn & Bacon 2008

5 Many plans available to the states
Number of plans unlimited -no plan accepted as best equalizing grants adaptations of foundation program principle varying degrees of power equalization categorical or special-purpose funding for innovative programs instructional programs or units to determine size of state allocation to districts setting of state standard or guidelines use of state committees Copyright © Allyn & Bacon 2008

6 Full State Funding Ramifications of full state funding
increase state control of local schools and decrease in power and authority of local school boards burden for providing good school program completely on state some districts leveled up and some leveled down little regard for educational needs or desires of local citizenry Copyright © Allyn & Bacon 2008

7 Inaccurate definition
no way to rationally or objectively determine funding for innovative or exemplary programs lead to extended use of sales and income taxes and less emphasis on property taxes Inaccurate definition full state funding has limitations almost full state funding can mitigate or eliminate most disadvantages of the system Copyright © Allyn & Bacon 2008

8 District Power Equalization (DPE)
Power provided to poorer school districts to obtain revenue per student as more wealthy districts making same local tax effort Each local district mill levy should produce same number of dollars of total school revenue per mill per weighted student in every district Last mill levied should produce same total funds as first one Equalized percentage matching (EPM) local district determines limits of local effort state maintains financial responsibility for entire program Each district chooses level its program will be supported by the state Copyright © Allyn & Bacon 2008

9 Property Reassessment and Local District Revenues
Difficult to get voters to override levies Computerization makes reevaluation of property on a yearly basis easier Percentage caps often established by legislators States’ option to raise property tax revenue tax rate assessed value of property setting mill levy required of each district Copyright © Allyn & Bacon 2008

10 There is no perfect system for distributing state funds
No plan is accepted as best Future plans will emphasize greater state involvement and less local responsibility State tax sources will increase to meet surging education costs Copyright © Allyn & Bacon 2008

11 Equalization of Services
Future consideration--state equalization of services rather than dollars Rationale--equal dollars don’t provide equal units of services in unlike districts Copyright © Allyn & Bacon 2008

12 Emphasis on Weighting Factors
Determining necessary funds—function of the “need” of the school district Need is related to number of pupils to be educated average daily attendance (ADA) average daily membership (ADM) established number reported (ENR)—used in national reports Equal dollars per student do not produce equal products or results diverse characteristics of students school district size and school attendance area Weighting factors best measures of additional resources and services needed Copyright © Allyn & Bacon 2008

13 Copyright © Allyn & Bacon 2008
Weighted-pupil concept (Mort and Reusser) most systematic measure of educational need Weighting puts extra costs on the state Copyright © Allyn & Bacon 2008

14 Principal Types of Weightings
Sparsity factors—small districts Density factors—additional funds to large city school districts municipal overburden large numbers of disadvantaged and exceptional children racial integration costs higher salaries and operational costs resulting from stronger unions weakened tax base due to less affluent and less educated citizens Grade-level weighting in favor of secondary schools Special education weighting Copyright © Allyn & Bacon 2008

15 Teacher qualification considerations Miscellaneous weighting factors
capital outlay debt service expenditures Copyright © Allyn & Bacon 2008


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