1. Patterns for School Finance Systems
Chapter 4
Patterns for School Finance Systems
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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
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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
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4. Three degrees of state participation
state operation of public schools
complete state support
foundation program
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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
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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
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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
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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
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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
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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
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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
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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
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13. Copyright © Allyn & Bacon 2008
Weighted-pupil concept (Mort and Reusser) most systematic measure of educational need
Weighting puts extra costs on the state
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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
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15. Teacher qualification considerations Miscellaneous weighting factors
capital outlay
debt service expenditures
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