Cynthia Brown, vice president for education policy of the Center for American Progress, argues in a recent Education Week commentary that we should stop using local property taxes to fund schools and shift fiscal responsibility for K-12 education to the states.
Indiana’s experience suggests advocates for equitable school funding should be careful what they wish for. Relying on state revenues to fund schools may result in a simpler, fairer system. But it may also mean that schools are less likely to get the money they need.
Brown builds from the work of the U.S. Department of Education’s Commission on Equity and Excellence, of which she was a member. Its report, issued in February, concluded that efforts to improve the schools should start with equity, including equity in funding.
“States should adopt a state-based system of school financing,” she writes, “one in which states provide all nonfederal resources for education, and districts no longer have the power to raise funds from local property taxes.”
Indiana switched to state-based K-12 funding 2009 as part of a larger “property tax reform” initiative. Generally speaking, the state now pays school general fund expenses, including instruction and most salaries. Local property taxes are used to pay for buildings and transportation. (Voters can choose in a referendum to raise their own property taxes to supplement state dollars for the local school district’s general fund).
No sooner had the switch taken place than the economy hit the skids, state tax revenues nose-dived and then-Gov. Mitch Daniels cut school funding by $300 million to keep the state in the black. Schools are still suffering from that cut, Continue reading