Q.2 Discuss different aspects of educational financing concerning school education.
Course: Educational Leadership and Management
Course Code 8605
BEd Solved Assignment
Answer:
Educators
can argue that the funding within education determines student success, staff
morale, and the overall functionality of the school
system. The importance of understanding all
types of funding is crucial to your
development as an Educator, parent/guardian, and student. In this blog, state funding will be addressed and aid in creating a
better understanding of trends and issues in school financing systems.
States
generally use one of four types of school financing systems to provide
districts with state funds:
foundation, general aid, flat rate/local effort equalization, and full state
funding. When using the
foundation financing system, states set a desired (guaranteed) per-pupil amount
they wish to see spent on students' education in the state (e.g., at $12,000
per pupil). States then make up the difference
between the amount generated by districts' local taxes and the state-guaranteed
per-pupil amount.
General aid is a foundation
approach using three separate calculations to establish the amount districts receive from the state. When determining
state aid to districts, states consider the guaranteed minimum per pupil and calculations of the percentage of
district resources below or above
the guaranteed minimum.
The
flat rate/local effort equalization financing system is based on a quantifiable
unit of need, such as a district's average daily attendance or
total school enrollment, and on districts' property tax rates to determine state aid. Schools are
fully funded in Hawaii and Vermont, with no consideration of local taxes.
Two other states have rather
unique ways of providing state funds to local school districts. In Pennsylvania, school districts receive a
percentage of state funds based on the amount a district needs to address key educational
principles established by the state. Wisconsin uses a guaranteed tax base system, where all districts, regardless of their level of wealth, have
the same tax rate. As a result, Wisconsin raises the
same amount allocated per pupil from a combination of state and local sources.
Tax
sources of funding are equally diverse and vary according to state. The three
main tax sources providing
input to education are income tax, sales tax, and property taxes. Income
taxation, however, is
generally enacted at a federal rather than at a state level, with much federal
education aid originating
from income taxes. Taxes levied on corporations are also included in income
tax, although the rate of taxation differs among
states. Sales tax is generated based on the sale of goods or commodities, which
is paid by the person buying the goods. A special type of tax, excise tax, is
levied on items that are considered undesirable for consumption, or that
consumers are encouraged to spend
less on, including cigarettes, gasoline, and liquor. Sales and income taxes
make up approximately two-thirds of all monies
channeled into education, while the income derived from excise taxes makes up the remaining third.
Currently,
lotteries are being marketed as a novel way of paying for public education. But
in many cases, education actually ends up getting the short end of the stick.
Instead of using lottery funds as
additional funding for schools, state governments use these monies to cover the
education budget and spend
the monies that would be traditionally earmarked for education on other issues.
In short, public school budgets have not
received any additional funding as a result of lotteries. In the end, billions of dollars indeed pour into the U.S. education system, but not in the manner that we have been led to believe.
Property taxation is the
most important source of revenue-generating taxation at a local level. Approximately half of the revenue generated from property tax is allocated for
education. The exact amount of revenue generated from
property taxes varies from region to region, due to differences in property tax rates
that are based not only on the perceived value of the property but also on the amount/percentage that a
constituency is willing to charge its homeowners as tax.
The
school district tax rate is determined by calculating the total assessed
valuation of the district, which
refers to the amount of money required to be generated divided by the local tax
base. The school district tax
rate, however, is subject to a legal maximum, which may not be exceeded. The school district tax is added to the tax rates
of other services (including fire relief, ambulance, or police services) and is described as a
percentage or "millage," where one mill is equal to one-tenth of a percent. Thus, a tax rate expressed as
312 mills is equivalent to 31.2%.
During
the late 1960s and in 1970s, property values and taxation increased far
more rapidly than other forms of wealth, resulting in
mass dissatisfaction with the rate of property taxation. This gradually led to various legal reforms
regarding the taxation of property, which again varied between individual states. In 1993, Michigan
decided to replace school funds generated from local property taxes with state-generated funds.
The state increased both sales tax and taxes on luxury items such as cigarettes, reallocating funds to its poorer
districts, and ensuring a more equitable education for all children in the
state. Other states have followed suit and have come to rely less on property taxes as a funding base for their
educational systems.
In some
instances, wealthier school districts have reacted to the redistribution of educational
funding by actively setting out to ensure
that their schools are not endangered or placed on a fiscal par with less economically fortunate areas.
The Parent Teacher Association (PTA), which can receive
state and national funds, and Parent Teacher Organizations (PTOs), which
cannot, work with local businesses to ensure
that funds other than those generated and allocated by the state are available to their schools. Parent groups conduct
fundraisers and seek monies from private foundations. Some parent groups
have sought legal support to ensure adequate funding for their schools. These advocates want to ensure that all
schools have a base minimum amount of money on which to operate their programs and services.
The
allocation of funds for education is determined by the governor and can vary
greatly from state to
state. The authorities must determine how available funds will be divided among
all educational entities
in the state. States typically funnel education funds to school districts
through state departments of
education. Schools may receive funds based on any or all of the following: enrollment, educational programs, or the
types of activities they offer students.
Furthermore,
some funds are designated for specific purposes: some can only be used for technology; others are solely for textbooks
or school supplies. Thus, some schools may have a pool of money allocated to one resource, while sorely needing
another. This can have a direct impact on
you as a teacher. For example, you may need art supplies for your third-grade
class, but because no money is specifically allocated for this purchase, you
may have to be creative in how you
provision your art program. You may have to consider approaching local
businesses for donations of money or
supplies. You may also have to sharpen your grant writing skills and apply to both corporations and foundations for that
much-needed extra cash.
Take
the time to review your school's financing system and how state funding may be
creating a greater impact that is unaware to you. If your school is lacking in
areas that are affecting student success consider researching the suggestions made in this blog such as
submitting grants for additional
funding.
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