ERIC Number: ED165329
Record Type: RIE
Publication Date: 1977-Dec
Reference Count: 0
School Finance Reform: The Equity and Efficiency Implications of Capitalization and Tax-Price Changes in Connecticut. Real Estate Report: No. 22.
McEachern, William A.
The author argues that the effect of tax capitalization on the value of property has been neglected in the judicial and legislative discussion of school finance reform, even though this phenomena may weigh heavily on an equitable solution to the current funding dilemma. He examines theoretical and empirical support for the thesis that if, because of differences in the taxable base, one town levies higher tax rates than a neighboring municipality in order to provide the same quality of public service, and if this difference is expected to prevail over time, then property values in the former community will be depressed relative to the value of identical property in the town where tax rates are lower. Consequently, at least part of the inequity in the current system of funding local services will be eased through tax capitalization. This analysis indicates that greater property wealth per pupil results in a lower price for education and this lower price in turn leads to greater per pupil spending. To credit property-based differences and the underlying price differences as the primary source of spending disparities across towns is simply incorrect. The evidence suggests that income differences across towns are more important than price differences. (Author/IRT)
Descriptors: Bibliographies, Educational Research, Elementary Secondary Education, Finance Reform, Models, Property Taxes, Statistical Analysis, Tables (Data)
Center for Real Estate and Urban Economic Studies, Publications, School of Business Administration, University of Connecticut, Storrs, Connecticut 06268 ($4.00)
Publication Type: Reports - Research
Education Level: N/A
Authoring Institution: Connecticut Univ., Storrs. Center for Real Estate and Economic Studies.