ERIC Number: ED378692
Record Type: RIE
Publication Date: 1994
Reference Count: N/A
Tax Options for States Needing More School Revenue.
National Education Association, Washington, DC.
Fiscal stress has plagued state and local governments in the first part of the 1990s, and difficulties in balancing budgets and obtaining revenue for needed public services are likely to continue. This document examines the leading alternatives for increasing state and local tax revenue, pointing out that the best options vary from state to state. It is concluded that the state government should play a major role in funding schools, but a strong case can also be made for relying on local school districts to raise a significant portion of their own revenues. The personal income tax has become more prominent in state tax systems; however, the property tax is still the primary source of local school revenue. Taxes differ in their growth potential, fairness, economic effects, stability, ease of administration, political salability, and exportability. Nine options for increasing state tax revenues are identified. The real root of financial inequality among districts is the reliance on local revenue, not the property tax itself. Suggestions for when and how to raise taxes, which is not always a political liability, are offered. State and local tax systems vary greatly. The benefits of earmarking taxes and lotteries for education are often exaggerated. The most attractive revenue opportunities for each state are concentrated in the three major taxes--personal income, sales, and property. Ten tables, one figure, and a glossary are included. (LMI)
Descriptors: Budgets, Educational Economics, Educational Finance, Elementary Secondary Education, Financial Exigency, Income, Local Government, Property Taxes, State Aid, Tax Allocation, Tax Effort, Tax Rates
NEA Professional Library, P.O. Box 509, West Haven, CT 06516.
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: National Education Association, Washington, DC.