ERIC Number: ED394188
Record Type: RIE
Publication Date: 1995-Nov
Issues and Challenges in State and Local Finances.
McGuire, Therese J.
This paper outlines the major challenges to raising state and local funds for education and other children's services and suggests principles for guiding efforts to answer these problems. It focuses on issues of state and local tax-based strategies for financing education and other children's services, and also discusses general fiscal issues facing state-local governments. Two problem areas in the financing of state and local governments include: (1) the fiscal linkages between state and local governments (school-finance reform and local property-tax relief); and (2) the structural deficits facing state governments. Because state and local resources are constrained, there is a compelling argument for concentrating efforts to improve education on those districts most in need. Increased state involvement in the financing of local governments has implications for both local accountability and the equity and efficiency of the state and local revenue system. If state governments severely limit local government access to the property tax, they also implicitly sever the link between revenue-raising responsibility and spending authority at the local level, and they cause a change in the mix of state and local revenues. The two primary sources of revenue for state governments are individual income and general sales taxes. If the reliance on either or both of these two taxes is to be increased in order to finance property-tax relief, the structures of the two taxes should be evaluated for possible changes that would make the taxes more equitable, efficient, and responsive to economic growth. Information about the Finance Project and its available publications is included. (Contains seven references.) (LMI)
Descriptors: Educational Equity (Finance), Educational Finance, Elementary Secondary Education, Income, Local Government, Property Taxes, Resource Allocation, School Funds, School Support, State Government, State School District Relationship, Tax Effort
The Finance Project, 1341 G Street, N.W., Washington, DC 20005 ($5).
Publication Type: Reports - Evaluative
Education Level: N/A
Authoring Institution: Finance Project, Washington, DC.
Note: For related studies of systemic revenue generation issues for education and other children's services, see EA 027 510, EA 027 513, and EA 027 515.