ERIC Number: ED397502
Record Type: RIE
Publication Date: 1996
Separating the Wheat from the Chaff: How Much Do Schools Really Benefit When States Raise Taxes on Their Behalf?
Gold, Steven D.
Adequate revenue is essential to the existence of good schools. Recognizing this truth, numerous governors have proposed and many states have adopted tax increases to enhance school funding. The real question is whether education spending increased more than it would have if taxes had not been increased. To answer these questions, the booklet was divided into three parts. First, it provides a framework for analyzing the relationship between tax increases and school revenue. Second, it describes the results of a study that examined how much school revenue rose in 49 states (Alaska is not included) between the 1982-83 and the 1992-93 school years. Finally, it considers 12 case studies of how various states attempted to increase education funding between 1982 and 1993--10 where state taxes were increased, 1 that instituted a lottery, and 1 that avoided raising state taxes at all. Findings indicate that: (1) The year after a reform there is always a big increase in state funding, but the follow-through differs; (2) the sales tax by itself does not provide the basis for large, sustained revenue increases; (3) the personal income tax is the best tool for increasing revenue, followed by the sales tax; (4) local taxes should not be neglected; (5) increasing taxes is always better for schools than leaving the tax system alone without a tax hike; and (6) there is no substitute for a strong economy. Fifteen tables and appendices containing statistical tables are included. (LMI)
Descriptors: Educational Economics, Educational Finance, Elementary Secondary Education, Finance Reform, Fiscal Capacity, Income, Regression (Statistics), Resource Allocation, State Legislation, Statistical Analysis, Tax Effort, Taxes
NEA Professional Library, P.O. Box 509, West Haven, CT 06516 (for price, call 1-800-229-4200).
Publication Type: Reports - Research; Numerical/Quantitative Data
Education Level: N/A
Authoring Institution: N/A