The Reality of K-12 School Funding

The Reality of K-12 School Funding

The ongoing challenge related to school funding should not be an adversarial, them against us argument, but rather a unified front to claim the solutions that are within reach. In every state, K-12 education funding is paid for with state and federal taxpayer dollars. Each state has its scheme for what to tax, how to tax it and how much taxpayers pay into the plan. There are three basic issues at the foundation of the matter.

  1. Tax Base and who controls it
  2. Tax Rate and who pays it, and how is it collected
  3. Tax Expenditure and priorities that impact performance

Tax Base and Who Controls it…

The map below is published by the State of Arizona, and it shows what type of entity controls the lands within our state. One look at this map, with the understanding that the white space is Tax Base, and all of the rest is controlled by one governmental entity or another that does not pay tax, tells the story of a shortage. Only the white area is privately controlled and thus considered Tax Base. The blue areas are controlled by the Arizona State Land Trust and have an income stream that goes to K-12 education as one of 13 beneficiaries set down in law.

In contrast, other states, east of the Mississippi River like New York, Michigan, Kentucky have far more land controlled by private landowners. Their Tax Base consequently is capable of generating far more tax revenue for K-12 education.

To provide relief for states like Arizona, Congress came up with a program called PILT, which stands for payment in lieu taxes. A big reason for this scheme was to make states like Arizona whole for designating significant portions of our state as “public lands.” Unfortunately, Congress could not help itself and began to whittle away at how much PILT is paid to our state. We now receive approximately 42% of what we are entitled to receive under the PILT plan,

In a major study by PERC, the Property and Environment Research Center, known as Divided Lands the lost economic opportunity cost is revealed. Stated simply, the states are far better at managing our lands better than the federal government. Aside for better land care and management, the money that organizations like the Bureau of Land Management (BLM) are taken out of Arizona and sent to Washington D.C., only to be redistributed into the Federal Budget. “The states examined in this study earn an average of $14.51 for every dollar spent on state trust land management. The U.S. Forest Service and Bureau of Land Management generate only 73¢ in return for every dollar spent on federal land management.” So where is the money from our Tax Base? It is clear that it is not going to give Arizona K-12 education an equal footing.

One thing that constituents can do today is write the Arizona Congressional Caucus (both Republicans and Democrats) and demand full restoration to 100% PILT payments. This is money that is supposed to go to fund K-12 education.

Tax Base and Who Pays it and How is it Collected…

Most of the K-12 education funding is provided through the property tax on homes and businesses. The Arizona State Land Trust also pays out a significantt sum into the K-12 education beneficiary fund. The notion that tax incentives, so-called “loop holes”, and Education Scholarship Accounts, known as ESA’s, “siphon K-12 school funding away from public schools” is a strawman argument. Tax policy is designed to attract as many businesses [job creators] and homeownerrrs to Arizona as possible. Take for example the Catapillar Headquarters relocation to Tucson. This move will add 600 well paying jobs to the TUSD tax base through new home building.

Long ago politicians figured out a number of crafty ways to hide taxation. One such is the business personal property tax, a tax on all goods that a busienss retaines year-over-year. Desks, chairs, computers, trucks and the like are taxed every year, over and over. This tax is rolled into the cost of goods sold. so who really pays for the tax? Consumers do when the buy the products that manufacturers make and sell.

Local school districts may also campaign for tax overrides, which provide a local control mechanism for schools that want to offer more, and taxpayers who want to give more. Not every school district has a school tax override, but it is a tool available to them. A problem with school tax overrides is voter turn out. In some cases less than 1 out of 10 people  vote. Then again, the voters are determining if they want their on taxes to increase.

Finally, the federal government provides some taxpayer funding for specific programs. One of those related to edcuation is called Freed and Reduce School Lunch. Since 1946, the National School Lunch Program (NSLP), “is a federally assisted meal program operating in public and nonprofit private schools and residential child care institutions. It provides nutritionally balanced, low-cost or free lunches to children each school day.”

Tax Expenditure and Priorities…

The Arizona Legislature has very few restraints on how taxpayer funding is spend at the local school district level. The philosophy is one of local school district control. Not every school district places the same priority on teacher pay, adminsitrative resraints, maintenance, and other decisions. Over the last several years much focus has been placed on teacher pay, in fact the Legislature has put more and more money into teacher pay through a number of mechanisms. Proposition 123 was one such measure to put billions of dollars in to public education funding.

Many have pointed to teacher pay as the reason Arizona has a teacher shortage, but what local school districts pay is not the only reason we have a teacher shotage. In an article by Valerie Strauss, writing for the Washington Post, several reasons are identified for the nationwide teacher shortage. She writes, “Teacher shortages are nothing new — most states have reported some since data started being kept more than 25 years ago — but the problem has grown more acute in recent years as the profession has been hit with low morale over low pay, unfair evaluation methods, assaults on due-process rights, high-stakes testing requirements, insufficient resources and other issues.” It is interesting to note that some private charter school operators, who may pay even less, have a waiting list for teachers who want to get out of the public school environment. Answering the question of “Why?” is an important matter that assuredly will be most uncomfortable for parents to ehar.

Back to the argument that ESA’s and the concept of school choice “siphon” public education money away from schools. “School choice” is really about parental authority. 100% of parents made a choice about where to have their children educated last year, and even this year for that matter. Approximately 95% of Arizona parents chose to have their children attend a traditional public school. Only about 5% made a different choice. In Legislative District 11 for example, last year out of 50,570 students only 162 used an ESA to receive ther K-12 education. A number of state and federal Supreme Court decisions have reinforced parental authority and the notion that the money follows the child until a choice is made about where to get an education. Cases like Zelman v. Simmons-Harris, 536 U.S. 639 (2002), Arizona Christian Scholarship Tuition Organization V. Winn, 563, U.S. 125 (20111) and Schwartz v. Lopez, 132 NV Adv 73 (2016) stand behind parental authority.

Finally, Arizona performance seems to be leading the nation when it comes to comaprison of norm referenced testing, known as NAPE. From 2009 to 2015, the latest numbers available, Arizona has led the nation in improvements for 4th and 8th graders in math, reading and science, even though we have some of the lowest paid teachers in the nation.

Solving the K-12 school funding challenge and the other feedback issues that techers have told us all about is not a simple matter. The funding challenge starts with our lands, the other reasons that people don’t pursue a career in teaching, or desire to stay in teaching is a much larger conversation for us to have. Performance is everything, but it starts with the taking of responsibility for each of us to do our part in the effort. Every solution should be leveraged to teach children not just in the way they should go, but also in how to think critically, how to evaluate circumstances and data in order to perpetuate the republic that we all so cherish.

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