I knew our educational system was funded through taxes, but seriously did not really understand the full process and its importance until now. In reflection, I remember listening to the older generation as they sat around discussing politics, taxes, voting, which led towards real heated debates over the have and the have not’s and the fairness of it all. This topic did not gain my full interest or attention, until now. Now the picture is clearer of the conversations of yesterday; I can finally hear their voices and understand.
According to Brimley, Berstegen, & Garfield (2012), taxation is the system that transfers funds from where they are produced to where they are needed. The funding of public education is dependent upon funding from federal, state, and local government. It’s a little known fact that when it comes to the funding of our schools, the U.S. Government contributes about 10 cents to every dollar spent on K-12 education – less than the majority of countries in the world. And it wasn’t until 1965, when President Lyndon Johnson passed the Elementary and Secondary Education Act as part of his War on Poverty, that the federal government created a lasting program to fund K-12 education (Woodruff, 2008).
The ruling of Serrano v. Priest “established a standard for California by the court and applied in practice that a child’s education must not be affected by the wealth of his or her parents or neighbors, except by the state as a whole (Brimley et al. 2012).” According to the National Center for Education Statistics, state and local funding accounts for approximately 93 percent of education expenditures (Woodruff, 2008). What’s the source of these funds? In most states, it’s sales and income taxes (both corporate and personal). But on a local level, these funds usually come from property taxes, which are set by the school board, local officials or citizens. It’s this system that causes the most dramatic differences between states, and even within districts. Depending on the property wealth of a community, its schools might boast gleaming buildings and equipment, or they might be dilapidated – struggling with the burden of outdated equipment and unpaid bills (Woodruff, 2008).”
Listed below are some of the principal taxes used to transfer funds to the public school system in California. They are property tax, personal income, corporate income, sales tax, as well as privilege, severance (oil and gas), and sumptuary (alcohol and tobacco) taxes; plus the lottery.
According to Brimley et al. (2012), the property owner pays taxes on real or personal property for individuals and businesses. Real property includes land, buildings and improvements. Personal property consists of tangibles, such as machinery, livestock, crops, automobiles and recreational vehicles; and intangibles, such as money, stocks and bonds. “Property taxes at the local level have proven to be a good and reliable source of revenue for operating schools and providing many other services of city, town and county government (Brimley et al. 2012).” However, there are a few criticisms surrounding the unfairness of individuals having to pay taxes on the full value of the property versus their neighbor who pays fewer taxes based on the era in which they purchased the property.
“California personal income tax laws are progressive in the sense that they charge a much higher rate for high earners than for those earning relatively small incomes. Income taxes pay for state programs and projects such as public schools and state highways. The state’s Franchise Tax Board (FTB) audits the expenditures of state income tax and makes this data available to the public. In 2013, for example, 31.7 percent (the largest portion) of the state’s income tax revenue went to health and human services, with 27.4 percent going to K-12 public education (www.statelaws.findlaw.com).”
Another source of revenue that funds public schools is Proposition 30. This initiative passed, increasing income taxes on single earners earning more than $250K a year and joint filers earning more than $500K for 7 years and includes a 3% income tax on earners of $1 million or more, as well as an increase in sales tax of 0.25% for 4 years.
“The Lottery’s mandate in the California State Lottery Act is to provide supplemental funding to California public education on all levels from kindergarten through the University of California plus several specialized schools. Since its inception in October 1985, the Lottery has provided more than $26.6 billion to students in California’s public schools (www.calottery.com).”
Lastly, Governor Brown restructured California’s education finance system through the newly Local Control Funding Formula (LCFF), which eliminates nearly all categorical programs and allocates resources to school districts, charter schools, and county offices of education. School districts with larger shares of disadvantaged students would receive additional LCFF dollars per student. The LCFF provides school districts school districts with supplemental funding for English learners and students from low-income families (Kaplan, 2013). The LCFF provides school districts with greater authority over the use of resources and require each district to adopt a Local Control and Accountability Plan (LCAP) and approve spending sufficient to implement the plan. However, the LCFF excludes several sources of school district revenue, including: certain local dollars, such as parcel taxes; state dollars for programs such as special education, the After School Education and Safety program, and child nutrition programs; and all federal dollars (Kaplan, 2013).
In the voices of those before me, let’s continue to support and move our educational
system towards what is just for our future leaders of the 21st century.
Brimley, V., Berstegen, D., & Garfield, R. (2012). Financing education in a climate of change.
Pearson Education, Boston: MA
California person income tax laws (2014). http://statelaws.findlaw.com/california-law/california-personal-income-tax-laws.html#sthash.8OUVYAzR.dpuf
Contribution to education (www.calottery.com)
Kaplan, J. (2013). Moving forward: Addressing inequities in school finance through the
governor’s local control funding formula. The California Budget Project, p. 1-29,
Sacramento: CA. http://www.cbp.org
Woodruff, J. (2008). How do we fund our schools?, The Educational Broadcasting Corporation,
New York: NY