'Most advocates of full State funding feel that the State should generate required revenues for funding the schools through taxes other than the property tax'
official who is more concerned with larger revenues than higer tax rates. Unit districts have the lowest State median assessed valuation per pupil, only $23,406, and also the lowest guaranteed assessed valuation per student as determined by the resource equalizer formula — $42,000. High school districts have the highest values from both sources — $68,528 median assessed valuation and $120,000 guaranteed assessed valuation. The figures for elementary districts are: $30,761 median assessed valuation and $64,615 guaranteed assessed valuation.
Table 111
Relative Valuation of Districts with Successful Operating Referenda FY73, 74
The values in Table III are not weighted by size of
increase in tax rate or distance from the midpoint.
Table III appears to indicate that
proportionately more State resources
than local resources will be received by
districts raising their levies.
Title 1 students
By this calculation of State aid, many
school districts would qualify for greatly increased support. A maximum 25
per cent increase from one year to the
next is allowed to prevent such wind
falls.
Of concern to many policymakers
was the capability of some school
districts to incur ever-increasing
expenditure levels because of the vast wealth
of some districts and the willingness of
the citizens to vote additional taxes.
H.B. 1484 imposed restrictions on these
wealthy districts by placing a ceiling of
$1,260 per student (TWADA) for those
districts calculating their assistance
with the "resource equalizer."
However, many districts were
already spending more than that
amount. Rather than destroy the
quality of educational programs, those
districts with tax rates above the amounts
required to produce the $1,260 were
permitted to tax above the maximum
rate if already authorized to do so, in
order to maintain their present high
expenditure level. By voter approval,
districts may increase the 1972-1973
expenditure level by 15 per cent.
The final solution?
There is considerable debate
regarding the optimum ratio of State to local
funding. Full State responsibility for
raising and distributing needed funds
for public schools was advocated as
early as 1940, and continues to be the
solution recommended by some authorities.
At present, Hawaii is the only state that
had adopted this system.
Proponents of full State funding
contend that: (1) it is the only way to assure
that schools in every part of the State
would offer equal educational
opportunity; (2) the tax structure would have
to depend more on progressive and less
on regressive taxes; (3) full State
funding would allow the educational system
to develop in an organized manner; (4)
adequate funding would be more easily
attained; and (5) the legal responsibility
of the State could be met with
assurance.
Opponents contend that such a plan
would (1) sacrifice local interest and
control, (2) oppose long-standing
American educational traditions, (3)
prove unworkable in view of the great
divergence of expectations, social
climate, and needs of the State, (4)
require unbearable State taxes, and (5)
guarantee mediocrity throughout the
State.
At least four states have recently
rejected serious efforts to enact full state
funding. In Illinois, two study groups
recently took opposing views on this
issue. Several members of the
Superintendent's Advisory Committee
on School Finance favored full State
funding in their final report to then
Superintendent of Public Instruction
Michael J. Bakalis. The Finance Task
Force of the Governor's Commission
on Schools rejected the plan.
A compromise on this issue during
the framing of the 1970 Illinois
Constitution resulted in the statement,
"The State has the primary
responsibility for financing the system of
public education" (Article X Section 1).
The Illinois Supreme Court interpreted
the statement to mean a commitment of
policy rather than a fixed percentage of
school funds.
The percentage of total school
revenue in Illinois from State sources
has increased from 25 to over 40 per
cent in the last seven years. This is a
little less than the average ratio for all
states. Nationwide, the percentage
ranges from less than 20 to more than
85.
Most advocates of full State funding
feel that the State should generate
required revenues for funding the schools
through taxes other than the property
tax. In most states the three largest
revenue producing taxes are the sales
tax, the income tax, and property tax. If
the property tax was no longer the
primary source of district educational
funds, revenue from the income tax and
the sales tax would have to be greatly
increased.
Problem magnified in Illinois
Undoubtedly the debate on State aid
to education will continue. The complexity of the formulas and
computations discussed in this article certainly will not hasten final resolution
50/Illinois Issues/February 1975
Elementary
High School
Unit
Total
Above Midpoint
17
04
15
36
Below Midpoint
28
09
07
44
The "resource equalizer" formula
also allows impoverished students (as
defined by Title I Elementary and
Secondary Education Act) to be
weighted by districts in order to receive
more aid. This formula uses as a base
the per cent of Title I eligible students
statewide — 18.2 per cent. If a local
school district has the same per cent of
Title I eligible students as the State, the
district multiplies its total WADA by
.375 for each eligible student of the district.
Is this the final solution? If not,
where do we go from here? Should the
State continue to assume an ever-increasing responsibility for financing
local schools?
This problem is magnified in Illinois.
Estimated revenues for the current ?
fiscal year from our State income tax
are about $1.5 billion while sales tax
receipts should produce $1.4 billion. It
would require substantial increases in
either or both of these taxes to replace
the amount raised by local school
districts — $1.8 billion in fiscal 1974.
Furthermore, the greater amounts
contributed by the State increases the
demand for more equitable distribution of
these funds among school districts
throughout the State.