Local funding of U.S. education

Any holistic examination of education has to consider the local funding component. Poorer areas simply cannot provide the same opportunity as richer areas. Aggregating all school taxes at the state level presents an interesting alternative.

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In many U.S. jurisdictions about 90% of funding for schools comes from a combination of state and local funding, split roughly equally between the two sources. The other 10% comes from federal sources through a variety of programs – the various title programs and competitive grants. On the surface it might seem reasonable to fund education through the combination of federal, state and local sources, however, looking beneath the surface reveals areas that could be improved.

Institutionalizing poverty

For poor areas with low property values (due to crime and the quality of schools), the amount of money that can be raised to fund schools is not just lower, but in many cases dramatically lower than in wealthier areas. Poorly funded schools cannot offer the same opportunities for a high-quality education that better funded schools can. If we view education as the key building block to graduation, continuing on to postsecondary education and career success, then limiting the opportunities available to poor children has the likely outcome of institutionalizing poverty. No social mobility available to these children translates to lost opportunity not just for the children but for the greater economy.

Alternative funding model

An alternative way of looking at the funding model for schools within a state could be to aggregate all of the school taxes and then distribute the same per-student amount across all districts. While the sources and total may be the same, the methodology for sharing that funding changes. Poorer districts would get more and wealthier areas would get less per student.

Investment in the future

It’s not hard to imagine that those who lose something under this proposed methodology would oppose this change and that those who gain would support it. However, this issue takes deeper consideration than from just the obvious involved parties. Education is an investment in the future that states, counties, cities and towns make. It is not only the parents of those children who need to take an interest in the education of local children. Everyone has a vested interest in the development of a state’s, indeed a country’s children. It also requires longer-term consideration about the desired outcomes years from now. This decision is not about education today – it’s about education over the next 25 years and beyond.

Common practice

If you think that this proposal sounds like some socialist plot to take from the rich, think again. This methodology is exactly the basis on which other taxes are paid and expended. Taxes are not redirected back to the local community – except for school taxes. Federal taxes are collected and then distributed nation-wide; state taxes are collected and then distributed state-wide; county taxes are collected and then distributed county-wide; and town taxes are collected and then distributed town-wide. This form of taxation and distribution is done for the greater good of the nation, state, county and town.

Taking another look

The issue of local school funding is significant. While many of us would choose to focus strictly on outcomes (achievement) rather than inputs (funding), to do so would allow the perpetuation of a funding mechanism that is at least part of the problem of a large number of underperforming and underresourced schools. Tony Mullen wrote an article, A Tale of Two Schools, and discussed the stark contrast between two schools he visited days apart. The funding model proposed here would balance the differences in the conditions of each school.

Rethinking local funding is not a silver bullet, but it is part of a larger discussion around education, both the waste and the opportunity.

Postscript

As property owners and therefore taxpayers in the United States, we have some firsthand experience with school taxes at the county and local level. We’re not just passive observers from afar.

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Nancy Knowlton is co-founder and CEO of Nureva Inc. and previously the co-founder and CEO of SMART Technologies. She writes about education, entrepreneurship, business management, technology, innovation and other passions.