Disparities in property taxes and Educational Inequality

Disparities in property taxes and Educational Inequality

One interesting aspect of the educational system in the United States is that states are autonomous with regards to how they want their public schools to be funded. However, the federal government provides supplementary assistance to the states and schools (the federal K-12 support began with the enactment of the Elementary and Secondary Education Act (ESEA) in 1965). For instance the No Child Left Behind Act of 2001 (NCLB) is a reauthorization of ESEA.


Source: NCES, “Common Core of Data,” surveys and unpublished data.

On a local level, the majority of school funding comes from property taxes, which are set by the school board or local officials (or citizens). Proponents of the policy claim that property taxes are the most appropriate source of funding to support large expenditures in public education and are more reliable and stable (as opposed to income and sales taxes) when it comes to schools making budgetary decisions. In addition to that, there are few states that do not collect income or sales taxes, which then makes it hard for them to support their public schools.

On the other hand, the main criticism of relying on property taxes to support schools is based on the disparities created by socio-economic differences among residents of different school districts. Lower property taxes in a school district (as a result of having lower-income residents) means lower school quality in that district.

Therefore, the opponents argue for a more equal distribution of resources among schools in a state (or even among states). While Massachusetts relies heavily on property taxes for school funding, California is among the states that relies less on property taxes to fund its schools. California’s public schools are funded through the state (57%), property taxes and other local sources (29%), and the federal government (14%).

One way to test those arguments is to look at the link between educational disparities among students in each school district/state and the reliance of those districts/states on property taxes.


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