Local Funding

Local sources make up nearly as much revenue as state sources. Local sources includes intermediate revenues from county or township governments, but the bulk of local funding comes from individual community school districts. Some of the local revenues come from sources such as revenues from student activities and food services. Most of the money comes from property taxes, which are raised to coverall community services as well as education. All homeowners pay taxes based on a local assessment of their houses. Local school budgets are mapped out by elected officials, including mayors and council members, as well as the local board of education. Residents are able to vote on local school budgets in regularly scheduled elections.

Funding schools with local dollars has benefits and drawbacks. The primary benefit of local funding is accountability. Taxpayers can see exactly how their money is being spent. They can see the new cafeteria at the high school, the new science lab equipment, the new textbooks. The local elected officials who submit school budgets to the voters know that if they fail to keep the promises they make, those same voters will remove them from office in the next election.

Members of the community also have more say in how local dollars are spent. Those who have children in the school system will be particularly interested in how tax dollars are spent. Some of them may become quite active in school affairs by participating in the Parents Teachers Association (PTA) or on the local board of education.

This arrangement can be a drawback to local funding as well as a benefit. Because members of the community know they have a say in the school budgetary process, they may be more likely to examine each expenditure carefully. This scrutiny is not the problem. What creates difficulties is when local residents perceive expenses as unnecessary. Those who no longer have children in the school system may be reluctant to see their property taxes increase for programs that will bring them little if any benefit. Senior citizens likewise may be reluctant to support tax increases (even though in many communities they get a property tax break). People who feel that teacher salaries are already too high or that the old gym is perfectly fine for the students or that new instruments for the marching band are an extravagance, may vote down any school budget increases.

Local elected officials need to be able to show community residents the positive side of spending more money on the schools. Better-equipped schools attract better teachers. Better teachers prepare students better, and more students achieve success. This improvement in turn means more young families, since for young families the quality of the schools is the most important factor when they choose a place to live. As the community becomes more attractive to outsiders, property values will go up; often the rise in value far more than offsets the extra cost incurred by taxes. Of course, higher property values may also mean higher tax assessments, so for the homeowner who has no children and who has no plans to move, the process of increased values may feel like a personal financial burden rather than tax dollars at work. For these and other reasons local funding is more complex than it would appear to be.

Inside Local Funding