Local Control and Equity Do Not Mix

(Guest Post by James Shuls)

Some things just go together–cookies and milk, surf and turf, the Three Stooges (Moe, Larry, and Curly, of course)–you get the picture.  At the same time, there are things that simply do not mix.  When it comes to public education, two fundamental ideals fit this bill–local control and equity.  Try as we might, we simply haven’t figured out, in our current public education system, how to deliver on both of these principles.

Recently, NPR launched an initiative focused on the latter, the “School Money” project.   Reporters for the news outlet asked the question, why do some schools have so much, while others have so little?  They summed it all up very succinctly:

Two words: property tax

The NPR reporters go on to say:

The problem with a school-funding system that relies so heavily on local property taxes is straightforward: Property values vary a lot from neighborhood to neighborhood, district to district. And with them, tax revenues.”

There is just one problem with this answer–it’s wrong.

Imagine if we replaced the local property tax with a different local tax; it could be a local sales tax, a local income tax, whatever. No matter what we tax, as long as we collect it locally, independent school districts will generate different amounts of money. It is not the property tax that causes inequities. It is our very system of public education itself; it is the local school district that causes inequities.

More specifically, it is the combination of local school districts and local support for public schools which causes differences in school spending.  Local school districts use the power of taxation to build new schools, to increase teacher pay, and to provide services for students. Interestingly, when given the opportunity, many local school districts tax themselves above and beyond any amount required by the state.

Here is the real kicker – the rich tend to tax themselves more.  In my home state of Missouri, for example, the 50 highest spending districts have a tax rate ceiling for operating funds of $4.582 per $100 of assessed valuation. The 50 lowest spending districts tax themselves at just $3.029 per $100 of assessed valuation. These districts not only have lower property values, on average, they also choose to tax themselves less.

In other words, when we allow property rich school districts to tax themselves more and property poor school districts to tax themselves less, we allow taxpayers to willfully contribute to the inequities we see between districts.

Many people, including the authors of the NPR reports, point to the gaps in spending and take a reductionist approach to this complex system. It’s the property tax! As much as I enjoy discussions about school finance, the issues here are much more fundamental —some people willingly choose to invest more in their children’s education than others.  These people appear to sort into communities with like-minded people.

It is easy to ask the question, “Why do some schools spend more than others?” It is much harder to answer the question, “Should we allow local taxpayers to have some say in how much they will support their local schools?” The former can be answered objectively, the latter cannot. If you say, “No,” you are saying you are uncomfortable with local control. If you answer, “Yes,” then you support some level of inequity.  In the current system, we can’t have both local control and equity.

If at the end of NPR’s “School Money” project we have only answered the easy questions, we will be no better off.  We will simply continue to wrestle with the same issues that we have grappled with for decades.  We will continually struggle to reconcile two incompatible ideals – local control and equity.

If, however, we start to think about how the fundamental organization of our school system—a patchwork of 14,000 school districts with geographic monopolies over the residents who live within them—contributes both to spending and educational inequities and think about how we can reform that, we might be able to move the discussion forward.

———————————————————

James V. Shuls, Ph.D., is an assistant professor of educational leadership and policy studies at the University of Missouri – St. Louis and a distinguished fellow of education policy at the Show-Me Institute.

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20 Responses to Local Control and Equity Do Not Mix

  1. George Mitchell says:

    I disagree with the premise of this piece. The Wisconsin experience since the 1970s illustrates how the allocation of state aid can diminish the impact of local per pupil property tax differences. While the Wisconsin system has bells and whistles that dilute its impact, the thrust nevertheless greatly reduces disparities that otherwise would exist.

  2. sstotsky says:

    So far as we have seen in this country, federal control and equity don’t mix, either. (Billions since 1965 for ESEA, and all we end up with is ESSA in 2016–and a growing gap in achievement according to the latest NAEP tests) Nor do state control and equity seem to mix, except in Massachusetts for about 10 years. No state seems to have closed “gaps” in ways that enhanced academic achievement.

    So, what does that suggest to us? Is there any evidence that 14,000 school districts did worse than the feds?

  3. Jason Bedrick says:

    Perhaps we have the wrong understanding of “local control.” Traditionally, “local control” has meant that individual communities decide how to fund and operate their local schools. But maybe that doesn’t make much sense anymore. “Local control” in a political system usually means control by the most organized special interests (i.e., the unions and district school establishment), and the political system inevitably forces citizens into conflict with one another, producing winners and losers.

    Perhaps we need a new understanding of local control. “Local control” is based on the principle of subsidiarity, which teaches us that “matters ought to be handled by the smallest, lowest or least centralized competent authority.” But the least-centralized competent authority in education is not the district school or school board, it’s parents.

    I think it will be hard to get people to give up their attachment to local control. Rather than fight it, we should work to redefine it. “Local control” should become synonymous with educational choice.

    • Greg Forster says:

      I don’t think we should try to tell people that school choice is local control. That sounds like the abracadabra strategy.

      But we can say “if you like local control, you’ll love school choice!”

      • Jason Bedrick says:

        Fair enough. My point is that if you believe in subsidiarity, it should lead you to control by parents, not just school boards — and there’s nothing more local than parents.

  4. George Mitchell says:

    On reading this comment from Jason I was about to write that local control should be synonymous with educational choice when he upstaged me. Indeed, choice is the essence of local control.

    States can moderate/diminish disparity on local property tax bases. In doing so, of course, legislators provide enough money that they feel justified in having states set an array of rules and standards in the name of “accountability.”

    A state-local finance system that moderates disparity in local ability to pay and gives primary “local control” to parents is one to strive for. It continually amuses me to hear arguments that parents won’t always make the best decision when those arguments are offered by proponents of top heavy control and regulation. What could go wrong with that approach?

  5. Some years ago the Education Trust gave Hawaii’s single, State-wide school district, which derives its revenue stream from the State of Hawaii general fund (income taxes, and the general excise tax, mostly) an A for equity in funding. I expect that they looked no farther than the central mechanism and imagined that equal funding would result. It doesn’t. School-level per-pupil operating budgets in the Hawaii DOE vary by as much as 50% ($4000 to $6000) within the Windward (sub) district, for example. That’s –school level- funding. The Hawaii DOE spends over $11,000 per pupil, on average. Nanakuli High and Intermediate at one time received one of the highest levels of per-pupil support. The State auditor examined some program budgets and asked people who were authorized to write checks on that budget about specific purchase items, and the program officers said that they did not recognize the expenditure. Nothing stops a DOE administrator from putting a central office furniture purchase on Nanakuli’s budget, and any local administrator who wants to survive in the system will remain silent. .

    • George Mitchell says:

      Variation in spending does not demonstrate inequity. A pure equity plan gives all districts the same ability, i.e., tax base per pupil. Districts may choose to spend more per pupil than others but that is not evidence of inequity.

      • (Mitchell): “Variation in spending does not demonstrate inequity.”
        What would? The usual measure of equity (or equality) –between districts– is per pupil funding. That’s the basis of Kozol’s mendacious claim in __Savage Inequalities__, that funding schools out of property taxes generated the dilapidated facilities he observed in districts serving low-income parents. That was false when he wrote, but set that aside. Why does this measure change when we consider differences in per pupil funding between schools within a district? If this tactic, creating a State-wide district and then asserting that because all (one) districts in the State get the same (a=a) per-pupil funding, then that funding is “equitable”, “equity” becomes a synonym for centralization, even if this means that children of politically adept parents get G/T classes, modern facilities, and new textbooks.

      • George Mitchell says:

        The key variable in defining inequity is capacity to spend. Districts with low property value/pupil have less capacity than districts with high property value/pupil. To reduce inequity the state should provide aid to equalize capacity Then individual districts can decide what to spend without being limited by capacity. Some might spend more than others but that will not be a function of equity or lack thereof; rather, it will reflect the district’s willingness to tax itself. In such a system differential spending levels would not measure inequity.

      • (Mitchell): “The key variable in defining inequity is capacity to spend.”
        How does this “capacity to spend” differ from “revenues”?

        (George): ” Districts with low property value/pupil have less capacity than districts with high property value/pupil.”
        This I do not see. Hawaii has one district. The Legislature appropriates a DOE budget. This is their revenue (with about 10% Federal on top). Property values have nothing to do with it. Do you contend that the current Hawaii system is equitable *every district in the State gets the same per pupil budget because there is only one district in the State) but that if the Legislature were to create independent school districts around each school and fund them the same way as today, at the same level as today, that somehow the identity of “school “and “school district” would make the situation “inequitable”? In many US States, local property taxes supply less than 50% of district revenues. Those inner-city majority-minority districts which Kozol indicted for “Savage –Inequalities–” get MORE money, on average, than suburban white districts.
        This is all a distraction. Lack of money is not the cause of poor performance. Variance in funding does not cause variance in performance. Equalization of funding will not equalize performance. There is no amount of money so great that the parasites who infest large urban school districts cannot steal it.

      • George Mitchell says:

        Returning to the premise of the original post, my sole point is that “local control” does not inherently mean there will be fiscal inequity between school districts. State aid programs largely can minimize such inequity.

  6. George Mitchell says:

    Say there are two families with the same income but one spends more than the other. There is no inequity.

  7. charliebelin says:

    So if state funding is “equalizing” the disparity between the low tax base districts and the high tax base districts so that every student in the state had the same per pupil allowance, why would the “locals” in a low tax base district vote to raise taxes only to receive less state aid per pupil? Once state aid is part of the equation to provide equity maybe some locals don’t view education or at least the finance side as under local control anymore. And are there rules and regulations that come with any state or federal aid, and if so do the non state aid receiving districts have to follow the same rules and regulations? That could be another equity concern.

    • George Mitchell says:

      The result of a properly designed state aid system is that any district in a state that chooses to spend X$/pupil will have the same tax rate as other districts that choose to spend at that level. I don’t know of any state that has such a system. Wisconsin has a system that partially achieves that result. In this kind of tax base equalizing scheme a local district does not receive less aid/pupil if it spends more. Again, the key to a “perfectly” designed system is that the same local effort will be required in any of a state’s districts to spend X/pupil regardless of the fact that individual districts have different levels of property value/pupil.

      • George Mitchell says:

        Example. A state has two districts. District A has a property tax base of $X/pupil. District B has a tax base of $2X/pupil. With no equalizing state aid, for District A to spend the same amount/pupil as B it must tax at twice the rate. A properly designed state aid scheme will result in the same tax rate for each district if they spend the same amount/pupil. If A or B chooses to spend more/pupil their tax rate would be proportionally higher.

        This is a “simple” system to design. The real world of politics makes achieving such a system quite difficult. The best that can be expected is that states will adopt systems that minimize inequity resulting from the fact that some districts have more tax base than others.

  8. […] Local control vs equity. Or: Why money and students should be allowed to cross district lines. […]

  9. Patrick says:

    I think we made a mistake more than a century ago by offering public education free to all. If we were to redesign the system I think, instead of multiple sources of taxing authorities there is only one who gives money to the parents, adjusting amounts based on income and disability such that the wealthiest receive the least and the poor and disabled receive the most.

  10. Patrick says:

    Also James, I’ve seen many rich districts with lower millage rates than poorer districts. The homes in the rich districts can still produce far more tax revenue than lower income houses with higher property tax rates. I wouldn’t be surprised if this is the norm.

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