Blog

Your Education Road Map

Politics K-12®

ESSA. Congress. State chiefs. School spending. Elections. Education Week reporters keep watch on education policy and politics in the nation’s capital and in the states. Read more from this blog.

Education

Local Sales Tax Revenue Plummets, Putting Additional Squeeze on Education Funding

By Daarel Burnette II — June 05, 2020 2 min read
  • Save to favorites
  • Print

In 2013, Philadelphia’s schools were in fiscal freefall. After having laid off thousands of employees in order to fill a multimillion-dollar deficit, district officials at the time said the city needed another source of revenue or else administrators wouldn’t be able to open schools’ doors that fall.

The city and the state came up with a solution: They would double the sales tax from one percent to two percent in Philadelphia in order to pay down the district’s ballooning pension fund and avoid even more layoffs. For every dollar spent on parking, lottery, hotel rooms and other purchases in the city, two cents would be sent directly to the school district.

By doing so, the city joined more than 400 school districts in the nation that are reliant on a local sales tax to bring in revenue to fund the constructions of buildings, prekindergarten programs, or a variety of other services.

Polk County school district, for example, instituted a half-cent sales tax 17 years ago to fund new school construction throughout the district.

Fulton County schools in Georgia in 1997 instituted a 1 percent sales tax to bring in money for school construction and technology.

But COVID19 has sent that sales revenue tumbling as the vast majority of businesses shut their doors in order to prevent the spread of the disease. The revenue will be slow to return even as businesses gradually reopen. That makes these districts especially vulnerable to teacher layoffs this fall,as they also will be hit from a revenue plunge in state sales and income tax aid.

Property tax revenue remains relatively stable during recessions because it’s reassessed so infrequently. For wealthy districts that can afford to do so, school board members typically raise the property tax in order to withstand recessions.

Philadelphia’s plight is a prime example.

In 2016, Philadelphia collected more than $381 million from local sales tax, according to federal data. That made up more than 13 percent of its revenue. City and state officials that the revenue has almost been wiped out in recent weeks. There’s no telling when it will rebound.

Philadelphia’s school officials projected in April that if the governor’s fiscal projections were accurate, the district would face a $1 billion deficit over the next five years.

The Pennsylvania legislature last month decided to spare districts by holding their funding flat until congress decides whether or not to provide states with a bailout package this summer.

Search below to see if your district has a local sales tax.

Events

Classroom Technology Webinar How Pandemic Tech Is (and Is Not) Transforming K-12 Schools
The COVID-19 pandemic—and the resulting rise in virtual learning and big investments in digital learning tools— helped educators propel their technology skills to the next level. Teachers have become more adept at using learning management
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School & District Management Webinar
Accelerate Learning with Project-Based Learning
Earlier this year, the George Lucas Educational Foundation released four new studies highlighting how project-based learning (PBL) helps accelerate student learning—across age groups, multiple disciplines, and different socio-economic statuses. With this year’s emphasis on unfinished
Content provided by SmartLab Learning
School & District Management Live Online Discussion Principal Overload: How to Manage Anxiety, Stress, and Tough Decisions
According to recent surveys, more than 40 percent of principals are considering leaving their jobs. With the pandemic, running a school building has become even more complicated, and principals' workloads continue to grow. If we

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Gunman in Parkland School Massacre to Plead Guilty
The gunman who killed 14 students and three staff members at a Florida high school will plead guilty to their murders, his attorneys said.
4 min read
Parkland school shooter Nikolas Cruz is sworn in before pleading guilty, Friday, Oct. 15, 2021, at the Broward County Courthouse in Fort Lauderdale, Fla., on all four criminal counts stemming from his attack on a Broward County jail guard in November 2018, Cruz's lawyers said Friday that he plans to plead guilty to the 2018 massacre at a Parkland high school.
Parkland school shooter Nikolas Cruz is sworn in before pleading guilty, Friday, Oct. 15, 2021, at the Broward County Courthouse in Fort Lauderdale, Fla., on all four criminal counts stemming from his attack on a Broward County jail guard in November 2018, Cruz's lawyers said Friday that he plans to plead guilty to the 2018 massacre at a Parkland high school.
Amy Beth Bennett/South Florida Sun Sentinel via AP
Education California Makes Ethnic Studies a High School Requirement
California is among the first in the nation to require students to take a course in ethnic studies to get a diploma starting in 2029-30.
4 min read
FILE - In this Jan. 22, 2020, file photo, Democratic Assembly members, from left, James Ramos, Chris Holden Jose Medina, and Rudy Salas, Jr., right, huddle during an Assembly session in Sacramento, Calif. Medina's bill to make ethnic studies a high school requirement was signed into law by California Gov. Gavin Newsom on Friday, Oct. 8, 2021. (AP Photo/Rich Pedroncelli, File)
Education California Requires Free Menstrual Products in Public Schools
The move comes as women’s rights advocates push nationwide for affordable access to pads, tampons, and other items.
1 min read
Tammy Compton restocks tampons at Compton's Market, in Sacramento, Calif., on June 22, 2016. California public schools and colleges must stock their restrooms with free menstrual products under a new law signed by Gov. Gavin Newsom, Friday, Oct. 8, 2021.
Tammy Compton restocks tampons at Compton's Market, in Sacramento, Calif., on June 22, 2016. California public schools and colleges must stock their restrooms with free menstrual products under a new law signed by Gov. Gavin Newsom, Friday, Oct. 8, 2021.
Rich Pedroncelli/AP
Education Florida to Dock School District Salaries for Requiring Masks
Florida is set to dock salaries and withhold funding from local school districts that defied Gov. Ron DeSantis' ban on mask mandates.
2 min read
Florida Gov. Ron DeSantis speaks, Tuesday, Sept. 14, 2021, at the Doral Academy Preparatory School in Doral, Fla.
Florida Gov. Ron DeSantis speaks, Tuesday, Sept. 14, 2021, at the Doral Academy Preparatory School in Doral, Fla.
Wilfredo Lee/AP