Dependence on Property Taxes Continued To Diminish in 1979-80

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Continuing a financial trend that began in the early 1970's, American public schools depended less on local property taxes in 1979-80 than in the previous fiscal year, according to a report issued last month by the U.S. Bureau of the Census.

The document, entitled Finances of Public School Systems in 1979-80, reports that property taxes accounted for 29.6 percent of the schools' general revenues in fiscal 1979 and 27.6 percent in fiscal 1980. Over the same period, state aid to public schools--financed mainly through income, sales, and usage taxes--increased from 42.7 percent to 44.7 percent of all general revenues. (See Databank below.)

The national trend over a period of three fiscal years, the report notes, is even more dramatic. "Due to the enactment of property-tax-limitation measures and related school-fi-nance-reform legislation," the document says, "the state share in the support of public education has increased from 39.5 percent in fiscal year 1977-78 to 44.7 percent in fiscal year 1979-80. There has been a corresponding decrease in the impact of property taxes which made up 33.1 percent of all general revenues in fiscal year 1977-78 but only 27.6 percent in fiscal year 1979-80."

The primary reason for the shift, according to the Census Bureau's analysis, has been legislation in many states providing property-tax relief.

'Pronounced in California'

"The swing was pronounced in California," which has one of the most stringent property-tax-limitation laws in the nation, the report notes. "Proposition 13 and a reorganization in the state's public financing system caused a decline in property-tax revenue to schools from 24.9 to 18.1 percent of total revenue be-tween 1979 and 1980. Meanwhile, the percentage of revenue from state sources increased from 59.9 to 64.8."

Similarly, large shifts from local to state revenues were noted in Georgia, Idaho, Nevada, and Washington.

Despite the clear trend toward state assumption of educational costs, the report notes, property taxes remained the most important source of locally raised revenues.

Moreover, the report adds, many states deviate substantially from the overall trend. In New Hampshire, the Census Bureau report notes, school systems receive some 87 percent of all revenues from "own sources," defined primarily as local taxes; by contrast, the corresponding figure is 20 percent in New Mexico.

The report is largely based on data collected from state departments of education. The survey included some 16,000 elementary- and secondary-school districts as well as 449 community colleges and other institutions of higher education that are locally controlled.

Among the other findings of the survey:

Public-school systems received $102.2 billion from all sources in 1979-80, or 10.6 per-cent more than in the previous fiscal year.

The school districts spent $100.7 billion in 1979-80, an 11 percent increase over 1978-79.

(The National Center for Education Statistics, a branch of the U.S. Department of Education, has predicted that public elementary and secondary schools will spend approximately $112.8 billion during the current fiscal year.)

Long-Term Obligations

At the end of fiscal 1980, indebtedness of public-school systems totaled $36.7 billion, nearly all of it in long-term obligations. Approximately $3 billion in long-term debt was incurred by school systems during the fiscal year covered, while $3 billion was retired.

The document also contains detailed information on the finances of individual school systems with more than 15,000 students.

Copies of the report are available for $4.50 each, prepaid, from district offices of the Department of Commerce or from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402. The catalog number is GF-80, No. 10.

Vol. 01, Issue 16

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