65 12.2 Financing Public Education

Federal Government Finance

The Federal government plays an important role in both governance and finance. The President of the United States appoints a secretary of education to administer the department and distribute funding to states for educational purposes. In 2018 the federal government appropriated $59 Billion to education, a 13 percent decrease from 2017. Despite the decrease, this funding is an important revenue source for public schools. Also, each house of Congress has its own committee on education. Members of these committees provide guidance and expertise as educational policies and budgets are developed. States and local school districts, rather than the Federal Government, make most of the major decisions about the content, assessment, teaching force, structure, and funding of elementary and secondary education. The Federal Government influences educational policy by attaching educational policies to receipt of federal funds (Kober & Usher, 2012).

Title I Funding

The purpose of Title I, Part A of the Elementary and Secondary Education Act (ESEA) is to ensure that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency in state academic achievement standards and state academic assessments.  It provides financial assistance through state education agencies to local educational agencies to meet the educational needs of children who are failing or are most at risk of failing the State’s challenging academic achievement standards and state academic assessments in schools with high concentrations of children from low-income families.

State and Local Finance

Public schools are funded approximately 90% by state and local revenue sources. Most local funds come from property taxes (Kober & Usher, 2012).  Since most of the school funding comes from property taxes, schools use various methods to maintain positive community relationships. Remember, taxpayers need to approve the school budget each year; however, depending on your community composition, many taxpayers do not have children in school.  Schools may host senior citizen luncheons or appreciation days, community health fairs, and offer up the school for community use. It is wise for teachers to develop relationships with all members of the school community. Strong school-community relations help increase the likelihood that a school’s budget is passed.  Schools and teachers need to demonstrate that they are responsibly using public funds. Teachers must find high-quality, cost-effective programming and materials to help students learn.

In 2020, New York State had the largest per-pupil average expenditure in the United States at $24,040 versus Utah, the lowest state at $7,628 (United States Census Bureau, 2020).  This demonstrates the variability in funding and resources by state. However, within states variability also exists between communities, largely due to revenues from property taxes. School districts that are wealthier tend to have more money and resources to dedicate to education. Illinois had the largest per-pupil average expenditure in the midwest at $15,741.

Local School Budget Development Process

One of the major roles of the board of education members is to develop a budget in collaboration with administrators. A budget is a financial operation plan expressing the estimates of proposed expenditures for a fiscal year and the proposed means of financing them.  Multiple laws and procedures must be followed during budget development.

When developing a budget, the BOE and administration need to keep several factors in mind and have accurate information about educational objectives, enrollment projection, the community’s receptiveness to tax increases, capacity, and facilities’ limitations.

An important term that BOE members, administrators, taxpayers, and teachers alike need to understand is the tax levy. The tax levy is the term used for the sum of revenue in property taxes a district must collect after removing other funding sources, including state aid, to meet the proposed budget. The tax levy is significant because this is the basis for determining the tax rate for each of the cities, towns, or villages that make up a school district.

To determine the tax levy, school districts use a state formula that begins with an increase of 2 percent or the level of inflation (whichever is less). The Tax levy limit is the amount a district’s tax levy may increase without requiring a supermajority to approve a proposed budget (60 percent of votes plus one). The result is often a number higher than 2 percent.

What is included in the School Budget?

The school budget presentation and materials must include categories of revenues, expenditures, and fund balance information, as well as comparison data from the prior year’s budget (ISBE.net, 2020).  Sources of a school’s financial resources (revenues) include property taxes, state education aid, and federal education aid. Also, schools often have a fund balance to offset budget costs. There are several types of fund balances that a school may have. Typically, they represent funds that were not used in a prior fiscal year or when additional unanticipated revenues are accepted. It is important to remember that schools must estimate their state aid revenues when developing a budget.

Illinois law requires certain procedures a school board must follow to adopt (approve) an annual budget. These actions include:

• The designation of an individual(s) to develop the budget in tentative form. The tentative budget includes revenues and expenditures that are anticipated during the fiscal year and contains a statement of the estimated cash expected to be on hand at the beginning and end of the fiscal year.

• The school board’s secretary publishes a notice of where, when, and during what hours the tentative budget will be on display for public inspection and where, when, and what time the budget hearing will be held. The tentative budget must be on display for at least 30 days before the budget hearing. It shall be the duty of the secretary of the district board to make the tentative budget available for public inspection and arrange for the budget hearing.

• Before taking final action on the budget, the school board must hold at least one budget hearing. The tentative budget details are explained during the hearing, and the public may ask questions or provide input on the tentative budget.

• The budget is voted on and adopted (or rejected) by the school board at a public meeting held after the budget hearing.

• The school district budget must be adopted by the end of the first quarter of the fiscal year (September 30).

Access and Equity in Education funding 

As we think about funding for schools, we turn our thoughts to equity and equality in education. Included below is a short video describing equity and equality in more general terms. As a teacher, you will have to make decisions on how best to meet the learning needs of your students. Local budgets will determine the types of materials and resources teachers and students will have access to. For example, access to technology, opportunities for professional development, updated textbooks and materials, access to field trips, and availability of extracurricular opportunities are a few ways that budgets impact schools and students. How can you make your materials equitable (fair) to the resources wealthier districts have in a school with fewer resources? As a teacher, the question of equity of resources is one you will need to get involved in. Advocating for your students’ equitable curricular and program resources is an appropriate role for teachers.

Equity Vs. Equality Explanation Video: