Equity in Funding for Iowa's Public Schools

Abstract

The problem. The problem of this study was to describe, analyze, and compare the education finance laws of three states, with particular attention to infrastructure and facility funding. Ohio and Texas entered the courts due to questions of equity in school facility funding and were selected for this study. lowa faced litigation in March 2002 from a coalition of school districts concerned about equity in school infrastructure funding due to the Local Option Sales Tax Bill passed in 1988. Procedures. Several states and their funding systems have been determined unconstitutional by State Supreme Courts in the past decade. Ohio continued to remain in litigation through February 2002 while Texas went through major finance reform to create a fully equalized system. A content analysis was completed on legal documents, state finance descriptions, property tax data, and governmental annual reports. Findings. The analysis of data indicated several common factors were in place prior to court rulings of unconstitutionality. County-based revenue in the form of credits or taxing authority were specifically noted in State Supreme Court rulings. Initial lawsuits were based on the single issue of school facility funding but created a comprehensive review of the entire school finance plans. The heavy reliance on property tax at the local level was a specific component of the Court's rulings. Constitutional language was specific in Ohio and Texas but limited in lowa causing debate for constitutionality. Conclusions / Recommendations. It was concluded that because there were similarities in the financial systems of all three state, the lowa system was in jeopardy of a court-based redress of their school funding system. If the case were to go to court, the proceedings would be predictably long and costly. It was recommended that an additional cent of sales tax for school infrastructure and property tax relief would provide equity over time in replacing local property tax to fund capital projects. Continued equalization efforts in the State Foundation plan to reach the 100 percent level would begin to level the playing field for low property wealth districts. A regional high school concept was suggested for revenue sharing between small districts. A sales tax clearinghouse for collection would recoup lost revenue due to Internet sales.