'Most advocates of full State funding feel that the State should generate required revenues for funding the schools through taxes other than the property tax'

official who is more concerned with larger revenues than higer tax rates. Unit districts have the lowest State median assessed valuation per pupil, only $23,406, and also the lowest guaranteed assessed valuation per student as determined by the resource equalizer formula — $42,000. High school districts have the highest values from both sources — $68,528 median assessed valuation and $120,000 guaranteed assessed valuation. The figures for elementary districts are: $30,761 median assessed valuation and $64,615 guaranteed assessed valuation.

Table 111
Relative Valuation of Districts with Successful Operating Referenda FY73, 74

Elementary High School Unit Total

Above Midpoint 17 04 15 36

Below Midpoint 28 09 07 44

The values in Table III are not weighted by size of increase in tax rate or distance from the midpoint.

Table III appears to indicate that proportionately more State resources than local resources will be received by districts raising their levies.

Title 1 students
The "resource equalizer" formula also allows impoverished students (as defined by Title I Elementary and Secondary Education Act) to be weighted by districts in order to receive more aid. This formula uses as a base the per cent of Title I eligible students statewide — 18.2 per cent. If a local school district has the same per cent of Title I eligible students as the State, the district multiplies its total WADA by .375 for each eligible student of the district.

By this calculation of State aid, many school districts would qualify for greatly increased support. A maximum 25 per cent increase from one year to the next is allowed to prevent such wind falls.

Of concern to many policymakers was the capability of some school districts to incur ever-increasing expenditure levels because of the vast wealth of some districts and the willingness of the citizens to vote additional taxes. H.B. 1484 imposed restrictions on these wealthy districts by placing a ceiling of $1,260 per student (TWADA) for those districts calculating their assistance with the "resource equalizer."

However, many districts were already spending more than that amount. Rather than destroy the quality of educational programs, those districts with tax rates above the amounts required to produce the $1,260 were permitted to tax above the maximum rate if already authorized to do so, in order to maintain their present high expenditure level. By voter approval, districts may increase the 1972-1973 expenditure level by 15 per cent.

The final solution?
Is this the final solution? If not, where do we go from here? Should the State continue to assume an ever-increasing responsibility for financing local schools?

There is considerable debate regarding the optimum ratio of State to local funding. Full State responsibility for raising and distributing needed funds for public schools was advocated as early as 1940, and continues to be the solution recommended by some authorities. At present, Hawaii is the only state that had adopted this system.

Proponents of full State funding contend that: (1) it is the only way to assure that schools in every part of the State would offer equal educational opportunity; (2) the tax structure would have to depend more on progressive and less on regressive taxes; (3) full State funding would allow the educational system to develop in an organized manner; (4) adequate funding would be more easily attained; and (5) the legal responsibility of the State could be met with assurance.

Opponents contend that such a plan would (1) sacrifice local interest and control, (2) oppose long-standing American educational traditions, (3) prove unworkable in view of the great divergence of expectations, social climate, and needs of the State, (4) require unbearable State taxes, and (5) guarantee mediocrity throughout the State.

At least four states have recently rejected serious efforts to enact full state funding. In Illinois, two study groups recently took opposing views on this issue. Several members of the Superintendent's Advisory Committee on School Finance favored full State funding in their final report to then Superintendent of Public Instruction Michael J. Bakalis. The Finance Task Force of the Governor's Commission on Schools rejected the plan.

A compromise on this issue during the framing of the 1970 Illinois Constitution resulted in the statement, "The State has the primary responsibility for financing the system of public education" (Article X Section 1). The Illinois Supreme Court interpreted the statement to mean a commitment of policy rather than a fixed percentage of school funds.

The percentage of total school revenue in Illinois from State sources has increased from 25 to over 40 per cent in the last seven years. This is a little less than the average ratio for all states. Nationwide, the percentage ranges from less than 20 to more than 85.

Most advocates of full State funding feel that the State should generate required revenues for funding the schools through taxes other than the property tax. In most states the three largest revenue producing taxes are the sales tax, the income tax, and property tax. If the property tax was no longer the primary source of district educational funds, revenue from the income tax and the sales tax would have to be greatly increased.

Problem magnified in Illinois
This problem is magnified in Illinois. Estimated revenues for the current ? fiscal year from our State income tax are about $1.5 billion while sales tax receipts should produce $1.4 billion. It would require substantial increases in either or both of these taxes to replace the amount raised by local school districts — $1.8 billion in fiscal 1974. Furthermore, the greater amounts contributed by the State increases the demand for more equitable distribution of these funds among school districts throughout the State.

Undoubtedly the debate on State aid to education will continue. The complexity of the formulas and computations discussed in this article certainly will not hasten final resolution

50/Illinois Issues/February 1975