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Edd 705 Evaluation of the California Tax System

Historically California has used three sources of income to fund education, property taxes, sales tax, and income tax. Prior to the Serrano vs Priest case, property taxes were the primary source of funding for education. This method of funding was problematic in that it created inequity among districts. It is also important to note that after the Serrano case and the passage of Proposition 13, there was a major shift in the funding of education to the State. How does the tax system in California work and is it adequately funding the needs in education?

Equity & Ability to Pay

A good tax system shares the tax burden equitably among its citizens requiring every person and business to contribute to their government (Brimley, Verstegen, & Garfield, 2016). The primary purpose of a taxation system is to shift private funds to the public sector to finance services for the good of all its citizens. In order to be equitable, the amount of tax required  per individual needs to be based on that individual’s ability to pay rather than having each person pay an equal amount. The fact remains that people want the services to be provided, but the majority of them do not want to participate in funding them. In 2012, the California Federation of Teachers (CFT) launched an initiative to raise taxes on citizens with an income of at least $1,000,000, while the initiative did not pass as originally intended, it highlights efforts to address equity in the collection of funds and the challenges to organize a campaign of this nature (Balderston & Begin, 2012).

Adequacy of Yield

In order to be practical, any tax that is implemented  must generate enough revenue to warrant its implementation. This not only applies to taxes but policies and procedures that are required by the State. For example, for a number of years, the State required all teachers and individuals who work with children to have a TB test every other year. Recently it was determined that the State was spending millions of dollars unnecessarily, so they revised the procedures and requirement.   It is important that taxes be applied to productive sources (Brimley, Verstegen, & Garfield, 2016)).

Costs of Collection

Another important factor in determining whether a tax is worthwhile is the cost of administering the tax. Brimley states “To the extent possible, taxes should have relatively low collection and administrative costs for both the government and the individual.” Personal property tax, while potentially lucrative, is not practical because of the costs associated with determining an individual’s personal property. This would also create issues of privacy, since determining an individual’s personal property would require an audit. Property tax on the other hand is very straight forward because property doesn’t move and it can be clearly defined. Sales tax is also one that is easy to collect and administrate.

Impact & Incidence

When developing a tax, it is critical that the tax impacts the person or organization that it is intended for. If not, the incidence of the tax will affect individuals that were not intended. These types of situations can lead to the overtaxing of one group and at the same time, the undertaxing of another group. Property tax is an area where this may occur, a property owner who rents his property may pass an increase on his property tax to his renter rather than paying the increase himself. You would not have this problem with sales tax, because only the individual making the purchase is required to pay the tax of that purchase.

Predictability

Since taxes fund government programs, it is beneficial to have that revenue based on consistent sources of income. When the source of income is stable you can plan and budget for programs accordingly. When evaluating the three main sources of income for California, none of them are very predictable… property taxes fluctuate with the market, sales tax is affected by the economy and spending power of its citizens, and income tax will fluctuate with employment and the economy as well.   Education’s reliance on state revenue can lead to significant problems, if the budget is not signed, or if restrictions are placed on the state by propositions,  districts will have no idea what their true funding will be (Dillon, 2009).

Ranking High and Low

When evaluating the different taxes that fund education, it seems that this would fluctuate depending on the economy. It is also affected by what propositions get passed in the state. Prior to Proposition 13, the highest ranked tax would have been property tax. The economy was booming and property values were skyrocketing. Since the passage of Proposition 13, property tax would be ranked low due to the restrictions placed on growth by the proposition. Income would seem to have more potential than sales tax due to the number of wealthy individuals and large companies who live and operate  in the state, thought recent tax burdens on corporations have resulted in many companies leaving California for “friendlier tax venues”.

What is best for education?

After examining the different tax revenue streams, the most stable for education would still be property taxes. Property is fixed and while the economy may affect property value, the climate of California continues to be a draw for people from other states. Income tax and sales tax are still also consistent revenue streams for education. There is no perfect solution, but I believe we are on the right track as we make adjustments to the policies that are currently in place to provide education with the funding it needs.

REFERENCES

Balderston, B., & Begin, C. (2012). A Campaign’s Demise and Its Lessons Initiative for Millionaires Tax. Against the Current, 27(2), 8–10.

Brimley, V., Verstegen, D. A., & Garfield, R. R. (2016). Financing education in a climate of change. Boston, MA: Pearson Education, Inc.

Dillon, N. (2009). Free Falling. American School Board Journal, 196(4), 18–21.

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Edd 705 Serrano II & AB 65

Background

Serrano v Priest challenged the way that the education system in California was funded. The case sought to determine whether the California public school financing system, violated the equal protection clause of the Fourteenth Amendment due to its dependence on local property taxes. At the time, the system was financed primarily by local property taxes, consequently, districts with lower socioeconomic tax bases were not able to spend as much money as more affluent districts. School district revenues were drawn from four sources: 1) local property taxes, 2) equalization assistance, 3) basic state aid, and 4) state and federal categorical aid. Districts were assured of basic state aid amounting to $125 per pupil. Tax bases were found to vary widely throughout the state, the assessed valuation per unit of average daily attendance ranged from a low of $103 to the high of over $950,000. It was determined that the funding model discriminated against the poor because it made the quality of a child’s education a function of the wealth of their parents and neighbors. Education in our public schools cannot be determined by the wealth of a given neighborhood. The court concluded that the funding model would not withstand constitutional challenge. SCOCAL, Serrano v. Priest , 5 Cal.3d 584 available at: (http://scocal.stanford.edu/opinion/serrano-v-priest-27628) (last visited Saturday September 2, 2017). The supreme court of California determined that the financial model adopted by the state was unconstitutional violating the equal protection clause of the fourteenth amendment and the analogous provisions of the California Constitution (Karst, 1972).

Serrano II Decision

After Serrano I, California implemented a number of reforms to the way it financed the pubic education system. Increases were made to the foundation level districts received, limits on expenditures per pupil exclusive of categorical aid and revenues generated by override taxes were imposed. In Serrano II, the Supreme Court confirmed that the finance system was unconstitutional. The court determined that any educational financing model that was based on a district’s taxable wealth was unconstitutional. The court opinion determined that per pupil spending needed to be equalized across districts. A revenue limit system was established and for the most part many of the differences had been eliminated. The effectiveness of Serrano II was never realized because the voters passed Proposition 13 which shifted the bulk of financing of education from local tax revenues to state tax revenues. Proposition 13 also limited the ability to collect local property taxes which consequently reduced the amount of funding that could be spent on education.

Significance of Serrano II

Serrano II established that the way public education had been funded in California was unconstitutional; with Serrano II and Proposition 13 a state-financed system of public education was established. The evaluation of taxable resources since the implementation of Serrano II has provided evidence of a reduction in the inequity of funding. Serrano II did not require an equalization of expenditures, it required a funding model that would be independent of taxable wealth. The court’s primary concern was not the inequity in funding, rather the inequity in the quality of educational opportunities made available to students as a result of inequities in spending capabilities. While there exists compelling evidence that Serrano II equalized per pupil expenditures, it cannot be determined whether the increase in funding of less affluent districts resulted in improved performance of their students (Downes, 1992). It also cannot be determined if these spending restraints had any effect on higher wealth districts.

Assembly Bill 65 (1977)

California Assembly Bill 65 (AB 65) attempts to equalize California school finance and improve school programs. The school finance portion of the bill arose as a response to the 1976 Serrano v. Priest decision in which the California Supreme Court said that the existing school finance system was unfair to both students and taxpayers. AB 65 provides additional state assistance to increase per pupil expenditures in low-wealth districts and imposes new limits on the growth of expenditures in districts with high per pupil property values. It created an annual inflation adjustment based on a sliding scale in order to equalize revenue limits among districts over time. Higher inflation increases went to districts with low revenue limits, with lower (occasionally no) inflation adjustments for high revenue-limit districts. The bill also establishes the School Improvement Program designed to increase the quality of public education primarily through state planning and implementation grants to participating schools. One section of AB 65 modifies the legislature’s proficiency standards in basic skills for students in grades 7-12 and extends these requirements to specified elementary grades. Also funded through AB 65 is a staff development program that helps teachers and other school staff members design and implement professional development activities tailor-made to meet specific local school needs. Regarding exceptional children, AB 65 provides for a Special Education Master Plan to ensure that all physically and mentally exceptional children receive appropriate services. The bill also merges state funding of separate programs for compensatory and bilingual education into a consolidated system called Economic Impact Aid.

Conclusion

Just as the Supreme Court ruled that “separate is not equal”, ensuring that funding is equally distributed does not necessarily mean that things will be equitable. Wealthy districts today continue to have advantages, and these advantages also occur within district boundaries. Developing a policy or financial model that will provide the equivalent level of educational opportunities continues to be a challenge in our state and across the nation.

References

Brimley, V., Verstegen, D. A., & Garfield, R. R. (2016). Financing education in a climate of change. Boston, MA: Pearson Education, Inc.

Downes, T. A. (1992). Evaluating the impact of school finance reform on the provision of publich education: The California case. National Tax Journal, Vol. 45, 4.

Kenneth L. Karst, Serrano v. Priest: A State Court’s Responsibilities and Opportunities in the Development of Federal Constitutional Law, 60 Cal. L. Rev. 720 (1972).

SCOCAL, Serrano v. Priest , 5 Cal.3d 584 available at: (http://scocal.stanford.edu/opinion/serrano-v-priest-27628) (last visited Saturday September 2, 2017).

Background and effect of Serrano, Serrano II, Serrano III and Proposition 13

Serrano v Priest

Edd 705 Posts

The financing of education is vital to the continued growth and success of our society. How we prioritize and allocate funding is a reflection of our commitment to future success.

Finish Strong

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We have all heard the phrase, run the race to win. When you see a well conditioned athlete run a race, often times you see them have a burst of speed in the final stretch and leaning into the tape to win the race. This is how we should plan to finish our school year… we don’t want to go into the last few days of school in cruise control, we want to finish strong. What are we teaching our students if they can just “pack their bags” in those final few days? We need to make sure we have activities that inspire and encourage our students to press through the finish line.

Don’t get me wrong, I know it has been a long road… but picture a marathon runner who has completed 26 miles of the journey and decides, I have gone far enough, I’m good with 26. They are so close to the finish…take advantage of those last days and continue to inspire and motivate your students to be their best and to press through to the finish!

Trust In the Lord

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Proverbs 3: 5-6

Trust in the Lord with all your heart, lean not on your own understanding. In all your ways acknowledge Him and He will direct your paths. It sounds so simple, just trust in the Lord, don’t lean on your own understanding… but so often, we “trust” in the things we see, the things we hear, the things we feel… When you are told that your position is being eliminated at work or that a family member has a terminal illness, it is easy to get caught up in worry and anxiousness. We start wondering what we are going to do, we start to scramble trying to figure out how things will work out, or how we can “help” fix things.

It is in these times that the Lord whispers in that still small voice… “just trust in me with ALL your heart.” It will not be easy, and there may be times when you will doubt and question whether God is really there for you, but rest assured… our God is faithful, He has a great plan for us, and as we rest in Him, He will bring you through each and every situation.

The Lord will always provide what we have need of, WHEN we need it. His timing is perfect, He is not early, He is not late, He is always on time. As we trust in Him and see Him provide and deliver time and time again, it will become easier to rest knowing that no matter how big the waves, no matter how dark the storm, no matter how loud the thunder, Jesus is there with us, holding us up in His loving hands, and He will direct our path. Be blessed and find rest today.

Dragon Eye Deviled Eggs

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Ingredients:

12 Hard boiled eggs

1/4 Cup Mayonnaise

2 Tablespoon Dijon Mustard

4 Tablespoons Sriracha Hot Chili Sauce

2 Habanero Peppers minced

1/4 cup Minced Onion

Salt & Pepper

Paprika

Instructions:

Cut your hard boiled eggs in half, lengthwise and set the whites aside. Set yolks aside into a mixing bowl. Sauté the minced habanero and onions until browned, set enough aside to top each egg (about 3 teaspoons). Combine mayonnaise, Dijon mustard, Sriracha, and remaining minced habanero and onions mixture with the egg yolks and mix thoroughly. Add salt and fresh cracked pepper. Fill your egg whites and sprinkle with paprika. Top each egg with a small spoon of the minced habanero and onion mixture. (If you like them spicier, you can add minced fresh habanero as a topping)  Serve and enjoy!

 

Encourage Risk Taking

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As educators, we want to instruct our students and prepare them for their future. That being said, it is critical that we encourage them to be bold, to take risks, and try new things. When you think of the many great inventions over the past century, how many were created on the very first try?

History is filled with great men who took risks… Abraham Lincoln, Winston Churchill, Thomas Edison, Albert Einstein, Louis Pasteur, Henry Ford, Fred Smith, Michael Jordan, Steve Jobs… the list goes on and on. As you look at the students in your class, it may not be the ones that earn the highest grades that will make an impact in the future. As teachers, we have a great opportunity to encourage and inspire our future leaders. We need to encourage them to take risks, let them know that it is okay to fail, that the key is to learn and persevere.

As you look at your students today, tomorrow and the next day… look for opportunities to challenge them to look at things through a different lens and seek out new ways to approach situations and problems. Who knows? One of these days, one of your students may be the one to find a cure for cancer, or invent a product that transforms an industry. Be a risk taker and see what happens!

Where To Lean

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Proverbs 3:5-6

Trust in the Lord with all your heart, lean not on your own understanding. In all your ways acknowledge Him, and He will direct your path.

Growing up there was a popular song by Bill Withers where the chorus was… “Lean on me, when you’re not strong, and I’ll be your friend, I’ll help you carry on… for it won’t be long, till I’m going to need somebody to lean on…” While these words may be true from time to time, the only one who will ALWAYS be there for you is Jesus! In Proverbs we are told that if we will trust in the Lord with all our heart, He will be there and He will direct our path.

We will go through peaks and valleys in our lives, and it is good to know that when we are walking through those valleys, the Lord is always there and He never fails. Sometimes He may be hard to see or His voice hard to hear, but He is that still small voice, He is the light at the end of the tunnel. Remember it is always darkest before the morning, Jesus will NEVER fail, He is the one you can always count on. Be blessed this week and trust in Him with all your heart!

Chicken Marbella

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Ingredients:

Marinade:

3/4 Cup Olive Oil

3/4 Cup Red Wine Vinegar

1 Cup Pitted Prunes

1/2 Cup Spanish Green Olives

1/4 Cup Capers

3 Bay Leaves

6 Cloves Garlic Minced

1/2 Cup Pitted Dates

1/4 Cup Craisins

1/2 Cup Artichoke Hearts

1 Teaspoon each Salt & Pepper

8 Chicken Thighs

1/2 Cup Brown Sugar

1/2 Cup White Wine

1 Can Chicken Broth

Instructions:

Mix all ingredients, except the chicken, together in a large mixing bowl. Add chicken and stir to coat. Cover and refrigerate overnight. (We put ours in our Tupperware marinating container, you could also put everything into a large Ziploc bag). If in a bowl, stir so that the marinade continually covers the chicken. If using a Ziploc bag or a Tupperware marinating container, flip it over every few hours, then let it sit overnight in the refrigerator.

The next day, preheat oven to 350 degrees. Place chicken and marinade mixture into a 9″x13″ baking dish and remove all the Bay leaves. Ina separate small bowl, mix 1/2 Cup brown sugar, 1/2 Cup white wine, and 1 can chicken broth. Pour over the chicken marinade mixture and stir to combine. Cover tightly with aluminum foil and bake for approximately 45-50 minutes or until chicken is cooked through.

Serve with white rice or couscous and a salad or roasted vegetables. Enjoy!

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