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.

Enhance Your Class With Games!

There are many great ways to make learning fun for your students. Resources like Quizlet, Quiz-Maker, and Kahoot are easy to learn, easy to set up and fun to use in your class to help enhance your lessons and a fun way to check for understanding. With these resources you can create flashcards, review games, or jeopardy type boards where you can have your students compete in groups or as individuals.

There are many more resources available that allow you to create fun interactive ways of teaching your students key concepts and develop critical thinking skills! Give one or all of  them a try today!

Chicken Salad

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Ingredients:

Chicken

Celery Diced

Craisins

Garlic Salt & Cracked Pepper

Mayonaise & Dijon Mustard

Instructions:

Take the meat from a roasted chicken, you can either roast it yourself, or purchase one that has already been roasted from your local grocery store. Dice the meat into 1/4″ chunks. Add two stalks of celery diced and 1/2 cup of Craisins (You can add more if you like) Add 1/2 cup of mayonaise and 2 tablespoons of Dijon mustard. Mix thoroughly and salt and pepper to taste. If you like your chicken salad a little creamier, you can add more mayonaise. Before serving, I like to add cashews or almonds. You can serve this over lettuce as a salad, on toast, or with crackers.

Spinach, Artichoke and Goat Cheese Quiche

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Ingredients:

  • 1 pie crust
  • 2 tablespoons butter
  • 1 small onion, finely chopped
  • 8 marinated artichokes, chopped
  • 10 ounces frozen spinach, thawed and squeezed of all excess liquid
  • 5 eggs, beaten
  • ¼ cup milk
  • ½ cup fresh goat cheese
  • Salt and black pepper

Procedures:

Adjust oven rack to middle position and preheat to 400°F. Roll out pie dough and place in a 9.5-inch frypan. Gently prick pie dough all over with a fork making sure that you don’t fully puncture the dough. Cover with foil, weight down with pie weights. Place in the oven and bake until browned, about 15 minutes. Remove from oven and reserve.

Meanwhile, melt butter in a medium skillet over medium high heat. Add onion and cook, stirring, until beginning to brown, about 4 minutes. Add drained spinach and chopped artichokes; season with salt and pepper to taste. Transfer spinach mixture to pie crust. Whisk together eggs and milk then pour over spinach mixture. Press goat cheese chunks into the quiche. Make sure everything is covered with egg mixture.

Place in the oven and bake until quiche is puffy and beginning to brown in spots, about 35 minutes. Allow to cool for 10 minutes and get the quiche out of the pan for slicing and serving.

How Are We to Be?

th-5

Matthew 5: 3-12

Blessed are the poor in spirit: for theirs is the kingdom of heaven. Blessed are they that mourn: for they will be comforted. Blessed are the meek: for they shall inherit the earth. Blessed are they which hunger and thirst for righteousness: for they shall be filled. Blessed are the merciful: for they shall obtain mercy. Blessed are the pure in heart: for they shall see God. Blessed are the peacemakers: for they shall be called the children of God. Blessed are they which are persecuted for rightesousness’ sake: for theirs is the kingdom of heaven. Blessed are you when men shall revile you, and persecute you, and say all manner of evil against you falsely, for my sake. Rejoice and be exceedingly glad: for great is your reward in heaven: for they also persecuted the prophets which were before you.

As we reflect on this passage of scripture, we are given a list of blessings. As you examine yourself, ask yourself, are you poor in spirit? Are you mourning? Are you meek? Do you hunger and thirst for righteousness? Are you merciful? Do you have a pure heart? Are you a peacemaker? Have you been persecuted for being a Christian? This portion of scripture is referred to as the beatitudes because these are the attitudes that we should have or BE. The good news is that we don’t have to try to do these on our own… if we were to try, we would ultimately fall short. Rather, these are the attitudes that God transforms in our hearts as we follow after Him. As believers, there will be times when we will mourn: and in those times, He will comfort us. When we have a pure heart, we will see God even more clearly. Reflect on His plan for you, rest knowing that He will never fail, He will always be there holding you up.

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