Why Isn’t My Money as Good as Theirs?

Not many people understand how public schools (not including Charter schools) are funded. The simplest and most direct answer is through property taxes (yes, money comes from other avenues, but the ‘surplus’ that is not decided by state per pupil expenditures is from property taxes). So, individual states have the power to determine their education budget. Each state uses a different formula, but in the end, they decide that each school district will receive a certain amount of money per pupil. This seems fair since each district is getting the same amount per pupil. But wait—because education functions on a federal, state, city, and district level, money is added and taken away by each subordinate level. In local elections (and sometimes also at other levels), community members vote on such things as what percentage of their property taxes go toward education.

Let’s do an example together: In the suburban community of Glen Hill there are 100 households. These community members voted that property taxes should be 2% of the home value and half of that 2% should go to schools in the district. Let’s say the average home value in Glen Hill is $300,000. That means that $6000 is what a family would pay per year, with $3000 of it slotted for schools. If each family in the community of Glen Hill is doing this, then every year, the district receives $300,000 extra to add to the already decided education budget. If there are 1000 students in this district, they are now adding an extra $300 per pupil to the budget. If there are 10,000 students in this district, they are still adding $30 per pupil to the budget. Get it?

Let’s outline a few more important points on this subject:

  • You only pay property taxes when you own property
  • Property taxes are always a percentage of the value of the home/land
  • Property taxes are paid once a year in a full lump sum (in most cities)

Why does this matter? (this is always the most important question I challenge my students to answer) It matters because on average, students who are performing below grade level are more likely to come from families whose yearly income does not facilitate property ownership. This means that these renters do not pay property taxes. They do not have the opportunity to ‘add money’ onto state per pupil expenditure budgets. So while students in Glen Hill are getting an extra $30 each, students in Freedom Heights are not.

And even if the parents in Freedom Heights owned property, if their property is not valued as highly as the property in Glen Hill, their 2% will not go as far. Freedom Heights parents know this so they vote to raise property taxes to 3%. But still, even paying a higher percentage rarely closes the gap in property value between social classes. All it does is take more money out of the pockets of families whose budgets are always stretched thin.

Parent of a 5th grader in a middle class school: I want the best for my child so I’m willing to pay a higher percentage than my neighbor to ensure my child receives a high quality education. But why does my money never seem to be as good as theirs? Why doesn’t it go as far?

Me: It’s not that it doesn’t go as far; it’s that it started in a different place.

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3 comments on “Why Isn’t My Money as Good as Theirs?

  1. […] scores. Politicians say the poor performance is because of lack of funding (see the post entitled Why Isn’t My Money as Good as Theirs? )so the government’s answer is to throw more money at […]

  2. […] can afford to pay their teachers more because of the higher revenue from property taxes (see Why Isn’t My Money as Good as Theirs? ) On the contrary, when the low performing schools don’t do well on the end of year […]

  3. […] for schools is clearly a multi-level problem that a localized strike can’t hope to affect. (See Why Isn’t My Money as Good as Theirs? for a description on school […]

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