FIGURE 10-1. MODEL I-A REVENUE PER WEIGHTED
PUPIL (EXCLUDING TRANSPORTATION)

31

T

12 MILLS

400 500 600 700 800 900 1000 1100 1200 1300 1400 REVENUE PER CHILD, IN DOLLARS

REQUIRED LOCAL

REVENUE

STATE REVENUE

LOCAL LEEWAY

FIGURE 10-2. MODEL I-B REVENUE PER WEIGHTED
PUPIL (EXCLUDING TRANSPORTATION)

L

17

19

21

23

25

27

29

31

100 200 300

400 500 600 700 800 900 1000 1100 1200 1300 1400

REVENUE PER CHILD, IN DOLLARS

REQUIRED LOCAL REVENUE

STATE REVENUE

80-973 072 - 47

LOCAL LEEWAY

score is reduced from 4.1 to 2.4. Furthermore, Table 10-19 shows that the district of greatest wealth would have revenue available equal to 209 percent of full equalization whereas the district of least wealth would have only 56 percent of the revenue required for full equalization.

Equalization Models with the Same Total Revenue as I-A but Increasing the Revenue from Local Sources and Decreasing State Revenue

Under Model VII-A, 50 percent of the revenue is provided from state sources, 50 percent from local sources, the local levy is 16.3 mills, 11 of which is required in support of the foundation program leaving a local leeway of 5.3 mills. The requirement of 11 mills of local effort was selected so that the district of greatest wealth would receive no state funds. Under this model, average deviation from full equalization is increased from 1.90 percent in Model V-B to 5.03 percent and the NEFP score is reduced from 7.5 to 7.2. Although all of the state's revenue is used for equalization purposes under Model VII-A, it is noted that the possibility of financial equalization under an equalization model is not as great when the state provides 50 percent of state revenue as when it provides a higher percent of school revenue.

Model VII-B shows more clearly the effect on financial equalization of educational opportunity when the percent of local revenue is increased and state revenue decreased. Under this model, 75 percent of revenue is obtained from local sources, 25 percent from state sources, the local tax rate increased to 24.452 mills, 10 mills of which is required in support of the foundation program leaving a local leeway of 14.452 mills. The required local effort of 10 mills was selected because the districts of greatest wealth would receive no state revenue under this requirement. Despite the fact that all of the state revenue is used for equalization, when the state provides only 25 percent of total revenue, the average deviation from full equalization is increased from 5.03 in Model VII-A to 14.25 in Model VII-B and the NEFP score is decreased from 7.2 to 5.1. A comparison of Table 10-6 with Table 10-21 and data presented in Table 10-23 for Models I-B and VII-B will show that a flat grant model when the state provides 63 percent of the revenue will equalize educational opportunity better than an equalization model when the state provides

only 25 percent of the revenue. However, a comparison of Model VI-B with Model VII-B shows that if a state provides only 25 percent of school revenue from state sources, an equalization model will provide much more financial equalization than a flat grant model.

Complete Local Support Model

Under this model, the same total revenue is provided as under Model I-A but all of it is provided from a local levy in each district of 32.6024. This model provides for no financial equalization whatsoever. The average deviation from full equalization is 30.98 percent and the NEFP score is 1, the lowest possible score on that scale. Tables 10-22 shows that the wealthiest district would have 248 percent of the revenue required for full equalization and the district of least wealth only 39 percent. It can be computed from data in Tables 10-4 and 10-10 that if there were no limits on the mills of local taxes District 1 could obtain the equalized foundation program shown in Table 10-10 with a levy of only 13 mills whereas it would require a levy of 83 mills in District 32, the district of least wealth. This condition shown in the prototype state is typical of the conditions found in most states.

Comparison of Progressivity of Tax Structure Under Alternative Models

Table 10-23 shows the tax progressivity score for each model computed in accordance with the methods described in Chapter 9 of this volume. It is observed from this table that the tax progressivity score is 18.10 for all models from Model I-A through Model III. This is due to the fact that the proportion from state and local sources is the same for these models. In making the computations of the progressivity scores for the prototype state the assumption was made that its state tax progressivity score was the same as the average state and the local score was also the same as the average state. Table 9-4 shows that the state tax progressivity score for the average state in 1969 was 20.49 and the local tax score 14.00. However, if the assumption had been made that the state tax progressivity score of the prototype had been as high as Oregon, 26.7 percent (see Table 9-5)