When middle- and upper-middle income families go house-hunting, they aren't looking for a home in just any neighborhood--they're looking for the best school district their money can buy. Lower income households have no such luxury. America's unique linkage between property wealth and school resources is a major reason why our public K-12 educational system is rife with inequity. And it's why the new push for standards and accountability in the absence of major school finance reform sets millions of children up for failure. Yet school finance reform is absent from the national debate.

How does the over-reliance on property taxes for school funding effect a child's education? It's the difference between a school staffed with well-qualified teachers and one with teachers with emergency certifications or who are teaching out-of-field. It's the difference between kids having the latest textbooks and kids having to share old editions with their classmates.  Finally, the property value/school quality linkage means many families are mortgaging themselves to the max in order to get their kids a decent education.

In the absence of political or public will to reform school financing, advocates for educational equity have taken the battle to the courts and the ballot box. As a result of court cases, most states have supplemented local school revenues with state funds as a way to equalize funding and meet basic standards of equity. New York State's Supreme Court only recently settled a decade-long court fight on this very issue.  The New York Court, like others, ruled that the state's current school funding violated the state's constitution by failing to provide a "sound basic education" to all students.

Despite the states kicking in more money for K-12 education, zip code educational inequity is far from resolved. According to the Education Trust, in 25 out of 49 states studied, high-poverty districts still get fewer resources than low-poverty districts. The resource gap is even greater along color lines--31 states in America spend less money on schools in high-minority districts than they do in predominantly white districts. Because those 31 states educate six out of 10 of America's school children, school financing reform is a national issue.

Not only are school resources widely disparate between rich and poor neighborhoods, they also vary wildly between states--even after adjusting for the local cost of living. State spending per pupil ranges from a high of over $10,000 in Wisconsin to just over $5,000 in Hawaii (adjusted for state cost of living). The vast resource inequality among America's richest and poorest states points to the need to radically rethink how this nation funds its public schools.

Today the federal government provides 8 percent of K-12 funding. The United States is alone in its emphasis on local funding for public schools. Among OECD countries, the central governments accounted for an average of 54 percent of funding for primary and secondary education. As opponents of increased federal spending often point out, throwing more money into the system won't fix the problem. And they're right. The problem lies in fixing the source of the money and how it gets allocated.

Severing the link between property taxes and school quality is good policy not just for lower-income families, but for squeezed middle-class families as well.  Elizabeth Warren and Amelia Warren Tyagi argue in the Two-Income Trap that middle-class families are mortgaging themselves into bankruptcy in a surbuban bidding war over homes located in the best school districts.  The authors argue that severing the connection between property values and school quality would fundamentally alter the housing market--slowing suburban sprawl and dampening city flight: two very worthy goals.

The final reason to delink property taxes from school funding once and for all is the highly regressive nature of the property tax. Property-rich districts can raise large amounts of revenue with low rates, while property-poor districts suffer from insufficient funding and higher tax rates. The state fiscal crisis has only intensified this tax burden for the average family.

Whether it's intended to promote tax fairness, educational equity or the revitalization of urban communities, ending America's unique reliance on property taxes to fund schools is a political battle worth fighting. Every four years, the country listens to a presidential candidate pledge his commitment to improving America's schools. But in reality, there is very little any president can do to dramatically improve educational outcomes without addressing underlying structural inequity caused by our school financing system. While there is now consensus that teacher quality is critical to improving student outcomes, the reality is that without fundamental reform, suburban districts will recruit the best teachers and rural and urban schools will get the worst of the draw.

Putting national school finance reform on the table will take political courage and conviction to stand up to the many different interests who have a stake in the current system. In their book, The Radical Center, Ted Halstead and Michael Lind advocate equalizing school funding through a progressive national consumption tax, with the funds allocated directly to students rather than to schools. Warren and Tyagi propose a tax-funded voucher program that allows parents to choose the public school of their choice.  Both ideas have their merits and their downsides. While the means to achieving a more robust federal financing of public schools is far from obvious, what's crystal clear is the need to engage the conversation.

Resources:

The Two-Income Trap: Why Middle-Class Mothers and Fathers are Going Broke, Elizabeth Warren and Amelia Warren Tyagi: Basic Books, 2003

The Radical Center: The Future of American Politics, Ted Halstead and Michael Lind: Doubleday 2001

"Property Taxes Rising Nationwide," Christian Science Monitor, December 3, 2004.

"The Funding Gap 2004: Many States Still Shortchange Low-income and Minority Students" 2004, The Education Trust

Solutions:

The Education Trust

The Century Foundation, Equality and Education Project

The Revitalizing Education Project at The Campaign for America's Future