Foundation of education 8

WESTERN UNIVERSITYDepartment of English

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Subject :Foundation of education Lecturer : Soeung Sopha

Chapter 8 Financing Public Education

Prepared by : Phien Davy

Chan Houng Meas Chanleakhena

2013-2014

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What is tax?

Tax  is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law.

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What is finance?

Provide money needed for something to happen.

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Outline

- Introduction

- Tax Sources of School Revenues…..(p237)

- Local Financing for Public Schools...(p237-240)

- State Financing of Public Schools….(p240-247)

- Federal Education Funding…………(p247-250)

- School Finance Trends………….......(p250-255)

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Introduction Education in the United States is the big business.

By 2006, public education (k-12) cost more than

$520 billion annually, and elementary and secondary

school education represented approximately 4

percent of the nation’s annual gross domestic

product.

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Federal Education Funding

State Financing of Public Schools

Local Financing for Public Schools

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Tax Sources of School Revenues

Public school funding relies primarily on

revenues generated from taxes, especially local

property taxes and state sales and income taxes.

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Most people today accept the following criteria for evaluating taxes:

A tax should not cause unintended economic distortions.

A tax should be equitable:

-Those with greater incomes or with greater property worth should pay more taxes are called progressive taxes.

- Those that require lower-income groups to pay a higher proportion of their income than higher-income groups are called regressive taxes.

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A tax should be easily to collected

The tax should response to changing

economic conditions, rising during

inflation and decreasing in a recession.

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Local Financing for Public Schools

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Local Financing for Public Schools

Property Tax is the main source of revenue for

local school districts, accounting for 77 percent

of local funding nationwide.

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Problems with property tax:

The property tax is not an equitable tax

because differing assessment practices and lack

of uniform valuation. Also, the property tax

may fail to distribute the tax burden according

to ability to pay.

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Other Sources of Local FundingSome Municipalities, specially small villages and towns, depend on such sources as traffic fine and building permits to help raise money for school

14User Fees

Exclusive product rights

Other Sources of Local Funding

User Fees-fees charged to use a certain facility or

service-are the most common type of special

assessment.

Exclusive product rights:

A growing number of school boards have signed

lucrative contracts with corporations for Exclusive

product rights and exclusive naming rights.

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Local resources and Disparities

Wealthy versus poor districts

- Wealthy area or an area with a broad tax base

generates more revenue than a poor school district.

- As a result, in most states, the five wealthiest

school districts often spend two or three times more

per student than the five poorest school districts do.

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Municipal overburden

- Cities are plagued by what commonly called

municipal overburden.

- A severe financial crunch caused by high population

density, a high proportion of low-income citizens, and

aging infrastructure.

- Spending needed for social services and upkeep

prevents large cities.

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Educational overburden

- English language learners, students in poverty, and

students with disabilities often require programs and

related services that might cost 50 to 100 percent

more per student than basic programs. Urban cycle of financial strain

- Dire need more revenues, city can not realistically

rise taxes.

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- Tax increases contribute to the decline of urban

schools because they cause business and

middle-income residents to depart for suburbs.

- Declining city’s tax base due to lack of

revenues also cause residents to leave-a no-win

situation.

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Tax collection performed by government agency- General Department of taxation- General Department of custom and Excise of Cambodia.

Taxpayer are divided in 3 regimes - Self Assessment System/ Regimes- Official Assessment System/ Regimes- Simplified Assessment System/ Regimes.

Component of Tax Revenue- Direct Tax- Indirect Tax

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Cambodia Taxation

State Financing

of Public

Schools

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State Financing of Public Schools

Although the states have delegated many

educational powers and responsibilities to local

school districts. each state remains legally

responsible for educating its children and youth, and

state’ portion of education funding has increased

steadily elementary and secondary education.

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State Revenue Sources

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Sale Taxes

Personal Income Taxes

• Sale tax compare favorably to other possible fund-raising taxes.

• Sale tax is easy to administer and collect .

• The sale tax is also elastic, because the revenue derived from it tend to parallel the economy.

Sale Tax evaluated

• Based on progressive percentage

of personal income.

• Also more equitable than other.

Income Tax

evaluated

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Sale Tax in Cambodia

• Cambodia’s VAT applies to the business activities of real

regime taxpayers making taxable supplies. In each case the

business must charge VAT on the value of goods or services

supplied.

- The rate 10 %

• Patent Tax Annual registration or license fee impose on all

kind of business, industries and service.

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• Personal income tax = salary tax (Cambodia)• Salary tax is monthly imposed on salary that has been received

within the framework of fulfilling employment activities.

Salary tax rate in Cambodia

Rate

Form 0$ To 500,000 0%

Form 500,001$ To 1,250,000 5%

Form 1,250,001$ To 8,500,000 10%

Form 8,500,000$ To 1,250,000 15%

> 1,250,001 20%

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Other State Taxes

Other State Taxes contribute limited amounts

to education. Those include

• Excise taxes on motor fuel, liquor, and tobacco

products.

• Estate and gift taxes

• Severance taxes

• Corporate income taxes.

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States’ Ability to Finance Education

State residence has a lot to do with the type

and quality of education a child receives.

State variations in spending is different from

one state to other state.

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State Aid to Local School Districts

State use four methods to finance public education.

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Flat grant model(the oldest, unequal method)

Foundation plan(a minimum per student)

Power equalizing plan(inverse ratio to wealth )

Weighted student plan (student weighted by characteristics)

The Courts and School Finance Reform

• Serrano v. priest (1971) • San Antonio v. Rodriguez (1973)• State court decisions

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Federal Education Funding

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Federal Education Funding• Until the middle of twentieth century, the federal

government gave states or public schools little financial assistance in educating American students.

• After Soviet Union, nation policy become more closely link to education and federal funding

• The Civil Right Act of 1964, which provided that all programs supported by federal fund must be administered and operated.

• In addition to these desegregation efforts the educational need of minority groups and women received

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Current Trend in Federal aid to Education

Federal education spending declined over the course of decade. School funding methods also change.

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Categorical Grants

Block Grants

• The trend toward more categorical funding gained

momentum as we entered the new millennium .

- No Child Left Behind (NCLB)

- Adequate Yearly Progress (AYP)

- The Obama Administration

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School Finance Trends

•Finance crises in education often make the headline.

•Coupled with rising cost and other budgetary problems, loss of state revenue has placed many local school districts in bleak fiscal situation.

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Taxpayer Resistance

Taxpayer initiatives

A tax revolt swept the country, putting a

damper on the movement for school finance reform.

Results of taxpayer resistance

Taxpayer willing to support increased

education spending for that purpose.

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The Accountability Movement

Reasons for the accountability movement

The accountability movement stems from various

factors.

Federal and state measures

Federal funding is now contingent upon evidence

of satisfactory educational progress.

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Tax Credits, Educational Vouchers, and School

ChoiceTuition tax credit

Allow parents to claim a tax reduction for the education

expenses they pay in order to send their child to nonpublic

school.

Educational vouchers

Is another ongoing trend in school in school finance

reform.

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Charter schools

A variation on the school choice theme is

concept of charter schools, discuss in the chapter

on Governing and Administering Public

Education.

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Streamlining School BudgetsNew search on school size

1. School sizeMaintaining old facilities

2. Modernization of older buildingAdding more teachers

3. Need for teachersStreamlining central staffs

4. Administrative reduction

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Streamlining central staffs

4. Administrative reduction

Reducing energy costs

5. Energy economic

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School Infrastructure and Environmental

Problem

Deteriorating

Asbestos cleanup

More classroom will be needed

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Financing Public Education in CambodiaIn Cambodia 12.4% of government spending is in

education.Education makes up a small part of the Government

annual spend, and the problem is that in absolute terms, this expenditure is very low. Just 1.6% of Cambodia's GDP (Gross Domestic Product) according to UNESCO is spent on education - ranking around 170th in the world.

The Revenue Sources • The priority action programmes (PAP) in 2000.• The Ministry of Education, Youth and Sports (MoEYS)• NGO• private households

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Discussion Question

1. State your reasons for or against the following types of financial support for school choice:

a) Government voucher that any student can use to pay tuition in any accredited school, public or private.

b) Voucher as in (a), but issued only to students whose families demonstrate financial need.

c) No voucher for private or parochial school, though student are free to choose any public school they like.

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Thank You!

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