FINANCING ELEMENTARY AND SECONDARY EDUCATION

While public education has never been adequately funded, the failure of the present Administration to foster economic recovery has made matters worse. In a period of economic depression well-intentioned efforts to reform state financing systems have further complicated the picture. The fact that state and local governments have recently moved from a condition of surplus to one of a billion-dollar deficit has increased pressures to cut education along with other services. As the economy stagnates, tax revenues go down, welfare and unemployment insurance costs go up and, in an increasingly competitive search for dollars, education loses out.

Federal support for education has actually declined in the last five years when one accounts for inflation from $6.3 billion in 1971 to $5.2 billion in 1976 (in 1977 inflation adjusted dollars). Proposed state education budgets project a year of deterioration in the quality of education unparalleled since the 1930's. The Ford Administration's budget for next year would drastically cut major federal programs. At the same time the momentum for states to pick up new responsibilities like compensatory education has slowed to a near standstill.

Solutions to the school funding crisis must deal with general economic programs as well as legislative proposals specifically for education. Before suggesting how education dollars should be spent, the dollars must be there. For this reason the AFT places strong emphasis on enactment of the AFL-ClO's program for economic recovery which includes: federalization of welfare; public service jobs and public works; countercyclical aid to localities with severe unemployment problems; federal guarantees for tax exempt bonds; tax reform; and other similar reforms.

Even while economic recovery takes place measures must be taken to increase state and federal funding for the schools. The example of federal government has set to states by initiating compensatory education programs like Title I must be maintained. The positive impact of federal aid on state efforts to reform and equalize their aid formulas must move forward. At the same time state equalization reform must be approached with caution. When dollars are scarce debates over how to distribute them become even more intense, and may ultimately cause funding cuts as political coalitions split and disintegrate.

The federal government should be a pace-setter in education support. It should define needs and fund programs to meet them. It should begin to provide general aid to education to states and local education agencies. It should direct its attention to educational disaster areas. More specifically, the American Federation of Teachers recommends the following:

• The enactment of a federal foundation program of general aid to education based on the assumption that a quality education is the fundamental right of every child.

• Passage of special legislation like the Emergency Education Revenue Act of 1976 sponsored by Representatives Carl Perkins and Peter Peyser. This bill would enable districts suffering severe economic cuts to apply directly to HEW for emergency grants.

• Full funding of existing categorical education programs like compensatory education (Title I), vocational education, education for the handicapped, adult and continuing education, bilingual education, etc. Full funding of programs already authorized would increase the federal share of educational support up to 22 percent from the current 7.5 percent.

• The creation of new categorical programs to address unmet needs. These should include early childhood education programs, education for prisoners, special programs for dropouts, rural education, education for the gifted, etc.

• The development of new formulas to target both general aid and categorical aid to areas of need. These formulas might be based on such factors as dropout rates, numbers of adults without a high school diploma, unemployment rates, areas of extreme population density or sparsely, areas with exceptionally large numbers of single parent families or working women, etc.

• Stipulations that where new categorical programs are created at the impetus of court mandate, as in the case of education for the handicapped or bilingual education, funds designated for existing programs are not to be redirected to these purposes. New categorical programs should be funded with new money at every level.

• New formulas, new categoricals, weightings for general aid and provisions for state-federal match should be formulated in such a way as to influence successful state level equalization.

The issue of state level funding for education is complicated by the fact that equalization reform is moving forward in a period of dollar shortage. State level court decisions may mandate equalization when it is impossible to "equalize up" in such a way that no district suffers loss. Some reform plans like district power equalizing (equal state dollars for equal local tax rates), percentage equalizing (state aid distributed inversely to school district per pupil property values), and full state funding (usually through a statewide property tax), may ultimately give less relief to cities with pressing needs. Extremely complicated formulas based on new and varied measures of cost, wealth, effort and need may, in addressing one problem, simply create others.

While accepting many of the principles of state equalization reform, the American Federation of Teachers recommends that it be carefully approached, particularly during an economic slump. Efforts should be made to devise more equitable measures of wealth, need and effort that would enable change to take place without penalizing districts. In considering these issues the AFT recommends the following general principles:

• Where wealth, need and effort are equal, high cost districts should get more aid.

•  Where wealth, need and cost are equal, high effort districts should get more aid.

• Where wealth, cost and effort are equal, high need districts should get more aid.

•  Where cost, need and effort are equal, low wealth districts should receive more aid.

• In measuring cost, need, wealth and effort, new factors such as per capita income, cost-of-living adjustments, student enrollment, etc., must be considered.

Beyond these more general considerations the American Federation of Teachers recommends adherence to a number of specific proposals in dealing with school finance reform at the state level:

• Reform proposals should allow that districts already investing considerable effort in funding their schools be "held harmless" so that equalization takes place over time and no districts are penalized.

• States should deal with special needs through both categorical aid, which allows for special program targeting, and through the weighting of general aid.

• The problems of "municipal overburden" where cities must spend disproportionate funds on a wide range of necessary services, must be dealt with in education formulas.

• Even as state responsibility is increasing, property taxes will remain the largest source of school funding. States should insist that property be assessed more frequently and administered more progressively. "Circuit breakers" which allow property tax rebates to the elderly or low-income families or where the state assumes the burden of property taxes for low-income families are one way of doing this.

Economic recovery, combined with a willingness on the part of the federal government to increase its responsibility for school support, are essential to the fiscal health of public education. If the lead is taken at the federal level presumably states and localities will be better able to pick up their fair share of the funding burden and even come up with more equitable ways of distributing funds at the same time.