Sources Of Revenue And Funding

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Schools have a number of various sources. The primary sources are federal, state, and local funding. The majority of funding comes from state and local sources; whereas a small percent (usually 9-12%) comes from the federal level. The method by which schools receive funding is through the taxation process. At the state level, taxes are levied from taxpayers, both corporate and citizens via sales and income tax. At the local level, school funding comes from property taxes. Let’s explore the how the various sources of school funding. “According to the National Center for Education Statistics, state and local funding accounts for approximately 93 percent of education expenditures” (Woodruff, 2008, ¶ 2). Let’s examine these various sources of revenue and funding and different formulas for allocation along with their pros and cons.
Revenue that comes from state income tax is said to be progressive, that is because state taxes fall differently on different taxpayers depending on the taxpayer’s income level. Typically, the percentage of income tax paid rises as the taxpayer’s income does, thus the reason they are progressive. The opposite is true for sales tax revenue. These taxes are regressive because regardless the taxpayer’s income, tax rates remain constant. This is sometimes a disadvantage for poorer taxpayers because they have to spend more of their income on what they need (Sims, 2004). The allocation of these funds for elementary and
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