Cost analysis of state aid to large urban school districts



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The purpose of this investigation was to compare state aid to twenty.large city school districts under current methods of state apportionment with the program needs evidenced in the current budgets of those large city school districts as a basis for developing a cost method of state financial support for the large city school districts. The study data were treated in the following manner: 1. State laws, research reports, and studies relating to state apportionment were analyzed as to the rationale behind the application of laws governing state apportionment. Cost provisions of the actual apportionments were analyzed. 2. The current budgets were transposed into program divisions and designated as program needs evidenced. 3. A model was constructed simulating the school finance structure in the twenty large city school districts. The model was adaptable to the revenue and expenditure patterns of the large city school districts. The model was factorable and alternatives for state apportionment were inserted in the different phases of the model. . The consequences of the alternatives were projected by means of state grants in aid and local revenues as budgeted in the large city school districts. This permitted speculation as to changes in program needs that resulted from changes in relationships of factors within the financial system expressed in the model. In light of this investigation the following guiding principles for a state support system appear to be warranted: 1. The large city school districts should be supported by an equitable state apportionment system. 2. The state support system should be adequate to the needs of the city school districts. 3. New plans of local support for the large city school districts should be sought to reduce the burden upon local property taxpayers. 4. The state support system should enable and encourage local initiative. 5. State, Federal, county or other aid to the large city school districts should be general purpose aid. 6. The state support system should foster local autonomy. The alternatives tested in the simulation model were: A Two Percent Tax on the Full Value of Property; A Realistic Foundation Program for the States; A Differentiated Property Tax; A Foundation Program Plus State Matching Grants; A Foundation Program Plus Special Aid; Flat Grants; and A Foundation Program Equalized to the Large City School Districts. Of these, the two alternatives which maximized the above guiding principles were an additional flat grant and state matching aid above the foundation program.