In 1982, the state of Missouri decided to give more money to schools, and to lower each school district’s property tax levy.
The first part, giving more money to schools, is working well enough. For the 2005–06 school year, the state handed out about $839.5 million from the designated-for-schools one-cent sales tax. That’s up from the $634 million it gave to schools in 1983–84 (both figures adjusted for inflation to 2008 dollars).
But school districts have, through local elections, bypassed the state’s effort to keep property taxes down. While local property taxes are lower than they were before 1982, they have crept up from a little more than $2 to about $4.
To give schools more money, the state levied a one-cent sales tax, in legislation known as Propsition C. Each year, revenues from that tax are collected and divvied up among each public school student.* Very roughly, that comes to about $845 per student, according to Roger Dorson, director of finance for the Missouri Department of Elementary and Secondary Education.
The money is then sent out to schools, but it comes with strings. Half of the Prop. C money is new money for schools — a gift, if you will. But the other half is more complicated.
When a school district takes the second half of the Prop. C money, it must “roll back” the local school property tax levy. By how much? Well, enough to lower its tax revenues by the amount that the state gave it. For example, if a school district were given $1 million from the state, it would have to lower its levy so that it took in $500,000 less in property tax revenues.
Effectively, the state was trying to move some of the burden of funding schools from property owners to the people who spend more.
But school districts have gone to the ballot box to get more money, on top of what the state began to give them in 1982. Since Prop. C took effect, school districts have been asking voters give up the state-mandated reduction in local property taxes.
Voters have said yes. As of this year, 430 school districts (of 524) have full waivers, according to Dorson. That means those districts do not — and, unless their voters asked for it, will never — have to reduce their property taxes because of Prop. C revenues.
I won’t say that Prop. C rollbacks are unfair. After all, district voters are the ones who approve them (though which voters vote is something to watch out for). But it is apparent that the state’s goal to keep local property taxes low is slowly eroding. And that a statewide sales tax now helps foot the ever-growing cost for schools.
* In determining state aid, each school calculates its average daily attendance. Students are weighted differently if they come from low-income families, are not native English speakers, or are special needs students. After those factors are taken into account, the state awards aid based on each school district’s “Weighted Average Daily Attendance.”