RESEARCH BULLETIN OF THE NATIONAL VOL. XV * No. 1 EDUCATION JANUARY - 1937 ASSOCIATION Financing Public Education Published by the RESEARCH DIVISION of the NATIONAL EDUCATION ASSOCIATION 1201 Sixteenth Street, N. W., Washington, D. C. RESEARCH BULLETIN oF tHe Published five times each year in January, March, May, September, and November President, ORVILLE C. PRATT NATIONAL EDUCATION ASSOCIATION Executive Secretary, WILLARD E. GIVENS Director of Research: William G. Carr; Associate Director: Frank W. Hubbard Assistant Directors: Richard R. Foster, lvan A. Booker, Hazel Davis Research Assistants and Section Heads: Frances G. Bradley, Louise B. Sease, Helen H. Cox, Anna Haddow, Madaline K. Remmlein, Jennette R. Tandy, and Bernice Woodbury Executive and Editorial Offices 1201 Sixteenth Street, N. W., Washington, D. C. Copyright, 1937, by the National Education Association Entered as second-class matter February 10, Washington, D. 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IV. ™ TABLE OF CONTENTS FOREWORD INTRODUCTION EXPENDITURES FOR PusBLic EpucaTion 1N 1933-34 Expenditures at Elementary and Secondary and Higher Educational Levels Expenditures in the Various States Relative Contribution of Federal, State, and Local Governments School Costs and Other Government Costs THE FEDERAL GOVERNMENT AND THE FINANCING OF EDUCATION Functional Distribution of Federal Expenditures Regular and Emergency Aid for Education Federal Expenditures in the Separate States Summary THE STATES AND THE FINANCING OF EDUCATION Percent of School Revenues from State Sources in Individual States Purposes of State Governmental Expenditures State School Revenue and Apportionment Plans Summary Loca FINANCING OF PUBLIC SCHOOLS Decline in Property Taxes Inequalities in Financial Ability of Local Units Summary Economic ABILITY OF THE STATES To Support EDUCATION Measures of Ability ‘To Support Education Income as a Measure of Ability Wealth as a Measure of Ability Wealth and Income per Child as Measures of Ability Yield of a Uniform System of State and Local Taxation as a Measure of Ability Private Expenditures as an Indication of Ability Expenditures for the Purchase of New Automobiles Life Insurance Premiums and Savings Deposits Luxury Expenditures Summary VI. Some Current Issues Page Jt 16 16 17 20 20 34 34 35 36 37 37 37 39 42 45 46 48 48 50 53 FOREWORD OUR YEARS AGO in its bulletin, “Facts on School Costs,” the Research Division sum- marized the school situation at that time in four words: increased responsibilities ; decreased resources. Thousands of young people were remaining in school or returning for additional training because of the lack of gainful employment. At the same time, school expenditures were being drastically curtailed. Educational progress both in professional method and in financial support was in jeopardy. At that point the Joint Commission on the Emergency in Education went into action. Its purpose was to warn the public and to unite the profession against the permanent impairment of the public schools. Thru numerous studies, conferences, public meetings, and radio programs, much was done to arouse public opinion. With the stabilization of the general economic structure, the strain upon education was relieved. The extent of the price paid by public education during those depression years has not been fully presented. It is the purpose of this RESEARCH BULLETIN to organize and to present authentic facts for the crucial year 1933-34. To what extent were all public expenditures affected? What happened to local, state, and national allotments to public education? The answers to such questions are of great significance to the future. Since the low point of 1933-34, public finances have been entering another critical period—that of recovery. The costs of various emergency activities are still largely to be paid. New governmental services have developed which present their claims upon public revenues. Meanwhile, education has accumulated a deficit in the form of unpaid teachers’ salaries, large classes, suspended building programs, shortages in instructional materials, and borrowing against future income. Recovery will gradually liquidate these deficits if education is not made one of the deferred items in governmental financing. But the most difficult problem is beyond even these. Can the experiences of the recent years be avoided in the future? As one examines the content of the present bulletin, it is obvious that education assumed an amazing proportion of the general retrenchment in public expenditures. How different this was from the increased financial support provided for schools during the economic disturbances of 1837, 1893, 1907, and 1921! Are we confronted with changes in public policy which call for extensive reformation of the governmental finance structure? Starting with the facts as set forth in this bulletin, a united profession must renew its efforts to build an intelligent, sustaining public opinion. During the year 1937, Congress will be in session and legislatures will meet in most of the states. Plans for recovery and reform must not overlook public education. This RESEARCH BULLETIN should be made available to every state legislator. The information will be of interest to parent-teacher associations, civic clubs, and other organizations actively at work upon the improvement of our educational and governmental! structure. Authentic facts on the problems of finance are a fundamental part of the case for public education. Witvtarp E. Givens, Executive Secretary, National Education Association. [+] Introduction The next few years are of supreme impor- tance in determining the future development of education. Economically, the nation is well along the road to recovery. Hope points to the future. But educators cannot forget the past few years, as evidenced by the many requests that the Research Division supply facts as to the financing of public education during the recent depression. What happened to the ex penditures for schools? ‘To what extent were all costs of government reduced? What are the trends in the improvement of the tax struc ture upon which schools and other public ser\ ices depend ? ‘These are but some of the ques tions for which the present bulletin will suppl) pertinent information. The Year Chosen for Study Facts on the financing of education in the vear 1933-34 are of especial significance. ‘Vhat year, which witnessed the beginning stages of recovery from the economic collapse of 1929 and the ensuing depression, saw a continued decline in the support of the public schools. Business analysts generally fix the low point of the depression in February 1933 ' and note a persistent, if slow, gain in economic activity atter that date. The national income * of 1934 was almost 12 percent higher than that of 1933. Yet expenditures for all public education in 1933-34 dropped to a new low, almost 26 percent under their 1930 level and the lowest point recorded by official figures in more than a decade. It is with the presentation of facts relating to school support in that vear, 1933-34—the low point of the depression for public education—that this bulletin is con- cerned. Some of the figures presented for the vear 1934 are compared with corresponding data for 1930 and, in a few cases, with those for 1920. Trends in the years before 1930, how- ever, have been largely ignored. This is not due to any desire to underrate the value of such long-term comparisons, but because a detailed study of educational trends between 1914 and 1930 is now in progress in the Research Divi- sion. Its results will be published in a future RESEARCH BULLETIN. 1 Some place it even earlier, in the summer of 19 ? National ‘“‘income paid out’’ as estimated by the U. § In some instances in this bulletin, school costs data for the years since 1933-34 might have been cited with advantage. Unfortu nately, reliable and complete figures are not vet available for these intervening vears. With public education as a function of the forty eight states, subdivided into 127,000 local school units, the compilation of nationwide facts is necessarily a slow and laborious task The federal Office of Education, the agency primarily responsible for the collection of edu cational statistics for the nation as a whole, ably performs this difficult service. How the Bulletin Has Been Organized ‘The information presented in this bulletin ts viven in six parts. Part | deals with the total educational expenditures of local, state, and national governments, their allocation among the major divisions of the school program, the proportion in which they are derived from various governmental sources, and their rela tion to other public expenditures. Part II] presents facts on the federal govern ment and the financing of education. Here are shown the functional distribution of federal expenditures, the extent of regular and eme: gency aid for education, and the federal con tributions to the separate states. Part II] takes up the financing of education by the states. First are shown the amounts con tributed by each state to its elementary and secondary schools, and the percent of the total school income provided from state sources. Next, the purposes of state governmental ex penditures are examined. Finally, facts are presented upon the sources of state revenues and the methods of distributing this income to local school units. Part IV reviews the share assumed by local governments in the financial support of public education. Particular attention is given to the declining effectiveness of local property taxes and to inequalities in the financial ability of local units. Part V is concerned with the financial ability of the people of the several states to support their school programs. Consideration is given to income and wealth, and to expenditures for Department of Commerce for the calendar year. ! 4. See | Department of Commerce, Bureau of Foreign and Domestic Commerce. Division of Economic Research. National Income in the United States, 1929-1935. Washington, D. C.: Government Printing Office, 1936. p. 22 [5] automobiles, life insurance, and luxuries. ‘The figures given for luxury expenditures are esti- mates based on the best available data. Such information, altho in great demand, is not generally available. Part VI, the final section, draws certain conclusions directly on the basis of the facts presented in previous sections and raises a few critical questions relating to the future of the financing of American education. How the Bulletin May Be Used The usefulness of this report depends largely upon the extent to which the information herein set forth is acted upon by the profession and by laymen generally. Classroom teachers constitute the lar; single group among the million or so per engaged in public education. Engrossed as th, are with instructional problems and overload, with added responsibilities, they have little ti; to study intricate financial treatises. For ¢! reason, the Research Division has prepa this bulletin in non-technical style to facili: ready understanding of the fundamental fact in public school finance. Thus are made aya able a number of important topics for prof sional conferences. Laymen also, who appreciate brief anal of public questions, should find this report us: ful. In this year of great activity in federal and state legislation, the bulletin supplies dat of primary importance to members of Congres and the state legislatures. FIGURE I NATIONAL INCOME AND PUBLIC SCHOOL COSTS, 1934 Estimated National Income Expenditures for all public education $1,940,133,433 $50,1 74,000,000 Research Division, National Education Associat Sources of data: U. S. Department of Commerce and federal Office of Education. See Table 24. [6] Ele Col Tea I. Expenditures for Public Education in 1933-34 In 1933-34 the American people spent a otal of $1,940,133,433 for all public educa tion. This expenditure, which fell below the two billion dollar level for the first time since 922, probably marks the conclusion of the recent downward trend in public education osts. It reveals a decline from 1930, the peak ear in educational expenditures, of over $665, 000.000. Indications are that 1935 and 1936 figures, when they are available, will show a new upward tendency. The total expenditure of $1,940,133,433 covers current expenses and capital outlays of elementary and secondary schools and _ insti tutions of higher education but excludes pay ments for debt retirement. It represents an innual cost of about $26, or 7 cents a day fo each of the 75,232,000 persons over twenty one years of age in our population. This amount paid for the education in that year of approxi mately 27,000,000 children and young people in public universities and colleges, teacher training institutions, and elementary and secondary schools. It should not be assumed, however, that the sum of $1,940,133,433 was sufficient to meet adequately the educational needs of the nation. Thousands of children in elementary and secondary schools in 1933-34 were affected by curtailed school terms and more than half a million children attended school in buildings that had been condemned as unsafe or unsanitary.' For public institu tions of higher education, 1933-34 was a period of financial stringency necessitating reductions in salaries and personnel. TABLE 1.—EXPENDITURES FOR PUB- LIC EDUCATION AT DIFFERENT ED- UCATIONAL LEVELS, 1933-34 Item Amount Percent 1 2 3 Elementary and secondary schools. $1,720,105 ,229 88 Colleges and universities 181,081,554 9 Teacher-training institutions 38 946,650 | > Total cost of public education $1,940,133,433 100.¢ Source: Advance data from U. S. Department of the Interior Office of Education, Biennial Survey of Education, 1932-34 Expenditures at Elementary and Sec ondary and Higher Educational Levels How was the total expenditure of $1,940 133,433 allocated among the major parts o1 divisions of the educational program? By fa the largest share, $1,720,105,229, was spent for elementary- and secondary-school purposes The expenditure for public colleges and uni versities was $181,081,554 or 9.3 percent of the total. The remainder, $38,946,650 or 2.0 percent, was spent for teachers colleges and normal schools. lable | shows this di tribution Expenditures in the Various States ‘Table 2 shows that there is a wide diver gence in the amounts spent for education in the several states. Several factors determining the amount of money spent fo! public education are: (1) the desire of the citizens to provide educational opportunity for all children and vouth of the state; (2) the number of persons for whom educational opportunities must be provided; (3) the sparsity of the school popu lation; (4) the financial ability of the state and its governmental subdivisions to support an educational program; (5) the efficiency of the methods used by national, state, and local gov ernments in obtaining revenues and in dis tributing monies to the schools; and (6) the competing claims of other interests upon the public treasury and the income of the people In the following pages certain facts and figures are presented, pertaining to the factors named above and their influence in determining the level of school support These data are basi to any study of the school support situation in a particular state or in the nation as a whole Table 2 also gives the total expenditure In 1933-34 for public education at each educa tional level in each of the states. In total ex penditures for public education New Yor} ranks first among the states with an expendi ture of $301,009,368 and Nevada last with $2,756,553. There is a difference of over $298, 000,000 between the total amount expended in New York state and that spent in Nevada The same two states rank highest and lowest with respect to expenditures for public elk mentary and secondary schools. 1 National Education Association, Research Division. ‘“‘Current Conditions in the Nation’s Schools.’ Research Bulletin 11 November, 1933, and “The Nation’s School Building Need Association ’ Research Bulletin 13:10; January, 1935. Washington, D. (¢ the [7] TABLE 2.—EXPENDITURES FOR PUBLIC EDUCATION AT DIFFERENT EDUCATIONAL LEVELS, BY STATES, 1933-34 States 1 Continental United States Alabama Arizona Arkansas California * Colorado Connecticut Delaware District of Columbia Florida..... Georgia Idaho Illinois Indiana Iowa. Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey. . New Mexico New York North Carolina North Dakota Ohio... Oklahoma Oregon. Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas.. Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Source: Advance data from U. S. Department of the Interior, Office of Education, Biennial Survey of Education, 1932-3+ Total expenditures for public education 2 $1,940, 133, 433 20,705 ,937 8,590,216 11,497,949 142,286,919 20,499 981 27,465,071 5,146,648 9,436,134 17,990,754 22,499,139 8,345,412 115,074,713 50,716,031 42,634,081 32,364,679 21,211,984 19,515,454 10,612,751 25,743,319 75,826,006 81,992,485 48,671,143 14,376,446 45,183,964 10,484, 905 21,025, 204 2,756,533 7,454,950 85,541,763 6,990,082 301 ,009, 368 27,723,130 11,452,781 111,405,068 30,584,358 16,112,123 154,675,115 11,706,427 14,218,045 11,106,212 21,501,330 70,457 , 839 10,229,344 4,861,334 26 ,686 , 942 25,943,160 22,633 ,008 49,983,595 5,203,601 $1,720,105, 229 Elementary and secondary schools*® 3 17,459,952 6,670,917 9,068,811 124,029,442 16,991,576 25,850,711 4,379,856 9,176,760 14,705 ,629 19,330,015 6,755,176 106,622,448 43 338,354 33 , 946 , 833 27 , 268, 242 17 ,033 , 809 15,890,354 8, 830,930 21,435,182 72,884,979 68 359,622 39, 305 , 813 11,548,101 40,895,317 8,824,568 17,162,569 2,174,333 5,850,352 83 , 888 , 306 5,653,122 289,871,779 22,556,788 9,501,148 99 ,926 , 443 25,139,002 13,049, 130 146,677,590 10,798 , 296 11,699,684 9,529,282 18,874,632 57,505,528 8,190, 143 3,592,571 20, 361,539 22,036,176 19, 760,664 41,310,933 4,391,822 Amounts spent for Teacher training institutions 4 $38,946,650 576,134 528,682 381,529 , 289,404 680,740 tN 532,994 259,374 190, 232 260,954 , 876,921 , 101,169 923 , 232 733,380 ,649 , 833 389,259 381,979 386 ,676 , 221,596 602, 808 094 ,662 318,076 447,917 230, 105 ~ 816,919 294,505 358,580 262,897 N , 229,536 645 , 822 716,261 919,000 321,258 , 294, 368 203 , 186 — 467,134 540,619 , 141,560 nN 79,084 , 200,792 643 ,344 656,659 ,097 ,470 N Higher educatio: other than teacher training institutions 5 $181,081 2,669 390 2,047, 15,968 > - »7 1,081 766,7 3, 285 2,978 1,329,2 6,575 6,276, 7,764 4,363 528 235 399 921 i -— Wem Ww = hod ™ hh ON ~ > ~ OUN = a ones S mn occoco ~ — ~_— = & OO wn N wh eee o> a Sm ow 0 S = & 25 ym tO ~ c * Includes expenditures for night schools, summer schools, part-time and continuation schools, and day schools. be 554 RS 61 60« 0 665 344 508 016 057 342 841 842 461 055 668 , 269 730 aoe 716 2,200 093 063 053 520 $625 356 735 945 361 [8] TABLE 3.—EXPENDITURES FOR PUBLIC ELEMENTARY AND SECONDARY SCHOOLS* PER PUPIL ENROLLED AND IN AVERAGE DAILY ATTEND- — ANCE, BY STATES, IN 1933-34 i Total expenditures Expenditures per pupil he States for elementary and Rank in Rank in ions secondary schools In average column 3 olumn 4 Enrolled daily attendance 1 2 3 4 5 ¢ ntinental United States $1,711,843,278 $64.76 $76.22 1 \labama 17,193,561 26.49 33 86 14 i4 Oo \rizona 6,661,585 71.80 86 91 1 1 \rkansas 9,068,811 19.86 26.13 18 18 65 Calitornia 124,029,442 111.13 126.22 3 3 Colorado 16,991,576 71.15 86.52 18 Of 9 Connecticut 25,585,809 78.20 89 62 10 Delaware 4,370,628 95.12 110.02 yc District of ¢ olumbia 9,077,419 96.45 118.83 9 Florida 14,669,105 38.35 12. 92 39 20 Georgia 19,257,889 25.18 32 68 16 15 a.) 44 Idaho 6.755.176 57.08 65 02 $1 sO 08 Illinois 106, 163,444 76.6 90.40 11 10 16 Indiana 43,067,450 61.83 65 92 6, 9 57 lowa 33,946 833 61.99 1.49 Ss 5 Kansas 27,268, 242 64.69 4.17 3 i] 342 341 Kentucky 17 ,033 , 809 27.94 36.08 43 43 842 ' Louisiana 15,852,666 34.34 41.53 41 41 161 Maine 8,814,769 52.86 $7.51 35 5 131 Maryland 21,367,180 72.76 84.71 15 15 Massachusetts 72,342,855 91.13 103.4 55 568 Michigan 68,359,622 70.03 6.76 | 269 Minnesota 39, 290,483 70.17 81.88 0 ) 730) Mississippi 11,510,354 18.93 »5 41 49 19 232 i Missouri 40,895,317 56.83 66.8 ; 8 Montana. 8,824,568 75.04 33.38 14 716 | 200 Nebraska 17,162,569 54.18 61.88 34 ; 103 Nevada 2,172,083 112.16 132.94 ) 7 New Hampshire 5,847 ,902 75.21 84.88 13 { 063 New Jersey. 83,219,158 100.58 118.85 } j New Mexico 5 648 ,556 61.09 64.27 053 520 New York 285,559,319 124.32 141.76 372 North Carolina 22,556,788 25.19 9 81 +5 4 625 North Dakota 9,501,148 59.13 69 .99 9 ) 256 Ohio 99 255,825 76.35 83.40 12 16 Oklahoma 25.139,002 40.32 51.09 38 38 735 157 Oregon 13,049,130 64.74 77.09 ? ) 945 Pennsylvania 146 ,677 ,590 72.19 82.72 16 18 361 Rhode Island 10,741,939 86.30 99.22 x 796 South Carolina 11,699,684 24.04 30.88 47 16 South Dakota 9,529,282 59.58 69.89 8 2 079 751 Tennessee 18,874,632 28.80 36.91 4? 4 201 Texas 57,505,528 43.84 53.55 37 679 Utah 8,190, 143 57.36 64.42 30 611 Vermont 3,589,071 54.23 61.32 33 $4 Virginia 20,254,109 34.59 41.64 40 10 640 685 Washington 22,036,176 64.67 ] 67 4 192 West Virginia 19,760,664 45.44 52.45 36 779 Wisconsin 41,087,428 70. 4 79.56 i9 0 Wyoming 4.386.959 8.57 03.05 ) 4 Source: Advance data from U. S. Department ot! the Interior, Office of Education, Biennial Survey o} Education @ Day schools only. Does not inc lude expenditures for night schools, summer schoo und part-time and continuat — 9 | ‘Table 3 presents a somewhat different pic- ture of the relative position of the states with respect to elementary- and secondary-school ex- penditures by taking into account not only the total amount expended but also the number of children to be educated. According to Table 3, New York again is the state in which the most money is spent for each child enrolled, namely $124.32, but Nevada, the state with the smallest total expenditure for elementary and secondary schools, ranks second in Table 3, with an expenditure per enrolled pupil of $112.16. From the maximum of $124.32, the amounts spent in the other states range down- ward to $18.93 in Mississippi. With respect to expenditure per pupil in average daily attendance, as well, New York and Mississippi, respectively, are at the top and bottom of the list of states. The range in ex- penditure per pupil in average daily attendance in elementary and secondary schools is from $141.76 to $25.41. Relative Contribution of Federal, State, and Local Governments How much did federal, state, and local governments contribute to the support of pub- lic education in 1933-34? Table 4 answers this question with respect to receipts of ele- mentary and secondary schools. It shows that local governments with a contribution of $1,- 365,554,000 assumed about 75 percent of the total costs for school support. State govern- ments supplied $423,178,000 or more than 23 percent of the total. Federal aid for elementary and secondary schools amounted to $21,548,000 or slightly more than | percent of the total school income. Of this amount received from the federal government, $7,011,928 was and $14,536,010 in the form of aid from federal relief funds for rural teachers. Columns 5, 6, and 7 of Table + show the percent of total revenues for element vocational education emerye and secondary schools coming from local u: of government has decreased in the last fift: years by about 9 percent, and that nine-ten: of this decrease occurred between 1930 1934. Conversely, the proportionate share total school revenues received from federal state governments have increased. The st furnished 23.4 percent of the elementary secondary-school income in 1934 as compar with 16.9 percent in 1930 and 16.5 percent in 1920. The federal government’s share creased slightly from 0.26 percent in 1920 0.40 percent in 1930 and then jumped to percent in the four-year period between 193 and 1934. The actual increase between 1930 and 1934 in the amounts received from federal and stat: governments by the elementary and seconda: schools was not so great as the above propo: tionate changes might, at first thought, see to indicate. A large part of the increase sinc 1930 in the relative contributions of these go ernments was due to the falling off, durin; the depression years, in the support afford: the schools by local governmental units and to the reduction in the total school budget itself. Actually, receipts from state sources 1: creased by only $69,500,000 between 1930 and 1934. During this same period receipts fron the federal government, it is true, almos' trebled, but federal aid has always constitute: so small a proportion of all school revenues TABLE 4—AMOUNT AND PERCENT OF PUBLIC ELEMENTARY- AND SECOND ARY-SCHOOL INCOME* MENTS IN 1920, 1930, and 1934 FROM FEDERAL, STATE, AND LOCAL GOVERN. Amounts Percents Unit of government - - ——_—_——— — - —_—-- 1934 1930 1920 1934 1930 1920 1 : 2 3 4 5 6 7 Federal $21,547,938 $7,333,834 $2,474,717 Roum 4 State 423,178,215 353,670,462 160,084,682 23.4 16.9 16 Local 1,365 553,792 1,726,708 ,457 807 , 560, 899 75.4 82.7 &3 $1,810,279,945 $2,087 ,712,753 $970,120, 298 100.0 100.0 100¢ Total (Figures for 1932-34 are advance data.) * Revenue receipts only. Source: U. S. Department of the Interior, Office of Education, Biennial Surveys of Education, 1918-1920, 1928-1930, 193 [10] Tens Texa Vern Virgi Wasl West Wyo OW ft ment ‘al ul t fift. /e-te! 1 1934 d State nd i! ropor See! since uring ordes 20 almost negligible. Even at the end o 130-34 period, in spite of their almost thy ] told increase, receipts trom federal SOUTCE nted for little more than |] tal elementary TABLE 5.—PUBLIC ELEMENTARY- AND SEC percent 1 ot and secondary-school income ONDARY-SCHOOL INCOME FROM FEDERAL, STATE, AND LOCAL GOVERNMENTS. BY STATES, 1933-34 Pe Ff States Federal State L>cal ee government government government Federa Stat i l 2 3 4 r 1 United State $21.54 938 $423.178 5 $1. 365 33 9 R10 1 945 } m 2,088 8? 5. 612.0 bt R4 i185 OOR8 ray zona 142,841 181.6 5. OR7.85 $1? 398 j S I sas 813.609 > 226 & ROS 54 11,098. 7490 ) 0 ( rni 259 633 68, 269.020 41,598. O¢ 140 1% 15 ) 18 ido 143.178 628 18. 486 19 S58 ORR } TT recticu / 078 ccm 16 72,404 4 4 53 ORE 3 1 51 Delaware 2 S57 4.069.874 301.3 } IR SOK ) x District of Columbia 1,916,241 435.78 9 352.02 04 Florida 759.631 5.267 12.06 59 8 O95 31¢ 0 ! Georgia 1,758,627 5.060.575 10,375.10 194 304 ) 0 j Idahe 52,049 9 73 7.743.9 8.525. 703 61 10 8 Illinois 618,321 625. 43¢ 104,59)? 96 11 R36 4 9 ndiana 187,950 13,514,820 36,.419_8590 §0.122.6290 20 wa 121,191 816.950 42,.215.760 43,153.90] ~ 1.89 97 & Kansas 121,029 490 739 23,489.02 ’4,100,795 50 04 Y 4 Kentucky 514,607 4,213,846 12,645.10 17,373,560 or j s Louisiana 1,070,949 6,944,839 12,553,415 0,569. 203 ry 61 03 Maine 51,263 2,725,293 5.573.411 8 349 96 61 3? 64 r Maryland 82,189 5,151,110 15,981 691 1. 214. 9900 39 4 28 5 33 Massachusetts 189,023 8,297 954 62,049,792 0.536.769 41.70 87 9 Michigan 349 716 17,257,114 55,874,253 73,481._O83 48 3 48 O4 Minnesota 220,877 10,628,104 29, 486.123 40, 335.104 55 6 35 ; 10 Mississippi 1,450,710 4,039. 808 5.132.899 10,623.41 13.65 32 0 ig 3 Missouri 753,684 1,513 ( 52.017.335 5 R24 705 z RR 90 20 Montana 132,926 1,001 , 347 9,439,615 10,573,888 6 9 4 XY Nebraska 181,919 1.026.761 17,596. 216 18. 804 806 9 46 0% § Nevada 32,847 342,714 1,859,608 ?, 235.169 17 1 33 83 20 New Hampshire 18,046 578,298 5,788, 23¢ 6, 384, 580 8 9 Of 90 6¢« New Jersey 172,855 2,212,399 83,330.56 85.715.8?21 0) 58 9 New Mexico 305 ,520 1,027. 335 4.746.424 6.079.279 03 90 g 0 New York 542,59? 79 953 936 202,494.50] 82,991 029 19 8 25 1 Se North Carolina 699,712 15,762,893 9,151.03 25 613,642 ; 61.54 35 North Dakota 423,580 1.038.643 8, 423.130 9 885.353 8 10 51 R85 91 Ohio 424,958 16,027,433 88,106,629 104.559.0270 41 18 33 &4 Oklahoma 1,303,595 8 328.728 18 693.97? 8 326.205 60 10 66 00 Oregon 167,679 294, 897 16,209,194 16,671,770 O01 l 9 Pennsylvania 499 925 30,253. 566 118,618. 3990 149. 371.890 34 10 25 9 41 Rhode Island 31,505 739.573 11,562.4 12, 333.555 S 6.00 3 South Carolina 465.707 3,305,892 8.108.520 11,880,119 9? R3 s South Dakota 249 504 1,047 026 10, 201, 468 11,497 998 1 9 11 SS Tennessee 1,050,190 10,554,993 3,223,242 14, 828.425 3 4? SI 3 Texas 1,003,918 27,324,794 24,696,863 53,.025.575 9 51.53 16 58 Utah 134,605 3,588,420 5.430, 866 9,153,891 4 39 20 59 3 Vermont 11.689 550.000 2.941.629 3,503,318 33 15 0 ~ 9 Virginia 882,664 5.458.036 14,025 5 0, 365,935 33 6 80 g Washington 112.887 9.169.535 15.513.108 4.795 530 4¢ 36 OR 5¢ West Virginia 620,644 10, 143, 126 9, 884,323 20 648,093 01 49 1 417.8 Wisconsin 147,673 7.957.395 32,020.25? 40, 125.320 3 19 83 9 80 Wyoming 77.104 1,036. 353 3.113.328 4.226.785 8 1 5 3 6 Source: Advance data from U. S Department of the Inte Office Ed enni ( u * Revenue receipts only School Costs and Other Government lected within the state by the federal! Costs ment. - ; ; i Tables 8 and 9 present data on total go Votal tax collections in the United States mental expenditures in 1930 and 1934. | AR: : roe < F ; -nta > “| . anc St. Lhe 2| & in 1934 amounted to $8,540,085,000. Of this ; aa ae latter table also compares expenditures fo: sum the federal government collected $2,665,- ie piieaiin Te de wemee wees enti, 0 pa fs a c educz same years Ww Lost ei. 076,000, the states $1,731,589,000, and the ah public siadeate snd ahaa pi ms | x é ses anc ws IC purpose a |- local governments $4,143,420,000. : Pos P inal =Is| 2 : : : other than education. (‘Table 9 is on page &§ 5 Approximately 23 cents of the total tax dol- rt: . ; Bui D 7. Unlike tax collections, instead of decli; (3) lar collected by federal, state, and local gov- j ; ae ; ; ; ; the combined total expenditures for al] ernments was spent for public education. About “ea eg < |e . . poses of federal, state, and local governny H |e 20 cents was used for elementary and secondary — : ‘ nm] ‘eer Si ARTS CE increased between 1930 and 1934, accord 5 schools and about 3 cents for public institu- one . Q. ti § hick et P : to Table 8, from $13,428,000,000 to s 4 ions of higher education. rg ee : ' ;, 496,000,000. This was a gain of more ; While expenditures for public education . _ z, ; a , 15 percent. Table 9 shows that during 0 declined by 26 percent between 1930 and eh v , Ot ape : same years net governmental expenditur: 4 1934, the reduction in total tax collections dur- — - > , 19.027 J > ‘ ul “od ly 16.8 increased 20 percent, from $12,037,000,000 Ee Pa ing the same period was only 16.8 percent. . U f* . giana ; to $14,449,000,000. It must not be though: [5 In 1930 approximately 25 cents out of each tax ‘Wg age P a : ar ee that this rise in the total cost of governmenr [A dollar was spent for education. Table 6 shows ; ‘ & : : was spread evenly over the expenditures of these relationships. ‘ geet Vv types of governmental units. Net federal ex. FR a penditures more than doubled between 193) RR |_| 3 TABLE 6.—TAX COLLECTIONS AND EX- and 1934 while the combined net expenditures . = PENDITURES FOR PUBLIC EDUCA- of state and local governments, from whic! : ; . 3s m |e TION, 1930 AND 1934 most of school support is derived, declined x 3 . . oO State expenditures were reduced by almost 6 #| » Total Expenditures Percent school = hercent, from $2,170,000,000 to $2,044,000 ria) s Year tax for public expenditures |e) & collections * education ” were of tax ‘ collections . ‘ ? ; TABLE 8.—GROSS EXPENDITURES OF : FEDERAL, STATE, AND LOCAL GOV. = 1930 $10, 266,129,000 $2,605 ,699 000 25.4 4 = 1934 8,540,085,000 1,940, 133.000 22.7 ERNMENTS, 1930 and 1934 ] = Index of s1W13 fx st 83.2 45 (Millions of dollars) : (1930= 100) : rae ‘ —— Percent of = Source: National Industrial Conference Board and U. 5. De Unit of government 1930 1934 change Zit. . partment of the Interior, Office of Education 1930 to 1934 g=§ * Of federal, state, and local governments, combined 32% » At all educational levels, elementary, secondary, and col : ie 8 legiate 1 2 3 4 aos U ig a Expenditures: T. yi P . _eoan norte Federal $4. 141 $7 . 207 +74.0 Table 7 (page 13) presents a comparison aoe + oes - between tax collections of federal, state, and Local 7.064 6.157 12 local governments and expenditures for public si satiated ein C education in each of the states in 1933-34. The combined $13,428 $15,496 variation among the states, from the national _ porcentage distribution: average expenditure of 23 cents out of each Federal 30.8 46.5 . ‘. - State 16.6 13.8 dollar of total taxes collected, is from 43 cents “ae 5? 6 30 7 in Wyoming to 8 cents in North Carolina. In ; g : All governmental units 3 the latter state, however, as the table shows, combined...... 100.0 100.0 a the low ratio of school expenditures to total tax collections is due in large part to the Source: National Industrial Conference Board. Cost 9 ; ernment in the United States, 1933-1935. Table 4, p. 7 amount—over $260,000,000 *"—of taxes col- oF 7 ' , 2 Of this amount, about $214,000,000 is in tobacco taxes. For a further discussion of the relation of federal tax collect school support in North Carolina and other states, see p. 20 * This is exclusive of debt retirement of $359,900.000 and tax refunds of $63,900,000. [12] cgavarnmant 1022.34 } jiu 47 4PUAUA q ) ‘ , 9 re ”)' ” 9 ' o- On ‘ ct C \ t lt 100° SO9 . 0 OS oI 000 &¢ Qo 5 6L¢ cf I tt9'S S19 I L SF peghseens 26 t 3d y uC ' I ' t {P3/) LE 1911 SBE O71 108 0 0 —e an g os IZ ¢7Z1 78 , OF tto's I 12 . I 0 Rs 2° 6S ct 62 67 07 000 ‘ OFS 000 oe il q' » 00's b FS 71 °¢ 618‘19 OOL ‘07 000 000 TLS ‘¢ tl ae) GIES Rb 7 9g I¢ ¢1°SZ 000° ZL0°7S $SO' LZ 000 000 ¢86 F1 LI . 6b Si Or Lt ¢l¢ 000° 016° 909 167 000 1 I Stl $19 FSI Ht 82% 9 Fi t r bo St 000 98 S9 6¢ 000 Zt Zit 9 10 + 00'L 89 6S L171 9S ) BSt FS OF , ° st 68 SO8 <7 8 O« I 890° SOF IIT WO It | tt £9 199 899 Li 61 ) 18 CFI ed N . f) REL RES sO t r Ort r ee ts ¢"s ¢ t( Os I Ct SIR t C g9¢ ' 600 ¢ 4 . lt rR t , ¢ Ik 91 ZL9 6 ) CBO OOO Y * O< t ri t S8 19 1 WL Z | 000 : OF Ss 86 OF 78 OFT Sst 67 as [ 000 . 09 87 O¢ g£9'6 000 ‘098 ‘4 Z 000 66 LS ¢69'°S9 000 617° 7F 000 SZI ¢I 000 Of 67 zO ee vOO £1l Se 000 8S6 #2 000° 96L°9 000 $2 77 RO St 000 £61 £07 000° S¢9 18 000 910 6¢ 000 £6 Li SZ 67 000 SOF IS 000 ' 968 ( ¢¢ 000 Sl 0 s S x1 $ ( » 101 ' 96 000 Zt 0 l $ $ 000° 900 '°ZLI ( ) 18 000 61 c's 000 L7Z FOS 000 000 618 €S 000 069° L6 900 978 Sl , IB 77 SZ St 000° 16S 000 000' £18 ° 77 000° 9SS' 6¢ 6le LbL SZ 6 le Le 9% 000 9T¢ ( 000 '1S¢' 91 000 '9L6 1 ISL°Z19 Ol OR 02 €S$°SZ 000‘ 1¢8 000 000 ' POE ‘7% 000° 76£' LI #St SIS Gol ce 91 so St 000° 691 000 000 PZ 000 #86 LIZ IZ ZO ¢¢ 1Z tt 710° 86 000° L6L'£S 000° LOL’ 1Z 000 6L9 $9 Zt 97 FE 8 6s Str P71 000‘ 00F '6L 77S‘ LZ 000 180'#£9' Zt tel, 86 Of OL BE 000‘ €89' EOI 000‘ 007‘ €8 SEO! Lt 0 IfO0‘'9TL'OS euelpul £7 61 $0 Of 000‘ 6SS‘86S 000‘ ZL¥‘O8Z 000‘ L*9'Z01 000 €1L°PLO'SII Sour] Sb Fs 1S ' Of 000‘ LOZ‘ 2 000° €87‘ 91 000'9LS'9 000° ZIt' StE'R OureP] SZ ST 67 LE 000‘ 071 ‘68 000 S8L‘ es 000‘ ZS‘ 97 000 6£1 66% 7Z 8181025) oF SI S607 000 ‘ZLF' L6 000 ‘987 '8S 000° L6S‘ LZ 000‘ 68S‘ TT #SL'066'L1 SPHols IL €Z 000‘ $08 ‘6s 000' SES‘ 8Z 000'697‘11 Pel OLF 6 ) J0 PHB ZO LI 000‘ 8£Z ‘0s 000'960'S 000‘ €Z1'L 900'610'8T REO‘ OFI'S CALS] IL IZ 1Z 872 000° £0$° 971 000° 987° ZL 000° 190° SZ 006° 9S1 62 1L0° $9 LZ jnoTOeUUO,) ZI €s Ze TF 000‘ 868'19 000 PLE‘ FE 000‘190' #1 000‘ £9F EI 186‘ 66 ‘07 apes) 9°12 87 Of 000‘991 ‘FIs 000‘ 6FL‘ OFZ 000 TLE STI 000' 9F6 ‘TST 616‘ 987 ‘ZHI BUIO HE 107 b6 Pf 000° S$s8 ‘Ss 000‘ 09‘ 9T 000‘ S97‘ 9T 000 '0S6‘Z 6b6* LOFT sesueAlY €8°7¢ $9 FE 000‘ L91 ‘97 000‘ 6F1‘9T 000‘ L¥9'S 000° TLE'I 917‘ 06S'8 piace: th, 86 FE £6 €F 000 ‘707 ‘6S 000‘ 86¢' LZ 000 ‘OL ‘61 000 ‘#9071 LE6‘ SOL‘ OZ BUIeq eT TL ‘2 ZO €¢ 000° S80'OFS'8$ OOO OZE' StI F$ OOO' ORS 1EL°I$ O00'9LO'S99'7$S EE CET OFO' IS | [eWeUNTGo,) 6 8 L 9 Ss ¢ € z I [eo0] pue yuewUus9403 Jus wIUIGA03 juowUI9A03 ay PE-EL6I 9181S [eispeg [e207] 2381S Telopeg ‘uoleonpe xB} j Zz *199 3 19d Aq P2}99[[09 Soxey ee os “ae " ith o soinjipuedxy vE6t SALLY LS Ad NOILVOOGHA DIiidfd » Ci &- ve -< N > Ke te Ge . — - . f £ = “~A + o> csc a s « FIGURE II INDEX OF EDUCATIONAL EXPENDITURES AND OTHER GOVERNMENTAL EXPENDITURES 1926—1934 160;— St ee | /Federal, state, and ff local expenditures, | excluding education 7 | ‘ f ¥ 140 an + 4 / 4’ | 7 | | 130 4 T | | | anemia | 4 120 +——_ — — > 2 stone 7 ——— ——: “3 | tot : | “State and locai ; a “+ expenditures, , Ye a at q : ; an | ™ excluding education | | | 110 f > — J ~S Yo a wg ~. sd “o N . — 2 , \ *.. [Local expenditures, F | : ~Jexcluding education 1926= 100% | | be \ public educational expenditures 1926 1928 1930 1932 1934 Research Division, Nationa! Education Associatior Source. of data: National Industrial Conference Board and federal Office of Education. Basic figures for edu- cation included current expenditures and capital outlays for el tary, y, and collegiate levels. [14] but expenditures of local governmental ts, the principal source of school support, fered .a greater reduction, from $6,630,000, 100 to $5,621,000,000, over 15 percent. Mean vhile, school expenditures had been reduced iring the same period far more than local overnmental expenditures. Expenditures for public education fell from $2,606,000,000 1930 to $1,940,000,000 in 1934, or aimost 26 percent. Elementary- and secondary-school expenditures of $1,720,000,000 in 1934 wer: 26 percent lower than in 1930. In contrast t all than this decline expenditures of vovernmental units Tfo1 all other se from $9,431,000,000 to $12,509.000.000. ilmost 33 percent. See also Figure II], page 14 ‘Table 9 show that purposes education In brief, the figures of while total governmental creased in the vears between expenditures in 1930 and 1934, state and local expenditures declined and pub lic school expenditures declined still more [he increase in the cost of government which occurred during this period was due, therefore, to a rise in federal expenditures and in expendi tures for purposes other than for public schools TABLE 9.—COMPARISON OF EXPEND ITURES FOR PUBLIC EDUCATION WITH PUBLIC EXPENDITURES FOR ALL OTHER PURPOSES AND WITH TOTAL PUBLIC EXPENDITURES, 193 AND 1934 (Thousands of Dollars) Percent f change Expenditures" for 1930 1934 1930 to 1934 l 3 \ \ $1 0 $14.44 Fede : 84 Start 1/0 O4 Lo 6.630 5 ¢ All p 60K Elen +1 1 Hig! rg! All gov » 43 0 Pe 1.6 ! Pere 8.4 8 Ra 6 1 “a I itu i ed data Depa ( f Educa Fidu \ ther figt i | i Nat I ( rence Boa ( , ? 4 abl Net II. The Federal Government and the Financing of Education ‘There is an ever-growing pressure on gov- ernment to provide new and more services in response to expanding human wants. This is characteristic of the ordinary course of social and political development but in depression years, such as those between 1930 and 1934, when private effort fails to a much greater extent than normally to satisfy even the actual needs of the population, the pressure is intensi- fied. At the same time diminished government resources, in such periods, often act as a check upon mounting public expenditures. In the United States impoverishment of local govern- ments has forced a reduction in local expendi- tures and an increased reliance upon federal spending. As already shown in Table 8, expenses of the federal government increased between 1930 and 1934 from $4,141,000,000 to $7,207 ,000,- 000. Practically all of this increase was in response to needs arising out of the depression. According to a recent analysis by the National Industrial Conference Board,' emergency ex- penditures of the federal government in amounted to $4,004,136,000 as compared \ general expenditures of $3,100,915,000. Functional Distribution of Federa! Expenditures This rise in expenditures for purpose relief and economic recovery is reflected in ¢! changes between 1930 and 1934 in the fu tional distribution of federal expenditur set forth in Table 10. Table 10 shows an increase in the per of total net federal expenditures devoted 1 social welfare purposes from 3.2 in 1930 26.4, or $1,579,400,000, in 1934. The s table shows an expenditure for education only $12,000,000 and a decrease in the percent of expenditures for educational purposes fron 0.6 percent in 1930 to 0.2 percent in 1934 It will be noted that there is a considerab| discrepancy between the amounts expended fo: education as shown in Table 10 and the tot ! National Industrial Conference Board. Cost of Government in the United States, 1933-35. New York: the Conference | 1936. p. 9, 10 TABLE 10.—PURPOSES OF FEDERAL EXPENDITURES, 1930 AND 1934 Purpose of expenditure Amount* 1934 1930 Percent of: Percent of Total (in millions Total of dollars) exclusive Gross exclusive Gross of debt total of debt tota! service service 1 2 3 + 5 6 1. General government $ 311.1 3.2 4 15.2 10.0 2. Protection 1,220.5 20.4 17.2 59.1 39.1 3. Education 12.0 0.2 0.2 0.6 0.4 4. Highways 245.3 4.1 3.5 3.2 2.1 5. Economic development 640.1 10.7 9.0 8.4 3.5 6. Social welfare wie ha alas iodine alsa SS acihid Wve m8 ‘ 1,579.4 26.4 22.2 3.2 2.1 7. Miscellaneous (RFC, AAA, and others not otherwise classified) 1,926.4 32.2 27.1 5.5 36 8. Public utilities 47.9 0.8 0.7 4.8 ..2 Total, exclusive of debt service $5,982 .7 100.0 84.3 100.0 66.0 9. Interest 756.6 10.6 15.9 10. Debt retirement 359.9 5.1 18.1 $7,099 2 100.0 100.0 * Figures in this column were derived as follows: The amount of the gross total was first obtained by subtracting $5,800,0( District of Columbia expenditures (exclusive of trust fund expenditures) from the total of general special and emergency expendit shown in the Annual Report of the Secretary of the Treasury for the Fiscal Year Ending June 30, 1934, Table 2, p. 282-93. amounts of items 9 and 10 are also from Table 2 of the 1934 Treasury Report. The amount of total expenditures exclusive of d service was obtained by subtracting the amounts of items 9 and 10 from the gross total. Items 1 to 8 inclusive are approximate. Th: were derived by distributing the figure for total expenditures, exclusive of debt service, according to the percents of column 3 » Percents shown in columns 3 and 4 and the classification of expenditures in which they are based are from the National Ind trial Conference Board, Cost of Government in the United States, 1933-35, Table 7, p. 14. Those of columns 5 and 6 are from similar study of the National Industrial Conference Board on Cost of Government in the Unitea States, 1929-1930, Table 5S, p [16] cent woul n 1° ditur () item! iT. fl mou 1. Lan Voc: 3. Fed 5. Pub 6. Pub bt Fed Leaflet a eo — he ee aid toi educatio1 Aside from the fact that Table 11 and in Table 11. emergency total Otadl of the two types of aid in ld be approximate,” the difference is due to nelusion by the National Industrial Con nce Board in Table 10 of certain FERA PWA, and WPA sums used for educational rposes under the head of social welfare ex t enditures and their exclusion under the head of educational expenditures. However, even if rhe $12,000,000 tor chown in Table 10 were raised to $79,800,000 expenditure education to agree with the data of Table 11 and if the lifference between these two subtracted from the $1,579,400,000 of social welfare expenditures, the proportion of total amounts were deral expenditures for education would in crease only from 0.6 percent in 1930 to 1.3 per 1934. Social would then show an increase from 3.2 percent cent in welfare expenditures n 1930 to 25.2 percent of total federal expen ditures in 1934. Of all the nine separate functions specifically) Table 10, for which federal funds ire expended, education receives the smallest temized in mount. Social welfare heads the list of func Some of the component data going into such a total would expenditures and those on er esent amounts allotted Between these two extremes lies the vorted by the U. S. Office of Education in Statistics of State S Biennial Survey of Education, 1932-1934). This figure wh rposes of vocational education and rural school continuat Table 4 of this Research Bulletin 1ergency expenditures are not TABLE 11.—FEDERAL AID TO official figure for pub THE tions, with respect to size Of eX] protection ral s second with ar expenditu 0 S1.220.500.000. or 20.4 percent ot 1 Regular and Emergency Aid for Education Federal emergency aid fot elementa second irvy and higher educ ition Was int of regular federal educat 34. ‘Table 11 presents an ai Part I of this table appropriations authorized by times the ami aid in 1933 of both types of! aid. regular annual law for educational purposes; Part II lotments for purposes of public education unde the federal emergency program. The figures of the table represent only federal aid distributed Those of Part | the national } 7 to the states exclude ims appropriated for military naval academies and for the Library of Con the public schools of Tess, Smithsonian Institution, the District of Columb Appropriations for the staff of the U.S. Office of Education, for the Bureau of Indian Aftai for vocational rehabilitation, and for educa tional expenditures under the Tennessee Valley be estimate See footnote b of Table 11. A tl i able since the former are appropriations authorized and elementar ar ndary hool rece pt i hool Systen ] 4, Bulletin, 1 5, No. 2 (advar 1 $21.54 fror the federa t exclude e | W k Adn { STATES FOR EDUCATION, 1933-34 Type and purpose of aid 1. Land grant colleges Vocational education 3, Federal oil and mineral royalties 4. National forest funds 5. Public land grant sales For elementary and secondary schools For higher education $7,458,000 1,250,000 940,000 000 Total regular appropriations $9 648,000 $8 II. Emergency aid 6. Public Works Administration aid* for construction me buildings $35,412,609 $6 .904.170 Federal Emergency Relief Administration Emergency education program 1.789.910 b. College student aid program ro c. Rural school continuation 14. 260, 261 Total emergency aid $51.462.780 $10, 283.868 ® Based on: Covert, Timon A. Federal Grants for Education, 1933-34. U. S. Department of the Interior, Office of | Leaflet No. 45. Washington, D. C.: Government Printing Office, 1935. Tables 1, 2 ind 4, p 11, and 1 > Estimated by Covert © Excludes loans amounting to $73 67 171.8 4 Includes $862,865 for rural school extension and $927,045 for 6t ) os ol 060 l Lvo LIZ elo’ ez! 000 OS . te 86" O76 7 oss Sot FOP Zt Z7*O' 6S 000 OS L + 1 + tt 000'°6 $19'¢ O6F * OF 000 °OS s peaydN t on " OO ¢ = bit I 000 0 $9 OR Sl IGON bot tt O68 Ie 00° 97081 juUOW ( Ot Of $6'240 789° 961 OFS 66S tt OSSTIN 0 88 ‘St I SSL‘OFI tool S8b'L89° LZ Iddississ! | MOS LS RSE LOT RTE 6LI OOF PLE SZ 181 SLE ES OF e IW tet 16 671 OF! 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YIOA MON v9 8 OOL TI 000 6 OOS 87 LIZ 6t $67 9L 000° OS 6rs 8 OOTXe IT MON 69 Os 'Ols 060° 76 Lb6* LIZ 10° eZ 000 ‘0S $6 TIE ‘7S Aasiof MON we OCG « Oss SOt FOr Zt 7*O OS 000 OS 107 zz L 1ysdueH MAN rt >t 000° 6 SL9° £2 OG6F OF 000 OS 6ss'‘1zs'‘s BPpeAQN ) t nM in ” c ~ t 0 $9 6f l i p t tt oc re Os 00 x1 euROoW TIN OSS IA Authority are also omitted. Part Il excludes funds for the educational program of the Civilian Conservation Corps and emergency relief allotments for nursery adult education, literacy classes, and vocational re- habilitation. From regular appropriations in 1933-34 of approximately $17,862,000 the elementary and secondary schools received $9,648,000, or 54 percent of the total, while $8,214,000 went to public colleges and universities and teacher- training institutions. Emergency aid for public education totaled $61,747,000, of which $51,- 463,000 or 83 percent was allotted for ele- mentary- and secondary-school purposes and $10,284,000 was spent for higher education. schoc ls, Federal Expenditures in the Separate States ‘Table 12 presents data for the fiscal year 1934 on federal expenditures for all regular and emergency purposes, and for certain educa- tional purposes separately, in the several states. It has not been possible to segregate from other expenditures the total amount spent by the federal government for education in each state, but columns 3-10 include the major projects in aid of elementary and secondary schools and institutions of higher education. An argument commonly advanced against any extension of federal aid to the states runs as follows: (1) federal aid payments to the individual states for whatever purpose they are made vary widely; (2) these payments bear no relation to the proportionate contribu- tion of the states to the support of the federal government; and (3) any extension of federal aid for education, if distributed on the basis of need, would only increase this discrepancy be- tween federal tax collections and receipts from federal sources. Table 12, (col. 2) confirms the truth of these three propositions, but those who favor federal aid on the basis of need see no reason why there should be a balance within a state between the amount of federal taxes paid and the amount of federal aid received. North Carolina is an outstanding example of a state which pays a large amount to the federal government in taxes and receives in return a relatively small amount of federal aid. Almost one-tenth of all federal taxes are collected in North Carolina,* but as shown by Table 12 *See Table 7, page 13. [ 20 ] North Carolina’s receipts from the federa| ernment represent less than 1.7 percent of ; total distribution of federal aid to the It should be noted, however, that the amount of federal tax Carolina do not constitute a source of sup) for North Carolina schools any more tha: the schools of the forty-seven other states. \ are these taxes paid ultimately by the citi of North Carolina. They are in the for manufacturers’ excises which are passed on ty | collections in Nor consumers of tobacco products—mostly ettes—thruout the nation. New York also, largely thru corporatio: come taxes and customs duties pays more t one-fifth of all federal taxes.* Slightly less t! one-tenth of total federal aid is allotted to Ney York state. Those who pay the federal corpo: tion income taxes collected in New Yor! the corporation stockholders who may be cit zens of New York or of any of the other stat Consumers in all parts of the nation pay ¢! customs duties collected at the port of New | York as part of the retail prices of the ported articles which they purchase. | Summary The foregoing pages show that the federa government spends less for education than f any other major governmental function. W! expenditures for education under the federa emergency program were more than three times as great as regular federal appropriations fo: education in 1933-34, the total federal aid fo: education in the states, both regular and eme: gency combined, comprised only about | pe: cent of total federal expenditures for all pu: poses. Federal expenditures as a whole more tha: doubled between 1930 and 1934 but the pe: cent of total expenditures allotted for purposes of public education increased very little. Whatever the final outcome of the present federal spending program, it may be questioned whether education is being neglected in the midst of a general expansion of governmental! functions, and whether federal expenditures for education are adequate from the point of view of national economic and social as well as educational welfare. The answer to thes: questions will depend partly upon the adequac) of state school support discussed in Section I1| in 1! York with $401 schoc iny ¢ smal. Oreg cent. is ta perce sourc in sl In so upWwe deriv conti state: schoc ward in ce 1930 state The 1930 pul III. The States and the Financing of Education ['aken as a whole, the forty eight state gov nments are assuming an increasing share in he support of public schools. As shown in an ‘lier section of this bulletin, tal elementary- and secondary-school revenues the percent of ¢ Oo coming from state sources increased from 16.5 sercent in 1920 to 23.4 percent in 1934. ‘The sean part of this growth, from 16.9 percent in the four-vear 1934. percent, occurred 1930 and to 23.4 riod between Percent of School Revenues from State Sources in Individual States shows amounts contributed lable i3 the by the various state governments to the support of their elementary and secondary schools in 1933-34 and the percent which state receipts were of total school receipts in each of the states in 1920, 1930, and 1934. Receipts for elemen tarv and secondary schools from state sources in 1933-34 ranged from $79,953,936 in New York state to $294,897 in Oregon. Delaware, with a state expenditure for public schools of $4,069,874, provided the largest share of total school revenues (approximately 93 percent) of iny of the states. The state which furnished the smallest proportion of total school receipts was Oregon with a state contribution of 1.8 pe cent. Other states ranking low in this respect in 1933-34 were lowa and Kansas. A glance at Table 13 makes it apparent that the general tendency of state governments to increase their relative contributions to elemen tary and secondary schools, altho well defined, is far from universal. In thirty-two states the percent of total sources increased between 1930 and 1934, but school receipts from stat in sixteen other states this percent declined. In some of the states, as the table indicates, the upward trend in the percent of school revenues derived from state sources began in 1920 and continued from 1930 to 1934. In most of the states, however, the trend in the proportion of school support from state sources was down ward during the decade 1920 to 1930. In fact, in certain states, in spite of the rise between 1930 and 1934, the percent contributed by the state government is still lower than in 1920. The table shows a marked increase between 1930 and 1934 in the percent of the school See page 10 and Table 4 support burden assumed by the state gov ments in number of states, notably Arizor 19.2 to 29.4 California (25.5 to 48.7), Indiana (5.3 to 27.0), North Carolina (1.4 to 61.5), Ohio (3.7 to 15.3), Oklahoma (10.1 to 29.4), Tennessee (23.8 to 42.5) lexas 33.5 to 51.5), and West Virginia 9 to 49.1). Table 13 further indicates the rank of the states with respect to the percent of total school income provided from state sources in each of 1930, and 1934. It should be and the years, 1920, pointed out, with regard to columns 6, 8, that it is possible for a state to maintain or even increase slightly its amount and percents of school support over a period of years and vet suffer a loss in its relative position among all of actually increased the proportion of its contribution between 1930 and 1934, the rank the states. For example, while Utah state of the state dropped from fifth place to seventh place during the four-year period. A number of other their state support without improving their ranks states increased proportionate This is, of course, further evidence of the gen eral tendency toward increased state responsi bility for the support of elementary and second ary schools, which definitely exists altho it is somewhat hidden by the shifts in different di rections which have occurred in the positions of individual states. Almost two-thirds of the states exhibit this tendency toward increased state responsibility in some degree. Because of this fact certain states which have only slight] increased their percents of state support have actually lost in rank. Purposes of State Governmental Expenditures 1912 to United States Census Bureau compiled data For every vear from 1932, the not only on the total amounts of state govern mental expenditures but on the purposes for which these totals were distributed. After 1932 data this work was discontinued and similar have not been compiled by any other agency Information concerning the purposes for which state governments spend their money therefore later by a careful checking, at a considerable cost of cannot be obtained for any year except time and money, of state departmental records and reports. For this reason the figures of ‘Table 14 are for 1932, altho it is probable that since that year the general pattern of state TABLE 13——PERCENT OF PUBLIC ELEMENTARY- AND SECONDARY-SCHOO) spending has consider to 18 of Table 14 present a percentage ar of the amounts shown in columns 3 to || ably altered. Colum: RECEIPTS* FROM STATE SOURCES, BY STATES, 1934, 1930, AND 1920 School” income States from state governments 1 Continental United States \labama \rizona \rkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Idaho Illinois Indiana lowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Source: U. S. Department of the Interior, (Figures for 1932-34 are advance data.) ® Revenue receipts only » Public elementary and secondary schools. 2 $423,178,215 5,612,007 2,181, 2,226,7 68 , 269,020 628,275 ,060,5 729,7 7,625, 13,514, 816,950 490.7 om aouMN OO ar son Nu oo = - > > an w = = N a 78, 12,399 27,335 , 936 , 893 1,038,643 27 , 433 .728 294, 897 30, 253,566 .573 3, 305 , 892 ,026 10,554,993 27,324,794 3,588,420 550,000 036 wn — wn ~ , 169,535 143,126 , 957,395 , 036,353 a i i) Office of Education, Biennial Surveys of Education, 1918-20, 1928-30, Percent of total schooi> income from state governments in: 1930 1920 1934 3 4 5 23.38 16.94 16.50 34.04 39.88 50.69 29.43 19.21 18.36 20.07 32.49 23.15 48.72 25.46 20.23 3.26 5.33 8.84 9.18 7.85 12.02 92.53 87.28 34.25 20.49 22.84 49 62 29.11 21.84 6.85 29.43 34.52 42.78 8.56 7.49 9 44 6.76 4.35 8.49 26.96 §.27 10.39 1.89 3.90 1.36 2.04 1.45 2.17 24.26 25.25 36.48 33.76 26.26 24.07 32.64 28.08 35.34 24.28 17.25 41.04 11.76 9.23 11.99 23.48 18 08 16.95 26.35 20.31 19.33 38.03 32.48 50.86 7.88 10.13 11.68 9.47 13.68 9.77 5.46 4.66 6.41 15.33 18.01 25.58 9.06 8.69 8.40 2.58 21.07 35.48 16.90 21.21 17.09 28.25 7.42 11.94 61.54 1.35 29.67 10.51 10.91 11.96 15.33 3.70 7.09 29 40 10.08 7.30 1.77 2.14 4.57 20.25 13.49 15.62 6.00 8.36 4.75 27.83 24.32 15.14 9.11 9.91 16.45 42.51 23.75 17.24 51.53 33.50 53.73 39.20 33.26 31.17 15.70 11.96 32.61 26.80 27.03 36.14 36.98 28.64 17.93 49.12 7.86 6.19 19.83 16.61 15.31 24.52 26.80 23.85 Rank in percent of schoo! in from state governments in 1934 1930 192( 6 7 . 10 2 13.5 3 28 6 5 14 45 46 37 39 ) 1 1 6 18 16 19 } 13.5 3 40 40 42 43 19 41 35 48 44 49 47 48 $8 24 15 11 13 ! 12 9 ) 23 26 ( 34 35 25 24 21 22 0 8 7 41 32 { 36 28 44 42 44 52.5 25 15 39 36 40) 46 21 9 30 20 4 17 10 33 2 49 14 35 31 32 32.5 45 42 15 33 41 49 47 47 27 29 27 43 37 46 18 16 29 38 34 26 6 17 23 3 4 1 7 5 13 31 30 12 0 11 & 9 8 2 4 38 45 29 27 28 22 12 17 193 [22] TABLE 14.—FUNCTIONAL DISTRIBUTION OF STATE GOVERNMENTAL EXPENDITURES BY STATES—1932 Sa Py eae 61 Ot Os #9 ¢ ”) Ft + $s tt $19 6 Il It ¢t . ol t ol ¢s { si it & Li ) I 8 S x9 S ) ro ¢ 6: § l ) ee yu 0 RZ Ft a sont ~1eyD 10} Seinjipuedxe juss Sk wo Ss OLR tt 06 § vl O® t S ¢ 2 +t St $ 8 Rt t OY Ss lt ( SO 9 zwO tt OS +t os RO f , ba is t t _ +01 8 4 oc ‘ Gi S¢ Sc t ' Rl 7 t \ git t l bi ri iS r 7 I Sy ft OL ¢ von ccs . lt t 79 rle sc ft ri ‘os ‘ cl é or 6 < ( ¢ SP oT % Sz ft : 76 yt OUL ¢ 86 Ft 88 9 sto So ft 6! Ft 6 r l tc Ft tlt ¢ Is 4 te 8 PSC t $6 7 10% 188 ct t Lv lL 960 $ IZ ¢ £s F OTF I oOo. s tR ¢ ort Ol ze ol $06 | QL i 961 1 se est t Lv ¢ Sth TRIS ZI or uony © siay30 -99}01g lv ' w sanueyD shemyaiy 10} Sainjipuedxg 9Fl bit 8O® 000 U01}99}01dg ~ s { s ub \\ s s EAN BALA aA 6'8 SUIYSE VW $+ oT it i P| \ 997 Ol ao OOR *¢ Oe | ¢790' 901 $6 clit st 67 8% 1 197 ¢t LL6 YL zor 91 t 800 Lt A O17 798 yIOA MAN FOL II xa MIN ISS OI ‘assaf MON Iysdwmey Man epeAdn| BYSeIGIN eueqwoy, LInossi py 1d IssIssi py SOUUIPY vi eueisino’] S ayy 0} ( 4} SJLYSIP [oOoyDs 0} pazeudoidde SPUIYIBVU AUIPUGA PUR KEES Sapnypouy , O XB} JO Spear0lg « ajqeaedas you pue uone Nnpe JIYsiYy 0} suros Sspunj UlB}109 sepny UT z peoples JO s}diada1 ssoiz ‘sa10}s UTeYD UO Saxe} JO spaad0id sapnypouy yBonpes jo sjuaurjedap 9)8)S WOI] PeAldI01 UOTBULIOJUL JUADeT BIOW JO stseq UDI JOOYIC UOISIAI(T y IBISAY uOoT eI OssSy uoljeonpy [PuoHeN A IANOY CLI$ seueyd . uc 9q1800 40 Q] 11qD J. aag I$ pue .SenuUdAadl jo state school support. It should be noted that in many states in which legislative appropriations from the state general fund form the principal source of state school revenue, the income tax is a major source of general fund receipts and so contributes largely, altho indirectly, to the support of the schools. ‘The income tax has been favored by experts from the point of view of equity. It is the form of taxation most in accord with the principle laid down by Adam Smith, that “citizens should contribute to the support of government in proportion to their respective abilities.” General sales taxes—Sales taxes are more dependable than income taxes from the stand- point of fiscal adequacy but they are regressive in their effect. In other words, they tend to rest more heavily upon the low-income groups of the population, who must devote a relatively large proportion of their incomes to the pur- chase of necessities, than on those with higher incomes, whose expenditures for necessities in proportion to income are smaller. On this ac- count, a general sales tax is justifiable only if the total fiscal system of which it is to become a part is generally progressive in character that is, if the total combined burden of all the taxes which comprise the system as a whole becomes heavier as the income of the taxpayer increases. Such a fiscal system would include income and inheritance taxes. General sales taxes may take any one of several forms. They may be levied on retail sales to the consumer, or on wholesalers’ or manufacturers’ sales. Or they may take the form of a privilege or occupation tax measured by gross income or gross receipts from all busi- nesses, professions, and occupations. The development of state general sales tax- ation occurred almost entirely during the de- pression period following 1929. Table 18 shows general sales taxes in effect in only six states in 1930. None of these contributed di- rectly to state school support, altho in five of the six states, sales taxes served as an indirect source of state school revenues thru appropria- tions from state general funds. In 1935, twenty-six states levied general sales taxes and eleven of these states earmarked sales tax pro- ceeds specifically for schools. Now, with the approach of recovery, there is some indication of a revulsion of sentiment against this type of taxation because of its admittedly regressive effects. Four states, New York, Maryland, New Jersey, and Kentucky, passed measures repealing their general sales tax laws allowed them to expire, in 1934 and 19 Table 16, column 5, shows amounts of sch revenues derived from general sales taxe six states in specified years. Selective sales taxes—Column 6 of Table |: shows school revenues derived, in the y: specified, from taxes on sales of selected co; modities in fifteen states. Prior to 1929 sy special sales taxes were rather more in favo: among the states than the general sales tay TABLE 18—STATE GENERAL SALES TAXES AS RELATED TO SCHOOL SUPPORT States having general sales taxes in specified ye (CAPITALS indicate general sales taxes earmarked in w or in part for state school support; italics indicate gene sales taxes contributing to state school support indirectly state appropriations from general funds.) 1930 1933 1935 1 2 3 Delaware Delaware Delaware Pennsylvania*® Pennsylvania* Pennsylvania* Virginia Virginia Virginia West Virginia West Virginia‘ West Virginia Georgia Mississippi Mississippi Mississippi North Carolina® North Carolina Arizona Arizona California California ILLINOIS ILLINOIS Indiana Indiana MICHIGAN Michigan MISSOURI Missouri NEW MEXiCO NEW MEXICO New York OKLAHOMA Oklahoma OREGON SOUTH DAKOTA SOUTH DAKOTA UTAH UTAH Vermont WASHINGTON WASHINGTON ARKANSAS Colorado IDAHO lowa LOUISIANA NORTH DAKOTA OHIO WYOMING Source: National Education Association, Research Divisior School Finance Systems; and Commerce Clearing House. Sal: Tax Laws. Chicago: Commerce Clearing House, 1936. ® Two taxes: a merchants’ and manufacturers’ license tax and a mercantile license tax levied as license tax plus flat rate or gross value of sales. > Expired in 1931. © Two taxes: a business and occupation tax enacted in 1‘ and a consumers’ sales tax enacted in 1933. The language of the law which provides that proceeds of the consumers’ sales tax shall be placed in the State General Fund for appropriation to the public schools makes it appear that this tax is earmarked for schools. Actually schools receive only such amounts as aré appropriated by the legislature from the State General Fund 4 Two taxes: a gross wholesale and retail mercantile sales tax first levied in 1931 and 3 percent retail sales tax adopted i: 1933. [ 28 ] The nation ng £1 source growt was especi means crow! Recen ments Do may 1 of the ments betwe trom \ rer [reas specia are a Table each collec that ; the I 200,0 collec two-t ingly taxat: alrea Di states tion assist _ Kansas Carolin bl lealing \r selective sales taxes are often levied \ of commodities of the luxury type, people can refrain from buying if they but they are difficult of administration nerally speaking, are less productive veneral sales taxes. Sometimes, as in the of the gasoline tax in many of the states, tax proceeds are earmarked for a purpose which is directly beneficial to the purchaser of the commodity taxed. Gasoline and tobacco raxes are examples of selective sales taxes that e been levied most successfully. Every state now taxes gasoline sales. “Twenty-four states mpose some form of tobacco excise or license ix The tendency toward increased state partici nation in public school support with its result ng greater reliance on special state taxes as sources of school revenue is not a mere out growth of the depression. Long before 1929 it was apparent that local property taxes, especially in some areas, were inadequate as a means of financing the modern school with its crowing enrolments and expanding functions.‘ Recent financial difficulties of local govern- ments have only served to emphasize this fact. Double taxation— There is one factor which may in coming years hinder the development of the use of sound taxation by state govern ments. This factor is the increasing conflict between federal and state governments arising from their search for new revenue sources. \ report just published by the United States Treasury Department gives revenues from six special state-imposed taxes from which revenues are also derived by the federal government. Table 19 shows the number of states imposing each of these six taxes and federal and state collections therefrom in 1936. It will be noted that aggregate federal and state receipts from the six taxes combined amounted to $3,321,- 200,000 and that, of this amount, the federal collections were $2,271,300,000, or more than two-thirds of the total. It is becoming increas ingly difficult for the states to find any field of taxation which the central government has not already entered. Distribution of state aid—Every one of the states as already pointed out in an earlier sec tion of this bulletin provides some financial assistance to its public schools. Few states, how ever, provide enough, or anywhere near et funds for the ] ( chool support of the ent program. Delaware with 93 percent and North ' t Carolina with 62 percent, of total school funds TABLE 19—COMPARISON OF FED.- ERAL AND STATE RECEIPTS FROM SIX SELECTED TAXES, 1935 Number of states levying State Federa collections Name of tax collections 1 2 3 } Estate and tance 4 $100, 800,000 $140.400 000 Individual i 8 100,000,000" 527.100.000 Corporation im & 56,900,000 * 572.100.0000 Gasoline 40 589, 200,000 161.500.0000 Liquor excise license, and store profit ' 166,600,000 441,000,000 Tobacco excise 1 license »3 28,600,000 459. 200.000 Total from six taxes 1,.049,900.000 71.300.000 Source: Data on state llections are from the | .. a Department, Division of Research and Statistic ri ections from Selected State Imposed Taxes, 1930-1936, Part I | Data on federal collections are from the U. S. Treasury Depart ment, Annual Report the Secretary of the Treasur the Fiscal Year Ending June 30, 1935. Washington, D. ¢ Govern ment Printing Office, 1936, p. 341 ® Does not include taxes collected in Ohio on in from intangibles whicl amounted to $7,800,000 This ame t wa not segregated between individual and corporate in e tax >» Includes the District of Columbia © Includes $7,800,000 in taxes collected in Ohio or me from intangibles which is not included in the distril 1 column 3 derived from the state, come nearest to pro viding complete state support of schools. The effectiveness of state aid depends, in large measure, upon the methods by which the funds are distributed to local school units. The method most frequently used is that which provides for a flat grant for each unit of edu cational need, defined in terms of (1) the number of children of school age who reside in the district or county as shown by the school census, (2) the number of children enrolled in the schools, (3) the number of children in average daily attendance, (4) the number of teachers employed, or (5) the number of in struction units (one teacher for each stated number of pupils, sometimes combined with other items of cost and adjusted for differences * The twenty-four states imposing tobacco excise or license taxes are Alabama, Arizona, Arkansas, Connecticut, Georgia, Iowa Kansas, Kentucky, Louisiana, Maryland, Minnesota, Mississippi, Montana, North Dakota, Ohio, Oklahoma, Pennsylvania Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Washington ® Growth in school enrolments and expansion in school services lealing with ‘Trends in School Costs.’ will be further discussed in a later issue of the Research Bulletin [ 29 ] t re eee or ¢ t cre‘ PE-ELE oOo ttt OO t OO FOL Phe be-L£ Lol el ) ( O8 Ol St-trol 09 7: 00 091°6$6'9 000 SLE St-FLol PEL‘ ZE 200 000 ' 6Z St FEL’ EOL St-FLol JUOUIIO A s¢ soo 'ses's uS8 $60'S8 OF SIP 'ZIZ'§ Ol $60 '8£Z be-fL6l yey) 6FO' £8962 00 ZL8° 117‘ SZ 200 7SE'LE6'°Z 00 S78‘ e7t' I FE-LL61 Sexo] 19‘ EOS 'f 100 O77‘ S#6'Z wll 769'6L 6b OFF BEST bEe-£L61 sassouua | S18 '9S6 00 S8S ‘ESL Zt Of7 ELI Sf-Feol Byoyed YINOS 00 000° L6 7 1900 000° #£7 00 000 f1lL°Z bEe-CL6l Buljore) yINos 96 Z7L7' 99F ov 6200 00S ‘79 ss9F SPE'18 OS $7‘ 77E $£e-EL61 pues] 2pouy 00 £99‘ ORL‘ OS 9000 000° €Z0'¢ 00 £99 £9L° LZ be-£L6l eluealAsuuad 00 TEL 687 00 ZEL 687 £¢-Zt6l uoza1() 00 Tf0' SIZ I 00 167 '69¢°8 00 000° 9¢ 00 OFL*ZI8'°Z Sf-FLol BwWOYPeTAO 00 LZE'F7ZE ZZ 100 OFO'FIO'FI 00 £68 '°SLZ 00 900° Z0F 00 88F'7E9'L ebfol oTuO Ro4egd YVuon 3. 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Distributed on ba = For reimbursements for superintendency unions, h ~ portation or board of children living or lands, tuit e ‘For rural agricultural aid For transportation, special departments (agr t pecial classes (deaf, blind, subnormal, defective in spee hools, associated rural schools, classificé n aid, tuitior “ Represents amount due for apportionment unde t ribution. The distribution by separate items cannot be For normal training in high schools, $42,124.13; re bf Distributed to districts equally ~ & For salaries of teachers in districts estal hed alte Distributed on the basis of average daily attendar basis of number of teachers ‘! Includes aid distributed on basis of average da att Approximate For supervision Payments to individuals in unorganized territor * For manual training, vocational education, educatior $18,819,697.28 on the basis of ratables; $25.268.4 nty " pe é " arable l cho pe ent I ‘ . } irie | of pup de ‘ 1 1 ‘ ir¢ t t wre that lailv atte } } ’ che | $1 5 ind stand " eeds « " j il educat ' I ead t na t count I centra buildings k pe | | ‘ als« l i ‘ eme eraze daily atte } 1 ize d ende i 4 ed () ] } essed i ir { ins} i fe planta I ‘ eme ‘ I ix ! ortat ine d sight-sa Asst ) t trail n { t hig! ho« he } out one-tl 1 is ava ¢ ded w rarie the basis of a t e pl ( equa i registration teachers « ence Continued on next / Mgt Continued from preceding page Distributed by state school commission on basis of need as shown in certified statements of organization * Calendar year ‘ For special classes for deaf, blind, or crippled children ® For orphans’ tuition ” For salaries and expenses of county and assistant county superintendents, and emergency appropriations to distre 5? Exclusive of $105,997 income from state school fund and $72,972 miscellaneous subsidic “ For apparatus and equipment, supervision, instruction in manual and household arts, medical inspection, spe to schools including aid for building programs ‘” High-school aid apportioned on the basis of number of pupils, and aid for closed and consolidated scha of $100 per teacher or $100 for each ungraded school; not separable ® Aid for closed and consolidated schools, apportioned $100 per teacher or $100 for each aid distributed on basis of enrolment, not separable ®! For transportation ® For school libraries, consolidated schools, supervisors’ salaries, and superintendents’ salaries *’ For high-school tuition, transportation, industrial aid, school libraries, free textbooks, and aid to crippled childr: ® For trained teachers in rural schools, supervision, standardization of rural schools, and vocational courses in high ® For rural supervision, insuring of minimum term, and division superintendents’ salaries ® Distributed on basis of flat rate per teacher needed, calculated on density of school population and average da ®7 $.1766 per day of ‘actual and construction attendance’ computed as prescribed by law * The sum proportioned to each local unit is based upon the number of needed teachers determined by average daily a The amount paid per teacher varies according to certificate held. ® For aid to state graded schools, supervising teachers, transportation, county schools of agriculture, classes for ch blind, or defective in speech, classes for crippled children, school libraries, and emergency aid to complete school tern *” Aid to union and consolidated high schools on basis of number of teaching units is included in the $175,000 rep: “other bases’’; not separable. ™ Flat rate of $295 for district high schools; teachers employed; not separable 2 For aid for subnormal and physically handicapped children. The amount reported represents half the appro, ungraded school, is union and consolidated high schools receive aid on the basis of the biennium 8 Distributed on the basis of number of teachers and drivers of vehicles used for transportation of school children; not between elementary- and high-school costs). The school census child, altho the least exact of the above-named units of measuring educa- tional need, is also the one most commonly used. ‘Table 20 shows twenty-two states em- ploying this measure as a basis for distributing all or part of their state school funds in the years specified. Eleven states distributed some state aid for schools on the basis of the number of children in average daily attendance. Three states made use of the enrolment basis and eight states each distributed all or a part ot their aid on the basis of the numbers of teachers or some form of the instruction unit. Other bases or some combination of those named above were in use in ten states. Of course, the presence of any one of these measures as a basis for distributing aid in a single state does not exclude the use of the others. Table 20 shows that many states make use of two or three of these bases simultaneously for the dis- tribution of different state school funds. The distribution of flat grants on a pupil or teacher basis ordinarily fails to take account of the economic resources which local school units can draw upon for the support of their public schools. It is well known that counties and school districts within a single state differ widely among themselves in their ability to provide educational support. Approximately two-thirds of the states, therefore, as shown in column 3 of Table 20, seek to equalize ¢! differences by apportioning at least a part their state school funds in inverse proport to local ability to raise school tax revenues Usually the amount distributed to each count or school district under such a plan is equ to the cost of a state-prescribed minimum ed cational program in excess of the yield of required local tax rate, together with availa funds from all other state and local sources The trend toward the greater use of stat aid for the equalization of school support amor local school units was especially noticeab! during the decade of the ’20’s. This trend | not continued, however, during the depressio years. A federal Office of Education report reviewing recent legislation relative to t! movement toward increased state support ot schools points out that: In most cases the provisions for apportioning the additional funds disregard the variations ability of local districts to support schools. Some o! the states, as California and Washington, whi now pay a larger share of their public-school costs than previously, had not been nor are they now distributing state school funds so as to equalize th costs of an acceptable, or fundamental progra among their local districts; others, as Arkansas a! Indiana, had been distributing funds on this basis . and continued to do so, but use other bases apportioning the new funds; while at least tw states, Florida and Virginia, which had used basis no longer do so.’ 7 Covert, Timon. State Provisions for Equalizing the Cost of Public Education. U. S. Office of Education, Bulletin, 1936, N Washington, D. C.: Government Printing Office, 1936. p. 35. [ 32] which have recently revised () states te school apportionment plans so as to for increased amounts of state aid to uted in the form of flat per pupil or Montana distributing icher P 1 Z din accordance with legislation enacted grants are Indiana and shows bases of new lanuary 1, 1933, in ten states. TABLE 21—METHODS OF UTING NEW STATE AID" STATES, 1935-36 DISTRIB- IN TEN Year of Census Instruc- States enactment Equali- or at- tion Other of legislation zation tendance unit l 2 3 4 5 6 S 1935 x ( 1933 x . : | la 1935 x 1933 x x x na 1934 x x Montana 1935 x! x x Nor ( i 1933 x 1935 x x ma 1935 x x art of Washington 1933 x - Sour Covert, Timon. State Provtsior for Equalizing nues t of Public Education. U. S. Department of the Interior Ount Office of Education, Bulletin, 1936, No. 4. Washington, D. ¢ Government Printing Office, 49 p.; and correspondence wit equ tate departments of education For purposes of this table ‘‘new state aid’’ means state wl revenues raised or distributed under legislation « ted ot 1933 or later ilab] »Some equalization aid will be granted until March ifter which all aid will be distributed on basis of th ITCeS ensus and the teacher unit nor ail - Summary l t SSI The proportion of school support coming rt i from state sources is increasing. It grew from tl 16.5 percent in 1920 to 23.4 percent in 1934, I t of the greater part of this growth—from 16.9 percent to 23.4 percent—occurring in the four- vear period between 1930 and 1934. This trend, 11 & . . . ay while not universal among the states, is never- ne of theless a definite one. In certain of the states vhic the proportion of state school funds has so ge increased as to far outstrip the general trend no : je in the states as a whole. ae D No state government furnishes a full 100 ar percent of the cost of its public schools. Dela- yasis ware, with a contribution of 93° percent I . Oo comes neart prov In North ¢ ir I tiie ipports certain major phases ot Most of thi states contribute from one-fifth to one-half of total school funds, complete state support. state entirely in @l ht month school program total school rev: ‘NHUES educatior ho ls ind Education, including higher well as elementary and secondary s« public libraries, topped the list of objects of 1932. Ay expenditure state governmental expenditures in proximately 25 percent of state were for educational purposes in that y This percent has probably declined since 193 | I due to the growth of relief expenditures Along with the increasing percent of public school support derived from state sourt n come an increasing reliance on spec il tate ar taxes and a decline in the importance of the general property tax as a source of s support. The growth in the use of state incom and sales taxes as sources of state school re¢ nue has been especially rapid. Competition between federal and state ernments for new sources of revenue may act as an obstacle to the future development of state taxes. It is becoming increasingly difficult for the states to find any field of taxation not federal and in those fields in which double taxation by already occupied by the government state and federal governments actually occur the latter to collect the the higher rates and the re tends to levy greater venues part of Recent data published by the United States Treasury Department indicate that state r ceipts from six special state-imposed taxes wer less than half of the federal receipts from the same taxes in the same states. Approximately two-thirds of the states dis tribute all or part of their state school funds upon an equalization basis. The tendency to ward a greater use of state aid as a means of equalizing local school support burdens, which had so great a development during the of the °20’s, sion vears following 1930. New state aid funds decade did not continue thru the depres tor school purposes are being distributed To! the most part as flat grants to local school units on a per pupil, or per teacher, basis IV. Local Financing of Public Schools The part played by local governments in the support of public schools has declined in relative importance during the past fifteen vears, altho in 1933-34 they still produced about three-fourths of total elementary- and secondary-school revenues ($1,365,554,000). The proportionate contribution in both 1930 and 1920 was 83 percent. This trend away from local school financing toward a greater reliance upon state support has already been noted in earlier sections of this bulletin.’ Sev- eral factors have influenced this trend. Chief among these in the vears since 1930 has been the decline in property tax revenues. Decline in Property Taxes ‘Total tax collections of local governments amounted to $5,018,000,000 in 1930 of which $4,614,000,000, or almost 92 percent, came from property taxes.” Complete information is not available for the vear 1934, but the National Industrial Conference Board esti- mates that of $4,143,000,000 collected by local governments about $3,729,000,000, or about 90 percent, came from property taxes.’ The figures of Table 22 indicate over 17 percent decrease in all local tax collections between 1 Pages 10 and 11 and Tables 4 and 5 1930 and 1934 and a 19 percent decre local property taxes. During the same , local school revenues decreased about 2 cent. This decline in property tax revenu: the accompanying public schools was due only in part to de decline in local supp: ing property values; a considerable proporti was due to delinquency in tax payments. | ures are not available for the year 1934 for local levies separately, but the | States Census Bureau reports a delinquen December 31, 1933, of 20.5 percent on property levies of both state and local gov: ments for the twelve months prior to [uy 30, 1933.4 A further cause of reduced revenues { the property tax has been the action take: some states in adopting or extending tax tation measures. Property tax limitation lay may be written into state constitutions or t! may take the form of statutory enactment They may place restrictions on state or lo tax rates, or both, or only on certain classes ot local tax rates such as those of school district Prior to 1929 fifteen states already had claus: in their constitutions restricting local propert levies while eight others limited state levi only Oe National Industrial Conference Board. Cost of Government in the United States, 1929-1930. New York: the Board, | ‘ National Industrial Conference Board. Cost ef Government in the United States, 1933-1935. New York: the Board p. 45 *U. S. Department of Commerce, Bureau of the Census. Current Tax Delinquency, All States. Washington. D. ¢ Mimeographed, 17 p 5 States having constitutional amendments affecting local or state and local property levies in 1929 were York, North Carolina, Oklahoma and Wyoming. States having constitutional limitations on state levies only in 1929 were Property Tax Limitation Laws. Chicago Florida, Georgia, Kentucky, Louisiana, Michigan, Missouri, New North Dakota, South Dakota, Utah. and Virginia. See p. 38-47 Alabama, Ark Oregon, Texas, West \ Idaho, Montana, New Me Administration Ser l Colorado Publi TABLE 22.—DECLINE IN LOCAL SCHOOL REVENUES AND PROPERTY TAX COLLECTIONS, 1930 TO 1934 Total school School revenues Total local Property tax Year revenues from !ocal tax collections of governments collections local governments ! 2 3 4 5 1930 $2,087 712.753 $1,726,708, 457 $5,018,000, 000 $4,614, 000,000 1934 1,810, 279,945 1,365 ,553,792 4, 143,000,000 3,729,000 000 Percent decline, 1930 to 1934 13.3 20.9 17.4 19.2 Sources: Figures on school revenues are advance data from the U. S. Department of the Interior, Office of Educat Biennial Survey of Education 1932-1934. Those on tax collections are from the National Industrial Conference Board’s stu of Cost of Government in the United States for 1929-30 and for 1933-35. ® Based on percent of total local tax collection derived from property taxes as estimated by the National Industrial Conifere Board [ 34 ] ment LON SSES lause per t of ents 100 100 tside of New England prac lhe demand for property tax relief which constitutions. Ou se during the depression resulted in the tically all states impose general or special lim otion of constitutional amendments in two its by statute. During the depression | vd states (California and Ohio), makin; statutory limitations increased in nun ind ll twenty five states which place constitu in the extent of their application nal restrictions on state or local tax rates, Table 23 summarizes the provisions of tax both. In addition New Mexico, which h id limitation laws which attect the low il finan nited state levies only, extended the applica of schools in twenty-nine states , of its amendment to local rates, Michigan xtended its limitation to all types of local Inequalities in Financial Ability of taxes, and Arkansas and Oklahoma strength Local Units ened their provisions affecting ditterent types local levies. Statutory limitations are even Another cause of the decline in local school more widespread than those included in State support and the trend toward a highet propor! TABLE 23.—PROVISIONS OF PROPERTY TAX LIMITATION LAWS IN NINE STATES, 1935 General limit a) state Limit in statute Governmental Total over all limit (b) counties Limit for school purposes States or constitution units affected percent of as c) municipalities percent of assessed valuation sessed valuation percent of as sessed valuation 1 2 3 4 5 6 ndiana Statute, 1932 All units 1.5 ir rporated 0.15 0.75 imended in 1933 [ es; 1.0in unin c) 0.75 1.25° < Dp 1 place n Statute, 1933 Local taxing 1.0 1.8 Sct d re exe district more than 20 per eral limitations to the ex cent rate may levy from 65 percet h 1930 ley f 1930 levies, or am child varying from $36 to $95 more than $600 per scl is Statute, 1933 Loc taxing b) 0.3 5 0.4 1.4, bu $30 p lis r 0.9 1.0 pup n elem ary $4 per put nt ‘ Michigan Const. 1932 All units, ex Ls D 1 by Determined | ( cept char ed ri n ard municipalitic boar Oklahoma Const. 1936 All units 3S Determined County excise board ‘ county ex 0.5 percent but peop 1 x I ird rate ip 4 a assessed valua i New Mexico Const. 1933 All units 0 i) 1.0 1 8 b) 0.5 c) 0.5 Ohi Const. 1933 All units, ex 1.0 T we 1 he 1 \ x : cept cl ed g un r irre expt municipalities service und rmer 15 t les 45 per ‘ iV ab ifter levie t oca bd i vided I Washington Statute, 1933 All units, ex 10 0.2 10 cept special b) 0.1 districts 1.5 West Virginia Const. 1932 All units Personal property, i) 0.01 Personal property, 0.138 0.5; residences and ind owner-occupied 0.328 owner occupied ther rural real estate, 0.665 } farms, 1.0; other real estate, 0.665 rural real estate, 1.5; urban real es tate. 2.0 Sources: Leet, Glen, and Paige, Robert M. Property Tax Limitation I ( igo: Public Administrat | Tax Research Foundation. Tax Systems of the World. 6th ed. Chicago: Commerce Clearing House, 19 i with state departments of education ' Graduated according to population | » Rate of 4.8 percent applies to cities over 70,000 in population © Varying according to size and type of school 4 To permit sharing in state equalization fund, 1.5 percent must be levied on property of school d tion of state aid has been the inequality in the financial ability of local governments. This is no new development. Before the depression the reports of state superintendents of educa- tion revealed a number of states in which the school districts varied among themselves with respect to wealth ° per school child by as much as | to 200 or more.*? During the depression years the difficulties caused by this factor were aggravated by the fall of property tax revenues mentioned in the preceding paragraph. The poorest counties and school districts in some states had found it difficult to raise adequate revenues for their schools by means of the local general property tax. Now it became impos- sible in these sections to support schools from this source. Many schools thruout the nation were closed. ‘Those which reopened were en- abled to do so only thru increased state and federal emergency aid. Summary Local governments furnished slightly more than 75 percent of total school revenues in 1933-34 as compared with 83 percent in both 1930 and 1920. Several factors have influenced this trend away from local school support. Among these are the decline in property tax revenues and inequalities in the ability of local school units to support schools. Local tax collections from all sources are estimated to have declined over 17 percent ® Wealth is measured by the value of tangible property. during the period from 1930 to 1934, or | $5,018,000,000 to $4, 143,000,000, whik property tax revenues suffered a reduct more than 19 percent, from $4,614,000 to $3,729,000,000, or from 92 percent of + local tax collections to 90 percent of total tax collections. The decline in local tax collections ha due in part to (1) delinquency of proper owners in making tax payments, and (2 effect of property tax limitation laws. Aci ing to the United States Census Bureau, n than one-fifth of property tax levies du 1932-33 were uncollected and delinquent months, or more, later. Twenty-five states ha constitutional limitations affecting proper: tax rates in January 1936. Statutory tax lin tations are more numerous than those em bodied in state constitutions. The number of tax limitation measures was increased, thei: application was extended, and their restrictions were made more severe during the depressio years. While inequalities in the financial resource of local governments are no new development the problems of financing the schools to which they give rise have been greatly aggravated by the depression. In the poorest districts of ce: tain states some schools have had to close en tirely. Others have continued to operate onl) on a greatly restricted basis. The result has been a tendency to turn toward increased stat: and federal aid. 7 National Education Association, Research Division. ‘‘The Outlook for Rural Education.’’ Research Bulletin 9:246-47 tember, 1931. Washington, D. C.: the Association. [ 36] V. Economic Ability of the States To Support Education Not only the local governments within the - but the states as a whole are unequal in ibility to support their public schools. lhe variations among the states in this respect d their relation to school expenditures are liscussed in the present section of this bulletin. How far do differences in public school ex- oenditures reflect differences in the financial bility of the states to support education? It has been suggested that the failure of certain states to provide an acceptable school program is due not so much to a lack of economic resources as to other causes such as fiscal in eficiency or too small a proportion of state support. Is this contention valid ? What are the economic resources of the several states? Data presented in the following pages will serve as . basis for at least a partial answer to these ind related questions. Measures of Ability To Support Education Income and wealth are probably the most commonly used measures of the ability of states or local communities to support education and other governmental functions. Most of the earlier studies of state educational support used one or the other of these types of data, or both Keith Bagley! set up variations in combination. and tables to show among the states in total, per capita, per teacher, and per pupil wealth. Norton ? data on and wealth in developing a formula for meas combined income uring the economic resources of the various states. State equalization studies have genet ally made use of statistics on the assessed valua- tion of property, or taxable wealth, as a meas- ure of local ability to pay. More recently, Chism* and . developed measures of the financial ability of the states Newcomer‘ have on the somewhat different basis of potential revenue from a uniform system of taxation in cluding both property and special taxes. and the § Nation 1 Keith, John H., and Bagley, W. C. The National Education Association, Research Division The 4:17; January and March, 1926. Washington, D. C.: the Assoc >Chism, Leslie L. Economic Ability of States To Finance Teachers College, Columbia University, 1936. 169 p * Newcomer, Mabel. The Index of Taxpaying Ability of State University, 1935. 88 p. Ability of the States To Support Education Public Schools. Contributions Finally, data on certain types of private ex those tor penditures, particularly articles of the luxury class, hye while they cannot actually said to measure the economic resources of a state, do nevertheless give some evidence of the existence, or lack, in any state, of ability to spend money, whether for private or public purposes. ‘hese and other indications of abil ity to pay for education, mentioned in the preceding paragraphs, will be discussed more fully below. Income as a Measure of Ability Public education is supported by taxation and taxes are paid out of individual incomes. When it is that the total income is the aggregate sum of all the incomes realized national received in the form of wages, salaries, profit and the like by all the it is clear that the interest, dividends, individuals of the nation, proportion of the national income received by ] the people of a particular state will largely de termine the relative taxpaying ability of that TABLE 24.—NATIONAL INCOME AND PUBLIC SCHOOL COSTS—1934 Percent national Item Amount income 1 2 3 National income $50, 174,000,000 100.00 Cost of public Elementary I econdary schools $1,720,105, 229 3.43 Colleges and 181,081,554 3¢ Teacher-trainir 38,946,650 US Total $1,940, 133,433 3.87 Sources: Est ate of national income from the U. S. Dey ment of Commerce au of Foreign and Domest Ce merce, Division of Economic Research National Income in the United States, 1 )-1935; figures on educational expend tures are advance data from U. S. Department of the Inte Office of Education, Biennial Survey of Education ls. New York: Macmillan Co., 1925. p. 268-71 to Education, No. 66 N \ Teachérs College, ¢ New York 5 This is roughly the definition of the ‘‘national income paid out’’ as estimated by the Division of Economic Research S Department of Commerce. For a more complete definition of income paid out and its distinction from ‘‘income produced ee: U.S Department of Commerce, Bureau of Foreign and Domestic Commerce, Division of Economic Research. National Income United States, 1929-35. Washington, D. C [ 37 Government Printing Office 1936. 240] ] J state—and consequently its relative ability to that out of every $100 of this sum onl) support public schools. was spent for public education. Of this S: The national income of the United States in $3.43 was spent for public elementa: 1934 was $50,174,000,000. Table 24 shows secondary schools and $0.44 for public TABLE 25.—INCOME AND PUBLIC SCHOOL EXPENDITURES, BY STATES Expenditures for public education Estimated States national Elementary Tax- income and supported 1934 secondary higher Total schools education 1 2 3 4 5 Continental U.S $50,174,000,000 $1,720,105,229 $220,028, 204$1 ,940, 133,433 \labama 501,740,000 17,459,952 3,245,985 20,705 ,937 \rizona 190,661 , 200 6,670,917 1,919,299 8,590,216 \rkansas 336,165,800 9,068,811 2,429,138 11,497,949 California 3,446 953,800 124,029, 442 18,257,477 142,286,919 Colorado 396 , 374,600 16,991 576 3,508, 405 20,499 981 Connecticut 948 288,600 25,850,711 1,614,360 27,465,071 Delaware 150,522,000 4,379, 856 766,792 5,146,648 District of Columbia 491,705,200 9,176,760 259,374 9,436,134 Florida 491,705,200 14,705,629 3,285,125 17,990,754 (seorgia 662 , 296 , 800 19,330,015 3,169,124 22,499,139 Idaho 145,504,600 6,755,176 1,590, 236 8,345,412 Illinois 3,602,493 , 200 106 ,622 , 448 8,452,265 115,074,713 Indiana 1,083 ,758,400 43,338,354 7,377,677 50,716,031 lowa 732,540,400 33,946 833 8,687 , 248 42,634,081 Kansas 577,001,000 27, 268,242 5,096,437 32,364,679 Kentucky 602 , 088 , 000 17,033,809 4,178,175 21,211,984 Louisiana 541,879,200 15,890,354 3,625,100 19,515,454 Maine 346 , 200,600 8,830,930 1,781,821 10,612,751 Maryland 792,749, 200 21,435,182 4,308,137 25,743,319 Massachusetts 2,393,299, 800 72,884,979 2,941,027 75,826,006 Michigan 1,841,385, 800 68 359,622 13,632, 863 81,992,485 Minnesota 908 , 149, 400 39,305,813 9, 365,330 48 671,143 Mississippi 301,044,000 11,548,101 2,828,345 14,376,446 Missouri 1, 384,802,400 40,895 317 4,288,647 45,183,964 Montana 190,661, 200 8,824,568 1,660, 337 10,484,905 Nebraska 446 , 548.600 17,162,569 3,862,635 21,025,204 Nevada 45,156,600 2,174,333 582,200 2,756,533 New Hampshire 200 696 , 000 5,850,352 1,604,598 7,454,950 New Jersey 2,122,360, 200 83, 888 306 1,653,457 85,541,763 New Mexico 145 504,600 § 653,122 1,336,960 6,990,082 New York & 649,997 600 289 871,779 11,137,589 301 ,009 , 368 North Carolina 767 662, 200 22,556,788 5,166,342 27,723,130 North Dakota 170,591 .600 9,501,148 1,951,633 11,452,781 Ohio 2.614, 065 , 400 99 926 443 11,478,625 111,405,068 Oklahoma 632,192,400 25,139,002 5,445 356 30, 584,358 Oregon 361,252,800 13,049,130 3,062,993 16,112,123 Pennsylvania 4, 224,650, 800 146,677,590 7,997,525 154,675,115 Rhode Island 366 , 270, 200 10,798, 296 908,131 11,706,427 South Carolina 366, 270, 200 11,699,684 2,518,361 14,218,045 South Dakota 155,539,400 9,529,282 1,576,930 11,106,212 Tennessee 607, 105,400 18,874,632 2,626,698 21,501,330 Texas 1,876,507 ,600 57,505,528 12,952,311 70,457 , 839 Utah 165,574, 200 8,190, 143 2,039,201 10,229,344 Vermont 130,452,400 3,592,571 1,268,763 4,861,334 Virginia 707 , 453,400 20, 361,539 6,325,403 26 ,686 ,942 Washington 672,331,600 22,036,176 3,906 , 984 25,943,160 West Virginia 496,722,600 19,760,664 2,872,344 22,633,008 Wisconsin 1,083,758, 400 41,310,933 8,672,662 49 983 595 Wyoming see 105 , 365,400 4,391,822 811,779 5,203,601 1934 Percent of income expended { Public Tax- elementary supported Tota and second- _ higher edaucatior ary schools education 6 7 3.43 44 3.48 65 4 3.50 1.01 t 2.70 72 34 3.60 53 +1 4.29 89 5 2.73 17 2.91 $1 3 1.87 05 I 2.99 67 3 ¢ 2.92 48 } 4.64 1.09 5 2.96 23 3.19 4.00 68 4. 68 4 63 1.19 5.8 4.73 88 5.61 2.83 69 3.5 2.93 67 3.60 2.55 51 3 OF 2.70 54 3 24 3.05 Py $1 3.71 74 4.45 4.33 1.03 5.3 3.84 94 4 2.95 31 3 4.63 7 5 50 3.84 86 4 70 4.82 1.29 6.1 2.92 .80 3 3.95 08 4.0 3. 89 .92 4 81 3.35 13 3.48 2.94 67 3.61 $.57 1.14 6 3.82 44 4.26 3.98 86 4 84 3.61 85 4. 4¢ 3.47 19 3 6 2.95 25 3.20 3.19 69 3.88 6.13 1.01 7.14 3.11 43 3.54 3.06 69 5.75 4.95 :.23 6.18 2.75 97 3.72 2.88 89 B.2 3.28 58 3.86 3.98 58 4.56 3.81 80 4 61 4.17 77 4.94 Sources: Data of column 2 were obtained by distributing total national income for 1934 as estimated by the U. S. Depart of Commerce, Division of Economic Research, among the states in accordance with the distribution for 1933 as given in Natior Industrial Conference Board, National Income and Its Elements, Table 25, p. 73. Data of columns 3, 4, and 5, are advan from U. S. Department of the Interior, Office of Education, Biennial Survey of Education, 1932-34 ed [ 38 ] A te wn r OS ™ of higher education. These figures -p interesting in comparison with those for 3) and 1932. In 1930 the proportion of ' il income used for all public education ibove 3.0 percent tor the first time and ised still further to 5.0 percent in 1932 [he expenditure for elementary and secon national in ose dar\ schools was 3.2 percent of come in 1930 and 4.5 percent in 1932. By 1934, as the national income increased some what and school expenditures continued to decline, the share of income devoted to publi education again dropped to between 3 and 4 percent as shown in ‘Table 24. [able shows distribution of ational income among the several states and the the 25 the percent of income in each state which was expended for public education in 1934. A study of column 2 reveals a high concentra tion of the national income within a_ few states. The people of seven states, New York, Pennsylvania, Illinois, California, Ohio, Mas sachusetts, and New Jersey, received $27,053, 820,800 or almost 54 percent of the total in come of the nation. ‘he income of New York, over 17 percent of the total, was 192 times is great as that of Nevada with less than one tenth of 1 percent of the total. According to column 8 of Table 25, South Dakota ranks highest among the states with respect to the percent of income spent for public education. Out of every $100 of in come received in that state, $7.14 was spent and $6.13 was secondary for all educational purposes spent for public elementary schools. Connecticut ranks lowest among the states with respect to the percent of income expended for all public education—$2.90 out of every $100. Maine, the lowest-ranking state, on the basis of the percent of income expended for public elementary and secondary $2.55 of $100 for this and schools, used ever) purpose. The fact that the data of arranged as to permit comparisons between Table 25 are so states as to the percent of income expended for school support does not imply that uniform ity among the states in this respect is either possible or desirable. In some states it may not require the expenditure of as large a percent of income as is actually being spent in some of the poorer states, in order to provide an ®In 1912 and again in 1922 National Industrial Conference Board has published estimates « ear 1932 and is published in the Conference Board Bulletin 7 the United States Census Bureau took an inventors adequate public school program. On the othe hand, the expenditure in some low-income states of to that a percent of income equal spent in certain richer states may be accon plished only at the expense of other stat the Hy functions or may involve a sacrifice on part of the people which is both economica and socially undesirable. As everyone knows the larger the income, the less burdensome Isa viven rate of taxation upon the individual taxpayer. So it is when the aggregate income of the people ot a state is considered. This fact should be borne in Table 25 mind in considering the tig ures of ind other tables of this sect ion. Wealth as a Measure of Ability The total wealth of the nation in 1932 was $247 300,000,000." Wealth consists of all those material things which possess a market value The sum of all these values represents the total amount of national wealth expressed in dollars and cents. This definition excludes commod ities such as fresh air and sunshine and the intelligence of the inhabitants, which have an important effect upon the material welfare of a nation, but are not measurable in terms of TABLE 26.—NATIONAL WEALTH AND THE VALUE OF PUBLIC SCHOOL PROPERTY Item Amount Percent ’ , Total national w 1932 $247 .300.000.000 100 00 ilue allr {im provemer 19 $136 000,000,000 5 00 Value of public s ol prop erty 1934 Elementary and secondary schools $6 624,771, 206 68 Colleges and universities 913,635, 207 Teacher-tr 190, 509 , 366 OR Tota $7.728,915,.779 Sources The fig total national wealth t National Industrial Conference Board Estimating Natio Wealth.”’ Conference Board Bulletin, Vol No. 5: May 1935, p. 4. The value of all real estate and equipms ASé upon an estimate of W. R. Ingalls that 55 percent { wealth of the nation was invested in real estate 1 ments in 1929 and the assumption that the same percentage of wealth was in the form of real estate and improvement 1932. Figures on value of school property are advanced dat from U Department of the Interior, Office of Educat Biennial Survey of Education, 1932-34 1 the wealth of the nation. Since 1 1? national wealth. The latest Conference Board estimate 34; May, 19 39 ] x 7+ Aa N o> x z8 69 06 tt OL AmMNM oo x Co aoa | Ot ol Z “109 jo SI 9 *]09 jua010g 06 ¢ oF ¢ te C $9 Z Is Z 8s 16 $6 +0 AMA N Nn N Nn+tN ve - ny II tt £7 OF 80 nmaate gt ¢ 6 Z “109 jo SI g¢ *]09 jus0Jeq os 9/ 9¢ It £9 19 ss £9 9L 68 79 L9 sol St +9 OL 8 Z “109 jo SI ® *]09 qus0leg PR 16 99 4 99 89 £2 £6 UZ ro '1 99 I8 oz 1 9¢ cs 8B Z ‘109 jo SI ¢ *]09 qus219g £9OL 860 ZSI SEZ $$o LZ SSZ7‘°SL9°ISI £F8'860' See ££9 898 Sor 1lOF Its 69 100 #720 ¢t P8L IFO 9S 180 000 79 SOP E7E 901 S98 O8E IZ ZIS ZOO'LLI 009° 918 O8F 7S9' SEO ' £7 816 €8l'ss 8S8 98S‘ TL 917 ‘86e ‘SE 8bZ O10 LI 868 £06 ZI 081°9L8'°09 SOL’ 990 6 LST L878 6$9'ZI8 ‘SI 8L1°970'#S PEGI ‘SJooyos Ale -puoses pue Are} -uewaja I11qnd jo Ayiadoid jo one, #£6 LO CLI Ise Zell It 789° 102 OfS ZL LOF 8£9' 681 60F 918 618 8Or L8I L6F St 90% LSL°OL 787 BLL BL 681° O71‘ 97T IL¢°966'SSI 8L9° LIZ $07 897 OOf 87S OFE 90F TE $69‘ £18 '69 067 ‘696 ‘18 If£ ‘FPO BE 126‘€10°7Z 1Z7$‘$96'SIT 709 90€ ‘8 Ie ‘OF SZS SLZ‘PSt' Sb S8e'LL0'Sz 681° 60F ZL E61 ‘Ajsedoid Jooyos d11qnd 118 jo anje, LI¢’ S68 OF IOL Sts It £18 SOL 6t 779 6SE 89 6L6 P88" TSI Ser’ 0£6 ‘OF8 PSE'O68 ST 608 ££0'LI Monn THT 897 LZ ££8 ‘9F6' EE PSE 'SEe eh 8b 779° 901 9LI‘SSL‘9 sio‘ore 6t 679° SOL‘FI O9L‘9OLL'6 9S8 6LE °F TIL ‘OS8' SZ 9LS° 16691 7th 670 $71 118°890°6 L£16‘0L9°9 7$6 6S LI 677 ‘SOT ‘O7L ‘I$ + FEST ‘Sjooyss Asepuoses pue Alejueuisle JO} Sainjipuedxy” S06 PR Ol $96 £81 St OFF OLE FI fbi 119 8b S8h'766' 18 900' 978° SL 61£' €bL SZ Isi°zt9 Ol Pst SIS 6 $86 TIZ'1Z 619° F9E'7E 180 ‘$£9' ZF 1¢0'9TL‘OS £IL'FLO°Stt ZI Stes 6£1 66% ‘7 PSL‘066°LT PEt OFb'6 8h9' OPIS 140° S9b°LZ 186 66% ‘07 616' 987 ‘ZtI 646° L6F ‘IT 9170688 L£6 SOL‘ 07 £eb Cel OFG' IF PEGI ‘UOKPONpS onqnd [Te 10} Soinjipuedxq Ors ssl li ZOL OF8 L 68l etl I LS¢°669°9 OSt 970'6 LLb 097 OT OIL OFT £61 Ses‘ t 829° S89°Z S$S8 908 7 677 6L8'F £01 8818 618° 1£6'9 O9F O9F LT 799° 1771 £66 '890'¢ SOf1h6'T 87s Sze'l 009 b6F 681 981'F bis Lis‘Z O88 S78 IT 617 SE0'7Z 6L0'9F0'T OSE ‘6FL'Z 000 ‘00€ * L#Z7$ (SIB{]op Jo Spuvsnoy) Ul) ZE61 qreem [e0] euewuoyy LINOSssI Wy 1dd ississ1jq BIOSIUUIPY uesIyoIW S} VSNL Oesse puelArey ourepw euPisino’y] Ayonjwusay sesuey BMO] eueipuy srourlll] oyep] *** BISI09+) BIquIN|OD jo WISI aIeMPpPd jnNoOMVeUuUO,) opes0joy eIusosyTe) sPsuReyly euozuy “eareqely sa7ye1g pau [ejusuNnUO> SHLVLS Ad ‘ALYAdONd TOOHOS DITEHNd 40 ANIVA AHL ANV ‘SHANLIGNAdXA IOOHOS ‘HLIVAM—lZ ATAVL [ 40 ] ¥ ¥ d 0 1 (usig { I , p 1 N Mm |F t t | } eq NOK . t . 6¢ tt $7 61 t S \V\ . 0'S09'991 8‘ 661 SOR‘ F619 s STAY ( t Mt '78P' LO S19° 66S $8 61 681 Ze BIA ISOM ( C ) ¢° 10S 78 BL iC rT Zi csi t Be ( . 6 Ff 6¢es' I 02 ‘ Z yes 81 t t ace Roe Ol St I ILS 6s ¢ t loc ( 1 . g ts R | gR' Ss 780 '7S¢ OF ttl O61 8 ol ) It I Yes) 6x ( c¢ ri $ 766 #£0 90 #7S SOS S 0 tl t | Z( S t Pol BBS IS Ol ZI 9 7¢9 FL8 Bl LZ S Ose ¢ ISS £6 1 It t osz‘¢zs'‘s os 78Z ‘67S ‘¢ 1¢'Z eI0xeG t + tl ¢ 79 0 eo 90 #89 ° 669 II l 968 1 t im) _ Qi R20 § I z7s9 967 '86L 7z7e Bis I Is] 9peua RS I y $9 . I ORE 06S LLY 8tZ 769 7Z eIueA]ASUUddg 161 zt 6t 09 gs OT 6FO e71 ‘ZIT ‘Ol 819° S897 BI) tls SR 68e' L6 ore 90S 6ll 700° BSE PRS OF 7Hl 1Ol ¢ emoYyeyyO 6s ¢ $69 BLE SLE OLb OFF LtP 890 SOF ITl PRP O19 FI o14O '6 1 ¢9 7 816° 9 ses 761 OS Stl Isl'7st tl 9S1°606'1 eo¥eqd YON 67 PR $ l Lol SSI Lis stl 88l OLT €7L LZ 97s S19 ¢ euljore-) YON 6's ro ¢ 00 tO 1 LEL' 161 O86 Sit £s0 6LL g9¢ 600° 10t 9F0 6£6 872 yIOA MAN of 777 8 tO 1 09S ‘ee 6 7zl 780°'066 9 £81 OL9 oor MON OS ¢ 09 ¢ 06 76 SLB LIZ ¢ 90¢ GOL’ 1#S' SB TLE SOF 6 Aasiaf MAN . et tS 69 170 £06 61 zs¢ OS6'PSt L L¥9'S80'!I a1rysdwepy MeN ' ( 99 9LL‘°096'°S eee ees‘ OSL ‘Zz LEO’ Lit BpeagwN t 98 676° 09 69S O07‘ SZ0'1Z LOU'ZSI't ByseIgaNn 35 ae: csi FE6 211 pct fe B00 ver OF O€8'SSz't SOQ Cet’ ce market values. It also excludes intangibles such as stocks, bonds, mortgages, and the like which, while they are bought and sold in the market, are nevertheless of value only as they certify to ownership of other forms of wealth which are material and tangible. To include these securities at their exchange value would involve a duplication in any estimate of total national wealth. Formerly the amount of total national wealth, as above defined, located within the boundaries of each state, provided an excel- lent measure of the state’s ability to support its governmental functions. Now, under mod- ern economic conditions, when the ownership of wealth located in any single state may be vested in stockholders scattered thruout the nation, this measure suffers from serious limi- tations. It is obvious that this diffusion of own- ership impairs the availability of the wealth located in a single state as a source of revenues tor the support of that state’s functions. Never- theless, the amounts and percents of total na- tional wealth located within the several states are generally accepted as one of the best avail- able indications of taxpaying ability. A part of the wealth of the nation and of every state is in the form of public school property. Table 26 shows, for the nation as a whole, the relationship between total wealth, the value of all real estate and improvements, and the value of buildings, sites, and equip- ment of public schools and public institutions of higher education. Approximately 55 percent of total national wealth existed in the form of real estate and improvements in 1929 according to an esti- mate by W. R. Ingalls.* Assuming that this proportion still held in 1932, the total value of real estate and improvements in that year was $136,000,000,000. Only about 3 percent of total national wealth and less than 5 per- cent of the value of all real estate and im- provements was invested in buildings, sites, and equipment of public schools and public institutions of higher education. In other words, out of every $100 of total national wealth in 1932, $55.00 was invested in real estate and improvements, of which only $2.68 was invested in property of public elementary and secondary schools and an additional 45 cents in the plants and equipment of public colleges and universities and teacher-t: institutions. According to Table 27, the distributio the total national wealth among the stat very unequal. Column 2 shows that in New York’s wealth was almost seventy as great as that of Nevada. Approxin one-third of the total wealth of the n was located in four states (New York, Pe sylvania, Illinois, and Ohio). Column sents data on the relationship between w: and school expenditures in the various Examination of the figures in this colum: veals that for every $100 of wealth, Calif: spent $1.20 and New Mexico, New Yor! Delaware each spent $1.04 for all public cation in 1934 as compared with $0.48 South Dakota, $0.51 in Nebraska, and $0.7 in the United States as a whole. Table 27 also shows the relationship tween the value of public school property total wealth in the separate states. Accordi: to the figures of columns 9 and 10, out every $100 of total wealth in Michigan, $4.47 was invested in educational buildings sites, of which $3.71 was in the pla and equipment of elementary and seconda: schools and $0.76 in buildings and ground } of higher educational institutions. At the oth: end of the scale, only $1.87 of every $100 wealth in Nebraska was in educational proj ertv—$1.47 in property of elementary secondary schools and $0.40 in propert: institutions of higher education. Wealth and Income per Child as Measures of Ability To arrive at any estimate of the relat ability of the states to support education necessary to compare each state’s resources ) with its educational obligations. Column 2 0! Table 28 shows the wealth behind each child enrolled in public elementary and secondai schools in the various states. The extremes are represented by Nevada with $21,582 o! wealth per pupil enrolled and Mississip; hy with $2,819, or a ratio of approximately eigh' to one. Column 3 presents data on income pe pupil enrolled. New York with $3,766 of in come in back of each pupil ranks highest an Mississippi with $495 ranks lowest. New Yor! 7 A revision of data originally published by W. R. Ingalls in the Amnalist for October 23, 1931, appears in: Moulton, Ha The Formation of Capital. Washington, D. C.: Brookings Institution, 1935. p. 187. [42 ] Mair Mar Mass Mich Minr Missi Mon TABLE 28.—COMPARISON OF WEALTH, INCOME, AND PER PUPIL ENROLLED IN PUBLIC ELE ution of BY STATES, 1933-34 SCHOOL EXPENDITURES MENTARY AND SECONDARY SCHOOLS sta in 19 3 Wealth per Income per Expenditures Value of public ity + pupil enrolled pupil enrolled for public ele- elementary and Rank Rank Rank Rank States in public ele- in public ele- mentary and secondary in in in in XIMate mentary and mentary and secondary school property column column column column secondary secondary schools* per per pupil 2 3 4 ~ © natu schools schools pupil enrolled enrolled . ) k, I I 2 3 4 5 6 7 8 9 nN / n owe U.S $9,355 31 $1,898 07 $64.76 $250 US s 3,620 06 3.12 6 49 R3 48 16 i4 15 lum: Ariz 11,274.71 2,054.96 71.80 103 19 15 30 : irkar 4,456.69 736.11 19 _ 8&6 4 44 48 1s 44 alifor fornia 10,596.12 3,088.51 111.13 393 { 3 5 orl rado 10,542.00 1,659 80 71.15 RR 8 24 18 3 in blic ed nnecticut 12,794.83 2,897.97 78.20 345 11 7 10 . ‘ fe elaware 10,764.34 3,275.92 95.12 370 24 3 6 0.48 Dist. of Columbia 14,084.58 5,224.68 96.45 108 5 1 5 id $0.76 la 5,075.17 1,285.47 38.35 18 4] 33 39 34 rg 4,012.46 865.90 25.18 3 16 44 46 48 laho 10,322 80 1,229 48 57.08 195 29 34 31 ; ship nois 12,537.79 2,601.73 76.6 347 13 9 11 rty t Indiana 9,952.17 1,555.98 61.83 54 31 28 26 18 wa 14,953.42 1,337.79 61.99 2? 2 32 5 cording Kansas 11,575.59 1,368.89 64.69 252 18 7] 3 ”) out eee Kentucky 4,603.79 987.54 27.94 102 43 41 43 +) 1, Dt.t Louisiana 5,818.11 1,173.90 34.34 121 39 36 41 9 KS Maine 9,506.58 2,076.20 52 86 198 32 14 35 3] - Maryland 10,694.40 2,699.38 72.76 237 25 8 15 4 plant Massachusetts 12,925.01 3,014.81 91.13 502 10 5 1 ondar Michigan 9,247.57 1,886.49 70.03 343 33 21 21 9 ‘rounds Minnesota 11,964.80 1,621.92 70.17 271 15 25 20 16 " Mississippi 2,818.57 495.11 18.93 45 49 49 49 49 e othe Missouri 10,908.05 1,924 44 56.83 211 23 19 32 9 100 ot Montana 14,934.85 1,621.74 75.04 249 ; 26 14 | Proj Nebraska 13,108.41 1,409.76 54.18 192 9 30 34 33 \ Nevada 21,582.08 2,331.87 112.16 308 l 12 ; 11 New Hampshire 13,962.77 2,581.20 75.21 256 6 10 13 1 rth New Jersey 11,249 67 2,564.99 100.58 394 20 11 4 4 New Mexico 7,249.22 1,573.89 61.09 101 36 27 27 ! New York 12,599.35 3,766.00 124.32 42 12 2 1 North Carolina 4,037.33 857.22 25.19 120 45 45 45 +1) 1S North Dakota 11,880.32 1,061.56 59.13 230 16 39 29 6 Ohio 11,238.51 2,010.76 76.35 291 1 16 12 1 )klahoma 4,973.79 1,013.95 40. 32 156 42 40 38 3 regon 13,324.72 1,792.32 64.74 254 8 23 22 18.5 lat \ Pennsylvania 1,169.61 2,079. 46 72.19 288 22 13 16 13.5 it Rhode Island 12,198.71 2,942.54 86.30 340 14 6 8 10 South Carolina 3,897.15 752.54 24.04 83 47 47 47 $5.5 yUTCes South Dakota 14, 486.49 972.39 59 58 22 4 42 28 , Dok he Tengessee 5,113.50 926.44 28.80 9 40 43 42 / child Texas 5,880.54 1,430.63 13.84 170 38 29 37 35 Utah 8,485 96 1,159.51 7.36 37 35 37 30 4 dal Vermont 9,977.80 1,971.29 54 23 153 30 18 33 +¢ eme Virginia 6,604. 16 1,207.97 34.59 114 37 35 40 1 Dal ; 2 O Washington 11,786.49 1,973.14 64.67 42 17 17 24 3 Sip West Virginia 8,490.45 1,142.25 45.44 155 34 38 36 38 Wisconsin 10,623.42 1,858.51 70. 46 IR6 26 22 19 15 eight Wyoming : 13,905.95 1,886.88 78.57 251 7 20 9 1 > pe f in .. 20urces: Based on data in Tables 25 and 27 as to wealth and income and advanc. a fr U.S. Departme vf ’ Umice of Education, Biennial Survey of Education, 1932-34 ind * Day schools only. Does not include night, summer, and part-time and continuatior or es FIGURE III EFFORT AND ADEQUACY, 1934 Effort* Adequacy” Percent of Income Number of Dollars Expended Expended for Education Per Pupil Enrolled 2 3 4 6 $120 $100 $80 $60 $40 _ < TETFEZS S SFE Zz€ REE: 7 T 6 $120 $100 $80 $60 $40 $20 Research Division, Nationa! Education Associa ® Based on data from Table 25, Column 6. » Based on data from Table 28, Column 4. Jso has approximately eight times as much in ome per pupil enrolled as does Mississippi. [he effect upon the educational offering of and income differences in wealth is clearly evident in the data of column per pupil 4. This column gives the expenditures for each pupil enrolled in public elementary and sec ondary schools. According to this column Mis sissippi expended $19 for each pupil enrolled is compared with an expenditure of $124 per pupil in New York. Thus, even after allow ng for the difference between the two states is to the size of the educational task, New York provided a school program more than six and one-half times as costly as that offered in \ississippi. This, of course, does not neces sarily mean that the school program of New York state is six and one-half times as eftec- tive as that of Mississippi. The school dolla: may have a higher purchasing power in Mis sissippi than in New York, but if an expendi ture of $124 per pupil is justified in the latte: state, a $19 per pupil expenditure can hardly be adequate in the former. The value of school property per pupil enrolled is also given in Table 28. Yield of a Uniform System of State and Local Taxation as a Measure of Ability In spite of the value of wealth and income is measures of ability to support education, they are, nevertheless, subject to certain limi tations. One or two of these have already been mentioned. There is yet a further limitation trom which these measures suffer. They as- sume, respectively, that every dollar of wealth is equally available with every other dollar of wealth as an object of taxation and that every dollar of income is equally available with every other dollar of income for the purpose of pay- ng taxes. Hence, on this assumption, since public schools are supported by taxes, every dollar of income and every dollar of wealth would be equally available with every other dollar of income and wealth for the support 1 schools and for other public purposes. This, of course, is not the fact. In any state, the torms assumed by the wealth within its bor- ders, the distribution of the total income of its residents by size of income, and the efficiency 8 Chiam, Leslie L., op. cit ® Newcomer, Mabel., op. cit # National Tax Association. 16-18, 1933. Columbia, S. C.: the Association (Walter G “ National Tax Association, op. cit., p. 361 Query ot the tax system and the state fisca administrative machinery in tapping these re state sources, all will profoundly affect ability to the state raise revenues for support ot ind local governmental functions. Realizing this, Chism § each tried to develop a truer measure of rela and Newcomer! tive ability to raise revenues, or “‘taxpaying ability,” on the basis of the potential yield ot a selected group of taxes to be applied uni formly in all states. Chism started with the “Plan for a Model System of State and Local Taxation” a committee of the National Tax recom mended by Association.'® This plan recognizes three majo: principles of fundamental to American fiscal theory and practise, as fol (1) that every person having taxable taxation as lows: ability should pay some sort of a direct tax to the government under which he is domiciled ; (2) that owned should be taxed by the jurisdiction in tangible property by whomsoever which it is located, because it there receives protection and other governmental services and benefits; and (3) that business carried on for profit in any locality should be taxed for the services which it receives.'' On the basis of these three principles, the committee recom mended that every state and local tax system should include a personal income tax, a tax on tangible property at its situs, and a tax on busi In addition, Chism includes in his proposed model system, measured by net income. ness to be used as a basis for estimating potential tax revenues, three supplementary taxes which most state tax systems: a are common to motor vehicle license tax, a motor fuel tax, and an inheritance tax. After estimating the potential yield of these six taxes applied at rates in all states, 1922-32, Chism and relates these potential revenues to educa ten-vyeal further uniform over a period, goes a step tional need. Assuming that the schools can reasonably claim 31.27 percent of the revenues of each state (the average percent of total tax collections devoted to the support of schools in all the 1932), he the amount of revenues which under his proposed states in determines model tax system would be available for edu cation and divides this by the number of ‘Second Report on a Plan of a Model System of State and Local Taxation secy.), 1934 p 353-427 [45 ] units of educational need in the state as defined by Mort.'* The resulting measures serve as the basis for Chism’s indexes of the relative ability of the states to support public schools. Newcomer, like Chism, starts with the pro- posed Model Tax Plan of the National ‘Tax Association as a foundation. To the three basic taxes on personal income, property, and busi- ness income, she also adds three supplementary taxes—a severance tax, a corporate organiza- tion tax, and a stock transfer tax—on grounds that these taxes represent extraordinary tax- paying ability in certain states which should be reflected in any index of the taxpaying ability of the forty-eight states. The difference between the indexes of relative state ability to pay taxes thus obtained by Newcomer and those obtained by Chism are chiefly due to the differences in the methods used by the two investigators. The two series of indexes are shown in ‘Table 29. According to Newcomer, the tax resources of New York state in 1930 were 115 times as great as those of New Mexico, as measured by the yield of a model tax system. On a similar basis, Chism found New York’s tax resources to be 82 times those of Nevada in 1932. Altho Nevada was at the bottom of the list of states with respect to total taxpaying ability, as esti- mated by Chism, when considered in the light of the educational task to be performed, Ne- vada's ability to pay taxes was higher than that of any other state. Chism found that the range among the states in the value of tax resources per unit of educational need was from $19.45 in Mississippi to $113.57 in Nevada, a varia- tion of from 1 to 5.84. A later investigation by Ashby Chism’s and Newcomer's data on taxpaying ability to educational expenditures in the states. The results are shown in columns + and 5 of Table 29. On the basis of Newcom- er’s figures, the percent of tax resources spent for current educational costs in 1930 varied among the states from 3.7 in Delaware to 79.6 in North Dakota. Based on Chism’s data for 1931-32, the variation was much smaller— from 21.3 percent in Arkansas to 42.6 percent in Wyoming. Newcomer's data, as_ stated above, take account of special taxpaying ability 'S relates 12 Mort, Paul R., director. Federal Support for Public Education. New York: Teachers College p. 62-114. 18 National Education Association, Research Division 14:105-62; May, 1936. Washington, D. C.: the Association “The Efforts of the States To Support Education.” in a few states and therefore show a variation. Private Expenditures as an Indication o{ Ability All goods and services, whether purc! collectively for public purposes thru tax or individually for private purposes, must paid for out of the total income of the p: It may be said that since this is true greater the expenditure for the support of ernment, the less there is available to for the satisfaction of private wants and nm This is only partly true. Some public expen tures, like those for public schools, brin; turns in succeeding generations many tim great as the initial investment. Likewise ¢ penditures for certain public services such those rendered by the schools represent actual saving within the current generation, They provide for the whole people at pul expense certain goods and services which wou! otherwise have to be purchased privately fron individual incomes at a much greater cost Furthermore, money spent for schools is almost immediately paid out again as salaries, wag and for the purchase of buildings, sites, su plies, and equipment, thus swelling the volum of consumption in the state and in the natio: On the other hand, it may be said that th greater the percent of the total national! come used for private spending, the less w be available for the payment of taxes for th financing of government-supported enterprises This again is only partly true. It may be t: of a society in which production is unable t keep pace with an expanding consume: mand. Many economists believe, however, that under our modern economic order, geared as it is to mass production, any reduction consumer spending will tend to retard pro duction and reduce the national income. |: creased spending is needed to stimulate produ tion, thus increasing the national income an making available more funds for both publ and private purposes. There is no disposition to argue in thes paragraphs that expenditures for the purposes mentioned in the following pages are too hig! It is evident, however, that in any state ©! nation large expenditures of this type do ind Columbia University Resear hk Bu [46 ] lregon Pennsy Rhode South ¢ South I Tennes: Texas ermor rginia Washin Vest V) Wiscons Wyomi! SOM Educati Federal Ashby, | ublishe —_—_ rABLE 29.—ABILITY ON THE BASIS OF TAXATION OF THE YIELD OF A UNIFOR STATES TO SUPPORT EDUCATION MEASURED M SYSTEM OF STATE AND LOCAI Estimated tax resources In thousands of dollars Percent of estimated tax resources expended for education Index of percent of tax resources expended for pub education U. S.=100 States On basis of On basis of On basis of Newcomer's Chism’s data data for 1930 for 1931-32 On basis of Newcomer Chism’s data 1930 for 1931-32 Newcomer's data for 1930 Chism 1931-32 6 tal United States ‘ 2 $ 78,600 100 600 100 400 000 500 600 900 000 300 900 900 200 woul an 200 100 800 _800 300 300 700 ine Maryland Massachusetts Michigan 500 , 444 000 Missouri 588 7,000 ntana 36,513 ,600 \ebraska , 469 52,400 {innesota \1 ssissipp! vada , 168 2,800 ew Hampshire 7,433 ,600 ew Jersey 260, 189 , 300 5. 327 000 »w Mexico 27 000 ow York 34,313 rth Carolina 3,542 51,600 North Dakota 2,916 600 Ohio ,978 ,600 kklahoma , 848 57,400 regon , 827 300 Pennsylvania 632 _300 Rhode Island ,546 ,900 South Carolina , 182 000 South Dakota .555 22,900 Tennessee ,220 51,300 073 139,600 , 323 17,100 , 804 9,800 rginia ,195 52,300 Washington 638 64,000 ermont Vest Virginia 614 50, 100 2 89 Wisconsin 52,084 101,600 2 3; 102 urpose 864 11,300 2 150 Wyoming O high tate 0! lo ind! Public Schools Contribution 3 as revised in Mort, Pau k Columns 4, 5, 6, and 7 fror Association, 1946 4 States to Finance Sources: Column 2 from Chism, Leslie L. The Economic Ability of the Education, No. 669. New York: Teachers College, Columbia University, 1936. P 124. Column Federal Support for Public Education. New York: Teachers College, Columbia University, 1936 Ashby, Lyle W. The Efforts of the States To Support Education. Washington D. ¢ National Education ublished as May 1936 Research Bulletin.) Tables 8, 9, and 13, p. 23, 24, and 29 cate a relatively high degree of purchasing power. In what proportions this purchasing power will be used for the satisfaction of indi- vidual, or of collective, wants the people them- selves will decide. Expenditures for the Purchase of New Automobiles Students of the market frequently make use of data on sales of motor vehicles as a basis for judging relative state or local purchasing power. In the nation as a whole, excluding motor trucks from consideration, 1,889,000 new passenger cars were registered in 1934. For the purchase of these, according to a recent estimate, the people of the United States spent upwards of $1,299,000,000. This esti- mate should not be compared with estimated expenditures for automobiles published in pre- vious issues of the RESEARCH BULLETIN. It covers the purchase price only of new pas- senger cars. Expenditures for the purchase of all used cars are excluded, of operation and upkeep. estimates of expenditures for new pas automobiles in the separate states. By sulting this table and Table 25, it will that out of $100 of income, New York s $1.43 for the purchase of automobiles o{ type, while Oklahoma spent $4.29. The as are al age for the United States as a whole in |9 was $2.59 out of every $100 of nationa come. Expenditures for the purchase of ney cars alone amounted to more than two-third of the cost of all public education. Expend and upker of all motor vehicles would be equal to seve; tures for the purchase, operation, times the cost of public education. Life Insurance Premiums and Savings Deposits Generally speaking, if the may assume that purchasing power in | community is relatively high. The people FIGURE IV Table 30 presen amounts sayy by the people of a community are large, y Public Schools - Elementary, Secondary, and Collegiate $1940,193,439 “ZL New Passenger Automobiles fof l=Th $1,299,000,000 Life Insurance $3,066,304,933 Luxuries $3, 487,441,000 SCHOOL COSTS AND CERTAIN OTHER EXPENDITURES, 1934 gee fey LY fo] ley YU 2 FY FY FV Fé ooee EVE keg = of =/ EY Each symbol represents 500 million dollars. Sources of data: See Tables 30 and 31. Research Division, National Education Associ Mi188188i Pf Missouri Montana Nebraska evada New Hamps New Jersey New Mexico New York North Caroli North Dakot kiahoma regon Pennsylvania Rhode Island South Caroli: South Dakot: vermont \ virginia Washington West Virgini: Wisconsin Wyoming Sources 32-34. Col ndustries 74 New York. "The fig peration and » Premiu pe ABLE 30.—EXPENDITURES FOR PUBLIC EDUCATION, LIFE INSURANCE, AND pASSENGER AUTOMOBILES,* AND ACCUMULATED SAVINGS DEPOSITS—1934 T el Expenditures Expenditures Purchase price Total amount Percent Percent Percent for public for life of new passenger in savings col. 2 col. 2 col. 2 States education insurance* automobiles* accounts is of is of is of 1934 1934 1934 1934 col. 3 col. 4 col. 5 1 2 3 4 Linited States $1 3,4 $3 , 066 , 304,933 $1,299 000 $21, 867 ,666, 000 21,779,014 17 , 360 71,171,000 4,220,488 4 , 196 16,408 , 000 13,187,459 10 832 433,000 161,379,475 79 806 §23,000 24,406, 137 12 , 500 ‘ 348 000 649,255 18 148 22,000 Delaware 075,686 Bi. 8,804 000 nistrict of Columbia m 3,892,318 12,745, 268 , 482,000 , 780,927 18 451 185,000 , 228,970 22 697 000 195,750 529 3. 100,000 . 546,320 7! aes 488 ,000 974,568 , 516 364, 000 291,451 2 878 954,000 549,070 22 913 7.153,000 194,176 t% aon 219,000 ,924,916 ; 344 83,928,000 Mair 805, 240 455 490,000 Maryland ~ F ‘ , 183,551 7 126 .710,000 438,579 { 7 , 761,000 1UuCcKY yisiana \assachusetts ,870,754 7 356,000 fin 426 ,328 - 810,000 Mississipp! ° ,450, 285 ‘ 575,000 Missour! Ds . , 533,685 8, 245,27 741,000 Montana y 534,790 7 000 Nebraska , 125,321 000 Nevada , 196, 33: , 279, 166 3 7.000 New Hampshire ; ; , 284,093 d " 000 New Jersey ; 625,987 2 2 000 New Mexico ; q 987 ,691 000 New York F , , 514,754 773,000 North Carolina , ’ 36,335,394 ; 5,674,000 North Dakota ; + 5,944,152 29,770,000 Or ; ,406,119 88,376, 952,000 \klahoma . 4 , 209,055 27 : 118,000 Oregon 625,928 ; 551,000 Pennsylvania 54,675,115 , 327,528 25: , 576,000 Rhode Island ; ,427 5,391,295 . 087 ,000 South Carolina : ; 8, 125,537 : : 853,000 South Dakota : ; , 687, 401 : 237 ,000 Tennessee : 683,578 : 607 ,000 873, 296 154,000 Utal , 552,566 737 379,000 Vermont : F 036,131 364, 910,000 Virginia ; : 576,243 585 693,000 Washington 5, § 371,572 15.908, 463 000 West Virginia Z 3,017,782 15,155, 82: 337,000 Wisconsin 983, .551,598 28,214,898 553,000 Wyoming , 203, , 253,554 3,106,345 382,000 Sources: Column 2 from advance data of the U. S. Department of the Interior, Office of Education, Bienntal Survey of Education 32-34. Column 3 from Life Insurance Yearbook 1935, Spectator Company, New York, p. 955-56, Column 4 based on Automottve ndustries 74:243; April 10, 1936. Column 5 from Savings Deposits and Deposstors, 1929 and 1934 American Bankers Association New York. * The figures given in column 4 represent the purchase price of new passenger cars only They do not include the cost o! peration and maintenance or the purchase price of used cars » Premiums paid on life insurance not only able to satisfy their needs thru the purchase of commodities but are possessed of a surplus of funds which may be set aside for future use. Savings may be deposited with banks, trust companies, or other financial insti- tutions or may be invested in securities such as stocks, bonds, and mortgages, or in life insur- ance policies. Table 30 shows that the accumulated sav- ings deposits in banks and trust companies in the United States in 1934 amounted to $21,867 ,666,000.'* Table 30 also shows the amounts deposited in banks and trust com- panies in the different states. Column 3 of Table 30 presents data on payments for life insurance premiums in the nation and in the separate states. The Ameri- can people as a whole paid out $3,066,304,933 in life insurance premiums in 1934 or $6.11 out of every $100 of national income. Luxury Expenditures Expenditures of a community for articles and services of the luxury class furnish a rough indication of taxpaying ability. People as a rule spend money for luxuries only after their needs are satisfied. Those whose incomes are so low as to be practically at what is known as the “subsistence level” are able to buy few, if any, luxuries. High expenditures in any community for luxuries implies, therefore, that the people have a surplus of income over and above what is required for the bare ex- penses of living—a surplus with regard to the disposal of which they can exercise some degree of choice. It is difficult to define exactly the goods and services to which the term “luxury” ap- plies. Passing years develop new customs and new standards. Items for which data are given in Table 31 are tobacco, soft drinks, candy, ice cream, services and goods sold by beauty par- lors, and admission to motion pictures, theaters, ball games, and other places of amusement. Whatever the decision with regard to the classification of the individual items repre- sented in this table, it will probably be agreed that, taken altogether, the estimated total ex- penditures for these items do furnish a rough index of purchasing power. Column 6 of Table 31 gives these total expenditures by states. Their relation to total income in each state may be determined by comparing the | of this column with those of column 2, 25. In the nation as a whole we spent $3,487 441,000 for all of these items in 1934 approximately $7.00 for every $100 of na income. This expenditure amounted to app; mately twice the cost of all public edu in that year. The estimates for the separate states widely. South Dakota spent almost $10.(() of every $100 of total income for the purc! of these articles and services. This compa; with an expenditure in Arizona, at the ot! end of the scale, of slightly more than $5, out of every $100 of income for these purpos The same two states spent $7.14 and $4.5 for every $100 of income, respectively, for : support of public education. No state spent as much for public educat as for the luxury items included in Table 3 In New Mexico school costs amounted to ° percent of these luxury expenditures, w! in Arkansas they were slightly less than 4 percent of the cost of luxuries. Summary Income and wealth are the most commo: accepted measures of ability to support edu tion and other public functions. In 1934 the total national income, as est mated by the United States Department Commerce, was $50,174,000,000. The amoun: of income in New York state was almos twenty times that in Nevada. Approximate 54 percent of the total income of the natio: or $27,053,820,800, was received by the peo; of seven states—-New York, Pennsylvania, |! nois, California, Ohio, Massachusetts, New Jersey. The percent of income spent ! all public education varied from $7.14 out every $100 of income in South Dakota to $2. of every $100 of income in Illinois. The rany in the percent of income expended for elemer tary and secondary schools was from $6.13 | every $100 of income in South Dakota ' $2.55 in Maine. The National Industrial Conference Boa: estimates the total wealth of the nation 1932 at $247,300,000,000. The distributio of this sum among the states was very unequé about one-third of the total being concentra’ ™ American Bankers Association, Savings Division. Savings Deposits and Depositors in Banks and Trust Compani United States, 1929 and 1934. New York: the Association, 1936. p. 4. [ 50] TAI Kentucky lsiana Maine Maryland Massachus Michigan Minnesota Mississippl Missouri Montana Nebraska Nevada New Hamp New Jersey New Mexic New York North Caro North Dak« klahoma Oregon Pennsylvani Rhode Islan § South Carol South Dako Tennessee Texas tah Vermont Virginia. . » Washington. West Virgini Wisconsin . . Wyoming Sources: National Edi S Bureau of I Census: U. § Beverages; a tions only, ' Figure LT Beverages; and Professor Carl Shoup, Columbia University. tions only \ Figure reported for Illinois includes expenditures at “Century of Progress.’ TABLE 31.—THE STATES’ ANNUAL BILL FOR CERTAIN LUXURIES IN 1934 aaa Toilet Expenditures Soft drinks, Theaters, preparations for public Percent States Tobacco ice cream, movies, and beauty Total education at col. candy and and other parlor columns 2 to 5 all levels is of chewing gum amusements services 1933 1934 col, 6 l 2 3 4 5 ay 7 8 S Ss $1 , 344,000 000 $1, 229,073,000 $600 , 000 , O00 $314, 368,000 $3,45 141.000 $1,940,13 133 55 63 21,100, 800 15,254,918 ? 760,000 1,984,000 41.099,718 20,705 ,937 50 38 rizona 4,435,200 3,192,643 1,560,000 686 , 000 9,873,843 8. 590,216 87.00 k 8 15,187,200 10,178,528 2,040,000 1.698 ,000 »9_ 103 8 11,497,949 390 § nia 78,355,200 70,234,940 50. 880,000 30,781,000 »30. 251,140 142,286,919 61 80 rado 11,827,200 12,496,988 4,020,000 2,701,000 31,045,188 20,499,981 66.0 ecticu 19,756,800 16,374,321 10, 260,000 5,593,000 51,984,121 27,465,071 52.83 yelaware 2,822,400 4,414,758 1,200,000 499 000 8 936,158 5. 146,648 57 59 ) f Columbia 8,601,600 11,411,287 6,420,000 4,274,000 30,706,887 9,436,134 30.73 . 16,128,000 13,184,574 5.760,000 3.585.000 38 657,574 17,990,754 16 4 gi 24,864,000 19,099,470 5,700,000 3,173,000 52.836,470 22.499, 139 42 58 4,838,400 4,175,563 1,320,000 780,000 11,113,963 8. 345.412 5 09 89,510,400 80. 882,709 60.960, 0008 24,840,000 »56.193,109 115,074,713 44 92 35,078,400 29,577,056 10,020,000 5.663 ,000 80, 338,456 50,716,031 63.13 wa 27,148, 800 25,032,735 8,400,000 5.060, 000 65 .641,535 42,634,081 64.95 K 8 19,891, 200 15,711,378 6,300,000 » 741,000 14,643,578 32. 364,679 > 50 Kentucky 22,848 ,000 16, 838 6, 240,000 >? 762,000 48,287,835 21,211,984 43.93 siana 18,681,600 12 321 6,120,000 » 394,000 39. 921,921 19.515,454 418 88 9,273,600 8, 218 1,860,000 1,893,000 21,051,818 10.612,751 50 41 nd 18,816,000 19, 436 11,700,000 4,185,000 53.875,436 »S 743.319 47.78 Massachusetts 53,356,800 48 630 30,720,000 14,518,000 147,022,430 75,826,006 51.5 Michigan 54, 163,200 53,592,619 20, 340, 000 10,941,000 139,036,819 81,992,485 58.9 Minnesota 29,702,400 27.419, 493 10,500,000 6,507,000 74,128,893 48,671,143 65 66 M 15,052,800 10,726,597 1,680,000 940,000 28.399, 397 14,376,446 50 62 M 40,992,000 33,587,539 15,180,000 10,340,000 100,099 ,539 45.183,964 45.14 M 6,316,800 5,100,482 2,040,000 912,000 14,369, 282 10,484,905 72.97 Nebraska 14,784,000 13,058,758 4,500,000 2.981 ,000 3§ 323,758 21.025, 204 59 5 Nevada 1,209,600 874,896 720,000 276,000 3.080, 496 2,756,533 89 48 New Hampshire 5 644, 800 3,992,528 3, 240,000 1,106,000 13,983,328 7,454,950 53.31 New Jersey 47,980, 800 37.650,964 26,160,000 13,084,000 124,875,764 85.541,.763 68 50 New Mexico 3,763,200 2,513,655 780,000 507 ,.000 563.855 6.990.082 9? 41 New York 165,312,000 161,909,626 125,880,000 60,580,000 513,681,626 301.009, 368 58 60 North Carolina 25, 267,200 21,290,413 5,520,000 3,106,000 55,183,613 27.723,130 50 24 North Dakota 6,316,800 4,990,413 1,680,000 950,000 13,937,213 11,452,781 82.1 ) 76,876, 800 75,908,710 31,920,000 18, 360,000 203,065,510 111,405,068 54 86 )klahoma 21,772,800 17,777,976 6,480,000 3. 326,000 49. 356,776 30,584,358 61.9 Oregon 11,961,600 9,666,022 4,200,000 2,771,000 28,598 622 16.112, 123 56 34 Pennsylvania 103 ,084, 800 128,383,076 41,040,000 20,938 , 000 293 ,445 876 154,675,115 §2.71 Rhode Island 8,198,400 7, 869,333 4,380,000 1,603,000 »? 050,733 11,706,427 53.09 South Carolina 13,440,000 9,930,528 2,400, 000 1. 166,000 6. 936.528 14.218,045 5)? 78 South Dakota 6,720,000 5,528,413 2,040,000 1,005 ,000 15,293,413 11,106,212 » 62 nnessee 23,654, 400 20,418,735 4,320,000 3,528,000 §1,921,135 21,501,339 41 41 Texas 56,985 ,600 49,075, 860 17,640,000 10,055,000 133,756,460 70.457, 839 52.68 tah 4,972,800 5,065,540 1,740,000 918,000 12,696,340 10,229,344 80.57 Vermont 4,032,000 3,585,655 780,000 625,000 9.022,655 4 861,334 53 88 Virginia 22,310,400 20,699, 884 6, 240,000 3,169,000 52,419,284 26 , 686 ,942 50.91 Washington 19, 353,600 16,949,424 9,300,000 4.552, 000 50,155,024 25.943, 160 $1.73 West Virginia 15,590,400 13,602,528 4,320,000 1,956,000 35,468,928 22.633, 008 63 81 Wisconsin 33,331,200 30,104,252 9,540,000 7.854,000 80,829,452 49 983,595 61 84 Wyoming. .. eT 2.688 , 000 1,785,770 1,200,000 502,000 6,175,770 5,203,601 84.26 Sources: Figures on expenditures for the luxuries given in this table are independent estimates of the Research Division of the National Education Association. They are based principally on data obtained from the following: U. 5 freasury Department Bureau of Internal Revenue; U. S. Department of Commerce Bureau of Foreign and Domest Commerce and Bureau of the Census; U. S. Department of Agriculture, Bureau ol Agricultural Economics; Sales Management; American Bottlers of Carbonated The amounts given for eac h state should be looked upon as approxima [51] a RE Qe Ces | in four states—New York, Pennsylvania, Lli- nois, and Ohio. For every $100 of total wealth located within its borders, California spent $1.20 for all public education. This may be compared with a ratio of 48 cents for educa- tion to every $100 of wealth in South Dakota. A part of the wealth of the nation is in the form of public school property. Out of every $100 of total national wealth, this investment represented $3.13, of which $2.68 was in ele- mentary- and secondary-school property and 45 cents in buildings and sites of higher educa- tional institutions. This compares with an in- vestment in all types of real estate and im- provements of about $55 out of every $100 of total wealth. Among the states the percent of wealth invested in educational buildings and _ sites ranged from 4.47 in Michigan to 1.87 in Ne- braska. Michigan’s and Nebraska’s investments in elementary and secondary schools in 1932 were 3.71 percent and 1.47 percent of total wealth, respectively. Recent investigations by Chism and New- comer have developed new methods of meas- uring the relative ability of the states to support public schools, on the basis of the esti- mated potential yield of a uniform system of taxation. Both of these investigators, in de- ciding upon the content of their uniform tax systems to be used in measuring relative tax resources of the states, started with the three taxes included in the Model Tax Plan, recom- mended by the National ‘Tax Association added three supplementary taxes. Neweor, selected as supplementary taxes a stock trap. fer tax, a corporate organization tax, 4 severance tax on grounds that these tay, represent extraordinary taxpaying abilit certain states. Chism added a motor vehicl, license tax, a motor fuel tax, and an inheritane, tax on grounds that these taxes are now « mon to most state tax systems. According ; Newcomer’s results, New York’s tax resource were 115 times those of New Mexico in [93 The estimated yield of the six taxes selected Chism was 82 times as great in New Yor! in Nevada. On the basis of Chism’s figures, tly amount of tax resources per unit of educatioy need showed a variation among the states from | to 5.84. While the volume of private expenditur cannot be said to measure exactly ability ; support education, it does furnish a rough ind cation of the presence or lack of such ability any particular area. This is probably especia! true of expenditures for articles of the luxu class for which there is a more or less elas: ter indicate a wide variation among the state: Expenditures for the purchase of new passe: ger automobiles were approximately sevent three times as great in New York as in \; vada. Expenditures for certain luxury co: modities varied from $513,682,000 in New York, to $3,081,000 in Nevada, a ranve from 1 to 167. | 52] tion for eacl som shot | incr 1931 loca two eral grou ing | pero out 1 have part and vant: that socie resou of ci vidus the e areas priva govel up pt as th Educ ities | source ) tion | will | Part ernm dened may 1 may | becau: ity no ot rea den is the di and n has be pressic VI. Some Current Issues Preceding sections of this bulletin have been devoted largely to the most recent reliable fig- ures related to the financing of public educa- tion. These facts suggest certain large issues for further exploration and future action. In each of these areas, planning is essential; in some cases, state and federal legislative action should eventually follow. 1. Can the American people pay for the increasing services of government? Between 1930 and 1934, the combined gross cost of local, state, and national government increased two billion dollars or 15 percent. Net fed- eral expenditures more than doubled. Certain groups particularly have said that the increas- ing load of “bureaucracy” is a menace to pros- perous economic development. Others point out that the large financial surpluses of the past have encouraged unhealthy speculation, that part of the accumulated reserves in savings and other forms might be used to better ad- vantage for service and cultural activities, and that the increasing needs of a changing modern society require the diversion of more financial resources to public services which the majority of citizens could not possibly purchase as indi- viduals. There are good economic reasons for the extension of governmental services in those areas not successfully or properly handled by private enterprise. The dollars spent by the government can be just as effective in building up purchasing power and creating employment as the dollars spent by private individuals. Educators may well investigate the possibil- ities of better use of the nation’s financial re- sources in the interest of all of the people. 2. Is it possible to develop a system of taxa- tion which will yield adequate revenues and will be stable, varied, flexible, and equitable? Part of the complaint against increasing gov- ernmental costs can be traced to the overbur- dened tax upon real property. While this tax may not be too high in many communities, it may be considered excessive in many instances because of the failure to utilize taxpaying abil- ity not represented by the ownership or the use of real property. In other words, the tax bur- den is badly distributed. A further difficulty is the duplication of taxation among local, state, and national governments, a condition which has become aggravated during the recent de- pression. These are but two of the conditions which led to the development of the Model Tax Plan of the National Tax Association. On the basis of this report, there is reason for be lieving that tax reform is possible and practical. Educators can perform a service useful both to the schools and to their communities in dissemi nating information as to the possibility of a more equitable distribution of the tax burden 3. Can governmental revenues, particularly those for schools, be stabilized? Between 1930 and 1934, while all state expenditures declined 6 percent and local expenditures dropped 15 percent, school costs were reduced almost 26 percent. The payment of school support as a deferred item in governmental costs, causes instability in educational income which is de structive to continuing school policies. While it must be recognized that there will be inevitable fluctuations in governmental income, civilization is dependent upon the continuous maintenance of a certain core of public activ ities. Education is an essential part of this core of governmental functions to be maintained unimpaired, irrespective of economic condi tions. Youth comes but once and neglect in one period may do irreparable damage to a state’s future social and economic progress. To avoid instability in revenues for essential public services, states should develop sound budgetary and fiscal procedures. Educators have the responsibility of presenting the proper claims of public education for impartial treatment in the distribution of governmental revenues. 4. Is there a possibility that certain govern mental services are developing at the expense of education? At the time when expenditures for all types of public education were declin ing 26 percent, the other costs of government (exclusive of those for education) rose more than 32 percent. A large proportion of this increase took place in the field of emergency relief. As has been properly said, people must be fed and clothed. Relief expenditures, there fore, were necessary and in most instances were neither too high nor improperly used. At the same time, it must be recognized that relief activities are primarily corrective and emer- gency in character. Education, on the other hand, is primarily preventive and continuous. No civilization can be so shortsighted as to curtail its essential and fundamental activities [53] to the point where new social and economic problems are created. The question will not be easily solved without careful consideration and planning by the American people. Educa- tors have the right to examine the social neces- sity of all governmental expenditures and to demand that political expediency shall not be permitted to outweigh larger social considera- tions. An effort should be made also thru cooperation with other governmental agencies to eliminate any unnecessary duplication in public services. 5. What should be the role of the federal government in the financing of education? In 1930 the federal government contributed 0.6 percent of the total cost of public education. By the inclusion of numerous semi-welfare expenditures, the proportion contributed by the federal government amounted to 1.3 percent in 1934. Data presented in this bulletin, as well as in other impartial investigations, demon- strate the wide range of ability among the states to support an adequate program of edu- cation. The result of this condition is that many future voters are being deprived of the rightful educational opportunities of American childhood. These same children will eventu- ally not only decide important social ques- tions in the states in which they live, but will determine the policies of the government of the entire nation. The continuance of these in- equalities is a menace in the light of the close social and economic interdependence of the states. It is for these, among other reasons, that educators ask that the federal government as- sume the responsibility which will enable the states to provide a foundation program for all children within the nation. Toward this end the National Education Association is spon- soring the Harrison-Black-Fletcher Bill now before Congress. The provisions of this bill, particularly ways in which the funds may be used to improve education in each state, should be made known to the public. 6. To what extent should the state assume responsibility for the financial support of pub- lic education? The percent of total revenues derived from state sources for elementary and secondary education increased from 16.5 per- cent in 1920 to 23.4 percent in 1934. The trend has been both for a relative and for an actual increase in the proportion of the load assumed by state governments. The rapidity of this transition in recent years has been caused in part by the breakdown of local revenue systems. But the movement is related also to great differences in tax-ability among the local districts within each state. It has been recognized by many that only thru the re- sources of the state can the inequalities result- ing from the geographical chance of birth be overcome. As the agency primarily responsible for public education, the state must equalize educational opportunity and the burden of its support up to a reasonably satisfactory mini- mum. Below this minimum program, no com- munity should be allowed to drop. Above the minimum, any local unit should be allowed to go upon its own initiative and its own extra support. In spite of splendid progress along these lines, there are still many states where these principles have not been accepted. In these states, educators have a problem of creating public understanding of the issues at stake and of promoting the necessary legislation. 7. Can local initiative be safeguarded in the improvement of the financial support of edu- cation? In 1920 local governments contributed 83 percent of the total elementary- and secon- dary-school revenues. This proportion declined to about 75 percent in 1934. These changes have come about largely by the increased pro- portion of state support. While efforts of the states to equalize educational opportunity should continue, sight must not be lost of the necessity of local initiative to adapt statewide programs to meet pupil and community needs. Experimental deviations are necessary to the growth and development of educational pro- grams. For these reasons, local initiative must be preserved, extended, and in some places, actually revived. If this is to be done effec- tively, four major difficulties need attention: (1) legal barriers, such as tax limitations and the dependence of boards of education upon other governmental agencies for the financing of schools; (2) low financial ability, arising chiefly from small and poorly organized ad- ministrative units; (3) unbalanced tax systems, particularly the sole reliance upon the property tax; and (4) lack of local leadership among both laymen and educators. Since the state delegates many of its educational functions to local units, the state should also create districts capable of effectively exercising local initiative. The reorganization of local units requires in most instances legislation based upon estab- lished principles and practises with which edu- cators may become readily familiar. [ 54] BULLETINS IN RELATED FIELDS . . Salaries of School Employees, 1936-37. Research Bulletin, Vol. XV, No. 2, March, 1937. (In preparation.) The Efforts of the States To Support Education. Research Bulletin, Vol. XIV, No. 3, May, 1936. 64 p. 50¢ Five Years of State School Revenue Legislation, 1929-33. Research Bul- letin, Vol. XII, No. 1, January, 1934. 40 p. 25¢. Estimating State School Efficiency. Research Bulletin, Vol. X, No. 3, May, 1932. 58 p. 25¢. The Ability of the States To Support Education. Research Bulletin, Vol. IV, Nos. 1 and 2, January-March, 1926. 88 p. 50¢. School Finance Systems. Summaries describing the plan of state support for schools in 46 states. Series 1, 106 p. $1.00. Report of National Conference on the Financing of Education. 78 p. 25¢. Finance and Business Administration. Review of Educational Research, Vol. V, No. 2, April, 1935. 64 p. $1.00. All orders for publications should be accompanied by funds in payment for same and must be so accompanied when orders for materia! amount to $1.00 or less. Orders not accompanied by funds in payment are subject to transportation charges. Make checks or money orders payable to the National Education Association, 1201 Sixteenth Street, N. W., Washington, D. C. N OUR COUNTRY, and in our times, no man is worthy the honored name of a statesman, who does not include the highest practicable education of the people in all his plans of administration. He may have eloquence, he may have a knowledge of all history, diplomacy, jurisprudence; and by these he might claim, in other countries, the elevated rank of a statesman; but, unless he speaks, plans, labors, at all times and in all places, for the culture and edification of the whole people, he is not, he cannot be, an American statesman.—Horace Mann. + Ee 8 inn