Who Pays the Bill?

America's public schools were founded on the principle that citizens should be taxed fairly to provide an equal educational chance for everyone. Yet angry taxpayers and parents no longer find their rapidly rising school taxes fair--or their children's schools equal. Their clamor is provoking a far-reaching reappraisal of how the U.S. finances its educational system.

The center of the problem is the local property tax, which pays for more than half of the nation's $39 billion public school bill. Property taxes are the only levies that most Americans vote on directly, and U.S. communities have been turning down increases at nearly twice the rate of five years ago. Last August, the California Supreme Court declared local property taxes unconstitutional--but for quite another reason (TIME, Sept. 13). The financial patchwork, the court said, allows communities with a high tax base to offer their children a richer education than poor communities--and to pay a smaller share of their income to do it. The quality of a child's education, said the court, should not depend on "the wealth of his parents and neighbors," and courts in Minnesota, Texas and New Jersey have subsequently agreed. In his State of the Union message, President Nixon promised to come up with proposals for "revolutionary" changes in school finance, but neither he nor the courts have made it clear exactly how such changes might work.

Last week the most thorough set of proposals so far emerged from a commission appointed by New York's Republican Governor Nelson Rockefeller and chaired by Lawyer Manly Fleischmann, a registered Independent. Hammered out after two years and nearly $1,000,000 worth of research, the Fleischmann report argues strongly that poor schools must be brought up to the level of rich ones. If property taxes are to be stabilized, then other taxes will have to go up substantially.

Greater Gap. Though New York is not facing an immediate court case, the commission investigated the same kind of financial disparities that have troubled courts in other states. For example: Long Island's North Shore town of Locust Valley, which has expensive homes and relatively few of them, taxes itself at a rate of $22.70 per $1,000 of its property's market value. That raises enough money to provide $1,722 for each child. Ten miles away, Levittown's blue-collar citizens pay school taxes of $35.60 per $1,000, but because Levittown is more densely populated and its property values are lower, these taxes generate only $955 per child. The gap can become even greater when a prosperous community attracts some industry that adds revenue without increasing the number of children. In the middle-class Long Island town of Sea Cliff, for example, one mammoth electricity plant pays one-third of the local school taxes, thus keeping the property tax rate down to $21.30. Comparing Sea Cliff with his own area, Levittown's school superintendent Robert F. Neidich says: "If we raise our tax rate 10-c-, we can buy one $4 textbook for every child. If they raise their rate 10-c-, they can buy five books."

To even the tax burdens, the Fleischmann commission proposed that New York become the first state in the nation to take over all the financial powers of its many local school boards. Property taxes would be kept, but the state would freeze them at a flat rate of $20.40 per $1,000--which would yield the same overall amount as property taxes do now.

Once the state acquired these local tax revenues, according to the Fleischmann plan, it would redistribute the money so that the lower 65% of the state's school districts would rise to the spending levels of those that are now in the upper 35%. The rich districts would not have to "level down," but could keep spending at their current rates while the poor districts catch up. After that, however, the rich towns would be forbidden to raise more money by imposing additional taxes on themselves. Allowing such variations, the commission said, would only re-create the present inequitable system. Districts with substantial numbers of children doing poorly in reading and math, however, would get a 50% bonus for each such child.

Towns v. Cities. The cost of improving poor districts and helping children with special problems would considerably increase the state's school bills: by at least $715 million, the commission estimated, over the present $5 billion. That money would have to be raised through existing sales and income taxes--although the commission put in a strong plea for new federal funds to help with the job--and there are substantial political pressures against any such tax increases.

In most suburbs, which are already paying heavily for education, the Fleischmann recommendations would slightly lower property tax rates. But property taxes would go up in most cities, which must spend far more of their tax revenues on welfare, firemen and police than the suburbs do. Even though cities would get increased aid for their disadvantaged children, New York City Budget Director David Grossman observed: "Any commission that imposes extra burdens on the city of New York for the benefit of well-off suburbs cannot be serious." The suburbs, on the other hand, had a complaint of their own about the proposed limit on their ability to get their children the best that money can buy. Said Superintendent Christopher Warrell, whose district includes Sea Cliff: "This would hamper districts that attach more importance to education." Another suburban superintendent went further: "If a limit is put on us, I'll probably go shoot myself."

Not even the commission is sure that more money would revolutionize the education of slum children. The committeemen were mindful, however, of the wry argument of Berkeley Law Professor John E. Coons, senior author of the most influential book in the current debate, Private Wealth and Public Education: "If money is inadequate to improve education, the residents of poor districts should at least have an equal opportunity to be disappointed by its failure."

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