During the Great Recession, we have seen property taxes and the housing market bubble decline substantially. During this down turn of housing prices and decrease in taxes we saw a drop in the revenue that is created by property taxes. Property tax helps to pay for a majority of public services but most importantly our K-12th grade education system. It also helps fund parks, police and fire department services as well. During this period of down turn there was not a raise in taxes causing the states to increase spending cuts and to use more federal monies and their rainy day funds. Because of this lack of revenue coming from property tax and housing bubble it caused the local governments budgets to be impacted negatively. By examining how much the property tax actually impacts, versus the other taxes collected in the local government one can see how big of an influenced it plays in our education system and our public services.
One must understand the structural and cyclical deficits that got us into this position and how each of these can affect tax revenue. Structural and cyclical deficit are a component of deficit government spending. Cyclical deficit is a temporary deficit that is linked to the production, trade and activity of business in the economy. It is the upward and downward change of the country’s gross domestic product. For example, during a cyclical deficit we may see low levels of business production activity but high levels of employment in businesses. Because of the lack of production it takes away from the government’s budget and causes a deficit when they try to continue to support public service programs. Unlike cyclical, structural unemployment exist with or without the business cycle. Structural deficit is ...
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...uture and in my eyes even if the state gets in debt having a well educated and skilled public will always yield a return.
Works Cited
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"INFORMATION ON HOUSING PRICE CHANGES." The Federal Housing Finance Agency. FHFA, n.d. Web. 5 Mar. 2014.
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Scott, Dylan. "Property Tax Revenue Limits Squeeze School Budgets." Governing.com. N.p., 6 Feb. 2013. Web. 5 Mar. 2014.
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...earn the material. Schools for the most part budget the money that they get to the best of their ability, but need more money to use for these basic and important needs. Overall the school budget committee needs to start from the bottom and fund what is necessary and needed to get schools back on their feet. These easily solved problems are a key part of school funding and should be addressed appropriately.
Roy, Joydeep. "Impact of School Finance Reform on Resource Equalization and Academic Performace: Evidence from Michigan." Mitpress Journels, 2003: 1-31.
"How the Great Recession Has Changed Life in America." Pew Research Centers Social Demographic Trends Project RSS. PewResearch, 30 June 2010. Web. 14 Mar. 2014.
...ategies” that have been used and research shows how schools are impacted” (Ramsey, 2006, p.xv11).
With this many students, both state and federal representatives have made efforts to adopt reforms designed to make a solution to the funding inequality. The disproportion of funds first and foremost effects the amount of programs offered to children that vary from basic subjects such as: English, Math, and Science. This created the motivation to improve the quality of education for low-income neighborhoods by targeting resources other than property taxes and redirecting the states budgets. The goal the school districts all shared was the need to increase instruction, add after school activities, promote a well-rounded education, physical innovations to facilities and classrooms, and to update the academic resources. The popular demand that the funding to public education needs to correspond throughout all the school districts. Wealthy tax payers often argue that a region that depends on property taxes is the “American way.” This argument derives from the ideology that American success relies on perseverance and hard work, but if the playing field is uneven the higher born student has an advantage. “High property taxes—the burdens and perverse incentives they create, the rage they generate, the town-to-town school funding inequities they proliferate—…represent an endless New England nightmare…” (Peirce and Johnson, 2006). In the attempt to
Local governments rely on property tax as a source of revenue to pay for school. Yet people in the urban areas pay the higher tax than suburban and wealthy communities, states on the other hand, relies on The Average Daily Attendance (ADA), which calculates state aid to school districts, tends to discriminate against urban school districts with high absentee rates by automatically, and excludes 15 percent of its student aid. Therefore, in many urban areas, the state ratio of funding remains significantly lower than 50 percent out of the tree entities the federal government allocates the least amount of funding. Residents in these areas who are under edu...
Then comes the education part, where according to the author Jonathan Kozol in his book Savage Inequalities Children in America’s schools, property tax is one of the main financial distributions that goes towards local schools. In Kozol’s book he quotes that, “typically in the United States, very poor communities place high priority on education, and they often tax themselves at higher rates than do the very affluent communities.
In the 1960’s California experienced reverence through the reputation of being a promising great state. The increasing population as well as the massive publicity, contributed in highlighting this notion. However, in 2011, California no longer holds the same reputation in the eyes of its residents. With a current state deficit of $25.4 Billion, many Californians believe that the state is hopeless and can no longer regain to its past stardom. Famed Historian, Kevin Starr argues that California has lost its promise entirely; however, California has not lost its promise entirely for the fact that California is still the eighth largest economy in the world. California is able to function even with a dysfunctional government and institutional structure. California still has the potential to recover its reputation as a great promising state. By tackling the state’s dilemma, we are able to understand why and how California lost its greatness. Once we analyze the core problems of the state, such as the initiative process, the state legislature, and misrepresentation of the public, we will have a better understanding of how to tackle the issue.
Shapiro, Margaret. "Area's 'Free Schools' on Way Out; Area 'Free Schools' a Victim of Times." Washington Post 9 Nov. 1979, Metro sec.: B1. Print.
When states try to find ways to restrain from non-essential areas, unfunded federal mandates are at the top of the list. These mandates often force state and local governments to spend much more than necessary on everything from medical care to welfare to road building. A complex web of federal programs bind together the tree treasuries of the local, state, and federal government. As much as 25 percent of state budgets now comes from the federal government, and up to 60 percent of some state budgets is spent on joint federal-state programs.
The government’s revenue comes from taxes. When the economy is doing well, the money keeps moving within the economy. The more transactions within the economy, the more revenue the government can make. This is the case with sales taxes and other trade and commerce related taxes. The government also takes in much of its revenue from property taxes. If the economy is doing well it is likely that more citizens will own property instead of rent. When the economy is not doing well, the money stops moving and the government may not collect as many taxes.
Even if the state pays a lot of money, that still doesn’t mean that the schools are well funded. In Hawaii, there is only one school district, and the state pays for nearly all of that district’s funding. Only 2% comes from property tax, and the rest comes out of income tax. But think about the industry in Hawaii- farming and tourism, t...
There are many other areas around the United States where urban schools suffer from lack of funding. In many of America...
After analyzing the data and the theory, we have provided our conclusion weather tax cut is better for the stimulation of growth or Government spending is? This report explains the big macroeconomic debates of the present times. It seeks to explore the debate within fiscal policy itself between tax cuts and government spending. We have tried to explain the argument through some theories and through some data collected from Indian econ...