Mon October 14, 2013
Commentary: Disparity Among School Districts
In Missouri, as in most states, public schools are administered by local school boards. The boundaries of school districts are drawn in accordance with state law. Schools are funded primarily through local property taxes. Districts with higher per capita incomes tend to have better schools. The districts most in danger of losing their accreditation tend to be those with lower per capita incomes.
The reasons for this disparity are obvious. More expensive homes generate higher real estate taxes than less expensive homes. Wealthier families can afford to live in wealthier school districts. In many cases the perceived quality of a school district can add a lot to the value of a house, thereby putting it further out of reach for families of modest means who want to live in the district.
Access to schools in wealthy districts is for the most part restricted to residents of the districts. The Missouri Department of Elementary and Secondary Education has published guidelines for districts to enforce their residency requirements. Under state law it’s a class A misdemeanor (punishable by up to one year’s imprisonment and a fine of up to $1,000) to submit false information in an attempt to meet a school district’s residency requirement. Missouri law also allows school districts to bring civil lawsuits against those who submit false residency information. It’s safe to assume that the evil these laws are designed to prevent is having children from poor districts enrolling in rich districts and not vice versa.
The federal government also plays an important role in perpetuating the inequality between rich and poor school districts. Federal tax policy disproportionately subsidizes the owning of real estate in rich districts in two ways. First, by allowing a tax deduction for mortgage interest. The loan on an expensive house will likely be much larger than one on a more modest house and will generate a much larger tax deduction.
Second, there’s the federal deduction for real estate taxes. The more a homeowner pays in property taxes to support local schools, the greater the federal subsidy to these schools. Suppose a homeowner in a wealthy district pays $10,000 in local school taxes. The federal subsidy in forgone income taxes could be almost $4,000. Now suppose another homeowner in a less affluent district pays $500 in school taxes. In that case the federal subsidy in forgone income tax revenue could be only $75 or less depending on the homeowner’s tax bracket.
In fairness, the policies of the state and federal governments aren’t the only reason for the disparity among school districts in the St. Louis area. Nevertheless, there’s something wrong with a system under which poor parents risk criminal prosecution for attempting to enroll their children in better public schools.
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