Alternatives to the Local Property Tax for Educational Finance

If we could get a nickel for every time the demise of the property tax has been predicted in this century, we probably could invest the proceeds and use the interest to finance a program of property tax reform. In a sense, this subject is old.In another sense, however, there is something very new about discussing alternative ways of raising money for local governments. In August 1971, the California Supreme Court issued its decision in the now well-known case of Serrano v. Priest; in March 1973, the U.S. Supreme Court overturned a similar ruling by a lower court in Texas. The Court ruled that the present system of financing local schools in California, which relies heavily on the property tax, unconstitutionally “conditions the full entitlement to such interest on wealth, classifies its recipients on the basis of their collective affluence and makes the quality of a child's education depend upon the resources of his school district and ultimately upon the pocketbook of his parents.†Since that time, more than 50 similar suits have been filed in some 31 states, and the U.S. Supreme Court is reviewing an appeal from Texas in a case similar to Serrano.