What is tax?
Tax is a financial charge or other levy
imposed upon a taxpayer (an individual
or legal entity) by a state or the functional
equivalent of a state such that failure to pay
is punishable by law.
Provide money needed for something to
- Tax Sources of School Revenues…..(p237)
- Local Financing for Public Schools...(p237-240)
- State Financing of Public Schools….(p240-247)
- Federal Education Funding…………(p247-250)
- School Finance Trends………….......(p250-255)
Education in the United States is the big business.
By 2006, public education (k-12) cost more than
$520 billion annually, and elementary and secondary
school education represented approximately 4
percent of the nation’s annual gross domestic
State Financing of
Local Financing for
Tax Sources of School Revenues
Public school funding relies primarily on
revenues generated from taxes, especially local
property taxes and state sales and income taxes.
Most people today accept the following criteria for
A tax should not cause unintended economic
A tax should be equitable:
-Those with greater incomes or with greater
property worth should pay more taxes are called
- Those that require lower-income groups to pay
a higher proportion of their income than higher-
income groups are called regressive taxes.
A tax should be easily to collected
The tax should response to changing
economic conditions, rising during
inflation and decreasing in a recession.
Local Financing for Public Schools
Property Tax is the main source of revenue for
local school districts, accounting for 77 percent of
local funding nationwide.
Problems with property tax:
The property tax is not an equitable tax
because differing assessment practices and lack
of uniform valuation. Also, the property tax
may fail to distribute the tax burden according
to ability to pay.
Other Sources of Local Funding
Some Municipalities, specially small villages and
towns, depend on such sources as traffic fine and building
permits to help raise money for school
Other Sources of Local Funding
User Fees-fees charged to use a certain facility or
service-are the most common type of special
Exclusive product rights:
A growing number of school boards have signed
lucrative contracts with corporations for Exclusive
product rights and exclusive naming rights.
Local resources and Disparities
Wealthy versus poor districts
- Wealthy area or an area with a broad tax base
generates more revenue than a poor school district.
- As a result, in most states, the five wealthiest school
districts often spend two or three times more per
student than the five poorest school districts do.
- Cities are plagued by what commonly called
- A severe financial crunch caused by high population
density, a high proportion of low-income citizens, and
- Spending needed for social services and upkeep
prevents large cities.
- English language learners, students in poverty, and
students with disabilities often require programs
and related services that might cost 50 to 100
percent more per student than basic programs.
Urban cycle of financial strain
- Dire need more revenues, city can not realistically
- Tax increases contribute to the decline of urban
schools because they cause business and
middle-income residents to depart for suburbs.
- Declining city’s tax base due to lack of
revenues also cause residents to leave-a no-win
Tax collection performed by government agency
- General Department of taxation
- General Department of custom and Excise of Cambodia.
Taxpayer are divided in 3 regimes
- SelfAssessment System/ Regimes
- OfficialAssessment System/ Regimes
- SimplifiedAssessment System/ Regimes.
Component of Tax Revenue
- Direct Tax
State Financing of Public Schools
Although the states have delegated many
educational powers and responsibilities to local
school districts. each state remains legally
responsible for educating its children and youth, and
state’ portion of education funding has increased
steadily elementary and secondary education.
State Revenue Sources
• Sale tax compare favorably to
other possible fund-raising taxes.
• Sale tax is easy to administer and
• The sale tax is also
elastic, because the revenue
derived from it tend to parallel the
• Based on progressive percentage
of personal income.
• Also more equitable than other.
Sale Tax in Cambodia
• Cambodia’s VAT applies to the business activities of real
regime taxpayers making taxable supplies. In each case the
business must charge VAT on the value of goods or services
- The rate 10 %
• Patent Tax Annual registration or license fee impose on all
kind of business, industries and service.
• Personal income tax = salary tax (Cambodia)
• Salary tax is monthly imposed on salary that has been received
within the framework of fulfilling employment activities.
Salary tax rate in Cambodia
Form 0$ To 500,000 0%
Form 500,001$ To 1,250,000 5%
Form 1,250,001$ To 8,500,000 10%
Form 8,500,000$ To 1,250,000 15%
> 1,250,001 20%
Other State Taxes
Other State Taxes contribute limited amounts
to education. Those include
• Excise taxes on motor fuel, liquor, and tobacco
• Estate and gift taxes
• Severance taxes
• Corporate income taxes.
States’Ability to Finance Education
State residence has a lot to do with the type
and quality of education a child receives.
State variations in spending is different from
one state to other state.
State Aid to Local School Districts
State use four methods to finance public
Flat grant model(the oldest, unequal method)
Foundation plan(a minimum per student)
Power equalizing plan(inverse ratio to wealth )
Weighted student plan (student weighted by characteristics)
The Courts and School Finance Reform
• Serrano v. priest (1971)
• San Antonio v. Rodriguez (1973)
• State court decisions
Federal Education Funding
• Until the middle of twentieth century, the federal
government gave states or public schools little financial
assistance in educating American students.
• After Soviet Union, nation policy become more closely
link to education and federal funding
• The Civil Right Act of 1964, which provided that all
programs supported by federal fund must be administered
• In addition to these desegregation efforts the educational
need of minority groups and women received
Current Trend in Federal aid to Education
Federal education spending declined over the
course of decade. School funding methods also
• The trend toward more categorical funding gained
momentum as we entered the new millennium .
- No Child Left Behind (NCLB)
- Adequate Yearly Progress (AYP)
- The Obama Administration
School Finance Trends
•Finance crises in education often make the
•Coupled with rising cost and other
budgetary problems, loss of state revenue
has placed many local school districts in
bleak fiscal situation.
A tax revolt swept the country, putting a
damper on the movement for school finance reform.
Results of taxpayer resistance
Taxpayer willing to support increased
education spending for that purpose.
The Accountability Movement
Reasons for the accountability movement
The accountability movement stems from various
Federal and state measures
Federal funding is now contingent upon evidence
of satisfactory educational progress.
Tax Credits, Educational Vouchers, and School
Tuition tax credit
Allow parents to claim a tax reduction for the education
expenses they pay in order to send their child to nonpublic
Is another ongoing trend in school in school finance
A variation on the school choice theme is
concept of charter schools, discuss in the chapter
on Governing and Administering Public
Streamlining School Budgets
New search on school size
1. School size
Maintaining old facilities
2. Modernization of older building
Adding more teachers
3. Need for teachers
Streamlining central staffs
4. Administrative reduction
Streamlining central staffs
4. Administrative reduction
Reducing energy costs
5. Energy economic
School Infrastructure and Environmental
More classroom will be needed
Financing Public Education in Cambodia
In Cambodia 12.4% of government spending is in
Education makes up a small part of the Government
annual spend, and the problem is that in absolute
terms, this expenditure is very low. Just 1.6% of
Cambodia's GDP (Gross Domestic Product) according to
UNESCO is spent on education - ranking around 170th in
The Revenue Sources
• The priority action programmes (PAP) in 2000.
• The Ministry of Education, Youth and Sports (MoEYS)
1. State your reasons for or against the following types
of financial support for school choice:
a) Government voucher that any student can use to
pay tuition in any accredited school, public or
b) Voucher as in (a), but issued only to students
whose families demonstrate financial need.
c) No voucher for private or parochial school, though
student are free to choose any public school they