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    Forced Consolidation of Small School Districts

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    What are the arguments for and against the forced consolidation of small school districts from a financial perspective?

    What sources of revenue (taxes) are the most appropriate and effective for the support of public schools and why?

    Which of the State funding systems for public school is the best and why?

    What are the pros and cons of Charter Schools from a school finance perspective?

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    1, What are the arguments for and against the forced consolidation of small school districts from a financial perspective?

    This question is straightforward. It is asking you to discuss the arguments for and against the forced consolidation of small school districts from a financial perspective. One source that is useful for this argument is based on the advantages and disadvantages of economies of scale, such as:

    Notion of Economies of Scale: Advantages

    • Expenditures per student generally rise, as district sizes fall below about 750 students and expenditures per student are relatively constant at enrollment levels above 1,000 students.
    • Holding student performance constant, it is evidenced that school district consolidation substantially lowers operating costs.
    • The larger a school district gets, the more resources it devotes to secondary or even non-essential activities.
    • Instead of making up a larger percent of the budget as school district size increases, the percentage spent on teachers, books, and teaching materials decreases.

    The Notion of Economies of Scale: Disadvantages

    • Scale economies enjoyed by large districts can come at the expense of the efficient production of educational outcomes.
    • Two inefficient districts combining do not necessarily merge into one efficient one (http://72.14.203.104/search?q=cache:r_PbXSvIs0oJ:www.louisianaschools.net/lde/uploads/3475.pdf+forced+consolidation+of+small+school+districts&hl=en&gl=ca&ct=clnk&cd=10).

    Also see http://72.14.203.104/search?q=cache:r_PbXSvIs0oJ:www.louisianaschools.net/lde/uploads/3475.pdf+forced+consolidation+of+small+school+districts&hl=en&gl=ca&ct=clnk&cd=10 for more detail.

    In other words, based on the advantages and disadvantages listed above, there is no solid foundation for the belief that elimination of school districts will improve education, enhance cost-effectiveness, or promote great equality and except for extraordinary circumstances, district reorganization should be a voluntary decision of local voters and school boards. Size does not guarantee success, as "good schools come in all sizes." Disputes on school mergers or consolidations may be costly diversions from the more important issues of disadvantage and equal opportunity, especially as they relate to school performancehttp://72.14.203.104/search?q=cache:r_PbXSvIs0oJ:www.louisianaschools.net/lde/uploads/3475.pdf+forced+consolidation+of+small+school+districts&hl=en&gl=ca&ct=clnk&cd=10
    Not everyone would agree though, as this is somewhat controversial.

    2. What sources of revenue (taxes) are the most appropriate and effective for the support of public schools and why?

    The questions is also fairly straightforward, as it is asking you to analyze and discuss what sources of revenue (taxes) are the most appropriate and effective for the support of public schools. More often then not, the combination of state and federal revenue (taxes) are most appropriate. For example, one of the school construction bills introduced in the 105th Congress offers an innovative approach to public school renovation and construction by harnessing the energy, resources, and expertise of the private sector. The Public Schools Partnership Act, introduced by Senator Bob Graham (D-FL) as S. 2397, would amend the federal tax code to allow the use of tax-exempt private activity bonds for the construction of privately owned school facilities leased back to the public school systems. If this bill were broadened to enhance its versatility, it could serve as the foundation for a legislative plan that encourages the use of public-private partnerships to build public schools more rapidly and at lower cost across the country (See http://www.heritage.org/Research/Education/Schools/BG1257.cfm).
    Example 1: State and Local
    Some States and local governments such as New York, Iowa, Delaware, and School District 4J in Eugene, Oregon, are also issuing general obligation bonds or revenue bonds for educational technology and infrastructure. Others are providing tax credits or incentives to individuals or private companies that donate technology or assist their communities to connect to the Information Superhighway. And still others, such as Nebraska and Georgia, have used State lotteries for these purposes. Figure 6 provides examples of these sources of funding. http://www.benton.org/publibrary/kickstart/kick.identifying.html#alternative

    Example 2: THE FEDERAL ROLE IN SCHOOL CONTSTRUCTION
    The Influence of Tax-Exempt Borrowing
    "Although the federal government operates no explicit program to facilitate or fund the construction of public elementary and secondary schools, it nevertheless has an important influence on school construction. It allows local communities to raise money for public construction by issuing bonds whose interest payments are exempt from federal income tax as well as any state income taxes for bondholders residing in the state of issue. Making such tax preferences available to investors in municipal bonds means that communities are able to borrow at lower costs than would be the case otherwise. In December 1998, when long-term AA taxable corporate bonds yielded 6.34 percent, the high-grade, long-term, tax-exempt municipal bonds yielded 4.17 percent, or more than two percentage points below the taxable equivalent.
    Although the tax-exempt privilege imparts an important benefit to communities by enhancing their ability to afford new schools and other public infrastructure, that same privilege, under certain circumstances, can deter states from utilizing public-private partnerships. The cost advantages of the traditional, all-public approach often appears to be the least costly option, particularly if the alternative is a new and largely untried approach. But this need not be the case, as the growing, albeit limited, experience of some communities with various aspects of school partnerships suggests.
    Potential savings from a well-conceived public-private partnership could overwhelm whatever cost benefits derive from using tax-exempt ...

    Solution Summary

    By responding to the questions, this response examines the arguments for and against the forced consolidation of small school districts from a financial perspective and also discusses other aspects of finance and funding for public and Chartered schools. References are provided.

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