School Funding

For many decades, the state plays a crucial role in education. However, with the development of society and the natural processes of evolution in the approach to the formation of the state's role as an economic entity is constantly changing. Rejecting the role of an omnipotent central authority, the state cooperates with multiple sectors of society in order to ensure greater chances of achieving the goal – providing education for all. Today it mobilizes and coordinates the efforts, and promotes self-management of educational establishments to enhance their efficiency and responsiveness.

The state is still responsible for setting national goals, mobilizing resources and supporting education. Education is seen as an important part of the whole society, not the exclusive prerogative of governments. Local authorities involved in the management of the institution, whether it is preschool, primary or secondary school, ensure its relevance and a great attraction.

It is connected not only with the fact that local authorities as representatives of the state are most interested in educational services but also with the fact that they can ensure control over the expenditure of funds, compliance with the specifics of different regions in the preparation of their budgets on education, etc. Thus, local authorities engaged in the current financial management ensure compliance with the basic principle; it is particularly important in light of the problems of educational funding - an optimum combination of centralized, sectoral and territorial approaches to their management.

That is why in most countries, the financing of secondary education, which is fundamental in continuing education, was translated to the local level. Such an order management and maintenance of secondary schools is shared by the United States. Funding sources in the USA allows the formation of free support level of international standards.

Federal government spending on education is still a small part of total budgetary expenditures, as most of them are made up of state appropriations and various private donations. The Constitution of the United States has no legal responsibility for securing education, but in accordance with legal norms, omission of any reference in it is no less important than their mention, because the 10th Amendment "Regulations on the Conservation of Aauthority" reinforces the power of the states that are not delegated to the federal government. As a result, fifty states of America are responsible for education (Harris, 2006).

Due to the fact, the suburban high schools have had in the end of the 90’s high academic preparation and high student achievement. This is attributed primarily to the fact that wealthy U.S. citizens lived in suburban areas due to the high urbanization of cities. It means that the most affluent states and communities could devote more resources to education.

However, only in the late 19th century, states began to allocate money to education, but the lion's share of these funds was mainly collected at the local level. However, even today, the thirteen American states are the main sources of funding for the community. For example, 95% of funding of the state New Hampshire is going to the local level (Johnes, 2004).

The study of these data shows that if at the end of the 80’s local income taxes from real estate accounted for a significant share in the state, their importance as a source of funding has by the end of the 90’s decreased. At the same time, increased amounts of cash subsidies to the state could become a major source of education funding (ADAS, 2000). This all eventually led to the fact that the size of the budget for a public school student in California has increased over 10 years two times and reached in the end of the 90’s 3807 dollars.

Traditionally, primary and secondary school education in the United States was in charge of the commons. It was funded by them due to property tax. States began to play an increasing role in financing education in the late 80’s, when in the 1987-1988 school year state revenues for the first time exceeded the receipts from local authorities. Federal support for education and most of the special programs such as assistance to schools with large numbers of slow learners increased in the 1960s and 1970s, so that by 1980 it was nearly 10% of spending on public elementary and secondary schools. Since then, federal funding has decreased to a level where the federal government provided only 6.5% financing in 1985 (ADAS, 2000). However, there is a large degree of variability across the country today both in the role of the federal government and the role of the states.

In recent years, the federal government provided approximately one sixth of funds (less than 6.5%) for elementary and secondary schools in Mississippi and Wyoming. Non-federal funds differ from state to state, for example, 100% in Hawaii, where there are no local schools, one third of Nebraska and one tenth in New Hampshire and Maryland (Brewer, 2010).

In the USA, there are no schools under the jurisdiction of the federal government except the military academies (such as the United states Naval Academy in Annapolis). However, the authorities provide guidance and funding for federal educational programs, which mainly involve the municipal educational institutions, and the United States Department of Education oversees the accomplishment of these programs. Given that the amount of financial support to secondary schools in the United States is directly dependent on the viability of communities, it should be noted that many wealthy communities spend more on education than most of the poor.

The education system in the U.S. includes both public and private sector. 80% of students in private secondary schools are exempt from tuition fees and provided with high quality education without significant financial support from the state.

Among those who attend private schools, the majority (73% - in the late 80's and 80% - in the late 90's) goes to a Catholic parochial school. The USA has highly developed system of federal tax credits for private and public schools, which allows significantly to reduce financial problems for public schools. It is a system of benefits for individual income tax.

This means that if a community (in our case, a district or city) imposes a tax of $ 1,000 on residents to support the public schools, the costs for it are much less than this amount.

In fact, the tax system also reduces the incentives for private spending on education, although the tax credit donations to private schools increasingly encourage it). If a parent spends $ 1,000 for tuition to send children to private school, he/she does not only refuse to pay for public education, but even these costs are not subject to tax deductions.

The main issues that have recently been discussed in the U.S. education are relating to the problems of financing. In our my opinion, the system of financing education in the United States cannot have a single database, because the major costs of schooling are carried out by local authorities (communities) and the states. However, if in a given state certain minimum standards of school education are set and determined by the minimum amount of spending per pupil, in other states and communities are determined by the maximum possible amount of spending. Expenditure per student in some communities is much higher than in others. Different communities have different opportunities for education.

In addition, they express different "flavors". Communities with similar financial resources may spend different amounts on education. These differences can be partly explained by different composition of communities.

This contributed to the question of compliance in the U.S. with human rights education. In 1971, California Supreme Court had a case known in the history of general education of the United States as the current practice of financing public schools in the state. The California Court declared that the right to education in public schools cannot depend on welfare; the financing of education through local property taxes created just such a precedent.

A court order required that California has developed an alternative method of funding education. Accordingly, some other states have adopted similar solutions. They interpreted the provisions of state constitutions as imposing obligations on those states to ensure that all children get the same education.

On the other hand, in 1972 The U.S. Supreme Court agreed that funding in Texas did not violate equal protection of the article on the U.S. Constitution (the 14th Amendment), although this has resulted in large differences in costs. There was confirmed the right of states to determine the amount and structure of expenditure on general education, which was opposed to the solution of a similar trial in California (Lanier, 2005).

These solutions have focused our  attention on several important issues. Should costs be equal in all communities of the State? Or do you only need to require that each community to be provided a minimum level of education? If equality is to prescribe, then it probably will not encourage the community to spend more on their children. Some states have defined the upper limit of expenditure: equality is achieved not only by maintaining a minimum level, but also by reducing the maximum one.

Obviously, if the standard is set at a low level, it will have no effect. If you insist on equality, clarify what you need to make a difference in the cost of education in various communities, or how to change the structure of educational institutions? Is the cost of equality? Some communities could use the funds for the development of sports facilities, while others - to create better programs for the development of basic skills. Still others might allocate more funds for special education programs.

The result is a difference in the approaches to the same people who are residents of different communities. Ensuring equality, the elimination of government control and the establishment of a centralized education system in every state would be required by the community.

Some states have responded to this opportunity to attempt to increase the equity while maintaining a certain percentage of local autonomy. For example, the state of New Jersey has expanded its share in the financing of education (poor districts receive more aid than affluent ones).The state has set minimum standards of education, compulsory for all districts, as well as set a ceiling of expenditure for school districts with high costs.

Today, in many countries around the world not only the degree of inequality in public schools but the overall degree of inequality in society and in the U.S. in particular presents a challenge. As long as the government does not want to forbid people to study in private schools, any attempt to introduce too much equity in the public education system will lead to the fact that people will go to private schools.

In my opinion, no restrictions can be in market relations as the market implies the existence of alternative competition. The establishment of the same limitations, in particular in terms of spending on education, violates the human right to education that society could give him. If a particular individual can get a better education due to the large amount of financial resources, this means that he/she will just pay more taxes in the future. Quite another thing is that children are not to blame for the fact that their parents cannot give them an education. No doubt, they should help the state, and it will be able to allocate funds (Kinsler, 2005).

In many countries there is a perception that private education leads to social stratification (only parents of the upper or upper-middle class send their children to private schools). However, today's American society does not suggest that private schools actively discourage, although there is disagreement whether private schools receive government support.

In my opinion, those who can afford to send their children to private school may be tempted by this if they believe that public schools do not provide their children an appropriate education. Education is investing in individuals, which brings a return, like any other investment. The main reason for parents and students to compare public and private education is ineffective. Information about the lack of state funding, bureaucratic red tape, inflexible management, and lay leaders abound in the mainstream press. Unfortunately, there is a little systematic research on the relative "performance" of public and private school education; they should be evaluated in order to obtain evidence-based conclusions with sufficient care.

An example of the need to take a cautious approach to the evaluation study compared the functioning of public and private is a recent study of private and public schools in the United States. It was found that these schools are mixed racially in the same way as governmental. At the same time, students who attend private schools have made a choice in their favor.

They (or their parents) have expressed the desire to get an education in the private school. It can expel a student who does not manage or undermine learning. Consequently, even if someone believes that a private school education is better, there cannot be concluded that the transformation of the public school system in private would improve learning.

One of the traditional arguments in favor of state control of education support is that it ensures greater efficiency of education compared to private, both from an economically and educational point of view. From the economic point of view the state educational organizations differ from private in two main directions: they do not have to worry about bankruptcy, and usually they do not have to worry about the competition.

Bankruptcy. One source of differences in the motivation of public and private schools is the need to deal with the threat of bankruptcy facing the private school, in contrast to the always present possibility of public funding, even in insufficient quantities for public schools. The possibility of bankruptcy is an important factor. It creates a restriction on the size of the losses incurred by the private school as a result of poor management, and natural mechanism for replacement of inefficient management team, especially when noting that a private school, in contrast to the usual representatives of private business, does not aim to profit. Public schools, by contrast, have long existed with a large deficit, but the non-payment problems, which have a place do not serve the cause of failure of these schools.

Competition. The second difference between the public and private schools is the lack of competition. Competition performs several important functions. In particular, it allows you to choose; it stimulates an increase of the quality of educational services improving the organization of educational process in school; creates better conditions for integration into the world educational space.

When there is the competition, consumers can find their own preferences when choosing. Choice makes a private school to accept those costs that are imposed on it externally as a result of increased competition in the market. Public school cannot afford the mobility management as a learning process and the financial management.

Albert O. Hirschman, professor  of the Institute for Advanced Study in Princeton, called the presence of selection in a developed competitive way communication preferences, in contrast to the "voices" - the expression of views through the political process (OECD, 2000). When consumers have no choice, only the voice is an acceptable method of choice, but the voice can be inefficient way to encourage the state bureaucracy for effective action. On the other hand, the competition creates a motivating structure, competing entities in their desire to attract customers trying to find a combination of services that meets the needs of the buyer.

In a broader sense, the competition provides a basis for comparison, there are several economic agents engaged in similar activity, and suggests the possibility of comparing their costs. In this case, the costs are different, allowing the consumer to know the cause of smaller or larger costs.

In conclusion, all American citizens may access to education and achieve personal success. Thomas Jefferson and other statesmen strongly believed that the intellectual development of a man is no less important than its spiritual development, and therefore the two should go hand in hand..