Nontraditional Public School Funding Sources

This paper by Henry A. Coleman examines a wide range of nontraditional revenue sources, including local-option personal income and general sales taxes, user charges and fees, gaming revenues, private donations, charter schools (which obtain greater private contributions than traditional public schools and may have lower costs), and tax expenditures. Coleman reviews the literature on these revenue sources, examines key issues with an emphasis on equity, and speculates about the potential for their future use.

Coleman concludes that no single nontraditional revenue source will play an important role in school funding. He asserts that fees and charges, along with tax expenditures, are the nontraditional revenue sources most likely to grow in importance. On the whole, Coleman believes that nontraditional revenue sources are less revenue productive, less stable, and probably less equitable than the local property tax. For these reasons, he urges state and local governments to loosen some of the constraints on property taxes, such as tax and expenditure limits, in order for the property tax to serve as a more effective source of funding for K–12 education.

This paper was presented at the Lincoln Institute’s annual Land Policy Conference in 2013 and is Chapter 7 of the book Education, Land, and Location.