Lecture 16 POLS 207Outline of Last Lecture: More Thoughts on NCLB and School FundingI. No Child Left BehindA. Is it even possible? a. Coleman Report (1966)II. Federal Courts’ role in educationA. 14th Amendment litigationB. Religious practices in the public school systemOutline of Current Lecture: Education Funding: National v. State/LocalI. Property wealth inequality and unequal school fundingA. SCOTUS and 14th AmendmentB. State courts and state constitutions (“Judicial Federalism”)II. Fiscal and policy capacity of the statesA. One source of “modern centralization”B. Public sector outpacing economic growthC. National debt v. balanced state budgetsCurrent Lecture: Federal courts for the most part haven’t touched the issue of school financing- Locally raised (mostly property) taxes are a major source of government-raised public education funds.Chapter 16:545 – 48 (on school financing)% public education expenditures from…Federal taxes: 8.8%State taxes: 47.2%Local taxes: 44%Caution: Nationwide locally raised taxes are no longer the largest source of government funds for K-12 public education.TX = 50% local, 30% state on ALL funding, 20% mix of federal aid and private aid (like parents)TX = 62% local, 38% state of State/local tax-fundingHalter chapter 11:241 – 44 - Inequalities in property wealth among districts – Note that NO court (Federal or State) has ever held that inequalities of property wealth violate Constitutional provisions.- Locally assessed property taxes result in unequal school funding (richer districts v. poorer districts)o See Halter, table 11.4 (p. 242)o Does this inequality violate the equal protection clause of the 14th Amendment?  SCOTUS said no; see San Antonio I.S.D. v. Rodriguez, 1973. They closed the door to further arguments against public education funding inequalitybased on the 14th Amendment. See also D&M chapter 16:547 See Halter chapter 11:242-44 for Texas case and solution…Edgewood v. Kirby (1989) - Supporters of more equal funding turned to their state constitutions for help…some state courts ruled that these education finance inequalities DO violate their state constitutions.- But how could they rule this way if SCOTUS had already ruled differently?  “Judicial federalism” (See also D&M, 9:293, 295) –involves the right of STATE courts to rule “differently” than federal courts (including US Supreme Court) on an equivalent issue. Mustbe done in a certain way.Fiscal and Policy Capacity of the States as pertains to government expenditures: The capacity to design, manage and finance quality public programs One of the sources of modern “centralization.”  See also Key Terms forChapter 16: “The Politics of Education” and Halter chapter 11:241 – 46Chapter 14: “The Politics of Taxation and Finance” Also: Chapter 3:84, 87 – 91 on federal aid and Chapter 17:562 – 65 on povertyHalter Chapter 11:241 – 46 Halter Chapter 10:200 - 218Trends…Measuring all government expenditures as a percent of GDP (See chapter 14:470) GDP: “gross domestic product” – annual dollar value of all goods and services produced in U.S.  Over the last 60 years, the public sector (the government) has grown faster than theEconomy.1920s: 2/3 of public expenditures were state/local, 1/3 was national government.Changing intergovernmental composition…Postscript: Much of national government funding comes from borrowing money…an advantage states don’t have (most states must balance budget).See D&M chapters 8:285 – 86 and 14:482 – 87…But note Rankings (p. 483) for states’ per capitadebt. Note also differences between “general obligation” (state pledges to pay back the value of the bond) and “revenue” bonds (More risky, proceeds from the bonds will be used to pay back the bond over time).Program composition of expenditures…National government OASDHI (Social Security and Medicare): 34%  Other “mandatory:” 21% Defense: 18% Other “discretionary:” 20% Interest: 7% OASDHI, Medicaid and defense represent 68% of 2011 Federal budget.Ezra Klein - Federal government: “An insurance company with a large