Dive Brief:

• While property taxation for education tends to be regressive overall where tax rates are higher in districts with lower average individual home values, the picture is different when looking beyond just homeowners.
• A new report from EdBuild finds the source of regressive tax policies is not generally because they overburden low-wealth homeowners, but because districts often don’t leverage the non-residential property tax base, made up of businesses, factories and farms.
• Report authors say if districts with non-residential properties tax them more, it would bring more money into the system overall, reducing the amount states send to higher-wealth communities and freeing up more money for the neediest districts.

Dive Insight:

Civil rights advocates have long pointed to the nation’s system of funding schools and cried foul. The reliance on local property taxes means that wealthy communities have an easier time fully funding schools simply because they have more wealth to draw from. The EdBuild report urges a shift in the narrative, calling on reformers to consider taxation more broadly, beyond just household wealth.

Corporations often get tax breaks as incentives to move into particular communities. School districts have lost millions and millions of dollars in potential taxes this way, all based on the rationale that if the corporations never came, they wouldn’t see that money anyway. In the aggregate, however, this practice contributes to a serious problem.