ATLANTA, November 1, 2012 – Were state policymakers to allow the use of ESPLOSTs to fund local operating costs for schools, ESPLOST revenue could cover between 17 and 31 percent of these funds according to a new study released at the Fiscal Research Center’s Forum on the Future of Georgia School Finance at Georgia State University on November 1.
Implemented at various times in all but one of the state’s 159 counties, ESPLOSTs have represented as much as 80 percent of the facility funding available to school districts. Local voters consider ESPLOSTs a popular alternative to property tax, with 94 percent of local referenda passing in the 16 years since this legislation was approved.
ESPLOSTs have helped improve capital investment in Georgia’s schools. Prior to the ESPLOST, Georgia lagged other high growth states in spending per pupil on school facilities. After the ESPLOST, Georgia is now closer to the average.
Before the ESPLOST, long-term debt per pupil in 1996 was approximately $3,900 in school districts outside Georgia and $3,200 in Georgia. By 2008 this debt averaged nearly $8,000 per pupil outside Georgia and only $3,560 in Georgia.
ESPLOST measures are popular. They pass by similar margins regardless of when an ESPLOST referendum is held.
Districts have significantly different sales tax bases, providing for significant variation in revenues available through ESPLOSTs. In Georgia, for example, the top 10 percent of districts studied raised $9,505 per student more than the bottom 10 percent. These distributional issues are primarily a function of the sales tax base and are not associated with enrollment growth, median family income (i.e., poverty), or percentage of minority students.
The report then discusses important issues to consider if the Governor and General Assembly were to allow school districts to use ESPLOST for operating funds. For the average school district, ESPLOST revenues could cover up to 21 percent of operating funds.
“School districts do continue to report substantial facility needs, particularly in the area of renovations and maintenance,” says Brunner, “so the shift to operations would represent a trade-off between competing priorities. Additionally, the state would need to consider how ESPLOST may increase disparity in school district funding across the state.”
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