State-Local School and Highway Expenditure Trends,1965-1966 and 1969-1970

Abstract

The data used in this analysis demonstrate a considerable state variation in support given local schools and highways as measured by percentage of personal income. In the area of education, the general situation demonstrated by the data is that the property tax, plus the assistance it received, did no more than keep up with personal income during the five-year period under study, which was also a period when local schooling demands were very strong. Highways, which are nearly entirely financed from fuel tax revenues, absorbed a general declining portion of personal income during the period of the great expansion of urban-related highway expansion needs and the completion of much of the interstate highway system. The analysis demonstrates some decline and certainly considerable stability of the portion of personal income used for local schools and highways. The findings do not support the common attitude that a service having access to a tied revenue source is able to benefit from relatively luxurious financing. Undoubtedly, the fact that this was a period of rapid inflation of incomes and that neither the property tax nor the gasoline tax possesses an automatic adjustment for price increases affected the level of support provided local education and highways during the 1965-1966 and 1969-1970 periods of great need.