Financing Facilities in Rural School Districts: Variations among the States and the Case of Arkansas
Mary F. Hughes,
This chapter from “Improving Rural School Facilities: Design, Construction, Finance, and Public Support” examines the main challenges that rural school districts face regarding school facilities funding and illustrates these problems with a case study from Arkansas. Most rural school districts serve only a small number of students, which tends to limit the funds available for construction or renovation. In addition, rural districts often have lower assessed property values and reduced resident capacity to support local taxes. In Arkansas, the per-student amount that a district could borrow for school facilities funding was three times larger for the state’s largest school district compared to the smallest one. The smallest district had 78 percent of its students participating in the free and reduced lunch program, indicating a lack of resident ability to support additional taxes. The total borrowing power of districts ranged from $531,000 to $363 million. When facilities funding is based on local property wealth and local ability to pay, significant inequities arise. In 1994, 15 states provided no state school facilities funding, and 8 of those states assessed local fiscal capacity by property valuations. State or federal aid could help remedy the inequities in facilities funding. Six data tables provide details on the states’ facilities funding, local fiscal capacity classification, and Arkansas districts’ borrowing power by size, rurality, and poverty rate.
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