A fiscal neutrality analysis of the equity consequences of recalculating the local wealth component of the Texas Education finance plan
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Swanson and King (1991) and Oakland (1994) stated that by sharing revenues from windfalls, such as natural resources, industrial plants, and utilities plants, local tax base values would be more equitable. Smith (1994) and Stark (1992) found that redistributing specified classifications of local property wealth in Illinois and Indiana created more equitable school finance plans in those states.
This study examined the equity consequences of recalculating the local tax base in the Texas school finance system. For the purposes of this study, properties which were classified by the state as commercial, industrial, mineral, or utilities property, were taxed at the state level rather than the local level. Business property taxes (commercial, industrial, mineral, and utilities property combined) accounted for approximately 51 per cent of revenues generated by the local property tax, in 1994, in Texas.