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I was surprised to read recently that "among all state and local governments, local school districts rely on user charges least." This goes against what I have heard anecdotally from friends and family members that are parents and/or teachers. Most parents that I've talked to feel that school districts have steadily increased user charges for auxiliary or extracurricular services like meals, transportation, athletics or after-school programs and clubs. Part of this may be due to the high visibility of user charges in K-12 schools compared to user charges in other state and local governments.
Wassmer and Fisher (2000) argue that school districts should increase user charges to "either supplement revenue or permit a tax reduction" in part because "these types of services tend to provide substantial private benefits" and "may be consumed by only a fraction of students in a school." One of the reasons that public school districts in Minnesota haven't used school fees to a greater degree is because state law prohibits public school districts from charging fees for necessary goods and services. These include instructional materials and supplies, required library books, required school activities, graduation caps and gowns, lockers, and student transportation to and from school for students that live more than two miles from the school. The argument for imposing these limits on school fees is that the state has a constitutional obligation to provide free public education to all students and therefore cannot deny students an education based on students' ability to provide books or other educational supplies needed to complete their educational requirements.
Many public school districts would not be able to offer extracurricular activities without the revenue generated from user charges. However, these charges create inequity among students and potentially lower quality education for lower income students. The positive effects of extracurricular activities such as academic clubs, music, art or athletics on educational outcomes have been well-documented. If lower income students do not have access to these activities, their education and quality of life are negatively affected. Inequities between school districts can also happen when affluent school districts are able to charge fees and spend at above-average levels compared to less wealthy districts. Check out this 2008 Information Brief from the Minnesota House of Representatives Research Department for a summary of Minnesota state law governing authorized and prohibited public school fees, the education expenses allowed under the state’s education tax deduction and credit, and an outline of student user fees in other states.
Finally, what is your experience with school fees? Do you think the use of school fees should be increased? Are school fees more acceptable than general tax increases?
Originally posted on PA5113, State and Local Public Finance, course weblog.