TABLE XXXI

APPROPRIATIONS FOR SPECIAL STATE AID TO PUBLIC SCHOOLS IN MINNESOTA, 1890-1921 AND THE PER CENT OF SCHOOL REVENUES FURNISHED BY THEM

Table XXXI, above, shows that the amount of the special state appropriations has increased steadily, but the per cent of state revenues furnished by them has increased only from 4.9 per cent in 1905 to 6.4 per cent in 1921. Special state aid in Minnesota has attracted a great deal of attention during the last few years because it must come up for action at every meeting of the legislature, and the amount of aid to be received by any district is always in doubt until the annual appropriation has been prorated. Actually, special state aid furnishes only about the same amount as does the endowment fund, of which far less is heard.

Proceeds from forfeitures.-Any insurance company which knowingly insures property for more than its value shall forfeit to the state, "for the benefit of the school fund," twice the amount of the premium collected.25

From this discussion of federal and state sources of school moneys, we turn in our next chapter to the local sources of school revenues.

25 General Statutes of Minnesota, 1913, p. 741, sec. 3323.

CHAPTER XI

LOCAL SOURCES OF SCHOOL REVENUE

COUNTY SOURCES

For the United States as a whole, the county is a school unit of increasing importance. The United States Bureau of Education reports that in 1918 the county furnished 7.9 per cent of the total school revenues for the United States;1 while in 1920, it furnished 9.93 per cent. This probably reflects a growing recognition of the injustice of the district system and a corresponding tendency to make the county the unit for school support.

A county tax, properly so called, is one levied upon the entire property of the county; the proceeds are paid into the county treasury and distributed thence to the districts or to the schools upon some basis, such as attendance, designed to equalize school burdens and educational opportunities. Minnesota's so-called "county one-mill tax" is a one-mill levy' required by law, the proceeds of which are returned to the district where they were raised. That is, each district receives all of, but no more than, the amount raised by the tax on its own property. Such a tax is in reality a compulsory district tax, and will be so treated in the present study.

In Minnesota, from 1858 to 1874, a so-called "state school tax" was administered as a compulsory county tax. From 1874 to 1919, however, the county, as such, contributed practically nothing to school support. It served merely as a channel through which state funds were distributed to the district, and supplied the officials who administered the "county one-mill tax." The county is the unit through which all school taxes are collected, and to which all levies must be certified on or before October 10 in each year, and through which school funds are distributed to the separate districts.

From 1880 on, superintendents of instruction advocated a return to a genuine county tax levy, but without avail.

At the present time, only two counties of the state, namely, Itasca and St. Louis, are permitted to levy true county taxes. The two laws which permit this are examples of the special legislation already referred to2a in Chapter IX, which bears witness to the need of radical reforms in Minnesota's school laws. These two laws are themselves good, and are such as the whole state should enjoy. It is a credit to these two counties to have secured their passage, but a great misfortune that neither law is state-wide in application.

1 United States Bureau of Education, Statistics of State School Systems, 1917-18, p. 54.

2 Unpublished data furnished by the United States Bureau of Education.

2 See p. 128.

In 1919, Itasca County secured the passage of an act requiring a ten-mill county school levy. The proceeds cannot be used for purposes for which district taxes cannot be used, and are under the general supervision of the "County Educational Committee." This committee consists of the chairmen of all school districts in the county. It is easy to see that such a tax helps in some measure to equalize school burdens and opportunities in a county like Itasca where district valuations vary from $13,674,516 to $64,070. It is interesting to observe, however, that in this county no district made a total school levy of less than twenty-five mills exclusive of the county ten-mill, and county one-mill, taxes. It is to be regretted, however, that the proceeds of this tax are apportioned among the districts on the distinctly antiquated and inadequate basis used for the endowment fund; namely, the number of pupils who have attended forty days out of a school year of six months. This basis for the distribution of school funds, as we have shown in Chapter IX, is based upon the educational standards of fifty years ago, and is neither suitable nor useful for the present day.

The Legislature of 1921 passed a school taxation bill which, though it does not name any county or counties, was specifically for St. Louis County, and for St. Louis County only. It is fair to say "for St. Louis County" since the law applies only to counties with an area of more than 5000 square miles, and St. Louis is the only one that has an area exceeding even 4000 square miles. The levy provided is 8/10 of a mill, and the proceeds are to be apportioned purely for the purpose of equalizing school burdens and school opportunities. The law provides that in every common, independent, special, and unorganized school district which levies a school tax of thirty mills (30), but from the proceeds of the same does not realize a revenue sufficient to provide $90 per pupil, the county auditor shall apportion to such districts an amount equal to the difference between what a thirty (30) mill tax levy brings per pupil and the amount of $90 per pupil, provided that in case the tax levied under this act does not in any tax year produce a sum sufficient to pay the per pupil allowance of $90. in full, that the auditor shall for that year automatically reduce the maximum of $90 per pupil to an amount that will allow all obligations to be paid in full. Provided, however, that no apportionment shall be paid for pupils attending less than 100 days in the public schools in the district. No part of said county school tax shall be expended for purposes for which school district taxes may not be expended. This tax shall be in addition to all other state, county, and local school taxes, and shall be apportioned to the several districts at the same time as the other apportionments are made.

& Laws of Minnesota, 1919, ch. 271.

4 Ibid., 1921, p. 537, ch. 357.

The 8/10 mill tax has been both bitterly opposed and warmly defended. Mr. J. K. Lafferty, executive secretary of the Cook Commercial Club, has formulated the following defense of the tax. He says:

We . . uphold the eight-tenths of a mill county school tax law for the following reasons:

The thirty-mill school tax, as appliable, does not give the child in the unorganized and rural districts the same advantages as it does those in the more populated centers. The estimate of ninety dollars per pupil yearly is not an excessive amount.

The opposition develops in the leading city of the county, and of the northwest, where the child is given the best common and high school obtainable. The rural community is the backbone of the county. Everyone is interested in the advancement of the rural districts, for from them comes our foodstuffs; yet it seems that from a city where every known educational facility is given, comes this effort to destroy or decrease the advantages of the child of the rural school.

Why should the city child, or one from a populated center, be given better educational facilities than the one of a school district that is unable to make an average of ninety dollars per pupil? Is not the education of one as important as the other? The opponents of the eight-tenths of a mill bill would feel far different if they, by some circumstance, were compelled to send their children to an inefficient school, caused by the opposition of a few in the city. Employers invariably ask: "What schooling have you had?" The highly paid and specialized secretary of the Taxpayers' League would not have the position he has today if he had not had the opportunity of a good school. His employer knows, too, that they cannot pay an untrained man the wages that they do him; therefore, are we to close the door of opportunity to the child of the sparsely populated district?

North of the Iron Range about three-fifths of the county is without a high school of the second grade. South of the Iron Range about two-fifths, omitting, of course, Duluth. Ninety-five per cent of St. Louis County is rural, some of which is selfsupporting and does not require the special tax, yet there are thousands of acres of tillable land waiting for the plow, and any opposition to the development of this is damming the very life blood of the county.

There is no better inducement we can offer to the furthering of agriculture in this district than a school where children can and will receive at least a fair education. We have not heard a farmer make a complaint against this eight-tenths of a mill tax. But the Taxpayers' League is composed of wholesalers, real estate dealers representing outside capital, etc., and it is our duty to know the attitude of Duluth's distributors of merchandise regarding this law and purchase our goods from merchants who will not countenance opposition to the opportunity of educating our children.

Shall we allow this League to compel a farmer to leave his plow and clearing and seek employment in a city or better organized locality to educate his children? Shall we allow education to be hindered by a few?

Shall illiteracy be allowed to gain in the rural districts?

The very foundation of this government is equality, and we cannot, as citizens, allow a radical division of education, for by that we would set up class in childhood. This is a question of education and citizenship, not one of whether a law is just or not, for any law that has for its purpose the furthering and betterment of the educational facilities for the children, whether in the city or the sparsely settled district, will have the support of all progressive people.

Everyone who is interested in the development of St. Louis County should get behind this and oppose any attempt to nullify or hinder the enforcement of the eight-tenths of a mill law."

The only true county school funds found in all counties of Minnesota are those derived from fines, forfeitures, and sales of estrays. These funds are specifically styled county school funds. They receive proceeds from fines and forfeitures for violations of laws bearing upon the following matters: (1) railroad crossings; (2) practice of osteopathy; (3) practice of dentistry; (4) practice of optometry; (5) provision of fire escapes ;10 (6) weights and measures;11 (7) usury;12 and (8) injury to the United States beacons or buoys.13

The county school fund is distributed with the state apportionment on the same basis as the endowment fund, under two provisos: (1) that it shall be used only for teachers' wages; and (2) that no district shall receive in any year from the apportioned fund, exclusive of state aid, a greater amount than that appropriated by such district from its special district tax and from its local one-mill tax for that year, unless it has levied the maximum allowed by law for school purposes.14

District sources.-Like the counties, the 7980 school districts in Minnesota vary greatly in size, population, and wealth. A single example will suffice. Lake County, with a land area of 2099 square miles, has 5 districts; Otter Tail County, with an area smaller by 60 square miles, has 286 districts.15

Minnesota school district moneys come from five sources, namely: (1) the so-called "county one-mill tax" (which we have shown is in reality a district tax); (2) a state tax on moneys and credits; (3) miscellaneous fines and forfeitures; (4) special local taxes levied by school districts; and (5) bonds issued by school districts.

In 1921 the proceeds of the county one-mill tax amounted to $1,728,991.16 This tax serves merely to insure a school tax levy of at least one mill in

M. K. Lafferty, Will the Eight Tenths of a Mill County School Tax Law Be Annulled? The Broadcaster, Virginia, Minnesota, August, 1922, p. 5.

Revised Statutes of Minnesota, 1913, p. 982, sec. 4406.

7 Ibid., p. 1096, sec. 4994. Ibid., p. 1101, sec. 5021. Ibid., p. 1102, sec. 5028. 10 Ibid., p. 1117, sec. 5112. 11 Ibid., p. 1287, sec. 5804.

12 Ibid., p. 1288, sec. 5806.

18 Ibid., p. 1967, sec. 8930.

14 Minnesota School Laws, 1921, p. 62, ch. 8, sec. 206.

15 Department of Education Report, 1919-20, pp. 186-87.

16 Unpublished data furnished by the office of the state auditor.