EDUC 648 QUIZ 3: REVENUE—LOCAL
VS. STATE CONTROL. EXAM
QUESTIONS AND ANSWERS
1. Which legal principle was established in Serrano v. Priest (1971) regarding school finance?
A. Education is a fundamental right under the U.S. Constitution.
B. Local property taxes are unconstitutional as a primary source of school revenue.
C. States are required to provide exactly equal funding to every student regardless of local
taxes.
D. The quality of a child’s education should not be a function of the wealth of his neighbors.
Answer: D
Conceptual Explanation: Serrano v. Priest established the principle of ‘fiscal neutrality,’
meaning a state’s school finance system cannot make the quality of education dependent
on local property wealth.
2. In San Antonio Independent School District v. Rodriguez (1973), the U.S. Supreme Court
ruled that:
A. Education is a fundamental right protected by the 14th Amendment.
,B. The Texas system of school finance did not violate the federal Equal Protection Clause.
C. Wealth is a ‘suspect classification’ requiring strict scrutiny.
D. States must equalize per-pupil spending within 10% variance.
Answer: B
Conceptual Explanation: The Court ruled that education is not a fundamental right under
the U.S. Constitution and that the Texas funding system, despite disparities, was rationally
related to a legitimate state interest.
3. Which funding mechanism allows local districts to set their own tax rates while the state
guarantees a certain yield per mill?
A. Guaranteed Tax Base (GTB) or Power Equalizing
B. Foundation Program
C. Flat Grant Program
D. Full State Funding
Answer: A
Conceptual Explanation: Power equalizing or GTB programs ensure that every district
gets the same revenue per student for a given tax effort, regardless of local property
wealth.
, 4. What is the primary difference between ‘horizontal equity’ and ‘vertical equity’ in school
finance?
A. Horizontal equity refers to taxpayers; vertical equity refers to students.
B. Horizontal equity is a local concern; vertical equity is a state mandate.
C. Horizontal equity treats equals equally; vertical equity treats unequals differently to
achieve fairness.
D. There is no difference; both terms refer to equal per-pupil spending.
Answer: C
Conceptual Explanation: Horizontal equity assumes all students should receive the same
resources, while vertical equity recognizes that students with different needs (e.g.,
disabilities, poverty) require different resource levels.
5. What is ‘tax effort’ in the context of local school revenue?
A. The extent to which a community taxes its own ability to pay for education.
B. The ratio of a district’s tax rate to the state’s average tax rate.
C. The total amount of property value in a district.
D. The administrative cost of collecting property taxes.
Answer: A
Conceptual Explanation: Tax effort represents how hard a community is taxing itself,
usually measured by the millage rate applied to assessed property value.
VS. STATE CONTROL. EXAM
QUESTIONS AND ANSWERS
1. Which legal principle was established in Serrano v. Priest (1971) regarding school finance?
A. Education is a fundamental right under the U.S. Constitution.
B. Local property taxes are unconstitutional as a primary source of school revenue.
C. States are required to provide exactly equal funding to every student regardless of local
taxes.
D. The quality of a child’s education should not be a function of the wealth of his neighbors.
Answer: D
Conceptual Explanation: Serrano v. Priest established the principle of ‘fiscal neutrality,’
meaning a state’s school finance system cannot make the quality of education dependent
on local property wealth.
2. In San Antonio Independent School District v. Rodriguez (1973), the U.S. Supreme Court
ruled that:
A. Education is a fundamental right protected by the 14th Amendment.
,B. The Texas system of school finance did not violate the federal Equal Protection Clause.
C. Wealth is a ‘suspect classification’ requiring strict scrutiny.
D. States must equalize per-pupil spending within 10% variance.
Answer: B
Conceptual Explanation: The Court ruled that education is not a fundamental right under
the U.S. Constitution and that the Texas funding system, despite disparities, was rationally
related to a legitimate state interest.
3. Which funding mechanism allows local districts to set their own tax rates while the state
guarantees a certain yield per mill?
A. Guaranteed Tax Base (GTB) or Power Equalizing
B. Foundation Program
C. Flat Grant Program
D. Full State Funding
Answer: A
Conceptual Explanation: Power equalizing or GTB programs ensure that every district
gets the same revenue per student for a given tax effort, regardless of local property
wealth.
, 4. What is the primary difference between ‘horizontal equity’ and ‘vertical equity’ in school
finance?
A. Horizontal equity refers to taxpayers; vertical equity refers to students.
B. Horizontal equity is a local concern; vertical equity is a state mandate.
C. Horizontal equity treats equals equally; vertical equity treats unequals differently to
achieve fairness.
D. There is no difference; both terms refer to equal per-pupil spending.
Answer: C
Conceptual Explanation: Horizontal equity assumes all students should receive the same
resources, while vertical equity recognizes that students with different needs (e.g.,
disabilities, poverty) require different resource levels.
5. What is ‘tax effort’ in the context of local school revenue?
A. The extent to which a community taxes its own ability to pay for education.
B. The ratio of a district’s tax rate to the state’s average tax rate.
C. The total amount of property value in a district.
D. The administrative cost of collecting property taxes.
Answer: A
Conceptual Explanation: Tax effort represents how hard a community is taxing itself,
usually measured by the millage rate applied to assessed property value.
