Tax Base Composition and Family Income in Measuring School District Fiscal Capacity. Working Papers in Education Finance, Paper No. 12.

The authors' review of several studies on school district fiscal response to state aid formulas precedes a summary of their research results from case studies of Colorado and Minnesota. The studies reviewed examined factors influencing district fiscal capacity and expenditure changes made in response to aid formulas, especially to formulas'"fiscal price" aspects (where additional aid is made dependent on district tax rate increases). In the summary of research on Colorado and Minnesota, both of which have modified guaranteed tax base formulas, the authors examine numerous variables' effects on district fiscal response and note the elasticity of the responses. The variables covered include household income, residential property values, state and federal aid, the formulas' fiscal price effects, pupil density and growth rate, percentage of minority pupils, and number of districts per square mile in a district's surrounding region. In their conclusions the authors discuss modifications in state aid formulas, including weighting for income and other variables, and long term changes in such factors as property values and fiscal capacity. A lengthy appendix provides 10 tables showing the Colorado and Minnesota results and also lists the data sources. (RW)