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Fiscal Neutrality

The concept of fiscal neutrality entails that no relationship should exist between the wealth of a community and the revenues or expenditures of the schools in the community. The notion is that the resources available to a child at school should not be a function of the wealth of the community in which he or she lives. In reality, communities with more wealth generally raise more revenues for their schools and have schools that spend more on education than communities with less wealth do. This entry places fiscal neutrality in the context of traditional school finance issues, discusses how to measure fiscal neutrality, and touches on the standards used to determine whether a given level of fiscal neutrality is regarded as “acceptable” by school finance ...

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