ABSTRACT
This chapter examines basic concepts of how schools are structured–financially and politically. Education is a federal interest, a state responsibility, and a local operation. Economists Harvey S. Rosen and Ted Gayer believe that financing educational programs through the three levels of government offers distinct advantages for meeting public responsibilities in education. First, this layered system provides for equalization due to fiscal capacity of the states and the localities. Second, it permits an equitable distribution of services. Third, it allows for a more economically efficient provision of educational services. Urban locations with large business and industry tax bases tend to have more, different, and increasingly expensive social, economic, and educational problems than do suburban or rural locations. However, rural areas have problems other areas do not have, including isolation, difficulty attracting teachers, and too few students to afford many high-quality educational offerings.
