In Ohio, the funding of schools became an issue which the State Supreme Court visited, and that Court found that schools in Ohio were inequitably funded, and the last that i read about the issue, the Court was not satisfied that the Legislature had adequately addressed the subject.
In Ohio, schools are supported from the general revenue of the local government entities which govern the respective school districts. There is in Ohio a School District Income Tax. When an employer hires a new employee, that employer is responsible for assuring that the employee completes a state withholding form (similar to the Federal Form W4), and one piece of information required is the school district number. In municipalities which have an income tax, as many of them do, the employee has a percentage of their gross pay withheld for the city income tax--for example, in Columbus, Ohio, that tax is 2% of gross. In other jurisdictions, the employee many have an amount any where from 1/4 of 1% to 2% of their gross income withheld for the School District Income Tax. It is the employers obligation to contact the local Board of Elections to find out what school district the newly hired employee lives in, and to withhold and remit a School District Income Tax if it is applicable.
In addition, local boards can and do hold bond referendums to provide funds for the renovation of existing facilities, or the building of new facilities. This would be in addition to the municipal income tax withheld, or the school district income tax. So, for example, in the case of one of my employers for whom i did the payroll accounting, i would withhold the 2% of gross for all employees which was payable to the municipality in which the business was located. Additionally, some of the employees were liable for school district income tax--so for one of them, i would withhold 3/4 of 1% of their gross income for the Fairfield Union School District, which was in addition to the 2% withheld for the municipality. That employee was also a property owner, and would have been liable for any levy passed by referendum for the F-U Schools.
All of which is to say that for some school districts, the well would be deep and rich, and for others, very, very poor. The town in which our business was located got 2% of gross of all the payroll for the business, a certain amount of which general revenue would have been applied to their schools. In addition, any property owners in the district would have been liable for assessment in any levies which passed a referendum. But other school districts, with a scant property tax base, and no municipal taxes or other municipal general revenue to rely on, would have only the School District Income Tax to rely upon, and the funds allocated by the State of Ohio. Wealthier districts had more sources of funding, and more lucrative sources of income (large property tax base, for example) to add to state funding. Poor school districts were unlikely to raise additional funds, lacking the lucrative property tax base, and probably not able to tap municipal taxes from employees and employers within the district.
The situation lead the Ohio Supreme Court to describe the situation as feudal. A time magazine article wrote:
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Source at About-dot-com.)
The constitution of Ohio requires the state to provide adequate education. The state Supreme Court found that the Legislature's funding methods failed to provide the mandated adequate education, and that therefore, the state's funding plan (which derives from legislation) was unconstitutional.
The majority opinion of the Court in
DeRolph et al., versus The State of Ohio can be read at the page linked here. The response of the Legislature has been to commission studies, and to determine, almost from one year to the next, that students in Ohio can be efficiently and adequately educated for an increasingly smaller amount of money per capita. To my knowledge, the State has consistently failed to stop the Perry County court which was the source of the original appeal from ordering the school board to provide more funds, and the Supreme Court has refused to hear appeals from the orders of the Perry County court. Effectively, the Supreme Court of Ohio has inferentially said that the State continues to fail to meet its constitutional duty to provide all children an adequate education. From the point of view of payroll taxes, you'd never know that anything had changed.