THE FLORIDA INDEX OF TAXPAYING ABILITY
AND THE REQUIRED COUNTY EFFORT
Paying for Florida's Minimum Foundation Program for Education is a joint
state-county responsibility. The amount that all of the counties together are
required to provide is equal to ninety-five percent of the calculated yield
of six mills of taxes levied on the non-exempt assessed valuation of the
state. This is referred to as the "six-mill equivalent" and as the "county
minimum financial effort." The figure of ninety-five percent is used since
it is assumed that at least ninety-five percent of the taxes levied are
collected. The rate of six mills was established by the legislature as "fair
and reasonable." Non-exempt assessed valuation refers to the assessed value
of the property on which taxes are levied. It does not include property
coming under the Homestead Exemption Law. It is the assessed value rather
than the cash value or actual value of such property.
The amount of money provided by the counties as their contribution to
the cost of the Minimum Foundation Program is determined independently of
the total cost of the program. The county minimum financial effort is de-
ducted from the total cost of the Minimum Foundation Program; the remainder
is the state's share.
As the non-exempt assessed valuation of the state increases, the mini-
*mum local effort required from the counties increases.* This holds true re-
gardless of the cost of the total Minimum Foundation Program. Increases in
the value of an instruction unit, for example, do not affect the minimum
'* This increase is limited to 5% for 1962-63 as explained on page.
The dollar amount each county is required to provide is computed by
multiplying that county's percent of the financial ability of the state, as
determined by an Index of Taxpaying Ability, times the dollar amount that the
counties are required to provide collectively. The requirement for each county
depends on two things, (1) that county's Index of Taxpaying Ability, and
(2) the amount that a six-mill levy on ninety-five percent of the non-exempt
assessed valuation of the state will produce.
Property is not assessed on the same basis throughout the state. Assess-
ments reportedly range from twenty-seven to one hundred percent of actual cash
value in different counties.* This condition makes necessary the use of some
standard other than assessed valuation in determining the relative (comparative)
taxpaying ability of the several counties. The Index of Taxpaying Ability was
developed in an effort to provide such a standard. This index does not depend
on property assessments to measure ability to pay taxes. It uses other
"factors" or measurements as indicators of financial ability.
The factors used in the Florida Index of Taxpaying Ability are given below.
All are factors for which objective figures are available. They are factors
which in one way or another indicate something of the ability of the people of
a county to pay taxes to support their schools. The factors now used are:
1. Sales tax collections as reported by the Comptroller.
2. Number of gainfully employed workers excluding government and
farm workers, as reported by the Industrial Commission.
3. Value of farm products taken from the latest official United
States Census of Agriculture.
4. Valuation of railroad and telegraph property as reported by
5. Automobile license tag sales (passenger cars) as reported by
the Motor Vehicle Commission.
Florida Railroad Assessment Board
Sales tax collections, gainfully employed workers, valuation of railroad
and telegraph property, and automobile license tag sales vary year to year.
The factor value of farm products depends on the United States Census of agri-
culture, and is available at five year periods rather than at yearly intervals.
Each county's percentage of the state total in each of the above factors
is determined by dividing the state total into each county's total. For example,
the total sales tax collected in Florida is divided into the sales tax collected
in each county; the number of gainfully employed workers in the state is divided
into the number of gainfully employed workers in each county. This is done for
each factor in the Index for each county.
Each county's percent of the state total of each of the five factors is
multiplied by the weight assigned to each factor by law (Section 236.071(2),
Florida Statutes). The sum of the products is that county's 'Index of Tax-
This can be stated another way. The Index of Taxpaying Ability of each
county is expressed in terms of its percent of the total taxpaying ability
of all the counties combined. This is determined as follows: Find the sum
of the county's percent of sales tax returns multiplied by .3654 plus its
percent of gainfully employed workers (less government and farm workers)
multiplied by ,24h2 plus its percent of the value of farm products multiplied
by .0586 plus its percent of the railroad and telegraph assessments multiplied
by .0461 plus its percent of automobile tag sales multiplied by .?857.
The indices of taxpaying ability of all the counties add up to 100 ner-
cent. To find the dollar amount that each county is required to provide it
is necessary to multiply that county's Index of Taxpaying Ability by the
dollar amount that the counties are required to provide collectively.
Counties having junior colleges or participating in the support of a
junior college under the Minimum Foundation Program are required to increase
their local minimum effort by five percent. An additional five percent ef-
fort is required for counties having kindergarten programs under the program.
To raise the required "six-mill equivalent" for participation in the Mini-
mum Foundation Program, some counties find it necessary to levy more than six
mills local tax while other counties may obtain their minimum requirement by a
tax levy of less than six mills. Low property assessment practices usually re-
sult in higher required tax rates. Conversely, high property assessments usu-
ally result in required levies below six mills. Tax levies, of course run higher
than the minimum required to meet the county's requirements under the Minimum
Foundation Program. Many necessary expenses are not covered by the minimum pro-
gram. Local taxes must be levied to meet these expenses.
Section 236.071(2), Florida Statutes, is the legal authority for the Index
of Taxpaying Ability. This Section states:
The legislature finds and declares that substantially equal
public educational advantages should obtain in all counties of
the state; that such equality does not now exist. In order to
provide in every county, from combined state and county sources,
substantially equivalent educational advantages, the state mini-
mum foundation program fund shall be, and it is hereby apportion-
ed and distributed on the basis of educational needs and rela-
tive taxpaying ability as prescribed by law, in the ascertain-
ment of which, the state board shall determine (a) the rela-
tive ability of the several counties to support the cost of the
minimum foundation program by ad valorem taxation, such ability
to be determined by an index of relative taxpaying ability es-
tablished by law; (b) the cost of the minimum foundation program
as determined in Section 236.07. In determining said index of the
relative taxpaying ability of the several counties of Florida the
state superintendent shall find each county's percent of the state
total of each of the following factors: sales tax returns, gain-
fully employed workers excluding government and farm workers,
value of farm products, assessed value of railroad and telegraph,
automobile tag registration. The Index of taxpaying ability for
each county expressed in terms of its percent of the state total
taxpaying ability shall be determined as follows: Find the sum
of the county's percent of sales tax returns multiplied by .3654
plus its percent of gainfully employed workers less government
and farm workers multiplied by .2hh2 plus its percent of the value
of farm products multiplied by .0586 plus its percent of the rail-
road and telegraph assessments multiplied by .0661 plus its per-
cent of automobile tag registrations multiplied by .2857; further-
more, if any county fails for any reason to make the minimum finan-
cial effort required for the minimum foundation program, the state's
portion of the foundation program allocation to that county shall be
decreased proportionately. The state superintendent shall obtain
data for the factors included in the index from the most reliable
published source as determined by the state board of education.
Section 236.07(8), Florida Statutes, provides the legal authority and
prescribes the procedure to be followed in determining the minimum financial
effort in each fiscal year required of the several counties.
The amount which each county shall provide toward the cost of
the minimum foundation program is that county's percent of the fin-
ancial ability of the state as determined by an index of relative
taxpaying ability prescribed by law multiplied by ninety-five per-
cent (95%) of the calculated yield of six (6) mills of taxes levied
on the non-exempt assessed valuation of the state, subject to the
provisions of Section 236.071. The financial effort of any county
toward meeting the cost of the minimum foundation program for that
county shall consist of the proceeds of either county or district
or of both county and district current school taxes provided, that
when a county is levying the maximum twenty (20) mills race track
and federal impact receipts may be included* If a county requests
that instruction units for kindergartens be included in its mini-
mum foundation program and is entitled to such units under the laws
of the state, the financial effort required of that county as pre-
scribed herein shall be increased by five percent (5%). If a county
is approved by the state board to operate a junior college, the fin-
ancial effort required of that county and of each county participat-
ing in the support of such junior college as prescribed herein, shall
be equal to five percent (5%) of the amount required for grades one (1)
through twelve (12) in the respective counties; . .
An example of how the Index of Taxpaying Ability works in a specific
county will serve to make the computation and application of the Index
clearer. Alachua County is used for purposes of illustration.
The first step is to determine what percent of the state total of each
of the five factors in the Index is found in Alachua County. This is accomp-
lished by dividing the state total for each factor into the Alachua County
total for each factor.
1. Sales tax returns
The total sales tax collected from all the counties for the
fiscal year ending June 30, 1961, as taken from the Report of
the Comptroller, amounted to $158,265,086,07. Of this total
state return Alachua County reported $1,560,252.73. Dividing
the state total into the amount reported from Alachua County
gives this county's share of the state total as .9858 percent.
2. Gainfully employed workers
The Industrial Commission reported that in 1960, there were
1,492,801 gainfully employed workers other than government workers
and farm workers in Florida. Alachua County had 15,163 such workers.
This is 1.0157 percent of the state total.
3. Value of farm products
From the 1959 United States Census of Agriculture, the value of all
farm products in the state amounted to $700,h76,217. Of this state
total, $10,350,804 or 1.4777 percent, was from Alachua County.
4. Valuation of railroad and telegraph property
The total value of railroad and telegraph property in Florida, taken
from the Report of County Finances, State Comptroller, was $297,056,3h6.
Of this total, $9,759,513, or 3.2854 percent, was reported from Alachua
5. Automobile tag sales
The total state revenue from the sale of automobile license tags
(passenger automobiles) for 1961, according to the report of'the
Motor Vehicle Commission, was $32,650,687.25. Alachua County's
share was $410,677.19, or 1.2578 percent of the state total.
Since it must be recognized that all of the above factors are not of equal
importance as indicators of the ability of a county to support its schools, the
next step is to apply "weights" to each factor. These weights were derived
through detailed mathematical processes and now are prescribed by law (Section
236.071(2), Florida Statutes).
Factor Percent of Times Prescribed Equals Weighted
State Total Weight Percent
Sales Tax Returns .9858 x .3654 = .3602
Workers 1.0157 x .2h42 = .2480
Value of Farm
Products 1.4777 x .0586 .0866
Valuation of R.R.
and Tel. Property 3.2854 x .0461 .1515
Auto Tag Sales 1.2578 x .2857 = .3594
Totals 1.0000 1.2057
Alachua County's Index of Taxpaying Ability thus is found to be 1.2057.
This means that according to the factors used in the Index as measures of tax-
paying ability, Alachua County has 1.2057 percent of the state's ability to-
support the Minimum Foundation Program.
For the year used in this example, the state total non-exempt assessed proper-
ty valuation was $10,984,386,811. The amount that the counties collectively
are required to provide is found by multiplying the total non-exempt assessed
valuation of the state by six mills by ninety-five percent. This formula
presumes a ninety-five percent collection. (10,984,386,811 x .006 x .95 =
62,611,005). This $62,611,005 is the total amount (as provided in Section
236.07(8))to be provided by all of the counties together toward meeting the
costs of the Minimum Foundation Program. However, the 1961 Legislature limit-
ed the amount to be required of all of the counties together in 1962-63 by
providing in the Appropriation Act "that the minimum financial effort for the
counties combined for grades 1-12 shall not be increased more than five per-
cent for 1962-63 over such effort in 1961-62, computed in accordance with
Section 236.07(8), Florida Statutes." The required effort for the counties
combined for grades 1-12 in 1961-62 amounted to $53,489,046; therefore, the
required effort for 1962-63 as determined above ($62,611,005) exceeds the
increase allowed by the Appropriations Act for this year and must be reduced.
If the 1961-62 required effort is increased by five percent (53,489,046 +
(.05 x 53,489,046)) the result is $56,163,498. This $56,163,498, then, is the
total amount which must be provided by all of the counties together for 1962-63
toward meeting the costs of the Minimum Foundation Program,
Alachua County's ability to pay has been determined already to be 1.2057
percent of the ability of all of the counties together. To find the amount
which Alachua County must provide, it is necessary only to multiply Alachua
County's Index of Taxpaying Ability times the total amount that the counties
collectively are required to provide (56,163,498 x .012057 = 677,163).
Alachua County's share of the total cost of the Minimum Foundation Program
thus is found to be $677,163.
Alachua County has a kindergarten program for which it receives instruc-
tion units under the Minimum Foundation Program. Therefore, the share pro-
vided by this county must be increased by five percent (677,163 x .05=33,858).
This means that $33,858 must be added to Alachua County's share in the cost
of the program (677,163 + 33,858 = 711,021). Alachua County's total minimum
local effort is $711,021, which amount this county must provide from local
county sources in order to participate fully in the Minimum Foundation Program.
To provide the required $711,021 from local ad valorem taxes it is neces-
sary for Alachua County to make a tax levy of approximately eight mills on
non-exempt property in the county. One point should be made here. The total
minimum local effort for the counties collectively was computed on the basis
of non-exempt assessments from the 1961 tax roll. (For the 1962-63 year, how-
ever, the total local required effort is limited by the Appropriations Act of
the State Legislature.) The actual tax levies by the counties are levied on
the 1962 tax roll. In a county in which the tax roll is increasing rapidly,
this affords some advantage to the county.
None of the above should be taken to mean that Alachua County is limited
to an eight mill levy. This is merely the minimum required to qualify under
the Minimum Foundation Program Law. Actually this county levies twenty mills
(the maximum) in order to provide a better educational opportunity for its
boys and girls than the bare minimum. All counties have a tax rate in excess
of the minimum. This is necessary because many requirements are not covered
in the Minimum Foundation Program.
Had Alachua County participated in a junior college program for which
instruction units were earned under the Minimum Foundation Program, another
five percent would have been added to its minimum effort in order to qualify.
However, Section 230.48(2) provides that "no county board or group of county
boards operating a junior college shall be required to make a financial effort
to support the junior college of more than fifty percent of the total cost of
the minimum foundation program for such junior college." No counties are
affected by this provision in 1962-63,
If Alachua County did not have a kindergarten program, then only its con-
tribution to the basic program would be required.
The same procedure is followed in computing and applying the Index of
Taxpaying Ability for each of the counties. The basic requirement is increased
five percent for a kindergarten program and five percent for a junior college
program earning units under the Minimum Foundation Program. In a few instances,
counties have had both junior college and kindergarten programs, whereby their
minimum local effort was increased by ten percent.
ItDEX OF TAXPAYING ABILITY
FOR THE YEAR 1962-63
Sales Tax Gainfully Farm Valuation of Auto Tag
Returns Employed Products R.R. & Tel. Sales Index of
Counties 1960-61 Workers 1960 1959 Property 1961 1961 Taxpaying
(Comptroller) (Ind. Comm.) (U.S. Census) (Comptroller) (M.Y.C.) Ability
.3654 .2442 .0586 .0461 .2857
TOTAL 00.0000 100.OflOO 100.0000 lOq.0000 100,0000 100.0000
~---------~ ~~-----~I---~--- I --
100.0000 100,0000 100.0000
100.0000 100.0000 100.0000
APPLICATION OF INDEX OF TAXPAYING ABILITY, 1962-63
(Used in computing county's part of Minimum Foundation Program)
County Minimum Additional Additional
Index of Financial Required for Required for
Counties Taxpaying Effort Required Kindergarten Junior College
Ability Grades 1-12 (5%%) ( )
Alachua 1.2057 $ 677,163 $ 33,858 $
Baker .1264 70,991 3,550
Bay .998L 560,736 28,037
Bradford .1682 94,6467
Brevard 2.2906 1,286,481 64, 324
Broward 7.4724 4,196,761 209,838
Calhoun .0663 37,236 1,862 1,862
Charlotte .2925 164,278 8,214
Citrus .1969 110,586 5,529 5,529
Clay .2551 143,273 7,164
Collier .3822 214, 657 10,733
Columbia .3087 173,377 8,669
Dade 21.3306 11,980,011 599,001
DeSoto .2135 119,909
Dixie .0683 38,360 1,918
Duval 9.0725 5,095,433
Escambia 2.9150 1,637,166 81,858
Flagler .1406 78,966 3,948 3,948
Franklin .0857 48,132
Gadsden .1W86 229,4t8
Gilchrist .0644 36,169 1, 08 1,808
Glades .0849 47,683 2,384 2,384
Gulf .1504 84, 70
Hamilton .1069 60,039 3,002
Hardee .2889 162,256
Sendrr .2952 165,795 8,290
Hernando .2378 133,557
Highlands .5078 285,198
Hillsborough 7.9398 4,159,269
Holmes .1080 60,657 3,033
Indian River .5451 306,147 15,307
Jackson .14ol 247,176 12 35
Jefferson .1351 75,877 3,794 3,791
Lafayette .0423 23,757 1,188
Lake 1.4509 814 876 140,714
Lee 1.2232 666,992 34,3-0
Leon 1.2032 675,759
Levy .1979 111,148 5, 5
Liberty .0433 24,319 216
Madison .1954 109743 1,2167
anatee 1.201 678,511 33,926 33,926
Marion 1.0659 598,647 29,932
Martin .3955 222,127 11,106
Monroe .6477 363,771
Nassau .3473 195,056
Okaloosa .7733 434,312
Okeechobee .1530 85,930 4, 297
Orange 5.9756 3,356,106
Osceola .3277 184,048
Palm Beach 5.1683 2,902,698 145,135
Pasco .6555 36,152---15,3
Pinellas 7.2135 4 ,051,354 202,568
Polk h.3740 2,456,591
Putnam .5478 307,664 15,383
St. Tohns .5987 336,251 16,813
St. Lucie .8079 453,745 22,687
Santa Rosa .3364 188,934 9,h47
Sarasota 1.8208 1,022,625
Seminole .7086 397,975
Sumter .2227 125,076 6,254
Suwannee .2566 1l4,115
Taylor .2248 126,255 6,313
Union .0609 34, 20 1,710
Volusia 2.5178 1,414,085 70,704 70,701
Wakulla .0492 27,632
Walton .1723 96,770
Washington .1113 62,510 3,126 3,126
TOTAL 100.0030 $56,163,498 i167,106 $1, 7i6,398
SOME QUESTIONS AND ANSWERS ON THE FLORIDA INDEX
OF TAXPAYING ABILITY AND ITS APPLICATION
1. If the non-exempt property assessments in one county were doubled, could
this have any effect on the minimum local effort required of a county in
another section of the state?
Answer. Yes. The total state non-exempt valuation would be raised,
thus increasing slightly the amount the counties collective-
ly have to provide.
2. If a county decided to cut school expenses by using only Rank IV and Rank V
teachers, reducing services, and delaying building repairs, would this action
reduce the amount of money required to meet that county's minimum local effort
under the Minimum Foundation Program?
Answer. No., The required local effort is not based on costs within
the county. The county's required local effort would not be
3. If allocations for teachers' salaries are increased under the Minimum
Foundation Program Law, what effect does this action have on the county's
required minimum effort?
Answer. It has no effect. The required minimum effort is not
based on the cost of the program.
U. If the Index of Taxpaying Ability and the non-exempt assessed valuation
of a county remain the same but the non-exempt assessed valuation of the
state increases, what logically would be the effect on the number of mills
of local taxation required to meet that county's share in the cost of the
Minimum Foundation Program?
Answer. The rate would have to be increased since the county would
have to raise more money on the same assessed valuation.
5. The amount of money that the counties collectively are required to provide
under the Minimum Foundation Program Law is determined by the total state
non-exempt property assessment. Why not use the assessed property in each
county to determine the amount each county is required to provide instead
of using the Index of Taxpaying Ability?
Answer. The ratio of assessed value to cash value varies widely
among counties. This would penalize the counties with
highest assessments and reward counties with lowest as-
6. What would happen to the amount a county receives from the state if the
county failed to provide its minimum required effort?
Answer. The state's portion of the Minimum Foundation Program
allocation to that county would be decreased proportion-
7. Is the amount of money a county receives from the state under the Minimum
Foundation Program reduced if the county raised, through local taxes,
considerably more money than it is required to raise under the Minimum
Answer. No. The additional funds are retained and used in the county.
8. If a county has a kindergarten or junior college program, paid for wholly
from county taxes, on which it does not earn instruction units under the
Minimum Foundation Program, is the county required to increase its local
effort by five percent?
Answer. No. The five percent requirement holds only if the kinder-
garten or junior college earns units under the foundation
9. If a county has both a kindergarten program and a junior college program
for which the county earns instruction units under the foundation program,
by what percent would the minimum county effort have to be increased?
Answer. Ten percent; five percent for the kindergarten and five
percent for the junior college program.
10. Is it safe to assume that the ratio between a county's required minimum
effort and the total cost of its Minimum Foundation Program will remain
at the same ratio (percent) from year to year?
Answer. This assumption is not sound. The ratio does not remain
constant. Required minimum effort and total cost of the
Minimum Foundation Program are computed separately.
11. If a county adds an exceptional child program, approved by the State
Department of Education, to its educational program, will this increase
that county's required minimum effort?
Answer. No. The required minimum effort is computed separately
from the cost of the program.
12. If the same five factors are used, why does a county's Index of Taxpaying
Ability change from year to year?
Answer. Because of changes in the county's percent of the state
totals in the factors making up the Index.
13. Does a county's Index of Taxpaying Ability ever go down?
Answer. Yes. The indices of all the counties total 100 percent.
All counties could not have an increase in their index.
1l. What is the difference between a county's "required local effort" and
the same county's "minimum required county effort"?
Answer. There is no difference. This also is sometimes called
the "county minimum contribution", "county requirement",
or "minimum local effort".
15, Is property coming under the Homestead Exemption Law included in deter-
mining the total non-exempt assessed valuation of the state?
Answer. No. The assessed value of homesteads is not included.
16. Why can some counties meet their minimum local requirement with a tax
levy of less than four mills while other counties have to levy over
Answer. Primarily because of local assessment practices. Since
the dollar amount is fixed independently of local tax
rates, a county with high assessed valuations can meet
its requirement with lower rates.