THE FLORIDA INDEX OF TAXPAYING ABILITY
REQUIRED COUNTY EFFORT
Research Report 32
Division of Research
Thomas D. Bailey
State Superintendent of Pubdlic Instruction
Research Report-32 is a revision of Research
Report-19 prepared by the Division of Research
of the Florida State Department of Education.
The preparation of these reports is one phase
in the implementation of Florida's plan for
improving statistical services of the State
Department of Education under the provisions
of Title X, National Defense Education Act.
THE FLORIDA INDEX OF TAXPAYING ABILITY
AND THE REQUIRED COUNTY EFFORT
Paying for Florida's Minimum Foundation Program is a joint state-county
responsibility. The amount that all of the counties together are required
to provide is equal to twenty-five percent of the total calculated cost of
the Minimum Foundation Program for the preceding year for all of the counties
for kindergarten and grades 1 through 12; however, the total amount required
for all of the counties together cannot increase more than five percent over
the total amount required the previous year. This is referred to as the
"county minimum financial effort." The total Minimum Foundation Program
calculated cost includes instructional salaries, transportation, current
expense and recalculation funds and excludes capital outlay and debt service
funds (which are provided entirely by MVL funds earmarked by Constitutional
Amendment) and adjustments for prior years.
The amount of money provided by the counties as their contribution to
the cost of the Minimum Foundation Program is determined by the total cost
of the program for the preceding year. The county minimum financial effort
is deducted from the total cost of the Minimum Foundation Program; the
remainder is the state's share,
As the total cost of the Minimum Foundation Program increases, the
minimum local effort required from the counties increases (but cannot exceed
a 5 percent increase). Increases in the value of an instruction unit, for
example, increase the minimum local effort.
* This increase is set at 5% for 1963-64 as explained on page 7.
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 total calculated cost of the Minimum Foundation Program
for the prededing year.
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 ex-
ample, 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 .2442 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 .2857.
The indices of taxpaying ability of all the counties add up to 100 per-
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 kindergartens under the Minimum Foundation Program are
required to increase their local minimum effort by five percent. An additional
requirement is also made for counties having junior colleges or participating
in the support of a junior college under the Minimum Foundation Program.
To raise the required "county minimum effort" for participation in the
Minimum Foundation Program, some counties find it necessary to levy more than
fifteen mills local tax while other counties may obtain their minimum require-
ment by a tax levy of less than two mills. Low property assessment practices
usually result in higher required tax rates. Conversely, high property assess-
ments usually result in lower required levies. 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 program. 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 minimum foundation
program fund shall be, and it is hereby apportioned and distributed
on the basis of educational needs and relative taxpaying ability as
prescribed by law, in the ascertainment of which, the state board
shall determine (a) the relative 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 established 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 per cent
of the state total of each of the following factors: sales tax
returns, gainfully 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 termsofits per cent of the
state total taxpaying ability shall be determined as follows:
Find the sum of the county's per cent of sales tax returns multi-
plied by .3654 plus its per cent of gainfully employed workers less
government and farm workers multiplied by .2442 plus its per cent
of the value of farm products multiplied by .0586 plus its per cent
of the railroad and telegraph assessments multiplied by .0461 plus
its per cent of automobile tag registrations multiplied by .2857;
furthermore, if any county fails for any reason to make the minimum
financial 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 superin-
tendent 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. This section,
as amended by the 1963 Legislature, states:
The amount which each county shall provide toward the cost
of the minimum foundation program is that county's per cent of
the financial ability of the state as determined by an index of
relative taxpaying ability prescribed by law in Section 236.071,
multiplied by twenty-five per cent of the total calculated cost
of the minimum foundation program for kindergarten and grades 1
through 12 for all counties for the preceding fiscal year for
instructional salaries, transportation, and current expenses other
than instructional salaries and transportation, and recalculation
funds provided in Sections 236.03 and 236.031, but exclusive of
adjustments for prior years as provided in Section 236.07(9).
Provided, however, that the combined required effort of all counties
for grades 1 through 12 shall not increase more than five per
cent in any year. 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 the county and district current school taxes; provided, that
when a county is levying the maximum mills permitted by law, race
track, federal impact, and national forest funds may be included.
If a county requests that instruction units for kindergartens be
included in its minimum foundation program and is entitled to such
units under the laws of the state, the financial effort required of
that county as prescribed herein shall be increased by five per cent.
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, 1962, as taken from the Report of
the Comptroller, amounted to $168,131,102.76. Of this total
state return Alachua County reported $1,729,558.66. Dividing
the state total into the amount reported from Alachua County
gives this county's share of the state total as 1.0287 percent.
2. Gainfully employed workers
The Industrial Commission reported that in 1961, there were
1,531,288 gainfully employed workers other than government workers
and farm workers in Florida. Alachua County had 16,011 such workers.
This is 1.0456 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 $700,476,217. 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 in 1962,
taken from the Report of County Finances, State Comptroller, was
$296,108,123. Of this total, $9,726,799, or 3.2849 percent, wasj
reported';from Alachua County.
5. Automobile tag sales
The total state revenue from the sale of automobile license tags
(passenger automobiles) for 1962, according to the report of the
Motor Vehicle Commission, was $34,959,304.39. Alachua County's
share was $443,255.86, or 1.2679 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 1.0287 x .3654 = .3759
Workers 1.0456 x .2442 = .2553
Value of Farm
Products 1.4777 x .0586 .0866
Valuation of R.R.
and Tel. Property 3.2849 x .0461 .1514
Auto Tag Sales 1.2679 x .2857 .3623
Totals 1.0000 1.2315
Alachua County's Index of Taxpaying Ability thus is found to be 1.2315.
This means that according to the factors used in the Index as measures of tax-
paying ability, Alachua County has 1.2315 percent of the state's ability to
support the Minimum Foundation Program.
Prior to the 1963 amendment to Section 236.07(8) the amount that the
counties collectively were required to provide was found by multiplying the
total non-exempt assessed valuation of the state by six mills by ninety-five
percent. In the 1962-63 fiscal year the amount required of all the counties
together was limited to a five percent increase over the 1961-62 county
requirement by the Appropriations Act passed by the 1961 Legislature. The
method to be followed in computing the amount to be provided by all of the
counties together was changed by the 1963 Legislature when Section 236.07(8)
was amended to prescribe that the required effort of all of the counties
collectively be twenty-five percent of the total calculated cost of the
Minimum Foundation Program during the preceding year. However, the 1963
Legislature also provided that this method of determining required county
effort would not be effective until the fiscal year beginning July 1, 1964
by including in the Appropriations Act the restriction:
.. that the required county effort for all counties collectively
for grades 1-12 for the fiscal year beginning July 1, 1963, shall
not increase more than five per cent (5%) greater than the required
effort for all counties collectively for grades 1-12 for the fiscal
year beginning July 1, 1962, and provided further that, effective
July 1, 1964, the required effort of all counties collectively for
grades 1-12 shall be determined by multiplying by twenty-five per
cent (25%) the total calculated cost of the Minimum Foundation Program
for kindergarten and grades 1-12 for all counties for the preceding
fiscal year for instructional salaries, transportation, current expense
other than instructional salaries and transportation, and recalculation
funds provided in Sections 236.03 and 236.031, Florida Statutes, but
exclusive of adjustments for prior years as provided in Section 236.07(9),
Florida Statutes, and provided further that the combined county effort
for all counties collectively for grades 1-12 shall not increase more
than five per cent (5%) in any year. Notwithstanding the above
provisions, the aforementioned county effort for the fiscal year
beginning July 1, 1964, shall not be less than five per cent (5%)
greater than the required effort for all counties collectively for
grades 1-12 for the fiscal year beginning July 1, 1963.
Therefore, for 1963-64, the year used in this example, the required county
effort for all of the counties combined for grades 1-12 is found by increasing
the 1962-63 requirement by five percent. Without these provisions by the 1963
Legislature the requirement for all of the counties together would have been
$70,009,022 (12,282,284,602 (total non-exempt assessed valuation) x .006 x .95).
The required effort for the counties combined for grades 1-12 in 1962-63 amounted
to $56,163, 98; therefore, the required effort for 1963-64 as determined above
($70,009,022) exceeds the increase allowed by the Appropriations Act for this
year and must be reduced. If the 1962-63 required effort is increased by five
percent (56,163,498 + (.05 x 56,163,498)) the result is $58,971,673. This
$58,971,673 then is the total amount which must be provided by all of the
counties together for 1963-64 toward meeting the costs of the Minimum Foun-
Alachua County's ability to pay has been determined already to be 1.2315
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 (58,971,673 x .012315 726,236).. Alachua
County's share of the total cost of the Minimum Foundation Program thus is found
to be $726,236.
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 (726,236 x .05 36,312).
This means that $36,312 must be added to Alachua County's share in the cost of
the program (726,236 + 36,312 762,548). Alachua County's total minimum local
effort is $762,548 which amount this county must provide from local county
sources in order to participate fully in the Minimum Foundation Program.
To provide the required $762,548 from local ad valorem taxes it is neces-
sary for Alachua County to make a tax levy of approximately eight and one-half
mills on non-exempt property in the county. One point should be made here. The
actual tax levies by the counties are levied on the 1963 Tax Roll and the esti-
mated millage necessary is estimated from the 1962 Tax Roll. In a county in
which the tax roll is increasing rapidly, the actual millage required may be less
when determined from the 1963 Tax Roll.
None of the above should be taken to mean that Alachua County is limited to
an eight and one-half 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 instruc-
tion units were earned under the Minimum Foundation Program, an amount equal to
. that county's per cent of the financial ability of the state as determined
by an index of relative taxpaying ability prescribed by law multiplied by five
per cent of ninety-five per cent of the calculated yield of six mills of taxes
levied on the non-exempt assessed valuation of the state . ." as required by
Section 236.74(6) 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 1963-64.
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 Tax-
paying Ability for each of the counties. The basic requirement is increased for
a kindergarten program and 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 in-
creased for each program.
INDEX OF TAXPAYING ABILITY
FOR THE YEAR 1963-64
Sales Tax Gainfully Farm Valuation of Auto Tag
Returns Employed Products R.R. & Tel. Sales Index of
Counties 1961-62 Workers 1961 1959 Property 1962 1962 Taxpaying
(Comptroller) (Ind. Comm.) (U.S.Census) (Comptroller) (M.V.C.) Ability
.3654 .2442 .0586 .0461 .2857
ash in tron
o.g.a w.n .li t. r
TOTAL 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000
APPLICATION OF INDEX OF TAXPAYING ABILITY, 1963-64
(Used in computing county's part of Minimum Foundation Program)
County Minimum Additional
Index of Financial Required for Additional
Counties Taxpaying Effort Required Kindergarten Required for
Ability Grades 1-12 (5%) Junior College
Alachua 1.2315 $ 726,236 $ 36,312 $
Baker .1244 73,361 4,3517
Bay .9820 579,102 34,350
Bradford .1704 100,488
Brevard 2,4302 1,433.130 85.008
Broward 7.5280 4,439,388 263,327
Calhoun .0672 39,629 1,981 2,351
Charlotte .3078 181,515 10,767
Citrus .1996 117,707 5,885 6,982
Clay .2386 140,706 8,346
Collier .3767 222,146 13,177
Columbia .3142 185,289 10,991
Dade 21.1051 12,446,031 738,250
De Soto .2070 122,071
Dixie .0718 42.342 2,117
Duval 9.1097 5,372,143
Escambia 2.8652 1,689,656 100,224
Flagler .1396 82,324 4,116 4,883
Franklin .0854 50,362
Gadsden .3913 230,756
Gilchtist .0627 36,975 1,849 2,193
Glades .0850 50,126 2,506 2,973
Gulf .1423 83,917
Hamilton .1025 60,446 3,585
Hardee ,2805 165.416
Hendry .3044 179,510 10,648
Hernando .2393 141,119
Highlands .5055 298,102
Hillsborough 7.8883 4,651,862
Holmes .1066 62,864
Indian River .5540 326,703 19,379
Jackson .4216 248,625 14,747
Jefferson .1327 78,255 3,913 4,642
Lafayette .0430 25,358 1,504
Lake 1.4528 856,740 50.819
Lee 1.2240 721,813 42,815
Leon 1.1758 693,389
Levy .1952 115,113 6,828
Liberty .0427 25,181 1,259
Madison .2002 118,061 7,003
Manatee 1.1977 706,304 35,315 41,895
Marion 1.0678 629,700 37,351
Martin .4040 238,246 14,132
Monroe .6382 376,357
Nassau ,3354 197,791
Okaloosa .7576 446,769
Okeechobee .1554 91,642 5,436
Orange 6.0392 3,561,417
Osceola .3197 188,532
Palm Beach 5.3635 3,162.946 187.614
Pasco .6697 394,933
Pinellas 7.1916 4,241,007 251,560
Polk 4.3298 2,553,355
Putnam .5435 320,511 19,011
St. Johns .5887 347.166 20.593
St. Lucie .8075 476,196 28,246
Santa Rosa .3319 195,727 11,610
Sarasota 1.8437 1,087,261
Seminole .7292 430,021
Sumter .2182 128,676 7,633
Suwannee .2581 152,206
Taylor .2203 129,915 7,706
Union .0635 37,447 2,221
Volusia 2.4894 1,468,041 73,402 87,078
Wakulla .0572 33,732
Walton .1696 100,016
Washington .1048 61.802 3.090 3,666
TOTAL 100.0000 $58,971,673 $171,745 $2,175,895
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. The non-exempt valuation in one county does not effect the county
requirement in another county for the kindergarten through twelve
program. If the other county has a junior college, the require-
ment for this might be increased slightly.
2. If a county decided to cut school expenses by 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
Answer. No. The required local effort istbased on its share of a
percentage of the total state Minimum Foundation Program cost.
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. Since the required minimum effort is based on the cost of the
program any increase in unit values would be paid in part by the
4. If the Index of Taxpaying Ability and the non-exempt assessed valuation of
a county remain the same but the state total calculated cost of the Minimum
Foundation Program 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. 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 assessments.
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 to fully participate in the basic program?
Answer. No. The additional requirement holds only if the kindergarten
or junior college earns units under the foundation program.
9. 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 in a county is not based
solely on the program in that one county.
10. 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. The required minimum effort is based on the previous year's
total calculated cost of the program, so there would be a
year's lag in cost increase to the county.
11. 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.
12. 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.
13. 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."
14. Why can some counties meet their minimum local requirements with a tax levy
of less than two mills while other counties have to levy over fifteen mills?
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.