THE FLORIDA INDEX OF TAXPAYING ABILITY
REQUIRED COUNTY EFFORT
Research Report 39
Division of Research
Thomas D. Bailey
State Superintendent of Public Instruction
Research Report-39 is a revision of Research
Report-32 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 1-12. The total amount required for all of the
counties together for grades 1-12 cannot increase more than five percent over
the total amount required for,grades.1-12 the previous year. This is referred
to as the "county minimum financial e .J~rt" or "required local effort." The
total Minimum Foundation Program calculated cost includes instructional sal-
aries, transportation, current expense and recalculation funds. Capital
outlay and debt service funds, provided by Motor Vehicle License funds ear-
marked by Constittitional Amendment, and adjustments for prior years are
The amount of money provided by the counties collectively as their con-
tribution to the cost of the Minimum Foundation Program is based on the
total cost of the program for the pra:.e.ing 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 five percent annual increase). Increases in the. value of an instruction
unit, for example, increase the minimum local effort.
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 all
counties for the preceding 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. Each factor in one
way or another indicates 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,
Sales tax collections, gainfully employed workers, valuation of railroad
and telegraph property, and automobile tag sales vary from year to year. The
value of farm products is taken from the United States Census of Agriculture,
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
* Florida Railroad Assessment Board
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 a "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 per-
cent of gainfully employed workers (less government and farm workers) multi-
plied by .2442 plus its percent of the value of farm products multiplied by
.0586 plus its percent of the valuation of railroad and telegraph property
multiplied by .0461 plus its percent of automobile tag sales multiplied by
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 addi-
tional requirement is also made for counties having junior colleges or partic-
ipating 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
assessments usually result in lower required levies. Tax levies, of course, run
hg-tr 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
ltite. that such equality does not now exist. In order to provide
in every county, from combined state and county sources, substan-
tially equivalent educational advantages, the state minimum founda-
tion program fund, shall be and it is hereby apportioned and distri-
buted 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 ,*.paying 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 terms of its per
cent of the state total taxpaying ability.shall be determined as
follows:i Find the sum of the county's per cent.of sales tax returns
mult irlied 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 multi-
plied 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 prrpori ionately. 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 pre-
scribes the procedure to be followed in determining the minimum financial effort
for kindergarten and grades 1-12 in each fiscal year required of the several
counties. This section, as amended by the 1963 Legislature, states:
i-re 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 Sectibn 236.071,
multiplied by twenty-five percent of the total calculated cost
of the minimum foundation program for kindergarten and grades
i through 12 for all counties for the preceding fiscal year for
instructional salaries, transportation, and current expense 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 percent 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 percent;
provided, however, that during each of the first six years in
which kindergarten units are approved in the minimum foundation
program the increased local effort shall not exceed three thou-
sand dollars for each kindergarten unit approved in the respec-
Section 236.74(6), Florida Statutes, provides the legal authority and
prescribes the procedure to be followed in determining the minimum financial
effort for junior colleges in each fiscal year required of the counties
participating in this program. This section states
The amount which each county approved by the state board
to operate a junior college or to participate in the support
,of a junior college shall provide toward the cost of the junior
college 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 multiplied by five
per cent of ninety-five per cent ofthe calculated yield of six
mills of taxes levied on the nonexempt assessed valuation of the
state subject to the provisions of Section 236.071; provided
that the required amount shall be subject to the limitation in
Section 230.48(2), Florida Statutes, places a limitation on the amount
required for the support of the junior college program. This section'states:
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 per cent of the
total cost of the minimum foundation program'for such 'junior
college. .. Any 'county board which fails to make thefinan-
cial effort required hereunder to support the junior college,
shall during such default be ineligible to receive any state
funds under the minimum foundation program. .
No counties are affected by this provision in the 1965-66 fiscal year,
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 clear.
Manatee 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 Manatee County. This is accomplished
by dividing the state total for each factor into the Manatee County total for
1. Sales tax returns
The total sales tax collected from all the counties.for the fiscal
year ending June 30, 1964, as taken from the Report of the Comp"
troller, amounted to $212,765,511.93. Of this total state return
Manatee County reported $2,278,873.19. Dividing the state total
into the amount reported from Manatee County gives this county's
share of the state total as 1.0711 percent.
2. Gainfully employed workers
The Industrial Commission reported that in 1963, there were
1,516,159 gainfully employed workers other than government
workers and farm workers in Florida. Manatee County had 15,834
such workers. This is 1.0443 percent of the state total.
3. Value of farm products
From the.19.59 United States Census of Agriculture, the value of
all farm products in the state amounted to $700,476,217. Of this
state tdtal, $9,323,268 or 1.3310 percent was from Manatee County,
4. Valuation of railroad and telegraph property
The total value of railroad and.telegraph property in Florida in
1964, taken from the Report of County Finances, State.Comptroller,
was $293,844,062. Of this total $2,485,106 or .8457 percent was
reported from Manatee County.
5. Automobile tag sales
The total state revenue from the sale of automobile license tags
(passenger automobiles) for 1964, according to the report of the
Motor Vehicle Commission, was $56,227,286.41. Manatee County's
share was $843,854.71 or 1.5008 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, 1.0711, x .3654 = .3914
Workers 1.0443 x .2442 .2550
Value of Farm
Products 1.3310 x .0586 .0780
Valuation of R.R.
and Tel. Property .8457 x .0461 = .0390
Auto Tag Sales 1.5008 x .2857 a .4288
Totals 1.0000 1.1922
Manatee County's Index of Taxpaying Ability thus is found to be 1.1922.
This means that according to the factors used in the Index as measures of tax-
paying ability, Manatee County has 1.1922 percent of the state's ability to
support the Minimum Foundation Program.
The method to be followed in computing the amount to be provided by all
of the counties together is given in Section 236.07(8) which prescribes 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 pre-
ceding year, however, the required effort for grades 1-12 cannot increase more
than five percent in any one year. This five percent limitation protects the
counties against sudden increases which could upset their local tax programs.
For the year of this example, 1965-66, the total calculated cost of the
Minimum Foundation Program for the preceding year (1964-65) was $249,108,312.
The amount that the counties collectively are required to provide for grades
1-12 is found by multiplying the total calculated cost for the preceding year
by twenty-five percent. (249,108,312 x .25 x 62,277,078) The provision that
the required effort for grades 1-12 cannot increase more than five percent
places a maximum on the county effort required. The required effort for grades
1-12 in 1964-65 was $61,920,257 and increasing this by five percent would give
$65,016,270, (61,920,257 x 1.05 65,016,270) Since the required effort for
1965-66 as determined above ($62,277,078) does not exceed the five percent
increase allowed by thisprovision, the limitation has no effect for the 1965-66
year, Therefore, $62,277,078 is the total amount which must be provided by all
of the counties together for 1965-66 toward meeting the cost of the Minimum
Manatee County's relative ability to pay has been determined already to
be 1.1922 percent of the ability of all of the counties together. To find the
amount which Manatee County must provide, it is necessary only to multiply
Manatee County's Index of Taxpaying Ability times the total amount that the
counties collectively are required to provide (62,277,078 x .011922 = 742,467).
Manatee County's share of the total cost of the Minimum Foundation Program thus
is found to be $742,467.
Manatee County has a kindergarten program for which it receives instruc-
tion units under the Minimum Foundation Program. Therefore, the share provided
by this county must be increased by five percent (742,467 x .05 37,123). This
means that'$37,123 must be added to Manatee County's share in the cost of the
program (742,467 + 37,123 = 779,590). Manatee County's minimum local effort
for kindergarten and grades 1-12 is $779,590.
Manatee County participates in a junior college program for which instruc-
tion units are earned under the Minimum Foundation Program. The method to be
followed in computing the additional amount to be provided for participation
in a junior college program is given in Section 236.74(6). For the year
used in this example, the state total non-exempt property assessed valua-
tion was $16,685,409,766. The amount Manatee County is required to provide
to p:rLicipate in the junior college program is found by multiplying Manatee
County's Index of Taxpaying Ability by five percent of ninety-five percent
of six mills by the total non-exempt assessed valuation of the state.
(.011922 x .05 x .95 x .006 x 16,685,409,766 = 56,693) This means that
$56,693 must be added to Manatee County's share in the cost of the program
(779,590 + 56,693 836,283). Manatee County's total minimum local effort
is $836,283 which amount this county must provide from local county sources
in order to participate fully in the Minimum Foundation Program.
To provide the required $836,283 from local ad valorem taxes it is
necessary for Manatee County to make a tax levy of approximately three 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 1965 Tax
Roll and the estimated village necessary is estimated from the 1964 Tax Roll.
In a county in which the tax roll is increasing rapidly, the actual millage
required may be less when determined from the 1965 Tax Roll.
None of the above should be taken to mean that Manatee County is limited
to a three and one-half mill levy. This is merely the minimum required to
qualify under the Minimum Foundation Program Law, Actually, Manatee County
levies almost twelve mills in order to provide a better educational oppor?
tunity 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 require-
ments are not covered in the Minimum Foundation Program.
If Manatee County did not have a kindergarten program or a junior college
program, then only its contribution 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
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 increased for each program.
INDEX OF TAXPAYING ABILITY
FOR THE TEAR 1965-66
R. R. & Tel.
Duval 9.7730 9.8500 1.2391 15.3324 7.9360 9.0232
Escambia 2.8214 3,0782 .4957 2.8779 2.9272 2.7807
Flagler .0737 .0620 .3147 .9492 .1159 .1374
Franklin .0490 .1107 .0077 .3005 .0849 .0835
Gadsden .2446 .3655 1.1960 1.1024 __.3463 .3985
Gilchrist .0298 .0168 .2174 .4505 .0492 .0626
Glades .0240 .0190 .4912 .5926 .0392 .0807
Gulf .1008 .1837 .0141 .3620 .1295 .1362
Haeilton .0389 .0625 .5976 .2829 .0698 .0975
Hardee .1201 .1186 -1.8835 .6773 .2046 .2729
--- I -- -- -------~I-- -- --
Walton .1120 ,1313 .2722 .3815 .2169 .1685
Washington .0569 .09 4 .1753 .1999 .1221 .0982
TOTAL 100.0000 100.0000 100.0000 100.0000 100.0000 100.0000
10,. S ;
_ - C-
APPLICATION OF INDEX OF TAXPAYING ABILITY, 1965-66
(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 1.3118 $ 816,951 $ 40,848 $
Baker .1155 71,930 5,493
Bay .9868 614,550 46,926
Bradford .1656 103,131
Bre*ar d _3.0437 1,895.527 144,738
Broward 7.7753 4,842,230 369,742
Calhoun .0700 43,594 2,180 3,329
Charlotte .2970 184,963 14,123
Citrus .2135 132,962 6,648 10,153
Clay .2419 150.648 11,503
Collier .4054 252,471 19,278
Columbia .3363 209,438 15,992
Dade 20.3134 12,650,592 965,972
De Soto .2056 128,042
Dixie .0694 43,220 2,161 3,300
Duval 9.0232 5,619,385
Escambia 2.7807 1,731,739 132;232
Flagler .1374 85,569 4,278 6,534
Franklin .0835 52,001
Gadsden .3985 248.174
Gilchrist .0626 38,985 1,949 2,977
Glades .0807 50,258 2,513
Gulf .1362 84,821
Hamilton .0975 60,720 4,636
Hardee _.2729 169.954'
Hendry .3293 205,078
Hernando .2334 145,355
Highlands .5207 324,277
Hillsborough 7.7460 4,823,982
Holmes .1033 64,332 4,912
Indian River .5674 353,360 26,982
Jackson .4316 268,788 20,524
Jefferson .1337 83,264 4,163 6,358
Lafayette .0422 26,281 2,007
Lake 1.4147 881 034 67.274
Lee 1.3142 818,445 62,495
Leon 1.2142 756,168
Levy .1928 120,070 9,168
Liberty .0416 25,907 1,295
Madison .1969 122.624 9.363.
Manatee 1.1922 742,467 37,123 56,693
Marion 1.1178 696,133 53,155
Martin .4168 259,571 19,820
Monroe .6348 395,335 30,187
Nassau_ .3331 207.445
Okaloosa .7528 468,822 35,798
Okeechobee .1692 105,373 8,046
Orange 5.9830 3,726,038
Osceola .3248 202,276
Palm Beach 5.4072 3.367.446 257,131
Pasco .6976 434,445
Pinellas 7.0171 4,370,045 333,687
Polk 4.2235 2,630,272 200,842
Putnam .5190 323,218 24,680
St. Johns .5791 360,647 27.538
St. Lucie .8512 530,103 40,478
Santa Rosa .3323 206,947 15,802
Sarasota 1.8419 1,147,082
Seminole .7640 475,797
Sumter .2255 140,435 10.723
Suwannee .2755 171,573
Taylor .2238 139,376 10,642
Union .0606 37,740 2,882
Volusia 2.6380 1,642,869 82,143 125,446
Wakulla .0461 28,710
Walton .1685 104,937 8,013
Washington .0982 61.156 3.058 4,670
TOTAL 100.0000 $62,277,078 $188,359 $3,232,244
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 is based 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 coat of the Minimum Foundation Program?
Answer, The rate would have to be increasedd since the county would have
to raise amre 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 xaic 'of assessed value to cash value varies widely among counties.
This would penalize the counties with highest assessments and reward
counties, with' ,loW''et aaissaements,.
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 andud 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 tocal 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.
15. Is the five percent referred to in determining the effort required for kinder-
garten the same as the five percent referred to in determining the junior
college required effort?
Answer. No. In determining effort required to participate in the
kindergarten program a county's required effort for grades
1-12 is increased by five percent, In the junior college
program the required effort is 5% of 95% of the calculated
yield of six,mills levied on the non-exempt assessed valua-
tion of the state multiplied by a county's Index of Tax-