THE FLORIDA INDEX OF TAXPAYING ABILITY
REQUIRED COUNTY EFFORT
State Department of Education
Division of Administration and Finance
Thomas D. Bailey
State Superintendent of Public Instruction
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 per cent 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
per cent is used since it is assumed that at least ninety-five per cent
of the taxes levied are collected. The rate of six mills was established
by the Legislature as "fair and reasonable". Non-exempt assessed valua-
tion refers to the assessed value of the property on which taxes are lev-
ied. 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
deducted from the total cost of the Minimum Foundation Program- the re-
mainder is the state's share,
As the non-exempt assessed valuation of the state increases, the
minimum local effort required from the counties increases, This holds
true regardless of the cost of the total Minimum Foundation Program.
Increases in the value of an instruction unit, for example, do not af-
fect the minimum local effort. Nor will a county's minimum financial
effort be increased by the inclusion of special units such as adult educ-
ation, exceptional child, or vocational education units,
The dollar amount each county is required to provide is computed
by multiplying that county's per cent 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 re-
quirement 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 per cent of the non-exempt assessed valuation of the state would
Property is not assessed on the same basis throughout the state.
Assessments reportedly range from twenty-five to one hundred per cent
of actual cash value in different counties. This condition makes nec-
essary the use of some standard other than assessed valuation in det-
ermining the relative (comparative) taxpaying ability of the several
counties* The Index of Taxpaying Ability was developed to provide such
a standard. This Index does not depend on property assessments to meas-
ure 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 avail-
able. 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 areas
o1 Sales tax collections as reported by the Comptrollero
2o Number of gainfully employed workers excluding government
and farm workers, taken from the latest United States Census.
3o Value of farm products taken from the latest official United
States Census of Agriculture.
14 Valuation of railroad and telegraph property as reported by
5o Automobile license tag sales (passenger cars) as reported
by the Motor Vehicle Commission,
Sales tax collections, valuation of railroad and telegraph property,
and automobile license tag sales vary from year to year The other two
factors, gainfully employed workers and value of farm produc.ts depend on
the United States Census and therefore are available at ten-year periods
rather than at yearly intervals
Each county's percentage of the state total in each of the above fac-
tors 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 work-
ers 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 per cent 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)o The sum of the products is that county's Index of
This can be stated another wayo The Index of Taxpaying Ability of each
county is expressed in terms of its per cent of the total taxpaying ability
of all the counties combined This is determined as follows Find the sum
of the county's per cent of sales tax returns multiplied by o3654 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 multi-
plied by .0586 plus its per cent of the railroad and telegraph assessments
multiplied by o0461 plus its per cent of automobile tag sales multiplied
The indices of taxpaying ability of all the counties add up to 100
per cento To find the dollar amount that each :..ur.y is required to pro-
vide 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 coming under the Minimum Foundation Program are required to
increase their local minimum effort by five per cento An additional five
per cent effort is required for counties having kindergarten programs
under the Minimum Foundation Program,
To raise the required "six-mill equivalent" for participation in the
Minimum 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 assess-
ment practices usually result in higher required tax rates. Conversely,
high property assessments usually result in required levies below six
mills. Actually these levies range from as low as 2,7 mills to higher
than 18 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 program. Local
taxes must be levied to meet these expenses,
Section 236.071 (2), Florida Statutes, is the legal authority for th~
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 min-
imum foundation program fund shall be, and it is hereby appor-
tioned and distributed on the basis of educational needs and
relative taxpaying ability as prescribed by law, in the ascer-
tainment 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 deter-
mined 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 Find the sum of the
county's per cent of sales tax returns multiplied by o365 plus
its per cent of gainfully employed workers less government and
farm workers multiplied by o2h42 plus its per cent of the value
of farm products multiplied by o0586 plus its per cent of the
railroad and telegraph assessments multiplied by .0461 plus its
per cent of automobile tag registrations multiplied by o2857j
furthermore, if any county fails for any reason to make the min-
imum 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 superinten-
dent 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 per cent of the financial
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
236o071o 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 max-
imum 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 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 (5%).
If a county is approved by the state board to operate a junior college,
the financial effort required of that county and of each county partici-
pating in the support of such junior college as prescribed herein, shall
be equal to five per cent (5%) of the amount required for grades one (1)
through twelve (12) in the respective counties;. o
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.
North County is used for purposes of illustration.
The first step is to determine what per cent of the state total of each
of the five factors in the Index is found in North County. This is accomp-
lished by dividing the state total for each factor into the North County
total for each factor
lo Sales tax returns
The total sales tax collected from all the counties for the
fiscal year ending June 30, 1958, as taken from the Report of
the Comptroller, amounted to $120,018,933991. Of this total
state return, $1,218,466048 was reported from North County.
Dividing the state total into the amount reported from North
County gives this county's share of the state total as 09518
2. Gainfully employed workers
From the 1950 United States Census, there were 8255,874 gain-
fully employed workers other than government workers and farm
workers in Florida. North County had 13,081 such workers.
This is 1,5839 per cent of the state total,
3, Value of farm products
From the 1950 United States Census of Agriculture, the value of
all farm products in the state amounted to $338,645,i16. Of this
state total, $5,125,903, or 1,5137 per cent, was from North County,
4o 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 $297,922,200o Of this total, $10,0l3,195, or 3.3711 per
cent, was reported from North Countyo
50 Automobile tag sales
The total state revenue from the sale of automobile license
tags (passenger automobiles) for 1958, according to the report
of the Motor Vehicle Commission, was $27,282,538o31. North
County's share was $343.574.,97, or 1l2593 per cent of the
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 Per Cent of Times Prescribed Equals Weighted
State Total Weight Per Cent
Sales Tax Returns .9518 x .3654 .3478
Workers 1.5839 x .2442 ,3868
Value of Farm
Products 1.5137 x 0586 0887
Valuation of R.R.
and Tel. Property 3.3711 x o0461 1554
Auto Tag Sales 1.2593 x .2857 -3598
Totals 1o0000 1.3385
North County's Index of Taxpaying Ability thus is found to be
1,3385o This means that according to the factors used in the Index as
measures of taxpaying ability, North County has 1o3385 per cent of the
state's ability to support the Minimum Foundation Program.
For the year used in this example, the state total non-exempt
assessed property valuation was $6,722,065,621, 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 per cent. This formula presumes a ninety-five per cent
collection. (6,722,065,621 x .006 x .95 = 38,315,774) This $38,315,774
is the total amount which must be provided by all of the counties to-
gether toward meeting the costs of the Minimum Foundation Program,
North County's ability to pay has been determined already to be 1.3385
per cent of the ability of all of the counties together, To find the amount
which North County must provide, it is necessary only to multiply North County's
Index of Taxpaying Ability times the total amount that the counties collectively
are required to provide (38,315,774 x .013385 = 512,857). North County's share
of the total cost of the Minimum Foundation Program thus is found to be
North County has a kindergarten program for which it receives instruction
units under the Minimum Foundation Program. Therefore, the share provided
by this county must be increased by five per cent (512,857 x .05 = 25,643).
This means that $25,643 must be added to North County's share in the cost of
the program ($512,857 + $25,643 = $538,500). North County's total minimum
local effort is $538,500, which amount this county must provide from local
county sources in order to participate fully in the Minimum Foundation
To provide the required $538,500 from local ad valorem taxes it is
necessary for North 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 1958 tax roll. The actual
tax levies by the counties are levied on the 1959 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 North County is limited
to a eight mill levy, This is merely the minimum required to qualify under
the, Minimum Foundation Program Law, Actually this county levies over
seventeen mills in order to provide a better educational opportunity for its
boys and girls than the bare minimum, All counties have a tax rate in ex-
cess of the minimum. This is necessary because many requirements are not
covered in the Minimum Foundation Program,
Had North County participated in a junior college program for which
instruction units were earned under the Minimum Foundation Program, an-
other five per cent would have been added to its minimum effort in order
If North County did not have a kindergarten 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 five per cent for a kindergarten program and five per cent for
a junior college program earning units under the Minimum Foundation Pro-
gram, In a few instances, counties have had both junior college and
kindergarten programs, whereby their minimum local effort was increased
by ten per cent,
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 collec-
tively 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 Foundati..n Program?
Answer. No. The required local effort is not based on costs within
the county. The county's required local effort would not
3. If allocations for teachers& salaries are increased under the Min-
imum 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.
h. If the Index of Taxpaying Ability and the non-exempt assessed val-
uation of a county remain the same but the non-exempt assessed
valuation of the state increases, what logically would be the ef-
fect 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 Tax-
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
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 proportionately
7. Is the amount of money a county receives from the state under the
Minimum Foundation Program reduced if the county raises, through
local taxes, considerably more money than it is required to raise
under the Minimum Foundation Program?
Answer. No. The additional funds are retained and used in the
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 per cent?
Answer. No. The five per cent requirement holds only if the kin-
dergarten or junior college earns units under the founda-
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 per cent would the minimum county
effort have to be increased?
Answer. Ten per cent; five per cent for the kindergarten and five
per cent 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 Pro-
gram will remain at the same ratio (per cent) 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 per cent 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 per cent,
All counties could not have an increase in their index.
h1o 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
determining 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 sixteen mills?
Answer. Primarily because of local assessment practices0 Since
the dollar amount is fixed independently of local tax
rates, a county with high assessed valuations can meet
its requirement with lower rates,