Here's a great essay on the Property tax issue by Capital District Libertarian Party member Werner Hetzner.
Increasingly we get reports about shifting the funding of public education away from the property tax. This is nothing new. It is just one more attempt to solve the wrong problem.
The original idea had been for public schools to be a local responsibility. Local people would operate local schools to teach local children with revenue collected with a tax on local property. That was the public school model. 
Unfortunately, that model has become increasingly unaffordable over time. The ever rising costs to operate public schools was especially hard on people living on fixed incomes like Social Security. The inability to keep up with rising school taxes force many people to sell their homes and others to lower their standard of living.
Political pressures led to various funding shifts away from local property tax to other revenue sources. Thus, state taxing powers were used to help pay the rising cost of schools. Later, additional reasons for state revenue were legislated. Thus, additional state moneys requested for items ranging from construction to computers were added. When these measures became problematic the Lottery was invented and gambling revenues were directed to public education. Unable to satisfy the growing school budgets, some districts were given the power to tax utility bills. But demand for money continued to outpace the abilities to pay and a federal bureaucracy was created to funnel more money to public schools.
Public education in NY state has now become nearly a $50 billion enterprise. Just in the past 20 years spending on public education has increased almost 300%. The money comes from the federal treasury (about 5%) and state coffers ( about 45 ). About half the money (51) is still raised locally.
The problem of paying for public schools continues, however. Even with help from federal and state coffers, half of a bigger amount still means higher property taxes.
Total General and Special Aid Fund Expenditures per pupil increased from
$6,562 in 1987-88 to $16,115 in 2005-06, a 146 % increase over the entire period and an annual percentage increase per pupil of 5.1 percent. The estimated 2006-07 Total General and Special Aid Fund Expenditures per enrolled pupil are $17,114, an increase of $999 (6.2 percent) over the 2005-06 school year. During this same period, State revenue including School Tax Relief (STAR) is expected to increase by $675 per enrolled pupil to $7,634. This is an increase of 9.7 percent from the 2005-06 school year.
Then there is the issue of fairness and equality in funding public schools. Political pressures have forced state school aid to favor poorer districts at the expense of richer ones. People in richer districts now get a double whammy! They have to pay their own high local school taxes in addition to high state taxes to fund schools in poorer districts elsewhere. Wealthy districts pay about 90% of their costs from local revenue while the poorest pay about 40%.
None of these prior attempts to shift the rising cost of local schools from local property tax to state and federal sources has solved the problem. So the trend continues. In other words, nothing really changes. It seems that no matter who is forced to pay, or from where the money is appropriated, public education costs relentlessly outstrip funding fixes.
Republican and Democrat politicians once again offer more of the same - new ways to shift the rising costs of public schools away from people who have trouble paying. Nothing will change. No matter how revenues are collected and from whom, our 'free' public schools will simply continue to become more unaffordable for those who must pay the bills. As long as politicians continue to find ways to shift these increasing education costs we can only expect these costs to continue to rise.
Politicians continue to solve the wrong problem. Instead if finding new ways to pay for more expensive education, they should find ways to lower the cost of education.
Here's a link to a new Public Policy Institute report that goes into more detail on the effects of STAR program: http://blogs.timesunion.com/capitol/wp-content/uploads/2008/02/star_proptax08.pdf
Isn't the problem 'public' education? As long as it is funded by the taxpayer and centrally planned by a bureaucracy and answerable in no small terms to special interests in the legislative arena, costs will always escalate without recrimination.
Politicians have no incentive to deal with costs, they are constantly re-elected regardless of it. If you support public education that's the first and only answer to the problem.
The answer for the poor in a completely private system is a personal grant to students whose families or guardians can't afford the new lean and mean system based on technology and innovation in the market place. While the role of that state is still present, it by no means defines the product or the issues that can simply exist as contractual matters.
Second concern/warning: Core advocacy issues and implied coverage bias needs to be considered as practice and/or policy here. A truthful libertarian response to certain public policy matters may not make us many friends. As long as we can produce respect, I'm fine.
Special note: I got Granny footage today and will make a composition for John when they interview.
I believe that Eric is right about the root cause of the cost of education problem, and that his argument should be made. I think that Werner’s essay reflects the belief, which I share, that taxpayer funded public education is likely to be a reality for generations and there may be some value in trying to fix the current system in the short term while working towards a more fundamental change over the long run.