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Where Has All the Money for Our Schools Gone?
New government spending data could reveal how tax breaks for big businesses leave K-12 school funding out to dry.
Aug 24, 2016
As fall approaches, millions of moms and dads are scrambling to prepare for the first day of school, excited to support their children's success.
But are schools ready to receive our kids and foster that success? Increasingly, the answer is no.
In at least 18 states, local government funding levels are declining, according to an analysis by the Center for Budget and Policy Priorities. And as a result, many schools will open with fewer teachers than last year, among other detrimental losses.
As lawmakers throw up their hands and say, "sorry, there's just not enough money," we must ask: Where has all the money gone?
State and local governments give away at least $70 billion a year to business subsidies, most of it in foregone tax revenue. Local property taxes are the most significant tax most corporations pay. In most communities, they're also the backbone of local school finance.
So when subsidies slash corporate property taxes, our schools often get hurt the most.
In Chicago, for example, we already have a glimpse into the unsavory relationship between tax subsidies and school finance. Last year, one subsidy program alone cost public services $461 million. Meanwhile, the city's schools are facing a budget that is $140 million less than they had last year.
When cities line the pockets of powerful interests with subsidies while short-changing children, they harm everyone -- including businesses that depend on a well-educated work force.
Unlike Chicago, in most cities it's difficult to calculate exactly how much state and local tax subsidies drain from a given school district. But that's about to change.
Starting next year, the Governmental Accounting Standards Board will require more than 50,000 government bodies to report how much tax revenue they've lost to economic development tax breaks given to developers and corporations.
Though school districts, library districts, and other special purpose districts seldom have a role in awarding these subsidies, they too will be required to report how much revenue they've lost lost--even as a result of tax breaks handed out by other governmental bodies.
This new data will also shine a light on inequities in education, allowing new critical examination of whether tax breaks that fill corporate coffers come disproportionately at the expense of the most disadvantaged school districts.
This way, we can say no to deals that pad the profits of the already wealthy at the cost of denying opportunity to those looking to get a foot on the first rung of the economic ladder.
Some states are already following the logic of this new common sense standard. In a 2011 budget deal, California decided to phase out an expensive subsidy granted by redevelopment agencies, and as a result, paved the way for local property tax revenues to rise by 10-15 percent in coming years. These added revenues will allow cities and towns throughout California to increase funding for local priorities--including schools.
Soon, we'll all have a much better idea about where the funding for schools throughout the nation has gone. Parents and teachers clamoring for smaller class sizes and more support services will have the data to back their demands.
And taxpayers will be able to debate whether costly, long-term tax breaks that often go to the most prosperous businesses in town have been worth the cost of struggling schools.
As we look ahead to the new school year, it's time to hold our governments and schools accountable to meet student needs. The data is coming soon that will help us get there.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
This column was distributed by OtherWords.
Scott Klinger
Scott Klinger is researcher with the Program on Inequality at the Institute for Policy Studies (www.inequality.org).
As fall approaches, millions of moms and dads are scrambling to prepare for the first day of school, excited to support their children's success.
But are schools ready to receive our kids and foster that success? Increasingly, the answer is no.
In at least 18 states, local government funding levels are declining, according to an analysis by the Center for Budget and Policy Priorities. And as a result, many schools will open with fewer teachers than last year, among other detrimental losses.
As lawmakers throw up their hands and say, "sorry, there's just not enough money," we must ask: Where has all the money gone?
State and local governments give away at least $70 billion a year to business subsidies, most of it in foregone tax revenue. Local property taxes are the most significant tax most corporations pay. In most communities, they're also the backbone of local school finance.
So when subsidies slash corporate property taxes, our schools often get hurt the most.
In Chicago, for example, we already have a glimpse into the unsavory relationship between tax subsidies and school finance. Last year, one subsidy program alone cost public services $461 million. Meanwhile, the city's schools are facing a budget that is $140 million less than they had last year.
When cities line the pockets of powerful interests with subsidies while short-changing children, they harm everyone -- including businesses that depend on a well-educated work force.
Unlike Chicago, in most cities it's difficult to calculate exactly how much state and local tax subsidies drain from a given school district. But that's about to change.
Starting next year, the Governmental Accounting Standards Board will require more than 50,000 government bodies to report how much tax revenue they've lost to economic development tax breaks given to developers and corporations.
Though school districts, library districts, and other special purpose districts seldom have a role in awarding these subsidies, they too will be required to report how much revenue they've lost lost--even as a result of tax breaks handed out by other governmental bodies.
This new data will also shine a light on inequities in education, allowing new critical examination of whether tax breaks that fill corporate coffers come disproportionately at the expense of the most disadvantaged school districts.
This way, we can say no to deals that pad the profits of the already wealthy at the cost of denying opportunity to those looking to get a foot on the first rung of the economic ladder.
Some states are already following the logic of this new common sense standard. In a 2011 budget deal, California decided to phase out an expensive subsidy granted by redevelopment agencies, and as a result, paved the way for local property tax revenues to rise by 10-15 percent in coming years. These added revenues will allow cities and towns throughout California to increase funding for local priorities--including schools.
Soon, we'll all have a much better idea about where the funding for schools throughout the nation has gone. Parents and teachers clamoring for smaller class sizes and more support services will have the data to back their demands.
And taxpayers will be able to debate whether costly, long-term tax breaks that often go to the most prosperous businesses in town have been worth the cost of struggling schools.
As we look ahead to the new school year, it's time to hold our governments and schools accountable to meet student needs. The data is coming soon that will help us get there.
Scott Klinger
Scott Klinger is researcher with the Program on Inequality at the Institute for Policy Studies (www.inequality.org).
As fall approaches, millions of moms and dads are scrambling to prepare for the first day of school, excited to support their children's success.
But are schools ready to receive our kids and foster that success? Increasingly, the answer is no.
In at least 18 states, local government funding levels are declining, according to an analysis by the Center for Budget and Policy Priorities. And as a result, many schools will open with fewer teachers than last year, among other detrimental losses.
As lawmakers throw up their hands and say, "sorry, there's just not enough money," we must ask: Where has all the money gone?
State and local governments give away at least $70 billion a year to business subsidies, most of it in foregone tax revenue. Local property taxes are the most significant tax most corporations pay. In most communities, they're also the backbone of local school finance.
So when subsidies slash corporate property taxes, our schools often get hurt the most.
In Chicago, for example, we already have a glimpse into the unsavory relationship between tax subsidies and school finance. Last year, one subsidy program alone cost public services $461 million. Meanwhile, the city's schools are facing a budget that is $140 million less than they had last year.
When cities line the pockets of powerful interests with subsidies while short-changing children, they harm everyone -- including businesses that depend on a well-educated work force.
Unlike Chicago, in most cities it's difficult to calculate exactly how much state and local tax subsidies drain from a given school district. But that's about to change.
Starting next year, the Governmental Accounting Standards Board will require more than 50,000 government bodies to report how much tax revenue they've lost to economic development tax breaks given to developers and corporations.
Though school districts, library districts, and other special purpose districts seldom have a role in awarding these subsidies, they too will be required to report how much revenue they've lost lost--even as a result of tax breaks handed out by other governmental bodies.
This new data will also shine a light on inequities in education, allowing new critical examination of whether tax breaks that fill corporate coffers come disproportionately at the expense of the most disadvantaged school districts.
This way, we can say no to deals that pad the profits of the already wealthy at the cost of denying opportunity to those looking to get a foot on the first rung of the economic ladder.
Some states are already following the logic of this new common sense standard. In a 2011 budget deal, California decided to phase out an expensive subsidy granted by redevelopment agencies, and as a result, paved the way for local property tax revenues to rise by 10-15 percent in coming years. These added revenues will allow cities and towns throughout California to increase funding for local priorities--including schools.
Soon, we'll all have a much better idea about where the funding for schools throughout the nation has gone. Parents and teachers clamoring for smaller class sizes and more support services will have the data to back their demands.
And taxpayers will be able to debate whether costly, long-term tax breaks that often go to the most prosperous businesses in town have been worth the cost of struggling schools.
As we look ahead to the new school year, it's time to hold our governments and schools accountable to meet student needs. The data is coming soon that will help us get there.
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