Peter Greene in Forbes reports on the impact of corporate tax breaks on school districts and their students.
Good Jobs First devotes itself to “tracking subsidies, promoting accountability in economic development.” Executive director Greg LeRoy has been leading the policy resource group since its founding in 1998.
LeRoy appears as the coauthor of the report “Abating Our Future,” along with researchers Christin Wen and Katie Furtado. Their findings show that when communities provide hefty tax abatements to attract business, it is often school districts that pay the price— a grand total of at least $2.37 billion in FY2019.
97 school districts lost more than $5 million each. And lest you imagine that’s simply a function of being a large district, the report also breaks the data down by per pupil costs. By that measure, 149 districts lost more than $1,000 per student.
Back when Tennessee had a big budget surplus in 2015, the money was spent on tax cuts, not schools:
This money, combined with the $600 million surplus from the fiscal year which ended on June 30, 2015, means the state will have about $1 billion in unanticipated, uncommitted revenue.
On top of that, economists are projecting growth in the $400-$500 million range for the upcoming budget year.
As Humphrey notes, proposals are floating so spend the surplus on road projects or tax cuts or both.
What’s not being mentioned?
Schools.
Despite a pair of lawsuits contending the state’s school funding formula, the BEP, is inadequate, lawmakers and the Governor are not rushing to suggest significant new investments in Tennessee schools.
And, of course, in 2014, Tennessee put tax cuts ahead of investment in schools:
Governor Haslam blames the $160 million hole in the budget on lower than expected corporate taxes. However, no mention is made of the $46 million in lost revenue from a 1/2 cent decrease in the state portion of the sales tax on food. While removing or reducing the sales tax on food is a laudable goal, doing so without finding revenue to replace it is irresponsible. The sales tax on food is the most reliable portion of state revenue. Additional revenue is lost by the gradual phase out of Tennessee’s estate tax, previously impacting estates over $1 million. The plan is to phase that out entirely by 2016, with an estimated revenue loss of around $30 million this year and around $97 million in 2016-17’s budget. So, that’s roughly $76 million, or close to half of the projected shortfall for the upcoming budget cycle. To his credit, Haslam says he wants to hold off on efforts to repeal the Hall tax on investment income – a tax paid by a small number of wealthy Tennesseans with investment income. However, he has also said reducing or eliminating the Hall tax is a goal. Phasing out the tax, as proposed in legislation under consideration this year at the General Assembly, would mean a loss of $20 million in the 2015-16 budget year and an ultimate loss in state funds of $160 million a year and in local revenue of $86 million a year.
All of this may sound familiar in a state that now has a $2 billion revenue surplus and schools that are underfunded by $1.7 billion.
So, with three months left in the fiscal year, the state is nearly $2 billion ahead of where it planned to be. Even if the surpluses drop off, the state is well on its way to a surplus significantly in excess of $2 billion.
To put this in perspective, the state is $1.7 billion behind where it should be in terms of funding public schools according to a bipartisan legislative commission.
For further perspective, the April surplus alone is three times what Gov. Bill Lee allocated in new education funding for the entire 2021–22 fiscal year.
Wins for School Privatizers
Capital and Main reports that privatizers have been relentless in their quest to secure public money for private schools across the nation.
Today, it’s school choice advocates who feel they have the momentum. Since the start of the year, two states that helped launch the national teacher uprising in 2018 — West Virginia and Kentucky — have passed some of the most expansive school choice policies in the country. And public education advocates in a third pivotal “Red for Ed” state, Arizona, have been fighting hard to stave off more voucher bills before the legislative session ends this month.
Following the 2020 election, West Virginia Republicans turned their majority into a supermajority. Emboldened by their new electoral strength, GOP lawmakers then pushed through a flurry of bills to expand school choice and weaken public sector unions, including a bill allowing much faster charter school growth and prohibiting automatic union dues deduction from paychecks.
And, in Tennessee, Gov. Lee is using “emergency funds” to impose charter schools in districts across the state:
On Friday afternoon before Mother’s Day weekend and just after the Tennessee General Assembly had adjourned, the Tennessee Department of Education announced 15 grants for charter school applicants – including grants for charter applications in several districts that do not currently authorize any charter schools – Rutherford County, Montgomery County, Millington Municipal, Fayette County, and Williamson County. The grants would allow applicants to plan and design their applications, and the applicants could ultimately bypass local school districts and receive charter authorization from Gov. Lee’s “Super Charter Commission.” The grants could also result in usurping the authority of elected school boards in Shelby, Hamilton, and Davidson counties.
Got education news? Email me: andy@tnedreport.com
Remember, your paid subscription makes exposing the privatizers possible!