A Teachable Moment

Former local teacher union pesident Morty Rosenfeld periodically attempts to make sense of the increasingly senseless world of public education.

Federal Tax Code and School Budgets

Most of New York State relies heavily on the property tax to support its local public schools. As a result, communities with a deep property base have generally had outstanding public schools, while property poor districts have been unable to provide the same level of quality. The inherent unfairness of tying the quality of a child’s education to the zip code of his residence is a problem that has had more than its share of lip service and much less serious political discussion than it deserves.

The recent changes in the tax code restricting the deductibility of state and local taxes and mortgage interest will make the discussion of how we finance our public schools even more vital. In communities like the Long Island suburb in which I live, it is almost impossible to have a conversation with a fellow citizen without the subject of ever-escalating property taxes coming up. While most communities have historically supported their local school budgets, they have done so grudgingly. Here in New York, the exasperation over ever-rising property taxes led our craven politicians to pass a property tax cap rather than reassess how we raise money to support our public institutions. While the property tax cap has and will continue to significantly damage our public schools, public pressure to reduce these taxes even further is a sure thing now that the federal government is reduced its subsidy of home ownership.

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Tax Bill a Shot at Public Education

I’ve seen little in the criticism of the Republican’s legislation to redistribute income to the wealthiest Americans about the threat it poses to the financing of public education. Limiting the deductibility of state and local taxes and mortgage interest payments will have a profoundly negative effect on the ability of school districts to raise the revenue necessary to maintain quality. Under the current federal tax law, there has been a growing reluctance of people to shoulder an ever growing property tax burden leading to support for property tax caps in states like New York and California.

The deductibility of state and local taxes and mortgage interest has been part of a conscious federal effort to encourage home ownership. Had these policies not been put in place, our suburbs would undoubtedly look very different than they do today. Removing these inducement to home ownership will not only make the already difficult job of financing public education in our suburbs more difficult, it will probably also slow or end the appreciation of real estate in suburban communities, further enraging homeowners as the equity in their houses fails to meet their expectations.

There is no doubt about it. This so-called tax reform redistributes income upwards while it takes a retributive shot at blue states that support public education and quality government services.

I’m off to California for a few says. I’ll be back here on the 27th.

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Tax Reform and Public Education

Financing education off of a property tax is among the worst tax policies we live with in New York and elsewhere. Families living next door to each other in identical homes may have widely disparate incomes; yet, they pay the same amount to support their public schools. Property taxes are unfair on a number of levels. In communities with meager tax bases, local public schools tend to be resource starved, although they often are charged with educating the neediest students. While most of the politicians I’ve spoken to over my years as a teacher union leader recognize this, just about none of them was willing to attempt to lead the way towards a more progressive way of financing public education.

Dependent, therefore, on the property tax to finance our schools for the foreseeable future, the tax reform talk coming out of Washington should be of concern to supporters of public education. Among the proposals being discussed by the Trump administration is an end the deductibility of state and local taxes from federal tax returns. In high tax states like New York and California, such a move would throw gasoline on the ever smoldering fires of property tax rebellion and create irresistible pressures to hold the line on property taxes beyond the two percent tax cap we already have on such taxes in New York or Prop 13 mandates in California. While efforts to end these deductions have failed in the past, with Republicans in control of all branches of the federal government, and with the impact of repeal of these deductions falling disproportionately on higher tax blue states, repeal would seem to have a much better chance this time around.

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A New Trend From California?

Other than to sigh with relief that President Obama was re-elected and the U.S. Senate will remain in control of the Dems and even tilt a bit to the left, I’ll leave the analysis of results to others for a while. My interest this morning, as I take up post-Sandi blogging, is on the California story of Proposition 30, a proposal to raise sales and income taxes to fund the public schools, and what it may mean for the rest of the country.

In a very real way, the tax revolt, like so many trends in modern America, began in California with the passage of Prop 13. This initiative was passed at a time when California had the undisputed number one systems of public k-12 education and public colleges and universities. It wasn’t long after the passage of Prop 13 that the schools of California began to decline, a descent that continues to this day. Proposition 30 was designed to begin to turn that dismal situation around. It calls for a half cent increase in the state sales tax and an income tax increase for those earning over $250,000, all of the revenue to be dedicated to the public schools. Had it not past, districts were facing massive program and staff cuts.

That California voters were willing to increase their taxes in support of their public schools is heartening. The other good news from California was the defeat of Proposition 32 that would have severely curtailed the rights of unions to put money into elections. Had it passed, the work that the California Education Association did in support of the tax increase legislation would never have been possible. With a little luck this good news will begin to move eastwards.

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