Raising Money for Education

Are there ways to open taxpayers' wallets for K-12 kids?
by | September 27, 2012
 

Among the 715,000 state and local employees laid off since 2008, 328,000 of them were teachers -- a big number. Normally, the number of teachers grows each year to keep pace with an expanding student population. But as studies on education funding surface, it's clear that primary education (K-12) has not been as protected from defunding as it was in previous recessions.

The Center on Budget and Policy Priorities' (CBPP) latest report on state education funding finds that states have made deep cuts since the start of the economic downturn and, in many states, those cuts deepened over the last year. Per-pupil school funding in 35 states now stands below 2008 levels. But the report also finds that some states have started to restore funding as revenues are beginning to rebound. Still, the increases are not enough to make up for cuts in past years. For example, Florida is increasing school funding by $273 per pupil this year, but it cut $569 per pupil over the past four years.

When the recession first hit and state revenues began their downward spiral, the federal government's stimulus package helped make up some of the shortfalls. But that ended in 2011 and the feds have been cutting back on the help they offer states ever since, which can only have a negative affect on education funding. Localities, of course, are where the rubber meets the road. State money helps -- it accounts for 44 percent of the total education bill -- but local governments are the ultimate funders. And their revenues are in even deeper trouble than state or federal systems, largely due to their dependency on property taxes, which brought in 2.8 percent less this past year than the previous year.

In this on-going, post-housing-bubble downturn, it's hard to imagine any locality asking its taxpayers to pay more in property taxes. But Robert Shiller, a professor of economics and finance at Yale University, argues it's not impossible. In a column in The New York Times, Shiller pointed to a July CBS-New York Times poll in which 74 percent of those asked said they were not willing to have shorter school days or more crowded classrooms in exchange for a tax cut.

Given that sentiment, Shiller asks why most states and localities balance their distressed budgets solely by cutting spending for education and other services rather than mixing in some revenue increasers? "What actually happens with tax policy in the political marketplace," he writes, "may be entirely different from what we would choose if, as a community, we focused on salient questions." That is, "when people make decisions without enough deliberation, consultation and information, they are easily influenced by superficial forms and irrelevant details of presentation or wording."

So, a lot more knowledge might help. In particular, we might convince taxpayers to pay more for education -- for the rehiring of teachers -- if the knowledge imparted was specific. According to studies by Deborah Small of the University of Pennsylvania and George Loewenstein of Carnegie Mellon University, people are more sympathetic to "identifiable victims" than they are to "statistical victims."

I interpret this to mean that if a proposed tax increase were targeted to go to hiring public employees in general, that might not go over so well. But if the proposal were specifically about teachers -- about the laid-off kindergarten teacher down the street or the soon-to-be-fired English teacher from the local high school -- taxpayers might be more willing to say yes to a tax hike. After all, 74 percent of them say they don't want overcrowded classrooms or shorter school days.

Raising property taxes is not the only means for restoring education funding. Education advocates in Arizona are putting before voters an initiative that would make permanent and target a one-cent increase in the state sales tax (set to expire) to fund education. Arizona tops the list for decreases in education funding, standing as it does at a 21.8 percent decrease, whereas the median decline for all states is around 9.4 percent.

To encourage voters to say yes to more money for K-12, the forces behind Arizona's initiative put a "sweetener" in the deal. Ten percent of the new money would go for new roads and other transportation fixes. That's got developers and construction companies on their side, as well as voters who are getting tired of crumbling roads. It can help to tap into two constituencies. And it's another way to pull voter sentiment toward investing in K-12 education

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