Federal

Tax Hikes to Fund Schools? Once Taboo, the Idea Is Gaining Momentum

By Daarel Burnette II — October 01, 2018 5 min read
Florida Democratic gubernatorial candidate Andrew Gillum wants to generate $1 billion for Florida’s schools by boosting corporate income taxes to 7.75 percent from 5.5 percent. He also wants to raise new revenue by legalizing and taxing marijuana.
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Politicians on the state campaign trail this year are making some eye-popping promises for parents and educators: billions more dollars for schools, double-digit pay raises for teachers, and hundreds of millions more to replace dilapidated schoolhouses.

And in some states, Democrats are going so far as to broach a topic often seen as off-limits in election season: tax increases.

Drawing confidence from poll data, an uptick in successful local referendum measures, and the swell of support for thousands of teachers who went on strike this spring for increased pay, Democrats in states such as Arizona, Florida, and Oklahoma are gambling that voters are so alarmed at the financial disrepair of their local school systems that they’re willing to tax states’ corporations and wealthiest citizens to bail them out.

“You’re seeing this confluence of larger political trends of income inequality and concerns about local government struggling after the Great Recession and not keeping teachers and school districts whole,” said Tracy Gordon, a senior fellow with the Urban-Brookings Tax Policy Center. “The politics of that have been fascinating.”

See Also: State Election Cheat Sheet: Education Issues to Watch

The pushback from Republican opponents and the business community in some of those states has been fierce.

They say citizens are taxed too much as it is, theorize that schools aren’t spending their money efficiently, and predict that revenue for schools will soon rebound with the economy. Democrats’ promises are both politically unrealistic and financially unsustainable, they say, and will ultimately damage the economy and cause another recession.

In fact, ballot measures to raise taxes in Arizona, Massachusetts, Oklahoma, and Utah were knocked off the ballot this past summer after either suffering from legal challenges or after proponents conceded to concessions from their state legislature.

“You’re seeing new job announcements on a daily basis,” said Garrick Taylor, a spokesman for the Arizona Chamber of Commerce and Industry who attributed the economy’s success to recent tax cuts made by Gov. Doug Ducey, the incumbent in that state’s race. “Arizona is an extremely attractive place to do business. It’s because revenue is up that makes [the most recent teacher pay raises] possible.”

To be sure, public school and anti-tax advocacy groups have waged battle with each other for decades over how best to provide children with an adequate and equitable education. And almost every election year, Republican and Democratic candidates alike have promised more money for schools, though they rarely provide much detail on how they’ll go about getting it.

Unusual Election Cycle

But this election cycle is unusual for the sheer ambition and specificity of candidates’ promises to raise taxes in notably conservative states where anti-tax sentiment has long ruled the day, analysts point out.

Democratic candidates David Garcia in Arizona and Andrew Gillum in Florida shocked political analysts when they ousted traditional Democratic opponents who promised not to raise taxes. Both candidates are competitive, according to some polls, against their Republican rivals who have promised to cut taxes.

“For too long, Florida Republicans have forced working people to pay too heavy a tax burden instead of the richest corporations,” said Gillum, the mayor of Tallahassee. “I will put an end to that as governor in 2019.”

He predicted in a whitepaper recently posted online on Medium that raising the state’s corporate income taxes will provide schools with $100 million for new school facilities and repairs, boost starting teachers’ salaries to $50,000, and provide $250 million more for early pre-K.

State politicians have come to realize in recent years that something is wrong with the way that schools are funded.

The national unemployment rate is at historic lows, and business is booming in many parts of the nation. And yet property and income taxes, which schools are heavily reliant on, have been slow to rebound.

But some national and statewide polls show that public sentiment for taxes has shifted since the heyday of property tax revolts in the 1970s.

A Pew Research poll conducted earlier this year shows that, for the first time since 1968, less than half of the nation’s voters say their taxes are too high.

A poll conducted by Marquette University Law School showed that more than 61 percent of Wisconsin voters prefer more spending on public schools over tax cuts. That compares to 46 percent of voters who said so in a similar survey conducted in 2013.

Against that backdrop, Tony Evers, the state’s superintendent of public instruction and Democratic nominee for governor, is campaigning on a promise to provide more than $1.7 billion more for schools, though he hasn’t said how he will do so.

In other states, candidates are throwing out dollar amounts they will provide schools and telling voters exactly where they’ll get it from.

Oklahoma Democratic gubernatorial candidate Drew Edmondson, said earlier this month that, if elected, he’s willing to restore several taxes including raising the state’s gross production tax by 2 percent and raising taxes on cigarettes in order to bring in up to $300 million more for schools.

Maryland Democratic candidate for governor Ben Jealous said he will push to legalize and tax marijuana to boost teacher pay by 29 percent.

Hawaii’s Case

Ballot measures pushed by teachers’ unions and Democratic operatives in states including Colorado and Utah seek to increase taxes by historic measures in order to provide a windfall for schools.

And in Hawaii, where more than 1,000 classrooms are taught by unqualified teachers because of a widespread teacher shortage, the state’s teachers’ union is pushing a ballot measure that would make that state the last in the nation to put in place a property tax to fund schools.

“The low property tax has made Hawaii a haven for mainland foreign investors to buy property,” said Corey Rosenlee, the president of the state’s teachers’ union. “And they’re getting rich and at the same time our schools are falling apart.”

A version of this article appeared in the October 03, 2018 edition of Education Week as Tax Hikes on Table As Candidates Eye School Funding

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