National Public Education

Tax “Reform” and Public Education

Now that the tax bill has been signed and is the law of the land, it is time to look seriously at how it will effect public education.  As is common knowledge, the bill takes away the deduction allowed for local and state taxes (SALT), if these amount to more than $10,000.  In other words, last year you could deduct from your income the amount you paid in local and state taxes, when filling out your federal tax return.  This meant, in effect, that you only had to pay 2/3 of the "sticker price" of those local and state taxes, since 1/3 of this was being given back to you by that deduction from your federal taxes, assuming your overall tax rate was around 33%.  Now this would not happen for everyone who is paying more than $10K in local and state taxes.

To me, this means that we will end up with 1/3 less public education.  I don't see any way around this, though this is not what is usually mentioned by most commentators in the media.  There we hear all about how this cut "may" affect the public schools, and how "advocates for public education" are "worried" that this may harm the schools.  No one wants to look at the numbers.  The savings plan for private schools is then often brought up, but this will affect only a tiny amount of money compared to the SALT provisions.  Hundreds of billions of dollars are involved in SALT taxes.  Cutting those services by a third will be a huge change.

I read somewhere, some time ago, that the whole reason the SALT plan was in this bill was that it was the main way that the other tax cuts, such as for corporations and the "one percent," could be funded.  Without it, the overall plan would not work.  That is how much money is involved in the SALT part of the new law.

What no one in the media is saying is that this has to mean less public education, (as well as less police protection, public health, garbage pickup, streetlights, parks, water supply, internet connections, etc.).  Each of us only has so much money to spend.  If now we will have to pay the full price for our state and local services, instead of  2/3 of this, we will obviously only be able to afford 2/3 of the services we used to get.  For example, if the various governments used to charge us a total of $20,000 in taxes, including property taxes, for their services, and we all were paying only $13, 300 for this last year, we are not going to suddenly come up with that extra $6,700 this year.  Instead, the state and local governments will have to drop back to finding a way to just charge us a total of $13,300.  That's all we will pay; that's all we have.  To do that, then, the governments will have to cut back their services drastically, by about a third.  It's just simple math.

But, you say, what about the exclusion for anyone paying less than $10,000?  Yes, that will affect a good number of people, but it will not affect the bottom line for the states and the local governments very much.  The property taxes on a large house in a wealthy suburb can easily approach $100,000.  That is where the local and state governments get their money.  The exclusion helps the low end of the economic scale, but the finances for local and state governments are dependent on the top end of the scale.

So what does this mean for the school?  It has to mean fewer teachers, bigger classes, less repair to the buildings, cheaper books, fewer "amenities" like art, music, foreign languages, a library, sports teams, and absolutely no improvements of any kind.  Doesn't education cost money?  Doesn't less money mean less education?

What is so bizarre about all this is that the party currently in power has been saying for years that the problem in pubic education is centralized control; that what we need is more state and local control of the schools, not any "interference" from Washington.  But here is a law that turns that notion on its head.  It will cut back all the local and state programs, and do nothing to lessen the federal role.  Does that make sense?  This program will centralize control of the schools more and more.  Perhaps I, who call for a larger federal role, should be happy, but it is such a wasteful way of doing this.  This law will harm public education.

So, a sad day.  As my son, an ER doctor in a large city, has said, we may well look back on this law as the beginning of the end of public financing of our schools and public hospitals.  Let us hope not.  We still have the vote; let's use it.

Peter Dodington

December 23, 2017




“Endangering Prosperity” by Eric Hanushek

Eric Hanushek et al. have written an excellent book on the economic implications of our weak public education system.  The authors put to rest many of the popular misconceptions about the schools.

First, just to review what everyone knows, on an international test of student achievement, such as the PISA exams (Program for International Student Assessment), the US ranks 32nd out of the 68 countries tested in math in 2011, in other words, just about at the bottom of the list of developed European and Asian countries.  The results are only slightly better for English skills.  All this is well known.

What is not so well known is that this poor showing is not caused by our diverse population.  All our students do poorly, rich and poor.  Among white students whose parents are college educated, less than half are at a proficient level in math, putting them below all the students, minorities included, in 16 other countries.  Our best students are nowhere near as good as the best students in many other counties.  Among white students in the US, only 9% performed at an advanced level, putting us, again, at the bottom of the developed world.  The problems of our educational system are not limited to our poor and minority communities.

As Hanushek points out, the US is not the only diverse country.  Canada, for example, has a similar level of diversity, but does much better than us educationally.  They also are a big country spread over a wide area, yet still seem to find a way to educate everyone.  It is not just the small homogenous countries that do well.

What Hanushek is worried about is that there is no doubt that these educational problems will affect our economy.  There can be no argument that educational level does not have an effect on economic growth.  The chart is right there on page 24 of this book.  All the countries with high test scores also have high rates of economic growth from 1960 to 2009.  And those with low test scores have low rates of growth.  The US is, again, about in the middle, below most of the wealthy countries in the world.

The authors also show that it is not simply the amount of money spent on education, or even the number of years of schooling offered, that makes a difference.  Strangely enough, it is how much the students actually learn that matters.  This is what is correlated with economic growth.

All this bodes ill for the future of US prosperity.  We are in trouble.  As Hanushek points out, many of our economic gains over the past two centuries have been linked to non-educational factors, such as our natural resources and our traditional support for new and innovative businesses.  And we also had an educational system that included a higher percentage of our population than any other country.  But none of this is still true today.  The rest of the world has caught up with us, and they have done so by educating their children to a higher level.  That is what we need to do if we want to continue to grow.

All this needs to be read by a wider audience.  The data in a book like this, written by professional economists, ought to be read by every state legislator and every member of the state departments of education, not to mention the federal Secretary of Education.  They are the ones in charge of our schools; it is up to them to find a way to improve them.  If they cannot do this, they need to be replaced by someone who can.

The only problem I have with this book is that Hanushek then blames teachers and particularly the teachers’ unions for these problems, saying that teachers have uniformly opposed innovations in public education, such as vouchers and charter schools.

This may be true, but they oppose them for good reason.  Is there any evidence that these quasi-private schemes will ever improve the public school system?  Can we really make a public program better by making it more private?   Does that make sense?  Regardless of how well each one does, these schemes cannot solve the overall problem, since they have no way to address the entire public program.  They only work because they are separate from the rest of the program.  That is not a viable solution.

Still, I am thankful that Mr. Hanushek has written such a good book on the realities of the link between public education and economic prosperity.

Peter Dodington

September 9, 2017