National Public Education
23Dec/170

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