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Investing in Public Education Pays

TEF Lessons for Members and Citizens Lesson 6. Investing in Public Education Pays. Objectives. Participants will: Learn the story behind our current economic crisis; See how corporate tax cuts hurt public education funding; and

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Investing in Public Education Pays

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  1. TEF Lessons for Members and Citizens Lesson 6 Investing in Public Education Pays

  2. Objectives Participants will: • Learn the story behind our current economic crisis; • See how corporate tax cuts hurt public education funding; and • Review why investing in public education provides more economic growth and a greater investment return than tax cuts.

  3. As a group can we agree that we will: • Respect and value differences of opinions and varying levels of knowledge • Be attentive

  4. The story begins with: THE RELATIONSHIP “The relationship between the business community and public schools is…”

  5. A quality education system depends on a strong economy… Because education needs business taxes to fund schools. Because business needs qualified workers that schools provide. A strong economy depends on a quality education system…

  6. American business and public education: Both face serious challenges • Business: needs a highly skilled and innovative workforce to compete in the new global economy. • Public Education: needs a modern infrastructure and resources to attract and retain a highly qualified workforce and meet the needs of an increasingly diverse student body.

  7. What’s changed? • The Economy. Knowledge-based. Now the best investment is in human capital. • Over 50% of teachers leave within their first 5 years. • Education funding isn’t keeping pace with the increasing costs of education. 6–7

  8. NEA Research analysis of US Census Bureau data; 2006 analysis for 40 states only due to small sample size in some states. Values adjusted for inflation (2010 dollars) using Bureau of Labor Statistics CPI calculator, available at: http://data.bls.gov/cgi-bin/cpicalc.pl 6–9

  9. Many of the current economic conditions that are creating massive cuts in our public education budgets, are a result of the economic policy agenda implemented in the 1980s: • Privatize • Deregulate • Cut Taxes/Shrink Government

  10. Privatize • Government outsourcing • Example: hire bus companies to run school buses instead of hiring school board employees directly. • Example: hire a corporation to run the school cafeteria instead of hiring school board employees directly. • Tuition Tax Credits and Vouchers: Using public dollars to fund private schools to increase “competition”

  11. Deregulate • Governments removed, reduced, or simplified laws on business. • This resulted in less government oversight. • Think about the financial crisis and the housing bust precipitated by lax regulations.

  12. Tax Cuts Really = Tax Shifts • From progressive to regressive taxes • Decreasing taxes on wealth andincreasing taxes on work 3. Taxing corporations less and taxing individuals more

  13. Since the late 1970s, corporations were granted short-sighted tax cuts and incentives that ultimately erode the funds needed for quality schools, which impacts their own pipeline for quality workers.

  14. EXAMPLES OF WHAT SOME COMPANIES COST PUBLIC EDUCATION • Lowe’s deducted $833 million in rent payments to itself and reduced its Alabama income tax liability by $25 million • Abercrombie and Fitch deducted over $200 million in royalty payments to itself and reduced its Alabama income tax liability by almost 90% • McDonald’s received a $466,000 check from the federal government to market Chicken McNuggets in the country of Turkey. • Over 90% of Wal-Mart’s distribution centers received taxpayer subsidies totaling more than $1 billion (meaning a $1 billion cost to taxpayers)

  15. The vicious cycle of the BIG BOX with tax breaks…

  16. Small businesses and the average citizen do not have the money or political clout to influence legislation providing similar exemptions, so we are left paying higher taxes while unaccountable, global corporations are given an unfair advantage.

  17. Corporation Wannamove A One-Act Role Play

  18. Activity Debrief • What was the determining factor for Corporation Wannamove’s choice of State A? • Is this a common occurrence?

  19. In Fact, Firms Report that the Quality of Available Labor is their Major Concern When Making Relocation Decisions Source: Robert M. Ady, “The Effects of State and Local Public Services on Economic Development,” New England Economic Review, Federal Reserve Bank of Boston, March/April, 1997.

  20. Site Selection Magazine’s Annual ‘Business Climate’ Rankings (1998-2008) Business Climate Ranking from Site Selection Magazine, for 1998-2008; Per Capita Personal Income data from Bureau of Economic Analysis, Regional Economic Accounts, for 1998-2008.

  21. Compared to labor costs taxes are just not that significant Source: U.S. Department of Commerce, National Income and Product Accounts, 2003. Richard G. Sims Sierra Institute on Applied Economics

  22. Telling it like it is…

  23. So what does all this mean for educators? • For many years we’ve had one recipe for economic growth: cut taxes. We’ve seen that this hasn’t produced the long term, stable prosperity we’d hoped for our communities. • Corporations aren’t intentionally trying to hurt public schools. However, by continuing to advocate for tax cuts and incentives they are removing the very funds needed to make their communities prosperous, desirable places to live, work and play.

  24. It’s no longer enough for educators to advocate for public education funding, we must be proactive in fighting revenue erosion.

  25. “I simply want to reduce government to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist, Americans for Tax Reform Interviewed on National Public Radio, 5/24/01

  26. The Economics of Public Education: What Every Educator Should Know!

  27. REFLECTION • Were you aware that investing in education provides greater returns than tax cuts? • What does this mean for you? For your students? For your community? • How might you act on this knowledge or awareness?

  28. Schools are being held accountable for results… When they lack the capacity to deliver those results… Accountability When funding is inadequate and inequitable… When tax structures are out of sync with the economy… School Capacity School Funding And not everyone is aware. MAKE THE TEF CONNECTION Economy & Tax Structure Public Support 6-31

  29. TEF Tools and Resources TEF Website: http://www.nea.org/tef Publications State affiliates in TEF Action 1 2 State-Specific Data Sources 3 • Studies supporting TEF concepts: • The Effects of State Public K-12 Expenditures on Income Distribution • K-12 Education in the U.S. Economy • Protecting Public Education from Tax Giveaways to Corporations. • School Funding, Taxes and Economic Growth • TEF Series • Why invest in education makes sense: • Enriching Children, Enriching the Nation • Corporate abuse: • The Great American Job Scam - corporate tax dodging and the myth of job creation. • Your Tax Dollars At Work…Offshore - foreign outsourcing firms are capturing state government contract. • No More Secret Candy Store - A grassroots guide into investigating corporate subsidies. States Facing Budget Shortfall – Center for Policy and Budget Priorities (CBPP) reports state fiscal profiles. State-by-state tax news and policy analysis provided by the Institute of Economics and Policy Analysis (ITEP). Economic Policy Institute’s (EPI) new report analysis rank states by overall unemployment as well as the change seen since the start of the recession in December 2007. Enriching Children, Enriching the Nation show state returns in budget, salary, crime reduction by investing in Pre-K thru 12. Find out how much Wal-Mart is costing your state in subsidy deals, healthcare cost, and property tax appeal appeals. Combined Reporting, How Does Your State Stack-Up? Institute on Taxation and Economic Policy (ITEP) This reporting requires multi-state corporations to report the income earned by both the parent corporation and all of its subsidiaries and to determine their income tax liabilities on that basis. Good Jobs First state-by-state corporate subsidy websites. • A few examples… • This video address from Alabama EA President, John Wright. • Alabama EA sheds light on corporate tax avoidance in Alabama • Detroit News, Friday, July 25, 2008 • MEA Press Release: Drop-outs One Too Many, April. 4, 2008 • Honolulu Advertiser, Dec, 2006 • Honolulu Advertiser, Feb. 2007 • Iowa State EA News ArticleKentucky EA - School Funding Statement. • Michigan’s Business Tax Incentives: • A study commissioned by MEA and NEA to improve the quality of the debate on business tax incentives. • Mississippi EA op-ed piece. • State Affiliate TEF Websites: Colorado, Illinois, Michigan, Mississippi, New Jersey, Oklahoma

  30. TEF Tools and Resources TEF Website: http://www.nea.org/tef Customizable Tools Introducing a New TEF Interactive Tool Other Useful Links 4 5 6 • Community Organizing • Business Outreach • Sample Political Action Tools • Corporate Legislation • TEF Model Legislation NEA Information on establishing a social networking site to use as an organizing tool. Others are: (http://www.ning.com/ ) and (http://www.groupsite.com/) http://www.faireconomy.org/tfoc to locate your state’s tax fairness organizing collaborative. These groups are located in 21 states. www.nea.org/tef

  31. Other Resources On Taxes… Funding for Schools On Economic Policies 7 8 9 Access Quality Education: School Funding Litigation A National Network of Advocates Involved in Education Finance Litigation, Abbott vs. Burkeis the New Jersey Supreme Court ordered a set of education programs and reforms widely recognized to be the most fair and just in the nation. U.S. PIRG on Countdown. Olbermann talks about U.S. PIRG's report "Tax Shell Game.” Free Lunch, Corp Welfare, Bill Moyers and David Cay Johnston (9:49)David Cay Johnston - A History of Government Subsidies (3:08)David Cay Johnston - Are Government Subsidies Unfair? (4:43)David Cay Johnston - A Moral Argument for Progressive Taxes (3:04) Videos PBS Now, "Taxing the Poor" ((26.03) Wal-Mart Subsidies(7:48) Warren Buffett's Tax Rate is Lower than His Secretary's (4:39) TAXES: Warren Buffett - Rich Taxed Too Little, Poor Too Much (5:17) Eye To Eye With Katie Couric: Buffett's Tax Code (CBS News) (1:40) Videos

  32. “Our lives begin to end the day we become silent about things that matter.” — Martin Luther King, Jr. The Call to Action!

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