Wednesday, January 31, 2007

BB Question of the (Wednes) Day

Yesterday's question didn't really get answered, although I enjoyed Paul's view on things. Today's question:

If it were up to you, how would you raise the revenue required to fully fund public education in Ohio?

I've been brainstorming for politically viable methods. As everyone knows, it ain't easy. So,if you have no ideas, feel free to tee off on one of these:


  • Increase the Cigarette Tax

  • Apply Sales Tax To Prepared Take-Out Food

  • 'Luxury Tax' on School Districts collecting more than 20 mills (For every Mill collected above 20 mills, an amount equivalent to 1/4 of a mill must be transferred to the state school trust fund)

4 comments:

Paul said...

If you buy into the theory that more taxes need to be collected and redistributed to fix the problem, then I would just go for increasing the state income tax. To the extent that our tax system is progressive, it reaches out and touches everyone who we think should contribute, in the proportion that is fair. You also get a Federal tax deduction for state income tax, which would not be the case with a sales tax.

I'm not a fan of the luxury tax, as it would make it even harder for growing suburbs to pass levies.

But I'll go back to the original assumption: as you point out so well in the correlation analysis you published, more money isn't necessarily the answer. You must have 'enough' money, but more than that may not have the desired effect.

The answer, I believe, is consumer choice, sometimes called a voucher system. Let parents send their kids and their money to the schools they feel are doing a good job. Vouchers make sure everyone can get a good education. Consumer choice means only the good schools survive.

Anonymous said...

What a surprise.....raise taxes!! That's the answer to all of our problems!!!!

ohdave said...

Bex, there's a "floor" of twenty mills, I think. But I could be wrong.

bonobo said...

P.O., my original thoughts on school funding reform were that it would address the inherent inequities in wealth-based district funding. As such, there was no reason to assume that reform would increase overall taxes, a system (hypothetically) would exist to make school funding progressive in the same way that the income tax is, and have the whole system represent a shift in taxes, rather than an increase.

That's not the system that's been proposed. Under the new system, no tax cuts are explicitly encouraged, let alone required, yet it is a virtual certainty that a large amount of additional revenue would be required. What Paul is saying, and by extension what I think you are saying, is that the need for additional revenue (and/or reduced spending) is one of the things that make the proposal unattractive. That's the reason that the mayors have publicly given for bailing.

I fully agree that constitutionally mandating expenditures without addressing revenue shortfalls is discomforting. My brainstorming is an effort to figure out whether or not this is truly a deal-breaker. Are there revenue sources that can be tapped to increase school funding to the levels required by the amendment? Is there a package of such revenue raising measures that could be implemented without a political bloodbath? If the answer is yes, and I would guess that it is, then we can discuss whether or not the amendment is the way to proceed. If the answer is no, then pushing the amendment is something like a cross between a game of chicken and a leap of faith.

OHDave, under the proposed amendment, there is a floor of twenty mills, and the state makes up the difference between the per-pupil revenue obtained through those 20 mills and the cost of a high quality public education. School districts can still voluntarily approve millages as far beyond 20 mills as they want, and the revenue obtained can be used for "extras." The 'luxury tax' idea proposes that a district that wants extras has to share. This would simultaneously place a downward pressure on property taxes in high-millage districts, and reduce the need for sales or income tax increases.

As Paul points out, however, there's already plenty of resistance to levies in some districts. Depending on one's interpretation of the amendment, there is either a great deal of flexibility in determining the actual dollar amount a district receives, or absolutely no flexibility. The floor depends on the level at which "High Quality Public Education" is defined, and the ceiling is the exact difference between local requirements and state requirements (well, probably- As Pho points out, the sentence spelling this out seems to say that the state shall not provide more money to a district than it provides to that district, although I think it is attempting to say that no district will get more money from the state than the amount required by the amendment). To the extent that this inflexibility would result in crises that need to be handled through local levies, a luxury tax would be another force restricting the flexibility of local districts.

I agree that an income tax increase is fairer than a sales tax increase, but income taxes tend to be tough sells. My suggestion springs from my continued amazement that I pay sales tax at the bagel place when my bagel is in a basket, but I don't when it's in a bag. A "fast food" tax not only makes sense, it's got some potential side benefits in social well-being.

Regardless, I'm not at a point where I can support vouchers. Kids with under-involved parents need better schools, not the shells that will be left when everyone else has abandoned them. Cities need good public schools, or every other element of urban planning and renewal will fail. Any solution that piles on the kids with the fewest resources, or further weakens urban cores, is not a solution I can easily get behind.