tabling SALT

Here’s how the Republican tax plan could threaten New York’s education funding

PHOTO: Kevin P. Coughlin-Office of the Governor/Flickr
Mayor Bill de Blasio and Gov. Andrew Cuomo at a press conference in 2014.

Republican lawmakers in Washington appear poised to approve sweeping tax legislation, which New York Governor Andrew Cuomo has dubbed an “economic death blow” to the state.

That blow, advocates say, could punch a hole in school budgets.

Schools across New York are already shortchanged billions of dollars, according to school-funding advocates, even as the state faces a $4.4 billion budget gap. The tax plan, if approved, has the potential to divert even more state and local funding from schools.

“I’ve been dealing with the state budget for more than 30 years and this is as volatile and uncertain as anything I can recall,” said Bob Lowry, deputy director of the New York State Council of School Superintendents.

The House and Senate must still combine their tax bills and pass a final version. Below is a guide to some of the worst-case scenarios for New York schools if that happens.

“Downward pressure” on local taxes

A provision of the tax plan would sharply reduce state and local tax (often called SALT) deductions a proposal that would hit high-tax states like New York hardest. The average SALT deduction in New York is $22,169, according to a report form the Governor Finance Officers Association, using data from 2015.

Advocates worry that voters whose tax burdens rise without the deductions will be less inclined to sign off on increases to their local school board budgets, which voters approve in most parts of the state. In New York City, school funding may be more insulated because residents do not vote on a budget.

However, the city could feel pressure to offset the lost SALT deductions by lowering local income taxes — a move that could shrink budgets across city agencies, including the education department.

“It stands to reason that there will be downward pressure for us to reduce our local taxes, which in turn would create less revenue for city services,” said New York City spokeswoman Freddi Goldstein in an email.

Flight of the super taxpayers

A small number of super-wealthy New Yorkers help keep the state and city governments afloat.

In New York City, about 25,000 families contribute more than 40 percent of the city’s personal income-tax revenue, according to the most recent figures analyzed by the city’s Independent Budget Office.

Their tax burdens could balloon without the SALT deductions, spurring a rush to lower-tax locales. While some experts said a mass exodus is highly unlikely, in a district where approximately 57 percent of school funding comes from the city budget, any significant loss of tax revenue could strike a serious blow to school funding.

“People who live on Park Avenue are not going to move to Alabama to pay lower taxes,” said Michael Borges, executive director of the New York State Association of School Business Officials. “But they may move to Scarsdale because they don’t have to pay a city income tax.”

A three-way “tidal wave of disaster”

Lost local revenue isn’t the only way school budgets could take a hit. In fact, it could be part of a triple whammy.

The tax plan would leave the federal government with a gaping $1.4 trillion deficit. Experts expect lawmakers may eventually plug the hole by slashing spending on healthcare and possibly other programs like education.

“It may result in lower federal funding for everything,” said George Sweeting, deputy director at the city’s Independent Budget Office. “If that happens, that would have an impact on federal funding for New York City.”

Still, school districts only get a fraction of their funding from the federal government. In New York City, federal money accounts for just 6 percent of school spending. (By contrast, 37 percent of the city’s education funds come from the state.)

However, federal spending cuts could have an indirect impact on New York’s education funding. If Washington provides less healthcare funding, for instance, New York could have to pick up the tab — creating a ripple effect, where it would have less to spend on schools.

The federal pressure would come at the same time New York is already facing a $4.4 billion budget deficit. Officials from Governor Andrew Cuomo’s office say the tax plan would be a blow to New York — but they also insist that Cuomo is committed to funding education.

Still, schools are staring at a “loss of federal aid, a loss of state aid, and a loss of local revenue,” Borges said. “It’s like a tidal wave of disaster.”

An under-the-radar change would cause “significant harm”

Finally, a little-noticed bond issue in the tax plan could cause New York schools pain.

Congressional Republicans would remove provisions that help schools borrow money for school construction projects, according to a letter signed by Board of Regents Chancellor Betty Rosa and State Education Commissioner MaryEllen Elia. The loss would “significantly harm districts’ finances,” it reads.

This measure would have a devastating impact on schools, school districts, local taxpayers and, most significantly, our students,” the letter continues. “That impact would be felt most dramatically by districts in poverty; in other words, the districts that would be hurt most are those that can least afford it.”

recruitment and retention

School districts counting on public support for higher teacher pay to pass new tax increases

Teacher Christina Hafler and her two-year-old daughter Emma join hundreds of other educators at a rally outside the State Capitol to call for increased eduction funding on April 16, 2018 in Denver, Colorado. (Photo by RJ Sangosti/The Denver Post)

Most school districts asking voters to approve local tax increases for schools this November have one thing in common: They are promising that money will go to raise teacher pay.

Polls show voters are inclined to support increasing teacher pay this year, following several high-profile walkouts across the country where teachers shared their struggles with working multiple jobs, and paying out of their own pocket to outfit their classrooms or help feed hungry students.

“Right now you got a pretty clear majority of people saying, teachers deserve more,” said Keith Frederick, who conducts polls for school districts and other government bodies to determine if they should put requests on the ballot. “Voters are very interested, these days anyway, they’re interested in their community schools, higher teacher pay.”

Many officials from those districts say the pay they offer simply isn’t keeping up with nearby districts, meaning a harder time recruiting and retaining teachers. Salaries and employee benefits take up the largest chunk of school district budgets.

School districts in Aurora, Jeffco, Westminster, Douglas County and Sheridan are among the districts making a local request this November. Ballots have been mailed out this week, and voters will start to decide if the request is worth a local tax increase.

Statewide, teacher pay in Colorado ranks below national average.

But measuring how competitive teacher compensation actually is among districts can be complicated. Surveys and studies show that salaries alone do not account for what keeps teachers in their job or what makes them leave. And how teachers get paid in some districts is complicated, based sometimes on their evaluations, or performance of their students, or school, or the difficulty in filling the job they’re in.

Then there are other work conditions that can be considered benefits. The school district based in Brighton moved this year to a four-day school week after failing to pass several tax measures. Although the change will only result in small savings, the district claims it’s a new way to attract teachers without having to raise pay.

But looking at state data for last year, most districts that have the highest starting salaries or average pay for teachers, including Cherry Creek, Boulder, and Poudre, also have the lowest teacher turnover.

Average teacher pay and teacher turnover rates

 

DISTRICT Average Pay Percent Teacher Turnover
Thompson $49,572 16.8 %
Poudre $54,140 9.7 %
Douglas County $53,080 13.4 %
Elizabeth $40,471 23.2 %
Littleton $66,399 9.5 %
Aurora $54,742 26.2%
Cherry Creek $71,711 10.1 %
Sheridan $49,535 35.9 %
Denver $50,757 20.3 %
Jeffco $57,154 14 %
Westminster $58,976 19.1 %
Adams 12 $59,511 12.8 %
Boulder $75,220 10.33 %
Pueblo 60 $47,617 18.3 %
Pueblo 70 $49,328 13.6 %

*Source: Colorado Department of Education. Districts in bold have a tax request tied to teacher pay on this November’s ballot.

None of those three districts are requesting local tax increases this year, but their neighboring districts, including in Douglas County, Elizabeth, Jeffco and Thompson, are.

The contrasts between districts can be large. In the neighboring Poudre and Thompson districts, the difference in the average pay is about $5,000, and the difference in starting salaries is even larger. Higher-paying Poudre has a teacher turnover rate of less than 10 percent. In lower-paying Thompson, the turnover rate is about 17 percent.

The Thompson district is requesting a $13.8 million mill levy override to raise teacher pay, and to purchase new books and technology. The district is also requesting a $149 million bond for building maintenance, security improvements and a new school.

Some of the districts requesting tax increases this year have failed to win voter approval before, including Thompson, Westminster and Jeffco. Although several factors including the political culture of the districts influence the vote, highlighting what voters value — like boosting teacher salaries — might improve the chances of voter approval.

Although most of the local tax measures don’t face organized opposition, criticism of a statewide tax measure for schools might impact other questions down the ballot. Critics of the statewide school measure have said that districts are not under obligation to use the money to pay teachers more, and worry that new money could go into administrative costs instead.

Some districts are trying to create assurances for voters.

Aurora Public Schools agreed to language in its contract with the teachers union that requires the district to set aside at least $10 million from new mill levy revenue, if approved, to give teachers a 3 percent raise starting in January. Remaining money would go into creating a new teacher salary schedule.

The Jeffco school board passed a resolution that commits a certain percentage of new tax revenue for teacher pay. The tax measure also includes language prohibiting use of that revenue for administrative budgets.

Even if districts do use the money for increasing salaries, most districts likely have to negotiate with their employee unions to decide just how to do it — whether it’s raising base salary, giving across-the-board raises, or creating new systems that reward certain teachers.

Several school boards across the state also passed resolutions committing to certain items that would get funding first if voters approve the state ballot request for new school funding. One common, top priority among those is improving salaries.

Denver’s school leaders said they would use the largest portion of the proposed new state revenue for teacher salaries. Negotiations there have been heated, as district leaders insist the state measure needs to pass in order for the district to come closer to meeting the union’s demands.

Election 2018

It’s not just the governor’s race. Here’s what Tennessee’s big legislative turnover could mean for education.

PHOTO: TN.gov
Gov. Bill Haslam receives an ovation during his final State of the State address in January before a joint session of the 110th General Assembly, cabinet members, and guests.

The battle to replace term-limited Gov. Bill Haslam has consumed the spotlight for Tennessee’s education-minded voters, but more than a hundred legislative races will decide who the new governor will work with on school policy for the next few years.

In addition to either Democrat Karl Dean or Republican Bill Lee as the state’s new chief executive, at least a fourth of the General Assembly’s members will be new to Capitol Hill in January. That’s because of an unusually high number of legislative departures, due mostly to retirements or the pursuit of other government jobs.

Incumbents aren’t running to fill 25 out of 99 seats in the House of Representatives and six out of 33 seats in the Senate — setting the stage for the biggest turnover since at least 1995, according to legislative librarian Eddie Weeks.

Among those opting against re-election bids are the leaders of three of four House education panels — Harry Brooks, John Forgety, and Roger Kane — all East Tennessee Republicans who have wielded considerable power in controlling the flow of bills in their committees or subcommittee. The fourth chairman, Rep. Mark White of Memphis, has been in office since 2010 and faces Democrat Danielle Schonbaum on Election Day on Nov. 6.

“It’s like getting Jupiter, Mars, the Earth, and the sun all lined up at the same time. It’s a ton of change,” said Kane of getting a new governor, a new education commissioner, and a critical mass of freshman legislators, in addition to administrative staff turnover.

At stake is whether Tennessee will stay the course on a massive school improvement plan launched in 2010 under former Democratic Gov. Phil Bredesen and continued since 2011 by the current Republican governor. The overhaul, spurred by Tennessee’s $500 million federal Race to the Top award, is grounded in higher academic standards; a new test to measure student growth and proficiency based on those new standards; and policies that hold students, teachers, and schools accountable for results.

The years since the overhaul have coincided with student gains on national tests, but also major headaches in administering the state test known as TNReady, now entering its fourth year. Technical glitches disrupted two years of giving the new computerized assessment, while scoring and score delivery problems marred another year.

“I hope we don’t try to reinvent the wheel,” said Rep. John DeBerry, a Democrat and education committee member who is running unopposed in his Memphis district. “We’ve laid a very good foundation that’s been proven by a lot of measurable factors.”

Kane, who serves on the other side of the aisle, agrees.

“I worry that you could see a total change in philosophy and literally everything we have done the last 10 years could become unwound,” he said. “When you have people coming in who are totally against any kind of testing but the ACT, as well as people who want to test everything, that’s a wide disparity.”


Read why Haslam worries that TNReady problems could unravel Tennessee education policy


Both gubernatorial candidates want to take a closer look at testing, but the next General Assembly will have a lot to say about steps moving forward.

“We’re the ones who pass the laws,” said DeBerry. “The governor has tremendous influence, but he doesn’t cast votes either in committee or on the floor.”

Still, uncertainty about legislative turnover, especially in the House, was on the minds of members of the State Board of Education on Thursday as they discussed how to make TNReady work better this school year, as opposed to just gutting the test and starting over.

“That’s the big unknown at this point that quite honestly nobody has control over,” said Wayne Miller, the former state superintendents chief whom Haslam recruited to facilitate his recent statewide listening tour on testing.

 “If we start to slide off track, it will be important for this group and others to speak loudly that this is not where we want to go,” Miller told the board.

A lot will depend on new legislative leadership, especially in the House which, like the Senate, has a lopsided majority of Republicans that likely won’t change significantly.

The speaker of the House decides committee appointments, both for membership and leadership, but that job is up for grabs too due to the exit of Nashville Republican Beth Harwell after her unsuccessful bid for governor. The Republican caucus is scheduled to elect a new speaker on Nov. 20, and candidates thus far are Reps. Glen Casada of Franklin, David Hawk of Greeneville, and Curtis Johnson of Clarksville.

The next speaker is expected to maintain Harwell’s two-committee system for education legislation because of the large number of bills on K-12 and higher education. Kane said the system has worked well.

PHOTO: Grace Tatter/Chalkbeat
Rep. Roger Kane of Knoxville is the retiring chairman of the House Education Instruction and Programs subcommittee.

“Last year there were 400 education bills alone,” Kane said. “That number would be grueling for one committee in the House. We have more members than the Senate committee and therefore more discussion.”

The Senate is less likely to see any kind of fruit basket turnover, and Dolores Gresham is expected to continue chairing her chamber’s education committee. The Somerville Republican has served in the legislature since 2002 and is not up for reelection this year.

But the huge turnover in the House will mean a significant loss of institutional knowledge on education policy. At the same time, the handoff presents an opportunity to gain fresh and innovative ideas, according to Brooks, the powerful committee chairman who is retiring after 16 years in office.

“I’m not worried,” Brooks said. “This legislature has been around for over a hundred years, and it’s managed to pick up and go after huge shifts in the past. There’s a lot of quality people returning, and there will be a lot of good folks who are going to be elected.”