What the tax reform bill means for public schools
Thursday, December 14, 2017
The much-talked-about GOP tax reform bill has massive implications for K-12 public schools.
For starters, the bill features tax breaks for families that prefer private and charter schools. They will find it easier pay the tuition with the expansion of "529" savings accounts that had been exclusively for college.
Advocates call this a much-needed move that seeks to prioritize the education of next-generation Americans. It is designed to expand options for parents who are not happy the state of public education and want something better for their children.
Americans are divided on this issue, and it's not just a Republican-Democrat split. Many parents prefer to send their children to a private or a charter school rather than the public school near them.
The bill has been criticized as a vehicle to benefit wealthier parents, but some middle-class parents support this as well. While this may be a source of debate, this is not unheard of in countries with weak public school systems. Parents there can choose the school they want their kids to attend and don't mind paying through the nose for it.
But first, a look at some numbers:
- 92 percent of funding for America's $634 billion public school system comes from state and local taxes.
- Federal K-12 spending seeks to help states meet the needs of vulnerable children from low-income neighborhoods.
- About 10 percent of Americans send their kids to private schools.
The U.S public school education is stronger than many other countries and deserves more support. By offering these incentives, the bill is assailing the importance as well as the efficiency of the public schools. It is undermining the successes of the system despite all odds.
A nation that makes basic education expensive paves the way for inferior education for the masses who cannot afford private schools. That, in turn, weakens its very foundation. By targeting public school funding, the Republican tax bill spells disaster for public schools.
Like the House bill, the Senate seeks to reduce the federal deduction for local and state taxes including property taxes. Now, states and school districts cities will have a harder time raising money for K-12 education. The latter depends on tax revenues from local and state levels for their resources.
Since these taxes will no longer be deductible, things are not looking good for public school budgets.
The bill also seeks to prevent school districts from using cost-effective measures like tax-free "advance refund bonds." Many districts seek to refinance high-interest school bond debt at lower interest rates to save money. These lower debt payments also help save thousands of taxpayers' dollars.
The bill passed by a hair in the Senate, 51-49, and lawmakers say they have reached a deal to reconcile with a version passed by the House before it goes to President Donald Trump.
Eliminating deductions for state and local taxes (SALT) will be a big blow for K-12 education funding. Democratic-leaning states will be impacted as they face higher tax burdens.
States and municipalities will feel pressure as they try to offset increases in federal taxes and provide relief to their constituents. This could impact $125 million in school funding. Discretionary spending by states in future will put our neediest students at risk.
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