Where Has All the Money for Our Schools Gone?

Aug 26, 2016 by

  By Scott Klinger, OtherWords | Op-Ed

(Photo: Mark Strozier)(Photo: Mark Strozier)

As fall approaches, millions of moms and dads are scrambling to prepare for the first day of school, excited to support their children’s success.

But are schools ready to receive our kids and foster that success? Increasingly, the answer is no.

In at least 18 states, local government funding levels are declining, according to an analysis by the Center for Budget and Policy Priorities. And as a result, many schools will open with fewer teachers than last year, among other detrimental losses.

As lawmakers throw up their hands and say, “sorry, there’s just not enough money,” we must ask: Where has all the money gone?

State and local governments give away at least $70 billion a year to business subsidies, most of it in foregone tax revenue. Local property taxes are the most significant tax most corporations pay. In most communities, they’re also the backbone of local school finance.

So when subsidies slash corporate property taxes, our schools often get hurt the most.

In Chicago, for example, we already have a glimpse into the unsavory relationship between tax subsidies and school finance. Last year, one subsidy program alone cost public services $461 million. Meanwhile, the city’s schools are facing a budget that is $140 million less than they had last year.

When cities line the pockets of powerful interests with subsidies while short-changing children, they harm everyone — including businesses that depend on a well-educated work force.

Unlike Chicago, in most cities it’s difficult to calculate exactly how much state and local tax subsidies drain from a given school district. But that’s about to change.

Starting next year, the Governmental Accounting Standards Board will require more than 50,000 government bodies to report how much tax revenue they’ve lost to economic development tax breaks given to developers and corporations.

Though school districts, library districts, and other special purpose districts seldom have a role in awarding these subsidies, they too will be required to report how much revenue they’ve lost lost—even as a result of tax breaks handed out by other governmental bodies.

This new data will also shine a light on inequities in education, allowing new critical examination of whether tax breaks that fill corporate coffers come disproportionately at the expense of the most disadvantaged school districts.

This way, we can say no to deals that pad the profits of the already wealthy at the cost of denying opportunity to those looking to get a foot on the first rung of the economic ladder.

Some states are already following the logic of this new common sense standard. In a 2011 budget deal, California decided to phase out an expensive subsidy granted by redevelopment agencies, and as a result, paved the way for local property tax revenues to rise by 10-15 percent in coming years. These added revenues will allow cities and towns throughout California to increase funding for local priorities — including schools.

Soon, we’ll all have a much better idea about where the funding for schools throughout the nation has gone. Parents and teachers clamoring for smaller class sizes and more support services will have the data to back their demands.

And taxpayers will be able to debate whether costly, long-term tax breaks that often go to the most prosperous businesses in town have been worth the cost of struggling schools.

As we look ahead to the new school year, it’s time to hold our governments and schools accountable to meet student needs. The data is coming soon that will help us get there.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Scott Klinger

Scott Klinger joined the Center for Effective Government in October 2013 as its director of revenue and spending policies. His team advocates for fair taxes that raise enough revenue to adequately fund government and for effective spending policies that provide Americans security, opportunity and prosperity. Scott’s expertise focuses on popularizing often complicated tax and spending policies in ways that help citizens understand how decisions made in Washington, DC, affect their daily lives and to use this understanding to be more effective advocates for public services and investment.

Prior to joining Center for Effective Government, Scott was the tax policy director at the American Sustainable Business Council and an associate fellow at the Institute for Policy Studies, where he wrote about issues of tax and economic inequality. He was also the director of corporate engagement at First Peoples Worldwide and a portfolio manager at United States Trust Company, Boston.

Scott has written widely on the topics of progressive taxation, executive compensation and corporate social responsibility.


  1. Ken Franklin

    Great, way past due to hold pandering politicians and their wealthy sponsors accountable and stop this downward spiral of public services funding for those of us who pay these taxes.

  2. camb888

    This era of severe austerity and poverty all began with Wall Street’s unfettered greed due to deregulation and changes to banking laws, which ultimately caused the depression/recession. Most people’s standard of living went down when good jobs simultaneously went overseas, thanks in part to trade agreements, in order for big business to enlarge profits at the expense of Americans, and has not yet fully recovered. Our largest corporations are still allowed to offshore profits to avoid paying US taxes. Poverty levels continue to increase.
    Communities, especially in poorer urban and rural areas were hit hard. They, like many other communities have no more tax dollars to contribute to anything. So our infrastructure is crumbling. Taxpayers are maxed out and can no longer support school funding increases, so our public schools are increasingly underfunded. Relief has not been forthcoming from either the feds or states. The advent of charters which siphon funding away from public schools makes the situation yet worse. Those with money increasingly purchase politicians and buy our laws. It’s been a perfect storm for everyone except Wall Street, big banks, big business, big corporations, and the 1%. Citizens United makes it possible. Schools are only a symptom of larger societal problems. It’s not going to get better until we change the status quo, including laws written by and for big-money interests. The US is getting more corrupt with every passing day. Big-money rule has failed the vast majority of US citizens and has to be ended. Fun fact: The US Dept. of Ed has been referred to as “the (Bill) Gates administration”.

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