Transcript The NEA’s Connecting the Dots Series:

TEF Lessons for Members and Citizens
Lesson 7
Tax Structures,
Economic Development, and
Funding for Public Schools
Thanks to the Arizona Education Association for their work on
this Lesson!
7–1
Objectives
Participants will self assess their
knowledge of taxes, economic
development and funding for public
schools.
They will learn how the three parts of
TEF are interrelated, and how public
education is the best investment for
economic development.
7–2
As a group can we agree that we will:
1) Respect and value differences of opinions
and varying levels of knowledge
2) Be attentive
7–3
Quiz
Time!
TAXES
TAXES
Taxes
1.
Americans
are unfairly
taxed.
7–5
TAXES
Taxes
2.
Raising taxes
will harm our
economy.
7–6
TAXES
Taxes
3.
The economies
of states with
higher taxes
grow faster
than states with
lower tax levels.
7–7
TAXES
Taxes
4.
Tax cuts stimulate
the economy
through increased
consumer spending.
7–8
TAXES
Taxes
5.
Low taxes
lead to lowquality
public
services.
7–9
Taxes
Economic
Development
Economic Development
1.
Business tax
subsidies have a more
positive impact on a
state’s economy than
investing in education.
7–10
Economic Development
2.
We need to provide business
incentives like tax subsidies to
grow our state’s economy and
attract business.
7–11
Site Selection
Magazine’s Annual ‘Business
Climate’ Rankings (1998-2008)
Top 10 States in
Business Climate Ranking
& Per Capita Income Growth
Adjusted for Inflation (2008)
Business Climate
State
Rank
PCPI Growth
1998-2008
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.
1
2
3
4
5
6
7
8
9
10
NC 0.5%
TX 1.6%
GA 0.2%
OH 0.3%
FL 1.4%
MI -0.1%
TN 0.8%
SC 0.9%
IL 0.9%
VA 1.7%
Growth
Rank
47
16
50
49
24
51
40
39
37
14
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.
Economic Development
3.
All businesses,
large and
small, have a
fair shot at
success in our
economy.
Economic Development
4.
There is proof that investing in
education is good for a state’s
economy.
7–15
Economic Development
Taxpayers’ return on investment in public
education exceeds returns generated by
the stock market.
Long-term return on common stocks: 6.3%
(Includes dividends and price changes)
Public return on investment in education: 11%
(Includes additional income and social security
taxes paid - does not include additional sales
taxes or reductions in social service outlays)
Sources: Stock market evaluations from a literature survey reported in “Long-term Returns,” by Victor Niederhoffer and
Alex Castaldo, April 2004; education information from “Education at a Glance 2008: OECD Indicators,” Organisation for
Economic Cooperation and Development, 2008, pp. 190-191.
An Investment in Public Education
Always Pays Because:
$ It is labor intensive (employs many people).
$ The money stays in the local economy because the
people employed pay local and state taxes and spend
their money locally (as opposed to tax cuts for
corporations who may invest their money in an
overseas factory).
$ Educated citizens go on to be gainfully employed,
pay taxes and contribute to the economy with their
purchasing power.
7–17
Economic Development
5.
Tax subsidies
should only be
given out to
companies if they
include
accountability.
7–18
$2.1 million per
job
“State and local officials agreed to give Scripps $310
million in state funds, plus another $200 million in
local government money toward its construction of a
364,000-square-foot campus now in progress at
Florida Atlantic University in Jupiter. Scripps now
operates from temporary space at the university.
Alex Philippidis, “Florida, Facing a $2B Budget Shortfall, Weighs
Scrapping ‘Innovation Incentive’,” BioRegion News, April 7, 2008.
Available at: http://www.genomeweb.com/bioregionnews/floridafacing-2b-budget-shortfall-weighs-scrapping-%E2%80%98innovationincentive%E2%80%99
“In return for the money, Scripps committed to
creating 545 jobs by 2015. As of March 17 [2008], the
institute created 242 jobs, [according to] Scripps
7–19
Florida spokesman Keith McKeown….”
Funding for Schools
1.
School funding
should be
dependent on
student test
scores.
7–20
Funding
Fundingfor
forSchools
Schools
2.
No state in
America
provides
adequate funds
for their public
schools.
7–21
Funding
for Schools
Funding
for Schools
3. 3.
(Insert
your
state)
has
(Insert Your State) has a
a $___ billion
$____
adequate funding
adequate
funding
deficit
deficit
for public
education.
for public
education.
7–22
Funding
for Schools
Funding
for Schools
4.
An equitable finance
system means
equal spending per
pupil across all
school districts in a
state.
7–23
The Economics of
Public Education: What Every
Educator Should Know!
7–24
REFLECTION
1. Were you aware that investing in education
provides greater returns than tax cuts?
2. What does this mean for you? For your
community? For our country?
3. How might you act on this knowledge or
awareness?
7–25
MAKE THE TEF CONNECTION
When they lack the
capacity to
deliver those results…
When tax
structures are
out of sync
with the
economy…
Schools are being
held accountable for
results…
Accountability
School Capacity
When funding is
inadequate and
inequitable…
School Funding
Economy & Tax Structure
And not
everyone
is aware.
Public Support
7-26
TEF Tools and Resources
TEF Website:
http://www.nea.org/tef
1
Publications
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.
2
State-Specific
Data Sources
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.
3
State affiliates in
TEF Action
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 Article
Kentucky 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
7–27
TEF Tools and Resources
TEF Website: http://www.nea.org/tef
4
Customizable
Tools
Community Organizing
•
Business Outreach
5
Other
Useful Links
6
Introducing a
New TEF
Interactive Tool
NEA Information on establishing a social
networking site to use as an organizing
tool.
Sample Political Action Tools
Others are: (http://www.ning.com/ ) and
•
•
Corporate Legislation
TEF Model Legislation
(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
7–28
Other Resources
7
On Taxes…
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)
8
On Economic
Policies
Videos
U.S. PIRG on Countdown. Olbermann talks about
U.S. PIRG's report "Tax Shell Game.”
9
Funding for Schools
Access Quality Education: School
Funding Litigation A National
Network of Advocates Involved in
Education Finance Litigation,
Abbott vs. Burke is the New Jersey
Free Lunch, Corp Welfare, Bill Moyers and
David Cay Johnston (9:49)
David Cay Johnston - A History of
Government Subsidies (3:08)
Supreme Court ordered a set of
education programs and reforms
widely recognized to be the most fair
and just in the nation.
David Cay Johnston - Are Government
Subsidies Unfair? (4:43)
David Cay Johnston - A Moral Argument
for Progressive Taxes (3:04)
7–29
“Our lives begin to end the day we become silent
about things that matter.”
— Martin Luther King, Jr.
7–30