Good News: Harrisburg is Not Cutting Education Funding! Bad News: Handouts for the Rich & Charter Schools

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If you live in Pennsylvania, you can breathe a sigh of relief now that the legislature has passed a stopgap budget that does not cut education funding.

 

But you can let out that breath in a cry of disgust when you see where much of that money is going and how many underprivileged kids will be left wanting.

 

GOOD NEWS

 

With the economy in tatters due to the Coronavirus pandemic, the state legislature never-the-less passed a budget this week providing flat funding for most state programs for five months.

 

The major exception is public schooling. That has been fully funded for the entire year.

 

So for 12 months, there will be no state cuts to basic and special education or block grant programs for K-12 schools. Nor will there be state cuts to pre-kindergarten programs or colleges and universities receiving state funding such as community colleges.

 

That’s really good news in such uncertain times.

 

School directors can get their own financial houses in order for 2020-2021 without wondering whether the state is going to pull the rug out from under them.

 

In any other year, flat funding would be a disappointment though.

 

Public schools have basically three revenue streams – the federal government, the state and local neighborhood taxpayers.

 

The federal government pays about 10% of the cost across the board. The problem in Pennsylvania is that the state isn’t meeting its obligations thereby forcing local neighborhoods to shoulder most of the costs.

 

Pennsylvania state government pays a ridiculously low percentage of the bill – 38%.  That’s the 46th lowest in the country. The national average is 51%.

 

In rich neighborhoods, the local tax base can pick up the slack. In middle class neighborhoods, they can try. But poor communities end up relying more on the state to help or else their kids (who already have greater needs growing up in poverty) have to do without.

 

Last year, Democratic Gov. Tom Wolf was able to increase funding for K-12 schools by $160 million, $50 million more for special education and $25 million for Pre-K programs.

 

Even this victory was a baby step to healing the billions of dollars looted from our schools during Republican Tom Corbett’s administration which has never been fully replaced or outpaced with increased inflationary costs.

 

Flat funding is great in a time of a global pandemic.

 

But in the broader view, it still shirks our duties to subsequent generations.

 

BAD NEWS

 

The 2020-21 state budget also includes $200 million in one-time funds to help districts pay for additional costs incurred during the Coronavirus crisis.

 

This includes the price of new technology to allow for distance learning, as well as deep cleanings in school buildings, new materials, remodeling, etc.

 

This money includes $150 million received from the federal government’s CARES Act and $50 million from state taxpayers.

 

That’s good news. Districts need extra money to help with unforeseen costs during this health crisis.

 

Unfortunately, this money is not being allocated by need.

 

Those with greater problems are not given more money to deal with them. Instead, the money is being divided nearly evenly.

 

If you think that’s fair, imagine dividing $10 so a rich person, a middle class person and a poor person could get lunch. They’d each get $3 and change. The poor person can eat off the dollar menu at a fast food restaurant. The middle class person can use it to pay for tip at a sit-down restaurant. And the rich person can light his cigar with it on the way to a fine dining establishment.

 

In the case of theCOVID-19 stimulus money, each school district will get a minimum of $120,000 while each intermediate unit, career and technical center, charter school, regional charter school and cyber charter school gets $90,000. If there is any money left over, those funds will be distributed to school districts based on 2018-19 average daily membership.

 

However, why should cyber charter schools receive this money at all? They don’t have any extra costs for transitioning to distance learning. That is their stock and trade already. Moreover, they don’t have buildings that need deep cleaning or remodeling. This money is a no strings gift to such enterprises while other educational institutions go wanting.

 

Moreover, brick and mortar charter schools almost always serve smaller student populations than authentic public schools. Why should they receive a flat $90,000? Wouldn’t it be better to given them a portion of this money based on the number of students they serve and the degree of poverty these kids live in?

 

In fact, wouldn’t it make more sense to do the same among authentic public school districts, too? Why should a rich district where almost everyone already has wi-fi and personal technology devices get the same as a poor one where these services are much less widespread? Why should the state give the wealthy as much help as those who can’t meet their basic obligations to children without it?

 

It’s not like the Commonwealth doesn’t already have a measure to allocate funding more fairly. The legislature passed a bipartisan Basic Education Funding formula that we could have used to ensured districts would have received funding proportionate to the needs of their students.

 

The fact that the legislature neglected to use it here shows too many in the Republican majority are not committed to equity. In fact, they revel in being able to bring unnecessary money to their wealthier districts.

THE COMING STORM

 
These measures from the state legislature are a start at addressing the financial impact of the 
Coronavirus crisis.

 

But the worst is yet to come.

 

Across the nation with the inevitable loss of taxes after shutting down the economy to save lives during the global Coronavirus outbreak, local districts are bracing for a 15-25% loss in revenues next fiscal year.

 

In Pennsylvania, districts anticipate $850 million to $1 billion in revenue shortfalls.

 

That could result in massive teacher layoffs and cuts to student services just as the cost to provide schooling increases with additional difficulties of life during a worldwide pandemic.

 

The state legislature can’t fix the problem alone.

 

The $13.5 billion in CARES Act stimulus provided to states is a fraction of the $79 billion that the federal government provided during the Great Recession. U.S. Congress needs to step up federal aide to protect our children and ensure their educations aren’t forfeit for economic woes they played no part in causing.

 

At the same time, Harrisburg can do more to stop giving handouts to educational entities that don’t need or deserve it thereby freeing up that money to patching holes in funding streams to local districts.

 

At the top of the list is charter school funding reforms already proposed by Gov. Wolf.

 

It is way passed time to end gross overpayments to cyber charter schools and eliminate all charter schools ability to profit off of students with disabilities. Gov. Wolf estimates this would save districts more than $200 million while stopping wasteful spending by charters on advertising and other things that should not be bankrolled by taxpayers.

 

Another way to generate extra money is to stop letting businesses and the wealthy cut their own taxes to support private and parochial schools.

 

The Educational Improvement Tax Credit (EITC) program allows people and businesses to donate their expected tax bill to the state for the purpose of helping parents pay off enrollment at a private or religious school for their children. Then these same people or businesses get between 75-90% of that donation back.

 

So if your tax bill is $100 and you donate $100, you can get back $90 – reducing your total tax bill to a mere 10 bucks.

Heck! Since this money is classified as a “donation” you can even claim it on your taxes and get an additional refund – even to the point where you end up making money on the deal! Pennsylvania even allows a “triple dip” – so you get the EITC tax credit, a reduction in your taxable income, and a reduction in your federal taxable income. We actually pay you to shortchange us on your taxes!

Now I’m oversimplifying a bit since you can only use the EITC for up to $750,000 a year, but it’s still a sweet deal for those who take advantage of it.

 

Meanwhile, this is less money for the rest of us to pay for much needed services. We lost $124 million in 2018-19, alone, to this program. Yet the legislature still voted to increase the program by $25 million last year.

 

We cannot afford to give away hundreds of millions of dollars annually to private and parochial schools while our authentic public schools which serve more than 90% of our children are underfunded.

 

And this doesn’t even address the blatant unconstitutionality of the program which, itself, is an obvious workaround to the separation of church and state!

 

It’s high time we closed this and many other loopholes that allow unscrupulous people and businesses to get away without paying their fair share.

 

Societies only work when everyone pulls their weight.

 

The commonwealth will only weather this storm if we stop the fiscal shenanigans and pull together for the benefit of all.

 

We are all being tested here.

 

Will Pennsylvania pass or fail?


 

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School Vouchers: Transubstantiate Your Cash For Fun and Profit

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When is a tax dollar not a tax dollar?

When it’s used to pay for a school voucher.

That’s the slight of hand behind much of our education policy today.

Lawmakers want to give away a huge bundle of your cash to religious schools, but they can’t because of that pesky old First Amendment.

The establishment clause sets up a distinct separation between church and state. It explicitly forbids public money being spent on any specific religion.

So these lawmakers do a bit of magic. They take that money, wave their hands over it, mumble a few secret words and Voilà! It’s no longer public; it’s private. And private money can be spent any way you want – even on religion.

Here’s how they do it.

You simply take public tax dollars and turn them into credits that can be used to pay for alternatives to public schools. Call it a “school voucher.”

 

But wait a minute. Isn’t that like a check? If Peter writes Paul a check, that money is no longer Peter’s. Now it’s Paul’s. Right?

Yes. But that’s not what’s happening here.

A school voucher isn’t a check. A check is an order to your bank to transfer funds to another account or to be exchanged for cash or goods or services. School vouchers do not come from your account. And they cannot be transferred into just any account or spent in any way.

They’re more like food stamps. It’s not money that can be used in any way you see fit. It’s money that can only be used to pay for a child’s education. And you can only use it at a private or parochial school.

You can’t go into a fancy restaurant and buy a filet mignon dinner with food stamps. Likewise, you can’t go to a real estate developer and buy a house using your school vouchers.

This money does not therefore change from public to private. Yes, individuals get a limited choice of how this money will be spent, but that’s true of all public money. Go to a local council meeting, a school board meeting, write your Congressperson, petition your state Senator – in all of these cases, you are exercising choice on how public tax dollars are being spent: Don’t spend tax dollars on that bridge. Don’t spend public money on that program.

Even in the case of food stamps, individuals decide how public dollars are spent for your private use – within specified limits.

If that was really private money, there would be no restrictions on how it could be spent – or certainly no more restrictions than on any other private money.

But lawmakers are pretending like this isn’t true. They’re pretending that simply changing the name of the money changes its substance. It’s a lie. It’s slight of hand. They’re trying to trick you into assuming a transformation has taken place that has not.

 

BAD DEAL

 

Moreover, it’s a metamorphosis we shouldn’t want in the first place.

Think about it.

We want our public money spent in an accountable fashion. We want there to be a record of how it was spent and what it was spent on. We want that information to be readily available, and if that money was misappropriated, we want to be able to act on that.

 

School vouchers remove much of that accountability. Private and parochial schools simply don’t provide the same transparency as traditional public schools. Often there is no elected school board, no public meetings, no open documents. Nada.

 

But if the parents who used the school voucher don’t like how the money is being spent, they can disenroll their child, right? So if they’re comfortable without this transparency, that’s all that matters, right?

 

Wrong. School vouchers are not paid for 100% by the parent. They are paid for with an aggregation of local tax dollars above and beyond what individual parents pay in school taxes.

 

In short, this is not just your money even if it’s spent on your kid. You shouldn’t be the only one who gets a say in how this money is spent. The community provided this money. The community should decide how it’s spent. At very least, the community should get a say.

 

If the community doesn’t want children to be raised with a distinctly Biblical view of history and science, the community shouldn’t have to contribute to that. If individual parents want to spend their own money on that, fine. That’s your prerogative. But school vouchers are made up of public tax dollars, yet we’re removing the majority of the public from having a voice in how that money is spent.

 

Moreover, traditional public schools are required not to discriminate against students. They can’t select against students based on learning disabilities, ethnicity, skin color, gender, religion, sexual orientation, etc. And that’s a really good thing. Everyone’s money is used to pay for these schools. These schools should serve everyone.

 

But private and parochial schools (and charter schools, too, by the way) aren’t held to this same standard. It’s telling, for example, that U.S. Secretary of Education Betsy DeVos has refused to commit to holding private and parochial schools that accept school vouchers accountable if they discriminate against children. She seems to be implying that the U.S. government will stand aside and let public tax dollars be spent to support schools that discriminate. And the reason they think they can get away with this is the cynical monetary alchemy outlined above: school vouchers are private money and can be spent any way parents want. It isn’t and they can’t.

 

This is government sanctioned money laundering, pure and simple.

 

Lawmakers have been bought off with huge donations from the privatization industry to enact legislation friendly toward private and parochial schools.

 

NAME CHANGE

 

In some cases, they don’t even use the name “school vouchers.” They call it education tax credit scholarships, but it’s effectively the same thing.

 

Instead of distributing the vouchers directly to parents, they allow businesses and individuals to make tax deductible donations to nonprofits set up explicitly to distribute vouchers for private and parochial schools.

 

The reason? People don’t like school vouchers. But if you call it a “scholarship,” it’s more palatable. For instance, while school vouchers are mostly supported by Republicans, a substantial number of Democrats support education tax credit scholarships.

 

In 17 states you can get substantial tax credits for donating to one of these private and parochial school scholarships.

 

Louisiana, Oklahoma, Pennsylvania, Rhode Island, and Virginia, for example, all provide tax credits worth between $65 and $95 on every $100 donated. Alabama, Arizona, Georgia, Montana, and South Carolina go even further by reimbursing 100% of the donation. You read that right. Donate $100, get $100 back.

 

Oh, but it gets much worse. Since these are considered donations, you can also claim them as charitable deductions and get an additional 35% off your taxes. So you donate $100 and get back $135! Yes. You actually make money off this deal!

 

In my home state of Pennsylvania, investors can even “triple dip” receiving a state tax credit, a reduction in their state taxable income, and a reduction in their federal taxable income. And, yes, that means they sometimes get back more in tax breaks than they provide in contributions.

 

Meanwhile all of these “savings” come from money stolen from local public schools. Businesses and individual investors are profiting off of the deteriorating conditions at public schools.

 

Ever wonder why class sizes are ballooning, teachers are being furloughed and electives are falling by the wayside? It’s because people are making money off children’s suffering.

 

In my home state of Pennsylvania, we call this the Opportunity Scholarship Tax Credit (OSTC) and the Educational Improvement Tax Credit (EITC) programs.

 

The state Budget and Policy Center estimates that about 76% of these “scholarships” go to religious schools. That was approximately $95 million dollars in 2014-15 (the last year for which data was available).

 

Many of these educational institutions are explicitly fundamentalist. This includes the 155 schools in the Association of Christian Schools International (ASCI) where they boast of “the highest belief in biblical accuracy in scientific and historical matters.” It also includes 35 schools in the Keystone Christian Education Association.

 

How many more parochial schools are using tax dollars to teach fundamentalist curriculum? Without an audit, we’ll never know.

 

And that’s a really significant issue.

 

These scholarships are supposed to be eligible only to low income students. Yet a significant number of them are being utilized at private schools with average tuitions of $32,000 – far more than the few thousand dollars provided by the scholarships. They are apparently being used by wealthy and middle class students who can already afford private schools but are using public tax dollars to reduce the cost.

 

A total of $11.2 million in EITC and OSTC tax credits went to just 23 of the most exclusive and expensive private schools in 2014-15. That’s 9% of the total. Suburban Philadelphia’s Haverford School, alone, received $2.2 million, buying down its $37,500 tuition.

 

How many parents misused these scholarships in this way? What is the racial and ethnic makeup of recipients? Again, without an audit, we don’t know.

 

This is not how public money should be spent.

 

We need to put the breaks on these initiatives, not expand them into a federal incentive program as the Trump Administration proposes.

 

Whether you call them education tax credit scholarships or school vouchers, these programs do not transform public money into private.

 

They are a scam. They are theft. And their biggest victims are children.