Rich

Who’s Trading Public School Funding for a Tax Credit?

stevenmsinger Accountability, Betsy DeVos, Budget, Campaign Donations, capitalism, church and state, Corporate Education "Reform", Democrat, Education, Harissburg, Pennsylvania, Philadelphia, Pittsburgh, Pittsburgh Public Schools, Politics, Prejudice, private schools, privatization, Propaganda, School Choice, School Funding, school vouchers, Schools, Students, Taxation, Teachers, Tom Wolf, voting , , , , , , , , , , , , , , , , , , ,

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Ever wonder why our roads and public school buildings are crumbling?

 

Ever wonder why schools can’t afford books, buses and nurses?

 

Ever wonder why classroom teachers are forced to buy paper, pencils and supplies for their students out of pocket?

 

Because businesses like Giant Eagle, American Eagle Outfitters, and Eat’n Park aren’t paying their fair share.

 

It’s a simple concept – you belong to a society, you should help pay for the roads, bridges, schools, etc. that everyone needs to keep that society healthy.

 

After all, as a stockholder, CEO or business owner, you directly benefit from that society. If it didn’t exist, you wouldn’t have nearly as many customers – if any.

 

Many of us learned this kind of stuff in kindergarten or grade school.

 
But ironically programs that allow businesses to avoid paying their fair share are being used to short change many of those same kindergarten and grade schools.

 

In Pennsylvania, one such program is called the Educational Improvement Tax Credit (EITC), and everyone from local banks to Duquesne Light to UPMC healthcare providers are using it to lower their taxes while stealing from the public school cookie jar.

 
Here’s how it works.

 
If you expect a tax bill of $X at the end of the year, you can donate that same amount to the state for the purpose of helping parents pay off enrollment at a private or religious school for their children. Then you 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 businesses. It just really hurts nearly everyone else because it reduces the state’s general fund – by $124 million last year, alone.

 

When we give away hundreds of millions of dollars every year to religious and parochial schools, we have less money to spend on public schools, roads and all other services that benefit the majority of our citizens – especially the poor who rely more heavily on these services.

 
So why doesn’t the state just budget this amount of money directly to religious and private schools instead of ransacking the general fund after businesses donate it to the tax incentive program?

 

Because it’s illegal to give taxpayer dollars to religious and private schools. The establishment clause of the First Amendment forbids it.

 

The founders of our country didn’t want a state religion with schools teaching theological propaganda like we had in Great Britain. Moreover, they demanded tax dollars be spent with accountability to the whole public – something you cannot do in a private or religious school which isn’t set up for everyone but only those who choose and can afford to go there.

 

However, some smart ass thought of an alleged loophole. He said that if tax money is turned into a tax credit, it’s no longer tax money and it doesn’t violate the rules to spend it on religious and private schools.

 

So this is a fiscal sleight of hand meant to give businesses a tax break while boosting private schools.

 
Who’s guilty of hiding behind this loophole to bolster their bottom line while short changing ours?

 

Probably a lot of businesses you know.

 

Thankfully, their donations to the EITC Program are a matter of public record as is how much money returned to them as savings.

 

You can find a handy database of state businesses right HERE searchable by county compiled by Pennsylvania Capital-Star.

 

 

I happen to live in Allegheny County in the Pittsburgh region – the second highest area of the Commonwealth for these tax dodge…. I mean credits.

 

 

Across the county in 2017-18 (the most recent year for which data is available), Allegheny County businesses donated $15,741,544. They got back $14,180,261 in tax credits.

 
A quick search came up with these noteworthy businesses:

 
–Fatheads – the Southside sports bar along Carson Street in Pittsburgh
Contribution: $ 10,000
Tax Credit: $ 9,000

 
–AEO Management, Co. 
(American Eagle Outfitters Corporate Office in the South Side, Pittsburgh)
Contribution: $ 350,000
Tax Credit: $ 315,000

 
–Apex Diamonds, Inc. (A Pittsburgh jeweler)
Contribution: $ 149,000
Tax Credit: $ 134,100

 
–Cochran Motors, Inc. (car dealership in Monroeville)
Donation: $ 100,000
Tax Credit: $ 90,000

 
–Deer Leasing Co. (freight and cargo business) THREE ENTRIES:
Donation: $ 444,444
Tax Credit: $ 400,000

 

Deer Leasing Co.
Donation: $ 221,111
Tax Credit: $ 200,000

 

Deer Leasing Co.
Donation: $ 388,888
Tax Credit: $ 349,999

 
-Dollar Bank – TWO ENTRIES
Donation: $ 225,000
Tax Credit: $ 202,500

 

Dollar Bank
Donation: $ 400,000
Tax Credit: $ 360,000

 
–Duquesne Light Company – THREE ENTRIES
Donation: $ 10,000
Tax Credit $ 10,000
(So 100% return on investment!?)

 

Duquesne Light Company
Donation: $ 50,000
Tax Credit: $ 45,000

 

Duquesne Light Company
Donation: $ 240,000
Tax Credit: $ 216,000

 

-Eat’n Park Hospitality Group, Inc. (Corporate headquarters in Homestead)
Donation: $ 25,000
Tax Credit: $ 23,500

 

-Federated Advisory Services Company (Asset management company) – THREE ENTRIES
Donation: $ 111,111
Tax Credit: $ 100,000

 

Federated Investment Counseling
Donation: $ 111,111
Tax Credit: $ 100,000

 

Federated Investment Counseling
Donation: $ 222,222
Tax Credit: $ 200,000

 
–Giant Eagle, Inc. – TWO ENTRIES
Donation: $ 833,333
Tax Credit: $ 750,000

 

Giant Eagle, Inc.
Donation: $ 221,111
Tax Credit: $ 200,000

 
–Glimcher Brokerage, Inc. (Real estate company) – TWO ENTRIES
Donation: $ 380,000
Tax Credit: $ 342,000

 

Glimcher Group, Inc.
Donation: $ 300,000
Tax Credit: $ 270,000

 
–HM Health Insurance Company (Camp Hill, Pa) – THREE ENTRIES
Donation: $ 50,000
Tax Credit: $ 45,000

 

HM Health Insurance Company
Donation: $ 243,333
Tax Credit: $ 219,000

 

HM Health Insurance Company
Donation: $ 165,556
Tax Credit: $ 150,000

 
–PNC Bank, N.A. – TWO ENTRIES
Donation: $ 685,000
Tax Credit: $ 616,500

 

PNC Bank, N.A.
Donation: $ 148,303
Tax Credit: $ 133,500

 
–Rohrich Imports, Inc. (Luxury Pittsburgh Car Dealership)
Donation: $ 60,000
Tax Credit: $ 54,000

 
–The Buncher Company (property management company) – THREE ENTRIES
Donation: $ 416,667
Tax Credit: $ 375,000

 

The Buncher Company
Donation: $ 416,667
Tax Credit: $ 375,000

 

The Buncher Company
Donation: $ 221,111
Tax Credit: $ 200,000

 

–The Huntington National Bank –TWO ENTRIES
Donation: $ 549,556
Tax Credit: $ 494,600

 

The Huntington National Bank
Donation: $ 111,111
Tax Credit: $ 100,000

 
–UnitedHealthcare of Pennsylvania, Inc.
Donation: $ 200,000
Tax Credit: $ 180,000

 

-UPMC Diversified Services, Inc. (Healthcare provider) – SIX ENTRIES
Donation: $ 200,000
Tax Credit: $ 180,000

 
UPMC Diversified Services, Inc.
Donation: $ 200,000
Tax Credit: $ 181,000

 

UPMC Diversified Services, Inc.
Donation: $ 190,000
Tax Credit: $ 171,000

 

UPMC Health Benefits, Inc.
Donation: $ 200,000
Tax Credit: $ 180,000

 

UPMC Health Benefits, Inc.
Donation: $ 200,000
Tax Credit: $ 181,000

 

UPMC Health Benefits, Inc.
Donation: $ 200,000
Tax Credit: $ 180,000

 

But this leaves out the largest and shadiest group donating to the EITC Program – Limited Liability Corporations (LLCs).

 

 

These “special purpose entities” are set up to represent individual donors so they can more easily divert tax dollars to private and parochial schools.

 

LLCs represent hundreds of individuals who allow the LLC to donate on their behalf and then they get the tax credits passed back to them. It’s a way to encourage the wealthy to get the tax cut and support school privatization without all the hassle of doing the paperwork themselves.

 

And most (if not all) of these LLCs are set up by religious organizations to boost their own parochial schools.

 

For instance, Business Leadership Organized for Catholic Schools is perhaps the largest LLC receiving EITC funds.

 

Across the state, these organization made $15.6 million in donations and claimed $14 million in tax credits.

 

In Allegheny County, the largest are CASTA-SOS LLC and Pittsburgh Jewish Scholarship LLC.

 

CASTA was set up by the Catholic Diocese of Pittsburgh. Pittsburgh Jewish Scholarship benefits Jewish schools in the city.

 

Here’s how much they took from the state general fund last year:

 

–CASTA-SOS I LLC
Donation: $ 509,500
Tax Credit: $ 458,550

 

CASTA-SOS II LLC
Donation: $ 460,890
Tax Credit: $ 414,801

 
–Pittsburgh Jewish Scholarship I LLC
Donation: $ 675,250
Tax Credit: $ 607,725

 

Pittsburgh Jewish Scholarship II LLC
Donation: $ 750,000
Tax Credit: $ 675,000

 

EITC money went to almost 1,170 different organizations across the state. A fraction were YMCA’s, the Salvation Army and preschools. But the vast majority were private and religious schools.

 

Defenders of the project claim this money goes to fund “scholarships” for poor children to help defray the costs of enrollment at these schools.

 

However, a family making as much as $100,608 per year can qualify for an EITC scholarship for their child. A family with two children could make up to $116,216 and still qualify.

 

Consider this: one of the largest single recipients of this money in Allegheny County was the exclusive Shady Side Academy in Pittsburgh. The private secular school took in almost $1 million last year so that its wealthy students didn’t have to spend as much on enrollment.

 

Why are we subsidizing the rich?

 

Why are we robbing the poor to do so?

 

Why are we using public money to fund the teaching of climate denial, creationism, indoctrination in religious and political ideologies?

 

The short answer – our politicians are spineless and indebted to the people this benefits.

 

Just this summer, the Pennsylvania legislature AGAIN increased the limit for the program by an additional $25 million.

 

That’s the pattern. Every year, the Republican-controlled (and heavily gerrymandered) legislature can’t get their regressive policies passed Democratic Gov. Tom Wolf. They need some Democrats to support their spending priorities. So they entice right-leaning Democrats with increases to these tax incentive programs in order to reach compromises.

 

The result – every year we allow more tax dollars to fly away to private and religious schools while further undermining funding for public schools.

 

But it could have been worse. Earlier in the year, the legislature passed a measure to increase the EITC Program by $100 million. Thankfully it was vetoed by Gov. Wolf. Unfortunately, he let the $25 million increase get through.

 

This is a problem that is not going away.

 

We need to let our lawmakers know in no uncertain terms that we do NOT support these programs. And this isn’t just Republican lawmakers. We especially need to pressure Democrats and even run challengers to those who are not progressive enough in the primaries.

 

And we need to let businesses who partake of the smorgasbord of tax credits that doing so will lose them our business.

 

If we want to stop theft disguised as “tax credits,” we have to start hitting these businesses where it hurts – in the pocketbook.

 

Because they certainly don’t feel it in their hearts.

 

Like this post? I’ve written a book, “Gadfly on the Wall: A Public School Teacher Speaks Out on Racism and Reform,” now available from Garn Press. Ten percent of the proceeds go to the Badass Teachers Association. Check it out!

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Prejudice of Poverty: Why Americans Hate the Poor and Worship the Rich

stevenmsinger Budget, Civil Rights, Compassion, Election, Labor, Media, Politics, Poverty, Prejudice, Propaganda, Racism, Republican, Sexism, Teachers, White Allies, White Privilege , , , , , , , , , , , , , , ,

2children

 

Take a breath.

Take a deep breath. Let your lungs expand. Let the air collect inside you.

Hold it.

Now exhale slowly. Feels good doesn’t it? You’d never realize there are hundreds of contaminates floating invisible in that air. Dirt, germs, pollution – all entering your body unnoticed but stopped by your immune system.

If only we had such a natural defense against prejudice. Racism, classism, xenophobia, sexism, homophobia – we take all that in with every breath, too.

It may not seem like it, but all these value judgments are inherent in American culture. They’re as much a part of life in the United States as the flag, football and apple pie. And to a greater or lesser extent, you have subconsciously accepted them to help construct your ideas of normality.

What does it mean to be a man? What does it mean to be a woman? How should black people be treated? To whom is it appropriate to be sexually attracted? What makes a person poor and why? All of these questions and so many more have been answered one way or another for us by the dominant culture. Not everyone accepts this perceived wisdom, but most of us have swallowed these solutions whole without thought, logic or criticism – and we don’t even know it’s happened.

Take our preconceptions about wealth and poverty.

Well paying jobs are drying up. Minimum wage work is becoming more common. Salaries are shrinking while productivity is increasing. Meanwhile the cost of living continues to rise as does the cost of getting an education.

Yet we still cling to the belief that all rich people deserve their wealth and all poor people deserve their poverty.

When we hear about someone on Welfare or food stamps, we sneer. The average conception is that this person is probably faking it. He or she could have earned enough to avoid public assistance, but he or she isn’t trying hard enough.

Moreover, we KNOW with a certainty that goes beyond mere empiricism that many of the poor still manage to buy the newest sneakers, have flat screen TVs and eat nothing but Porterhouse steaks.

You can hear this kind of story uttered with perfect certainty from the mouths of white, middle class people everywhere. They don’t mind helping people who are really in need, they say, but most poor folks are gaming the system.

Never once do they stop to consider that this story about impoverished individuals living better than middle class Americans is, itself, one of the most pervasive myths in our society. We know it the same way we know all Polish people are dumb, all Asians are smart and all Black people love fried chicken and watermelon.

However, none of this “knowledge” is supported by the facts. Look at the Supplemental Nutrition Assistance Program (SNAP). According to the New York Times:

Allegations of fraud, including an informal economy in which food stamps are turned into cash or used to buy liquor, gasoline or other items besides food have been used to argue that the program is out of control. In fact, the black market accounts for just over 1 percent of the total food stamp program, which is far less than fraud in other government programs like Medicare and Medicaid.

If you include erroneous payments because of mistakes on applications, overall loss to the food stamp program comes to 4%, according to the Department of Agriculture. Compare that to the 10% lost to Medicare and Medicaid – programs no one is calling to be cut or eliminated.

But figures like these don’t convince the average American. We’re so certain that all or most poor people are just lazy parasites. Everyone “knows” some low-income person they deem to be living too high for their circumstances.

And, yes, sometimes you do see an impoverished individual not wearing rags. Sometimes you do peek into an indigent person’s hovel and see new electronics or game systems.

How does this happen?

Debt.

Credit card companies are waiting in the shadows to extend a line of credit to just about anybody. It’s a safe bet for these businesses. If they give you money today, they can charge exorbitant rates of interest – even more so with the highest risk clientele. But there isn’t much risk to these corporations these days when almost anyone can take a job as a state constable or bail recovery agent to hunt down debtors and bring them to economic justice.

When you see a destitute child with new sneakers, his parents probably bought them with plastic. When you see an X-Box in a needy person’s house, chances are that wasn’t paid for in cash. They used the charge plate and will end up paying for that game system many times what it’s worth.

It’s a problem not limited to the poor. Even middle class folks are drowning up to their eyeballs in debt. As wages have decreased, people have used their credit cards to keep a standard of living they expect. But they’re paying for it with huge portions of their paychecks going to these credit card companies. Yet even though we all do this, middle class folks look down their noses at people lower down the economic ladder for doing the same thing.

In fact, they refuse to even see that obvious truth. Instead they cling to the lie that poor folks are social parasites. We even begrudge them food. Those are my tax dollars going to pay for that penurious person’s free ride, they say.

Unfortunately, we don’t stop to consider how much of our taxes are actually going to help the less fortunate.

Let’s say you make $50,000 a year. That means, you pay $36 toward food stamps. That’s ten cents a day – the same amount many charities ask to help feed starving children in Africa.

If you add all safety net programs, the cost only goes up an additional $6 a year. That doesn’t seem like a huge chunk of my taxes. Honestly, do you begrudge needy people less than the price of a meal for a family of four at Bennigan’s?

By and large, your tax bill isn’t going to the poverty-stricken. It’s going to the wealthy. Over the course of a year, you pay $6,000 for corporate welfare.

You read that right. Six K. Six grand. Six thou. Those are your tax dollars at work, too. And it’s a much larger burden on your bank account than the $42 you shell out for the poor.

What do you get for that $6,000 outlay? It includes at least $870 to direct subsidies and grants for corporations. An additional $870 goes to offset corporate taxes. Another $1,231 goes to plug holes in the federal budget from revenue lost to corporate tax havens. Oh! And don’t forget a sizable chunk for subsidies to Big Oil companies that are polluting our skies and fueling climate change and global warming.

Most of your money isn’t going to feed hungry children. It’s going to recoup losses for giant transnational corporations like Apple and GE that hide their money overseas to boost profits and avoid paying taxes for things we all need like schools, police and fire departments.

This money subsidizes giant multi-national corporations that are already making billions and billions of dollars in profit each year. In the past decade alone, corporations have doubled their profits – all while reducing their American workforces and sending jobs overseas. Yet we only complain about poor folks using food stamps and buying new sneakers on credit.

Why is that? Why does it only bother us when poor people get help and not when huge corporations do?

Part of it is the media. We’ve been convinced that big business deserves its money and poor people don’t. Another part of it is that these facts often go underreported. Movies and TV shows love portraying the parasite poor person but rarely portray the corporate leech. Outside of “It’s a Wonderful Life” and “A Christmas Carol,” the wealthy are usually portrayed in the most positive light possible and not as addicts hoarding cash they don’t need to compete with each other in a childish game of one-upmanship.

Finally, there is the racial and sexual element. By and large, corporations are run by white males. The poor are mostly black, brown and though women make up a slightly higher percentage than men, it is often conceptualized as uniquely female. Take the term Welfare Queen. Why is there no Welfare King? How telling that our conception only allows for one gender in this role!

The reality is much different. The true Welfare Queens are Big Businesses. They make unprecedented profits and avoid paying taxes on them. They have tons of cash on hand but never can seem to get enough. And if we increased the corporate tax rate to what it was in the 1950s when the Unite States was more prosperous than it has ever been, these same corporations would still be Filthy. Stinking. Rich.

So the next time you hear someone blaming the poor for gobbling up your taxes, remember the facts. First, it’s simply not true. There is no widespread fraud by the poor. They are not gaming the system. They are not putting an undue burden on the middle class. However, big business IS – in fact – cheating you out of income. Business people are getting fabulously wealthy on your dime – and even if we stopped subsidizing them, they’d still be fabulously wealthy!

Finally, don’t ignore the racial component. Would middle class Caucasians still complain so vehemently about the poor if they weren’t mostly talking about Black people, Latinos and women? I doubt it.

We may breath in these prejudices but we’re not helpless. It’s up to all of us to dispel these myths, not to let them stand, to confront them every time they come up. And, yes, I mean EVERY. TIME.

The only immune system we have as a society is education, knowledge, wisdom. And once you know the truth, don’t let anyone get away with this kind of racist, classist bullshit.

NOTE: This article also was published in the LA Progressive and on the Badass Teachers Association blog.