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The Madison Central school board is tooting the opt-out horn again. Three years ago, after losing two opt-out efforts at the public ballot box, the school district engaged in some serious budget cutting. However, with enrollment dropping due to unavoidable demographic factors -- we've passed the baby boomlet, and Madison's population, while stable, is skewing older -- the school will continue to receive less money under the state aid formula. Therefore, just to maintain salaries and programs at current levels, board president Kelly Johnson says the board may need to opt out of the state property tax freeze.
Opt-outs are a tricky issue for me. As a teacher, my livelihood depends on sufficient public funding for education, and determining what is "sufficient" is difficult enough in itself. But whatever constitutes "sufficient" funding, we can't get that funding fairly under South Dakota's current system of taxation. South Dakota, with no personal or corporate income tax, relies primarily on sales and property tax (along with lots of federal welfare) to fund its government functions. Neither tax is based on an individual's ability to pay. The property tax hinders the ability of lower-income workers, retirees, and farmers to obtain and hold onto their property. Property tax also penalizes people for having richer neighbors: if I am content with my small house and limited income, but a wealthy businessman builds a sprawling mansion next door, his construction drives up my property value and tax bill, which forces me to work more hours just to hold on to what I have. I may be able to enjoy increased property balue by selling or borrowing against my property, but if I am interested simply in holding onto and enjoying my land and living within my current means, I'm out of luck.
Three years ago, I voted against both of Madison Central's opt-outs. I participated actively in the campaign against the first one, circulating petitions to put the opt-out to a public vote. I will oppose and will urge my fellow citizens to oppose any future opt-out as well. I love education. I want to see our school sufficiently funded to provide the kids as many educational opportunities as we can manage. I want to see Madison's debate team provided with enough funding for proper coaching and travel to all the tournaments during the debate season. But I will not accept the argument that I have to support these valuable programs by approving an increase in an unjust tax system. It's like saying I have to approve the repair of a major highway by using indentured servants, or that I should support winning debate rounds by cheating. We cannot do the right thing by doing the wrong thing. If Madison voters and others across the state want more funding for their schools, they need to find the political will to fight for a more just tax system.
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3 days ago
The opt out will solve nothing anyway. In 2010 the school district will be at -$300,000 again. Then what? I asked that question at the meeting and the only answer was that hopefully the state would do something by then. If not, I guess another opt out??
ReplyDeleteI have one answer to save more money in school districts. Put a number of schools under one administration - one supt - with each school still retaining its autonomy, but the expensive business office and supt could be consolidated. Sioux Falls essentially already operates this way. Why couldn't a number of other schools across the state?
I also have another tax (sin tax if you will) that would generate a lot of money, would be strictly voluntary, and wouldn't be noticed much. A nickle on every bottle/can of pop. Now that's a sin tax that would hit me, or I could stop getting my caffeine this way if I didn't want to pay it.
An income tax will not happen in SD. I don't understand corporate taxation enough to comment on it. But dumping the education mess back on the same taxpayers does not solve anything.
Are you going to work against this new opt out? They are going all out on this one this time, and there was one person at the meeting who is experienced in getting opt outs passed and the board is welcoming her help with open arms.
Dear Anonymous,
ReplyDeleteWe could definitely save by reducing our administrative expenses. The salary of the superintendent alone would pay the salaries of two, maybe even three teachers.
Income tax -- I hear everyone say an income tax will not happen, even though it seems lots of people individually think it would be a great idea. I don't advocate adding an income tax to the total burden; I advocate replacing the property tax and even the sales tax with it so that the tax burden falls more fairly on people with more income who can afford to pay more taxes. (See My tax reform proposal for some numbers!)
Any idea who the "opt-out expert" is who will be helping the board?
I may not be working actively against the opt-out, simply because winter is debate and one-act season, and I spend all my time teaching and coaching. But I will certainly sign petitions, vote, and engage in conversations! Hope to hear more from you!
CAH
I have read your comments on the opt out and the income tax. After two opt out defeats the board did make some of changes requested previously and some that came out of the meetings they conducted. There are probably a number of things that could be done to further reduce spending and there should be some consideration of what the effect of the Trimester program is. Now that Dr. Sweet is gone it may be possible for this to be looked at in a more objective manner. A very important point that I cannot seem to find current information on for the school is what are the numbers of students from Madison going to State colleges requiring remedial English and Math. The figure for Aberdeen was 44%, When those figures use to be available for Madison they were around 33%. This may indicate the school is not putting sufficient emphasis on the basics and without a good understanding of Math and the the ability to read and comprehend what is read its hard to continue on in higher education. Which may account for Madisons high numbers of college dropouts in the past ( I do not have current figures to say that is currently the case). We do need to look at combining administrative and business offices, determining what the role of counseling should be and how it may be provided. What subjects can be taught remotely. These and other changes will take time and probably will not happen as long funds can be obtained from the taxpayers in one form or another. I would rather not see this opt out but if there is to be one it should be for the least dollars possible, it should be honestly presented and not hypped with with the purpose of scareing voters about things that will be done away with when they won't be. If you will notice almost none of the dire claims made before the prior opt out attempts occurred. I hope that the people supporting the optout will be honest about the situation.
ReplyDeleteOn the income tax for the state I do not agree with your assessment. Most of the people on the lower end of the income scale do not pay federal income taxes, many do recieve earned income credits, food stamps and or other forms of assistnace. Some would be above these levels and pay a small amount of Federal Income Tax. It would appear that anyone paying less in percentage of SD state taxes is also paying a lot more in Federal Income Tax. I think that if you would look at the total tax load, those making $50,000 and up are paying a good portion of the bill. Consider also that a person what ever he pays in taxes is receiving government benifits and services in some form rather it is the road they drive on, the schools their children attend, the protection received from police or fire departments. That being said why shouldnt everyone pay some taxes. Why should a person who gets out and makes money be penalized for it. If a person makes more money they pay much more in total taxes than someone making very little. States that have income taxes generally seem to have the full assortment of other taxes also.
I would like to see the .10 per container of soda tax with the funds going to education. That is a voluntary tax on something nobody really needs, and that amount is probably not sufficient to reduce consumption. I think that another penny on the sales tax would be a good idea. The tax is incremental and much of it is paid by people from out of state. It is my understanding that about 35 to 40% of sales at the Empire and Rushmore Malls are to people from out of state. I favor letting others pay our sales tax, I would also like to see all internet sales subject to sales tax. With computers it would be relatively easy to identify and allocate.
In summary:
1. Optouts are no way to finance schools. On Madisons we will have to see what is presented.
2. I am against a state income tax, it would end up as just another tax adding to our total burden.
3. I would think at a .10 per container tax for soda would be good and/or another penny on the sales tax and the eventual addition of the sales tax on internet sales.
Anonymous 2
Thank you for the very subsantial comments!
ReplyDeleteOpt-Outs: You're right: opt-outs are no way to fund schools. Property tax is no way to fund the system. The value of one's property is not the best gauge of one's ability to pay. Property value depends far too much on the choices others make. I'm very bothered by the notion that even if I choose to live in a modest home to keep my expenses down, wealthy neighbors can choose to build mansions all around me and drive up the property tax that I have to pay, conceivably to the point where I can't afford to live where I live any more. That's an unfair burden to place on people with low or fixed incomes (like retirees) or on people whose income may vary significantly from year to year (like farmers). One's tax burden, to be fair, should be more closely tied to one's ability to pay.
Sales Tax: A sales tax is similarly unfair. The same people who suffer under the property tax bear an unfair burden under the property tax. To determine the fairness of any tax, we shouldn't ask who puts the most money in raw dollar terms into the state treasury; we should ask how much of a burden a given tax is to each individual in terms of the proportionate impact that tax has on that individual's budget. The sales tax on necessities -- basic food, clothing, utilities, etc. -- takes a bigger proportionate chunk out of a low-income family's budget than it does out of a wealthy family's budget. Paying $6000 sales tax just to get my house built takes two months of my teaching salary; a lawyer building a similar house could pay that sales tax with 60 hours of work.
In that view, an income tax requires the same amount of work from every individual, rich or poor, to pay their share of the budget. We talk about how with federal income tax, we all work for the government each year until sometime in May. Nobody likes paying taxes, but at least under that scheme, we're all beholden to the government for a similar number of workdays per year. If total income tax were 30%, the government would be taking three and a half months worth of my paycheck and three and a half months of the lawyer's paycheck.
You mention the benefits that lower-income people receive. I thought the idea behind government assistance was that we as a nation recognize that some people can't afford the necessities and that we thus help them out so they can back to the point where they can afford those things. Asking the poor to pay for what they can't afford right now doesn't square with our responsibility to our fellow citizens (or our fellow Christians, fellow humans -- take your pick of moral foundations for charity and compassion).
But if the benefits the poor receive from the government somehow require them to pay taxes, then we should also consider the benefits that the wealthy receive which allow them to accumulate their wealth. We don't have to look at the special enticements and deals that governments offer to wealthy corporations in hopes of spurring economic growth (consider Brookings's offer to Lowe's of essentially free land, which I hear Lowe's is now responding to by opening a store in Sioux Falls). Consider all the everyday benefits that allow people to get rich and stay rich. Everyone benefits from the roads that permit the shipping of goods and the travel of customers and employees to stores and offices. Everyone benefits from the education system that produces relatively literate workers who can support themselves and voters who can make reasonable choices (more or less). Everyone benefits from police and fire protection, scientific research supported by the government. Everyone benefits from the social contract, and in every specific case, one can argue that the wealthy benefit even more, in proportion to the wealth the scoial contract permits them to amass. Entrepreneurs bring their talents and ambitions to bear to produce their wealth -- they earn what they make -- but without the support of the entire society, they would be no better off than the rest of us.
An income tax does not punish people for success. Suppose I have five workers on my construction crew. Four of them are hard-working guys, but they are all built like me, weighing in at a lanky 150 pounds. The fifth guy on the crew is big 300-pound bruiser who can hardly fit in the truck. I expect all of my guys to work hard to earn their pay, but when there's a really big beam I need held in place (and I don't have a skid-steer handy), I'm going to ask the big guy to handle the job. I'm not punishing him for being big; I'm asking him to shoulder the burden that he is equipped to bear. And he can bear it: asking the big burly fellow to shoulder that massive beam demands no more from him than asking my regular-sized workers to carry some smaller boards demands of their musculature.
Soda-Pop Tax: If we can't get a state income tax to replace the property and/or sales tax (and don't worry: I won't support simply adding an income tax, because that would increase the overall tax burden on everyone, and I don't want that!), I might give some consideration to a soda-pop tax. You're right: pop is an absolute non-necessity. It has plenty of social costs in terms of obesity and other health problems to boot. Keep that idea bubbbling around -- it might get some support!
I've been in favor of a state income tax for about 30 years. This could replace the sales tax and property tax. Every now and then I go across the border to shop in Minnesota, and it isn't in the big stores, I only go to Pipestone, or Luverne. Another tax that I have been in favor of is a luxery tax. When I was younger, there was a tax on jewelry and make-up. That was taken off in about 1960, give or take a couple years. I don't know what other products the tax was on. I know it was on make-up and jewelry because I worked in an old fashioned dime store(like Woolworths) and as a teen ager I used these dimestore products. This was a nationwide tax.
ReplyDeleteYou make a good comparison between taxing people's time rather than their property. But an income tax still amounts to taxing some people more than others simply because we can. When you have a big guy on the construction job that you ask to do bigger jobs, it is because he happens to possess an asset the smaller guys don't. That adds to his value to you and he deserves to be paid more than a smaller guy equal to him in all other ways. That is the law of supply and demand. If you fail to pay him more, his asset allows him to more easily go to a company that will. It doesn't matter if it is a fluke of genetics. That worker is there for his own benefit, not yours.
ReplyDeleteWealthy people are penalized by a social contract that defines the amount needed for society by the arbitrary or political need of politicians. The social contract exists to benefits everybody by doing what everybody needs it to do and no more. We allow government to abuse the contract when it takes what it wants in the name of doing good things. The things people applaud because the goal is noble and the cost easy to ignore. We would all like universal health care, but it isn’t a justifiable part of the social contract and is disastrous for healthcare. Taxing the “Richest 10%” sounds nice enough for the other 90% but has consistently led to lower revenue. I recognize that it can’t always be the case that lowering tax rates increases revenue, but we haven’t hit that point yet. The only reason to stick with property taxes is that they are much more stable. There are a lot of ways to overcome that issue with a modicum of spending restraint….so property tax will probably never go away.
It may not feel fair to have to spend 3 months to pay for the taxes on a house that somebody else can pay for in a few weeks. It’s also not fair that they can pay off that house in a fraction of the time it would take you. Because it isn’t fair in no way makes it moral to take more of their money. Would you believe it to be moral if the government subsidized poor peoples’ houses to allow them to be able to buy houses as nice as a lawyer’s for an equal number of hours of work as the lawyer?
What do you believe the limits of “good” activity by the government should be? When is the social contract being abused and the wealthy being pillaged?