Home > Uncategorized > No Surprise: In the End, Charters, Private Schools Win, Public Schools Lose in GOP Tax Bill

No Surprise: In the End, Charters, Private Schools Win, Public Schools Lose in GOP Tax Bill

December 21, 2017

There is a series of shaggy dog stories that open with a person telling an crusty old Mainer about a series of woes only to have the old timer reply, “it could have been worse” and follow that response with an even more horrific tale. After reading a story summarizing the GOP tax bill in today’s Education Week, my only thought was “it could have been worse”… but not by much. The Education Week article offered “Four things for Educators to Know About the Tax Bill Congress Just Passed”, which are paraphrased below:

  1. Public education will be more costly for affluent parents
  2. Teachers will still be able to deduct $250 for their out of pocket costs
  3. Private schools will be less costly for affluent parents
  4. Public school debt service will be costlier, private school debt will be cheaper

The net effect of the GOP bill’s $10,000 limit on state and local tax deductions will be an increased unwillingness on the part of affluent taxpayers to shrug off state and local tax increases, and those taxes are the predominant source of public school funding. When that is combined with the opportunity for those same parents to shelter funds for private schools— including parochial schools— it increases the likelihood that the most affluent parents might be inclined to enroll their children in private schools and vote against increases in funding for public education.

There is also some arcane but substantial changes to the way debt is paid for, changes that will adversely impact on public schools and help charter schools. Here’s a brief description of those changes:

The final bill headed to Trump would end what are known as qualified school construction bonds and Qualified Zone Academy Bonds, which are tax-advantaged tools that can help reduce total capital costs for schools—the latter are particularly important to charter schools. However, charter advocates have praised the bill for preserving Private Activity Bonds, which provide special finacing for certain projects.

Also, the bill would end advance refunding bonds, which are used to pay down long-term debt at reduced costs. K-12 business officials say getting rid of these would rob them of a helpful fiscal tool.

But teachers will still be able to deduct $250 for the supplies they provide for their children because their local school district budgets have been slashed over the past decade.

But, as noted in earlier posts, it could have been worse. ALL local and state tax deductions could have been lost. Homeschooling parents as well as private school parents could have sheltered their costs for education. Teachers could have lost their deductions. And private schools could have continued benefitting from qualified school construction bonds and Qualified Zone Academy Bonds.

But here’s the really bad news: thing are going to get worse for public education. Why? Because the real damage to public schools won’t happen until the GOP determines that revenues are not flowing in the way their economic models predicted and they must, therefore, cut the safety net even more than they have already by failing to fund CHIP and cutting back on other programs that support children raised in poverty.

The only hopeful news is that the inevitable cuts to “entitlements” like social security, Medicaid and Medicare might cause voters to wake up to the fact that government programs like these are essential to them and aren’t for “other people”. And as government programs are diminished there might be a recognition that government ISN’T the problem… and the relentless greed of the .1% is.


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