Let’s fix school funding this year
by Chuck Hoven
(Plain Press, January 2005) A good New Year’s resolution for Clevelanders and Ohioans would be to finally find a fair and equitable way of funding public education. This past November, Clevelanders overwhelmingly rejected an 11.4 mill levy that would have brought $68 million a year to the school system. Clevelanders rejected the levy not out of the hardness of their hearts, but simply because in the poorest big city in the nation, many of Cleveland’s citizens simply couldn’t afford to pay more. Administrators of the Cleveland Municipal School System have told the public that even if the levy passed, there would still not be enough resources to adequately meet the educational needs of Cleveland’s public school pupils.
In this issue of the Plain Press, students from Case Western Reserve University continue to examine public education in Cleveland and the State of Ohio. What the students seem to understand (that policy wonks promoting tax abatements to spur housing and industrial development don’t seem to understand), is that when one group of taxpayers gets a reduced tax bill, others must pay more. When new residents and new businesses get property tax abatements in Cleveland, existing residents and businesses are continuously asked to pay more. As pointed out by the a CWRU student writing for the Plain Press, in some low income neighborhoods of Cleveland the average homeowner is paying over 6% of their income to foot their property tax bill.
In an October 3, 2004 Plain Dealer article, “Tax burden should be shared, Clevelanders tell schools”, Plain Dealer reporter Ebony Reed points out that tax abatements in Cleveland now amount to $17 million a year being lost to the Cleveland Municipal School system. It is Cleveland’s policy to give all new housing in the city a100% property tax abatement for 15 years. New businesses are also lured to the city of Cleveland with promises of tax abatement. In a December 13, 2004 article in Crain’s Cleveland Business, “City strikes down nine tax abatement agreements”, reporter Jay Miller notes “agreements for commercial or industrial developments typically abate for 15 years 60% of the real and personal property taxes resulting from improvements companies make to their properties.”
Some policy experts continuously tell us that these types of tax incentives are necessary to spur development in Cleveland. Without them, according to their argument, housing wouldn’t be competitive in the city and businesses wouldn’t move to the city or choose to expand in the city. What they don’t talk about is the impact of such choices on existing residents and businesses.
Clevelanders must find a more equitable way of funding public education. The first rule of any tax system is that it should be fair. We must choose the fairest system possible. Cleveland’s poorest homeowners should not be paying upwards of 6% of their annual income in property taxes while new homeowners, most with substantially higher incomes, pay nothing. The city of Cleveland, which benefits from the payroll taxes generated by new housing and new businesses, should offer to reimburse the school system for all the tax abatements it has given over the past ten years. It should continue this policy into the future. The city should find out what the cost would be to pass a payroll tax to cover the amount needed to reimburse the school system. If all people who work in the city of Cleveland pay this tax, the burden on each person will be substantially lower than that now faced by low-income homeowners. Many of those who don’t currently contribute property tax to our school system will pay payroll taxes. (Yes, this includes members of our pro sports teams, staff members of property tax-exempt hospitals such as Cleveland Clinic and University Hospitals, the mayor of the City of Cleveland, and the CEO of our school system). Voters will see the system as fairer than what now exists.
Over the decades the Cleveland Municipal School District has shown a pattern of progress in years immediately after the passage of a levy, only to see the progress erode as the number of years since the passage of the levy increases. More dollars do make a difference - not only measured by test scores, but also by the quality and variety of educational offerings, after school programs, summer school and transportation services that we can offer our students. Let us create a local solution. Then let us, and our political leaders, use our political capital to seek a statewide solution.
Four times the State of Ohio Supreme Court has ruled that funding public education through property tax is unconstitutional. The lead article in last month’s Plain Press noted that former State Representative Brian Flannery is leading an effort to force the state of Ohio to find a way other than property tax to fund education. Flannery’s petition drive found the support of the Ohio Coalition for Adequacy & Equity. There is no other issue more important to the State of Ohio or the City of Cleveland, yet the front page of the Plain Dealer on December 10th 2004 tells us that the Mayor of the City of Cleveland chose to spend her political capital pushing a statewide ballot initiative to allow cities to choose to have casino gambling. Mayor Jane Campbell would much better serve the citizens of Cleveland if she fixed the inequities in the way Cleveland funds education by putting her political capital behind a local payroll tax for the schools and joining statewide efforts such as that of Flannery and the Ohio Coalition for Adequacy & Equity to fix the way schools are funded in the state of Ohio.
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