Saturday, December 10, 2005

Grand trade on education proposed by Hidden Cost of Tenure editorial

What institution is likely to spend months and tens of thousands of dollars poring over court documents, musty personnel records from all 800 school districts, conduct hundreds of interviews and review every single case of a tenured teacher getting fired over the last 18 years? The General Assembly? The business community? The State Board of Education?

How about a tiny newspaper chain?

The Small Newspaper Group that runs papers in the Quad Cities, Kankakee and Ottawa financed this massive investigation. Their bureau chief, Scott Reeder, led the effort.

The results are here: www.TheHiddenCostOfTenure.com

I'll talk about them in a minute (and they are definitely worth a long read), but I wanted to note how appropriate this report is in terms of the debate on my blog here on MoveOn.org (and some of MoveOn's 3.3 million members) protesting the Tribune Company's recent decision to cut back staff at its papers around the country.

Because of staff cuts at a profitable enterprise, we will all suffer from fewer reports like the excellent one that the Small Newspaper Group produced on teacher tenure.

The Tribune editorial board weighed in on the subject with their editorial here (and posted in full below by 'Richard Nixon' in Illinoize here) calling for an abolition of tenure, but it would be nice if a few of the bigwigs at the Trib's corporate office decided to invest more resources into newspaper staff.

By the way, when MoveOn.org people confronted the Trib's CEO at a New York City media conference (press release here, Trib story here), Mr. Fitzsimmons decided not to engage in that discussion.

The Small Newspaper Group had a few little suggestions and one big one.

The small suggestions include:


-- It shouldn’t take a reporter six months to get this kind of information. It should be collected by the state and offered to the public as an accountability report card each year.

-- Illinois should follow Iowa’s lead in outlawing secret deals with bad teachers. Sunlight is a great disinfectant.

-- Long term teachers who are incompetent should receive severance pay reflecting their seniority, along with professional outplacement help. This is better than keeping them in the system, where the damage they cause to students lasts for years after the student has left that classroom.


These all seem exceptionally reasonable to me and my hope is that the General Assembly and local school districts embrace the ideas. If I had to guess, I'd guess the first idea that forces the State Board of Education to do more work at collecting data is the one most likely to pass in 2006.

But the editorial closes with this idea:

-- But the greatest reform would be a grand trade. Financing schools with property taxes, started when only the rich owned real estate, is wrong, resulting in huge disparities among school districts in the state. Illinois should replace the property tax with an equivalent income tax, in return for real accountability for performance. The system we have is a sham and a disgrace..

Now that the costs of tenure are no longer hidden, we can do no less

.

This is the slowly simmering pot of a big idea that will hopefully be served up in 2007.

Up to now, the debate on education has turned on raising the 3% state income tax to 5% (raising about three billion), putting half the money into poorer schools and the other half into richer property taxpayers in the form of lower property taxes.

I've always found that to be an awkward trade.

Better, in my view, to trade accountability and performance for the extra money. Forget lowering property taxes altogether. Just spend the money on better schools. I believe that we're more likely to convince the reluctant taxpayer to pay an extra two percent of their income for education if s/he believes that the money will actually make a difference in the lives of children, and by extension, the state. That's a more compelling pitch than putting more money into the same school system (with some serious flaws), but with, perhaps, a smaller local property tax bill in exchange for a higher state income tax.

Scott Reeder and the owners of the Small Newspaper Group have done Illinois students a great public service in documenting some of the major flaws of our schools. Now we have the chance to use this knowledge -- produced by a civic-minded for-profit company -- to make life better. I hope this becomes a central part of the education funding debate.

8 comments:

Anonymous,  11:52 AM  

Oh, come off it, Dan. The idea behind the swap was basic fairness -- raise some taxes, cut some others, and in the process give schools a fairer and more stable revenue source. Now you're saying, what we really ought to do is raise taxes on everybody because you think that's less "awkward?" Jeezle, Dan, you really think that'll fly? Run that up a flag pole and people will start shooting, not saluting.

Reg Adkins 12:20 PM  

Throwing money in any form, tax or otherwise only worth considering if their is a clear end purpose in mind (ie what is the goal and how will it be accomplished). That is rarely the case but should be the demand of the populace.

Extreme Wisdom 2:13 PM  

It seems to me I've read about that kind of idea before...

But where?

Despite the fact that I'm not a big Trib fan, they did the right thing when timing their "Tax Swap" article on the same day the Teachers took a paid vacation day to go to Springfield and lobby for Martire's Non-Swap.

Now, it appears as if they are reading my blog.

1. Cut Education property taxes to zero

2. Pass HB 750

3. Fund Children - Not bureaucrats - with 100% funded from State, to parents, who chose the school.

4. Make every school a Charter School able to take 501c3 donations.

5. Make every district history.

6. Repeal every mandate save broad testing and let each school decide on curricula

What's not to like?

Dan Johnson 3:18 PM  

Anonymous -- you ought to get a nickname on this blog. And ask legislators how many of them believed that property taxes would really fall. It's tricky for the state government to permanently lower taxes collected from a local government. That's not a clear argument. Raising taxes for better education where the recipient of the funds (the school disticts) gives up something in return is a lot clearer, and I think, more compelling. And Bruno, you can't eliminate all local property taxes and finance education with a 5% income tax. That's not nearly enough money. Plus, schools can take 501c3 donations now. And repealing all mandates is another way of saying 'very low standards' when higher standards for education is the direction we should be going.

Cal Skinner 7:13 PM  

So, you want to raise my income tax by 60% and allow me to continue to pay among, if not the highest, effective property tax taxes in Illinois.

I would guess you live in Cook County, which has the lowest effective tax rates in Illinois.

What's an effective tax rate?

Divide your property tax bill by the value of your property.

Chicago had an effective tax rate of 1.1% in the Revenue Department publication for the year 2000 that I'm looking at.

Crystal Lake's was over 2%.
Decatur's was 2.17%.
Hillsboro's was 2.15%.
McComb - 2.14%.
Peoria - 2.16%.
Rock Island - 2.19%.
Rockford - 2.98%.
Springfield - 2.14%.

So, Chicagoans pay 1% of the value of their homes in taxes each year, while in the rest of Illinois people pay over 2%.

The fairest tax has always been one that someone else pays.

Where do you live Dan?

Dan Johnson 11:23 AM  

First, I live in the greatest city in the world: Chicago.

Second, if you want lower local taxes, then don't ask the state for relief. Ask your local government to change its tax rates. That's the awkward part of the tax swap: looking for the state to permanently constrain a local government. And by awkward I mean the perception is that the local government will find a way to get around the state's constraints, which saps support for a moderate state income tax rate like 5 or 6 percent.

Third, the effective increase in the income tax would be far, far less than what you imagine, largely because between a quarter to a third of the increase in the state income tax paid would be offset by fewer federal income taxes paid. For every extra dollar spent on the state income tax above the 3% rate, one dollar is deducted from taxable income for federal income taxes paid, and the federal rate is between 25% and 35%. So the effective state income tax rate (assuming the current rate of 3% is a baseline) would be something like 4.5%, not 5%.

Now, to be fair, I know there is some state law that gives Cook County property taxpayers a break relative to other counties, but I've never really understood it. Something about the equalizer....

Cal Skinner 7:23 PM  

Not, the equalizer, but the classification system. The last time I checked homes in Cook County were assessed at about 2/3 of what those in the rest of the state are assessed...after imposition of the equlizer.

Anonymous,  5:37 AM  

Why not just eliminate the property tax and the income tax and go with a single consumption tax with refunds for poor and lower to middle income tax payers?

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