Character, Taxes and Education

A short while ago I attended a Frederick County Council public hearing that involved several issues.  The first issue was the county tax rate. The two different methods of determining property tax rates included a “constant rate” and a “constant yield.”  The constant rate model would keep property taxes at the same level or amount. However, even with the same rate, if the property value goes up, your taxes go up.  The constant yield would adjust the rate so the County would receive the same amount of funding. So if your property value goes up, your taxes would not increase.  

There was a lot of citizen participation with this topic and the citizens overwhelmingly supported the constant rate, which will normally raise their taxes.  One of the speakers said he was a business person and he believed the constant rate was a “smart business decision” for the county. He added that this was not a republican or democratic issue and it would be good for everyone.  Another speaker talked about the need for building a sport complex for sporting events, like soccer and baseball fields. He emphasized that the plans in his community to build the complex requires funding. Several speakers included growth issues and educational funding as a reason to keep a constant rate property tax.

I was just a little surprised that citizens were in favor of keeping a constant rate tax system which increases their taxes.  Primarily because we are accustomed to politicians promising to lower our taxes. However, I was very impressed with the reasons given.  They all expected growth in the county. They see the need for future educational expenditures and community improvements. As several persons said, with growth the county will have to provide more services.  From my perspective they were informed citizens and stood up for their beliefs.

“The function of education is to teach one to think intensively and to think critically. Intelligence plus character – that is the goal of true education”
– Martin Luther King, Jr.

The character of the citizens that spoke was evident to me.  They were looking forward and understood that when the government provides education, public safety and infrastructure, there is a cost.  While listening to the citizens participating in their government, I thought about the teacher strikes in the news. Teachers have been on strike in Kentucky, Tennessee, Oklahoma, West Virginia and Arizona.  According to the teachers all of the schools are underfunded. I am aware that teachers have gone on strikes before, but I don’t remember so many states in the same year.

If the schools were being underfunded, the question is why?  One reason could be the financial collapse starting in 2008. When government revenues fall it would be expected that educational funding would be reduced.  According to the National Education Association Teachers Union, “U.S. teacher pay, adjusted for inflation, is now 5% lower than it was in 2009,” so it is low.  One perspective is that the country almost had a second depression, so it stands to reason that teacher pay, along with other public funding was reduced.

While the recession was part of the initial problem, there are other contributing factors.  It was reported that the states that were in the news did not have collective bargaining. Of course that is a larger issue in that many governments have tried to eliminate public unions.  Without getting into the details, we do know that without collective bargaining public employees do receive less pay over time. That seemed to be a significant contributing factor in the states with striking teachers.

Another factor, that started well before the before the recession – is that we have politicians promising us lower taxes.  Their message is clear that since government is so inefficient, they don’t need any more income and we should lower taxes. The argument that government is inefficient does have some validity.  However, the argument that to fix the issue we need to collect fewer taxes or as some like to say, “Starve the beast” does not work. If you think the government is too big, you determine what you want to reduce, then reduce or eliminate that service.  Just reducing funding for everything, including education – will result in government inefficiency. The fact is that when we have state and local governments trying to maintain the public services with fewer dollars, eventually problems develop in numerous areas, including education.

“Dividing and elephant in half does not produce two small elephants.”
– A quote from
The Fifth Discipline

While the recession is over and governments are catching up with our educations systems, we still have a long road ahead.  How bad the problems had become was evident when one state gave their teachers a raise of over six thousand dollars. That sounded like a big raise.  Before the raise the teachers were ranked 49th in the country.  After the raise they moved up to 47th.  Not properly funding public education is ignoring our future.     

I thought about all of this while at the County Council Hearing and listening to the public comments.  The last topic on the agenda was the Adequate Public Facilities Ordinance (APFO) which raises funds for School Construction.  The APFO started in 2011 and was optional if developers wanted to build in areas with inadequate school capacity. There are currently “a dozen developments that have outstanding agreements to pay school construction fees.”   The fees were supposed to be increased over time and the hearing was about the proposed increases. As one would expect, builders and the building industry testified against the increases. Testimony from the citizens mirrored the constant tax rate proposal, being in favor of the increases.  Again, the citizens seemed well informed and spoke of the needed funding future educational needs. The speakers addressed the history of shortfalls in the county budgets. One thing that really stood out was the repeated theme that someone has to pay for the schools and infrastructure. Every time someone gets a tax break, the rest of us have to pay more.

“Only the educated are free”
– Epictetus

Investing in the future is not an option if you expect the future to be better than today.

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