The utility of educationWritten by Tim Higgins | | email@example.com
The Toledo Public Schools (TPS) has made it official: it will look for additional revenue from taxpayers on the May ballot. Rather than asking for an additional levy, TPS is instead looking for its additional financing for the school system by means of a 0.75 percent tax on earned income. This would apply to all those who live in the district controlled by TPS, regardless of where they work. I found this situation and this approach interesting on different levels.
The district funding is largely provided by levies which are based on property values, a practice that was declared unconstitutional in the 2002 DeRolph v. State of Ohio state Supreme Court decision. While the court considered this practice prejudicial to less well-to-do districts however, it provided no guidance on an alternative means of financing to the state legislature, and that body has yet to show the wisdom or the backbone to come up with a judicially acceptable way to finance public education in Ohio.
Moving out of the realm of property tax into income tax therefore seems a logical extension of the DeRolph decision. One can assume that eventually other school systems across the state may emulate in an attempt to find a way to comply with the state’s high court ruling.
Additionally, an income tax would likely provide a more stable revenue source to TPS, since the money it generates would not be subject to the downward spiral of Toledo housing values. Some say however, that this downward trend is in some part caused by TPS and that increased taxes would likely lead to further departures from the district, thereby reducing the revenue potentially generated by the proposed tax.
I also found in the financial situation of the district an interesting analogy, considering the fact that its mandate is to work with children. Consider if you will, the potential case of one of your offspring who receives a regular allowance for necessary living expenses. In addition to the income that you provide them, they have additional sources of revenue from outside the home.
Imagine your reaction if one evening during dinner they should suddenly announce that they are massively in debt for this year and will be worse off next. Consider what you would say about this sudden and drastic change in their financial status when their only excuse is to blame a reduction in the amount of money they were receiving from this outside source.
Having apparently ignored the situation for far too long, I wonder what you would say when they come cap in hand to you, looking for a rather drastic increase in the familial stipend that you provide to make up the difference. It is exactly this plaintive cry that we hear from TPS: this year, neither the federal government nor the state is giving them as much money as they used to (though no less is taken by these entities from taxpayers).
What we do not hear yet however, is anything that would provide understanding of where all of the money that we have been giving them has been going (other than it apparently used to investigate employees and board members) and why a greater sacrifice is required of those footing the bill.
What also goes unexplained is the fact that while enrollment continues to decline in the district, the corresponding costs of operation do not appear to be seeing comparable reductions. Unfurnished as well is any form of explanation as to how such a massive hole in the district’s budget could go apparently unanticipated and unnoticed for so long.
We are forced to ask whether this situation was in fact not unexpected and TPS was hiding its looming financial problems from the citizens of the district; or worse yet that it was a surprise, in which case someone was doing an exceptionally poor job of money (mis)management?
The only conclusion that we can draw about TPS based on the information released by the district to date indicates that it would like to operate differently than both organizations in the private sector, whose first consideration is to determine available revenues and operate within them; and those in the public sector who are currently requesting salary and staff reductions in desperate attempts to make ends meet (though it does share a need with the latter to threaten dire consequences).
TPS instead appears to want to operate more like a utility company. If you want more from them, more money from you will be required to provide it. If you want less however, more money will be required nonetheless because you don’t use enough.
Columnist Tim Higgins blogs at http://justblowingsmoke.blogspot.com/.