One of the best sources of information on tax policy as it relates to education and local property taxes is the Education Tax Policy Institute (ETPI). Their analysis is an excellent way to understand why Ohio voters are rejecting school levies, at a 50% or higher rate. The answers they provide show that it's not because voters hate education that levies are failing. In fact, it's just the opposite. Voters have taxed themselves locally to one of the highest rates in the nation. So it's no wonder that voters are tired of shouldering so much of the burder through local property taxes.
If you google "property tax burden" or any other combination of "tax" and "burden", you're likely to come up with a list of links to the Tax Foundation (or one of the ubiquitous news reports that rely on the Tax Foundation to push the theme that darnit Ohio's taxes are just too high). One of those unfortunate news pieces is here, at the PD site from just last December.
But the ETPI debunks the methodology used by the Tax Foundation pretty thoroughly, and shows that the ranking the Tax Foundation annually uses and which show Ohio's "tax burden" as being one of the top ten in the country are misleading to say the least. As ETPI explains, the TF rankings lump a lot of taxes together and weight them. But what interests me, and probably a lot of other voters, is how much of our taxes for schools come not from corporate and personal income taxes or sales taxes, but instead from local property taxes. As the ETPI shows, Ohio's statewide income tax is fairly low, or at least average, while our property tax rates, which are voted on directly and locally by the people who pay them, are actually very high. Interestingly, Ohio’s state-levied taxes (i.e., those enacted by the state legislature) amount to $1,733 per capita and rank 34th, lower than all but 16 states. Conversely, Ohio’s local taxes are $1,283 per capita, 9th highest in the nation. (It might also be observed here that,under Ohio law, much of this local burden has been imposed directly by local voters rather than elected officials.) Combining these state and local burdens yields the figure of $3,016 in per capita state and local taxes, and the ranking of 20th, explained earlier. (my emphasis)
Go to the ETPI site and click on "Ohio's tax ranking: setting the record straight" for the full PDF that the above came from.
So, as I've said before, it's up to the governor and legislature to change the system. Voters have taxed themselves at a high rate. But they can't take anymore. The system has to change.
Monday, March 10, 2008
Why Levies are Failing: Not Because Voters Hate Schools
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7 comments:
Thank you for providing this information. The implications are not very positive for those at the top of the taxation heap. Still waiting for Strickland to actually DO something about this education funding mess we are in...
You need to get your facts straight. You are confusing all sorts of Tax Foundation publications -- property taxes, state business tax climate, and state & local tax burdens.
No, I'm talking about their state and local tax burden statements that the ETPI puts out.
I don't have much use for any of the TF's publications.
Correction: I'm talking about their tax burden publication. The ETPI document that I mentioned is a response to that.
I happened to write about this very same topic at http://rowseyblog.com/?p=22
I don't think that an educated person would say that the tax levies are failing because the voters hate schools or the kids in them. I believe that it is a protest vote against our current system of funding schools which the state government on all levels fails to address. I don't think that we should punish the children in our school systems just to make a statment.
People's property taxes are too high in my district --you could rent an apartment for what we pay every month in property tax for our one suburban home. And the baby boomers are facing or in retirement --and their incomes are static. They don't feel they can afford to stay in their homes with these taxes. I did vote for the levy, however, this time.
But the reason for the ever increasing school budget is the constant raising of the base income of the teachers and administrators and the support staff--every time a union gets a raise they turn around and start to threaten strikes if they don't get the next one. So as the incomes steadily increase, the property taxes do. And it wouldn't matter WHERE the support comes from--it's ultimately our pockets.
And rightly we pay for good schools --but in Toledo the schools aren't even good and they pay their staff well --more than in some outlying districts --and understandably so in that the teachers are in a war zone everyday. But it's not good education the kids get there because they aren't interested in a good education. They haven't the sense to know that there is a correlation between hard work at school and economic success in life. And their families are too dysfunctional to help the kids get ahead -- that's why we need vouchers --so kids who are willing to work will have opportunity to aspire to private school standards of conduct, effort and attendance --or be expelled back to public school if they prefer to play the fool in school.
A few years ago, a class valedictorian known for her nationally acclaimed poem --stopped attending her city school for the last quarter or so of her senior year --all the teachers knew it --but they just graduated her with honors anyway.
Solution --teachers stop clamoring every year for raises in the contracts! You get raises automatically in the step increases of your contract as it is.
Dave:
While an argument can be made that it is better to fund schools primarily with state money rather than local money, no one should believe that it will lower the aggregate burden on Ohio taxpayers.
IMO, the primary (and unspoken) goal of the GIRFOF amendment is to create a stable compensation funding source for school employees, not to lower the burden on taxpayers. I for one am fairly confident that GIRFOF will increase the total burden on taxpayers because its design is to raise the funding to the districts with the lowest PPS while allowing the rest of the districts to keep their spending at current levels by supplementing State Aid with (horrors!) local property taxes.
So my property taxes may go down (not away), but I bet my state income tax, sales tax, and who-knows-what tax will go up - more than my property taxes went down.
I don't know about other districts, but here in Hilliard the issue is primarily the ignorance of the electorate. Our voters are not stupid people - they've just never had the structure of school funding explained to them by our school leadership.
And so the voters don't undertand that very few houses generate enough property taxes to pay for the cost of educating the kids that live there, especially in a high-growth district like ours where nearly all houses have kids - because the parents moved here to put their kids in a good school system with a low tax burden. Unfortunately, the act of moving here screwed up the funding balance (residential vs commercial vs State), making us a highly taxed district.
Nor did they understand that nearly 90% of the cost of operating our district is salaries and benefits, and that teachers are actually compensated fairly well (I think most believe teachers take a vow of poverty when they get their licenses).
And so when times are getting tight, as they are now, they don't see why they should be paying for 7% raises (with the step) and 100% of the healthcare costs when their own healthcare burden is skyrocketing.
We had a 9.5 mill permanent operating levy on the ballot last week. It was shot down with 57% of the vote against, the widest margin in my memory, in spite of the campaign committee spending over $50,000.
And now the BOE seems poised to be vindictive in their response by cutting stuff that directly affects kids and families (e.g. transportation) instead of asking the teachers' union, which whom they are also acrimoniously negotiating, to hold off on salary increases for a year - a sacrifice many of us in private industry have been asked to make (the other choice being to get fired).
That's going to make getting the levy passed in November even harder. And that means there's a chance our new $60 million third high school is going to sit finished but with no money to staff it.
PL
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