[lbo-talk] Kansas Education Shortchanged by Corporate Tax Breaks

Chuck chuck at mutualaid.org
Mon Feb 6 09:10:25 PST 2006


Kansas Education Shortchanged by Corporate Tax Breaks

By Kari Lydersen Infoshop News (news.infoshop.org) January 6, 2005

The Kansas public school system has become famous--or infamous--worldwide as a leader in the fundamentalist Christian movement to de-emphasize the teaching of evolution and introduce creationism and intelligent design to the curriculum.

But another important story in Kansas schools has gone relatively unnoticed. Kansas schools need to spend $399 million more just to get up to sufficient resource levels, according to a report mandated by the state Supreme Court which was released at the end of 2005. In January 2005 the Supreme Court had ordered the legislature to spend more per pupil in schools, noting deficiencies especially in low-income areas and areas with many English-as-a-second-language students.

Members of the Wichita youth activism group Hope Street Youth Development say they have felt the effects of the dearth of school funding first hand. Among other things, as documented in a report by Hope Street, after school programs ranging from sports to band are not free but entail fees high enough to keep many students from participating. Late afternoon buses which used to take students home from these activities have also been cut.

“If you’re involved in any kind of activity, whether it’s an after school club, sports, or whatever, it all requires some kind of fundraising,” said Louis Goseland, 17, a member of Hope Street and a senior at Wichita High School West. “There are times when instead of practicing you spend more time talking about fundraising. In the classrooms t eachers often pay out of pocket to carry out the curriculum and do activities. The journalism program is supported by two different departments, and they’ll take so long arguing about which one will pay for toner for the printer, because neither one has enough money. And the school facility’s pretty worn down. Everything in there’s pretty old.”

The November 2005 report by Hope Street found that 46 percent of Wichita students decided not to participate in an after school activity because it was too expensive. With 65 percent of Wichita students receiving free or reduced cost subsidized lunches, it is obviously not a school district where families have muc h disposable income for extracurricular activities. Most programs charge a $50 “pay to play” fee, which is reduced for low-income students, along with equipment, uniforms and other costs. The report notes that most students participate in fundraisers to support extracurricular programs. But since the main people who buy raffle tickets, candy or whatever the fundraising commodity may be are relatives, this is essentially just another charge on families.

States all over the country are experiencing severe budget crunches and have problems with under-funded schools. Students and organizers at Hope Street think they know where to point the finger for their funding problems. Major companies received over $74 million in tax breaks in Wichita in 2004. This is money that otherwise would have gone to the state budget and been available for school funding. Tax abatements are generally given as a way to try to boost the local economy, by luring companies and helping them prosper and grow, thus theoretically creating jobs and more investment.

But critics of these corporate subsidies note that they are often given to large multi-national companies with comfortable profit margins who don’t need a tax break just to survive; and the abatements are regularly renewed multiple times even if companies have failed to come through with local economic stimulation or job creation. Hope Street activists say the state should be invest ing in students--its future, as the saying goes--rather than huge companies.

The largest recipient of tax abatements in Wichita is the outdoors and camping equipment company Coleman, which received $1.4 million in tax exemptions between 1998 and 2005, according to city of Wichita records. In January the Wichita city council decided to continue Coleman’s 5-year abatement for another year, and then re-evaluate, even though Coleman has not delivered on the promises it made the city in order to receive the abatements.

“Stated that although our policy says we should not grant th is, that we owe an obligation to a company that started here to help them stay in business and keep them competitive with the overseas market,” say minutes from the city council meeting.

Other major recipients of tax breaks in the area included Learjet, Flight Safety International, Eycon Industries, Excel Manufacturing and Royal Carribean.

The Coleman Company was started in Wichita a century ago when W.C. Coleman began manufacturing and selling lanterns. To get a tax abatement, the company promised to create 200 new jobs. But instead, 142 Wichita Coleman jobs were actually cut in 2002.

“One of the arguments for abatements is that they help companies come to Wichita,” said Jake Lowen, an organizer for Hope Street. “But Coleman’s been here for years. They don’t need welfare.”

An analysis on loss of tax revenue in Kansas was done by the Nebraska Coalition for Educational Equity and Adequacy, which is working on similar issues in Nebraska. The analysis says that the Wichita Unified School District lost $3.8 million in potential revenue from property taxes on corporations in 2004 because of $74.1 million in tax abatements given to those companies, of which Coleman was the largest recipient.

Though property taxes go into the state budget, which then funds schools on a per pupil basis, the report used tax abatements in the area covered by the school district and the formula to calculate how much property tax revenue goes to schools to give an example of how schools lose out when companies get tax breaks.

Janet Harrah, director of the Center for Economic Development and Business Research at Wichita State University, said the tax abatements actually have little effect on schools since a set per-pupil amount is funded by the state regardless of property tax revenues. She said the only direct correlation is on a relatively small amount levied through taxes for capital improvements on schools.

“Property taxes are assessed to raise money for schools, but if they don’t raise enough money to fully fund schools, the amount you receive [is still] directly tied to the number of students you have,” she said. “With a few exceptions {property tax abatements] don’t affect funding for schools.”

But critics of the tax abatements say the currently inadequate level of funding could eas ily be raised if the money from corporate property tax abatements was available.

“That is an amount that otherwise would be going to schools,” said Jerry Hoffman, co-executive director of the Nebraska group. “These are the wealthiest corporations in America, it’s absurd to think they need subsidies.”

After the state Supreme Court’s January 2005 ruling on school funding, the state legislature approved an additional $142 million for schools. The court ordered the legislature to come up with an additional $143 million or they might order the schools closed altogether.

Meanwhile student activists at Hope Street say they hope to make a clearer case to the public about how the tax abatements are hurting their schools and are putting corporate welfare above student needs.

“We want to do more research to make an unquestionable case that there is a connection between the tax abatements and education,” said Goseland. “They’re denying the connection – but we know it’s there. We want to do a real awareness campaign and have the youth take leadership.”

--------- Kari Lydersen is a freelance writer whose work has appeared in the Washington Post, In These Times, LiP Magazine, Clamor, and The New Standard.

Additional articles by Kari Lydersen at Infoshop News:

* Katrina's Environmental Devastation Adds to a Legacy of Environmental Racism http://www.infoshop.org/inews/article.php?story=20051017081945776

* Don't Eat That Fish! More Mercury Will be the Legacy of New Coal-Burning Plants http://www.infoshop.org/inews/article.php?story=20050922095709940

* Profile on Conscientious Objector Camilo Mejia http://www.infoshop.org/inews/article.php?story=20050819093845571

* TeleSur Takes to the Airwaves http://www.infoshop.org/inews/article.php?story=20050805124307140

* Vets, Students Standing Up Against Recruiters http://www.infoshop.org/inews/article.php?story=20050524080704241

* “Behind Closed Doors:” Bringing Sex Workers’ Struggles into the Open http://www.infoshop.org/inews/article.php?story=2005050907465576

* Immigrant Activist Deported from Canada http://www.infoshop.org/inews/article.php?story=20050425080159912

Infoshop News is one of the more popular independent news sites, online since 1997 and now with over 20,000 articles and editorials in its archive. Infoshop News is a news aggregator, independent news syndicate, forum, and publisher of original investigative journalism.

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