Every Kid Deserves a Great School Wisconsin

1
Every Kid Deserves a Great SchoolWisconsin

• Building an Economic Foundation for School
  Success
  
• John Milroy and Steven Cupery

2
is a land of opportunities
but these opportunities are being compromised by
unfair tax structures, uneven economic
development policies, and inadequate school
funding
and not everyone is aware.
3
Public education is at risk
Why are schools in such financial peril?
What can be done about it? How can you address
the issues facing public education?

4
To ensure equal educational and economic
opportunity for all Americans, we need to do
three things

• Make taxes fair
• Level the playing field for business
• Fund schools adequately

5
Do our schools need more money?

• Public schools already consume 50 of the state
  budget, and what do we get for all the millions
  we spend?

6
Lets Start with correcting the numbers.

• The governors budget for FY 05-06 shows
  expenditures at 25.895 billion of which k-12
  expenditures were 40 of the total state budget,
  not the 50 often quoted by those seeking to
  attack public education.
  
  Source Legislative Fiscal Bureau

7
Is there a problem?
Waukesha schools look to more cutsSkyrocketing
fuel costs could cause deficit, administrators
warn

School troubles eyed at forum
Schools trim counselorsBudget constraints,
emphasis on teaching thin ranks of advisers

School revenue falling short
Schools bundle up for savingsFacing rising
energy bills, educators cut costs by many means

Health costs push district over its budget
8
Revenue limits are causing a crisis

• Revenue limits cap how much money schools can
  raise.
  
• Revenue limits freeze spending at 1993 levels
  (with adjustments for inflation and
  enrollment).
  
• Revenue limits have no meaningful link to todays
  students, todays expectations, todays costs.
  

Revenue limits are the major reason we are
forced to go to referendum each year, and the
major reason we are in financial
difficulty.-Racine Superintendent Thomas A.
Hicks
9
Revenue caps force yearly cuts
Statewide revenue-cap growth is about 2.5.
But the cost of providing the same services from
year-to-year grows by 4.1. That difference sq
ueezes budgets, causing structural deficits and
cuts.
Source Institute for Wisconsins Future survey
10
Reality Cuts, cuts, cuts

• If the quality of schools decline, its not just
  the kids who are hurt. Wisconsins economic
  health depends on the health or our public
  schools. In order to improve the economy and
  create and maintain good jobs, we need a
  well-trained, educated workforce. We need great
  schools in order to attract businesses and
  families.
• Five years ago, 41 of districts reduced the
  number of academic courses. In the 2003-04
  school year, 52 reported more cuts to
  academics.the heart and soul of education.

Source 2003-2004 study by the Wisconsin
Association of School District Administrators and
the Wisconsin Education Association Council

11
.and more cuts

• The value of Wisconsin residents single largest
  investment their homes will also decline,
  because schools and property values are directly
  related. Wisconsins economic future also
  depends on great schools. Other results from the
  survey showed
• 69 laid off teachers or other support staff.
• 68 increased class sizes.
• 60 offered fewer courses.
• 55 reduced programs for gifted and talented
  students.
  
• 53 reduced courses in art, music, theater.
• 51 reduced extracurricular programs.
• 49 reduced programs for at-risk students
• Source 2003-2004 study by the Wisconsin
  Association of School District Administrators and
  the Wisconsin Education Association Council

12
Where school funds come from?
Total federal, state local funding for
Wisconsin
9.2 billion in 2003-04
13
The state system controls 90 (combined State
local funds)
Total federal, state local funding for
Wisconsin
9.2 billion in 2003-04
14
An example of why schools are so desperate for
funds
Source Wis. Dept. of Public Instruction
15
What about a referendum?

• Districts can raise additional revenue above the
  mandated caps through referendum. However in
  many districts a significant portion of this new
  money would go to other districts thus making
  it difficult to sell.

16
Putting thought to action. What can you say to .
.

• You say our school finance system is in trouble?
  Tell me about it.

17
Just answer this one question, are Americans
overtaxed?

• Whats wrong with this question?

18
Depends on who were talking about, Sean.

• Taxes on the highest 1 of Wisconsin income
  earners are going down. Taxes on the rest of us
  are going up. If he lived in Wisconsin, what
  would be happening to Sean Hannitys taxes?

19
Wealthy taxpayers have lowest state income tax
rate since 1931
Highest tax rate on individual incomes
20
Wisconsin Tax Trends
Institute on Taxation Economic Policy, Who
Pays? A Distributional Analysis of the Tax
Systems in All 50 States, January 2003
21
Tax Distribution by Income Group
Source Institute on Taxation and Economic Policy
http//www.itepnet.org/wp2000/wi20pr.pdf
22
The Wealthy Find More Ways to Pay Less
The top 1 has, on average, a 2 tax reduction
through federal itemized tax deductions.
Source Institute on Taxation and Economic Policy
http//www.itepnet.org/wp2000/wi20pr.pdf
23
The tax burden on the lowest 20 of Wisconsin
income earners is almost twice as high as it is
on the highest 1.
vs.
5.90
10.20
per 100 of personal income
Lowest 20 of Wisconsin income earners
Highest 1 of Wisconsin income earners
Source Institute on Taxation and Economic Policy
http//www.itepnet.org/wp2000/wi20pr.pdf
24
Wisconsin Tax Distribution
Source Institute on Taxation and Economic Policy
http//www.itepnet.org/wp2000/wi20pr.pdf
25
(No Transcript)
26
Relative property tax burden decreasing for
schools.

• Hamilton
• Kettle Moraine
• Mukwonago
• Muskego
• New Berlin
• Oconomowoc
• Watertown
• See LUC Local Tax Tables in the LUC Web Site
  under Resources/TEF Training -
  http//www.weac.org/luc/resource.htm .

27
Putting thought to action. What can you say to .
.

• You say the wealthy arent paying their fair
  share of taxes? Really?

28
Are Wisconsin businesses facing a tax hell?
29
Myth Wisconsin as tax hell Fact Wisconsin
government spending is in the national mainstream
-- 18th highest
Sources US Census Bureau, US Bureau of Economic
Analysis
30
Nationwide since 1980, state corporate income tax
payments as a percentage of reported profits have
fallen dramatically.
Corporate taxes have decreased by more than 50.

What happened to Wisconsin corporate taxes?
Dr. Richard S. Sims, Sierra Institute for Applied
Economics
31
Wisconsin Corporate Taxes

• Wisconsin Corporations continue to avoid paying
  state and local taxes and their percent of tax
  revenue is declining.

Personal income data are from Bureau of Economic
Analysis, U.S. Dept. of Commerce, Regional
Economic Accounts http//www.bea.doc.gov/bea/regio
nal/data.htm Tax revenue data are from U.S.
Census Bureaus State Government Tax Collections,
http//www.census.gov/govs/www/statetax.html
32
(No Transcript)
33
As the Corporate Tax Declines
Residential Taxpayers Pay More
34

• State business taxes below U.S. average
• New study contradicts Midwest reputation of
  uncompetitive climate
  
• By BRUCE MURPHY Posted Nov. 16, 2004
• Wisconsin's business taxes are lower than
  those in 35 other states, based on a new study by
  the Federal Reserve Bank of Boston that measures
  more than 15 taxes that can affect corporate
  profits. The study determines what percentage of
  a state's total business profits is taxed. In
  Wisconsin, long saddled with a reputation for
  being a tax hell, taxes amount to just under 33
  of business profits - below the national average
  of almost 36, according to the study.

35
Business brags about low taxes
Forward Wisconsin is a unique public-private
state marketing and business recruitment
organization. http//forwardwi.com

• Wisconsin business taxes are lower than those in
  35 other states.
  
• Wisconsin ranks fourth lowest in the nation in
  business taxes as a percent of all state and
  local taxes.
  
• The state's business-friendly attitude
  is reflected in positive business tax changes
  that have been made in every biennial legislative
  session since the early 1970s. 
• Corporate Income Tax rate has not been changed
  in the past 20 years.
  
• Wisconsin's business taxes are among the lowest
  in the country.
  
• Wisconsin has single-sales-factor tax treatment
  and a 60 capital gains exclusion no unitary tax
  on foreign-owned corporations no inheritance and
  gift taxes.

36
Do Corporations use public services?

• What public services do Corporations demand?
• Should they pay for public services like everyone
  else?
  

37
Some businesses pay no state taxes on the
products they produce.

• The economy is moving away from manufacturing
  toward services and commerce is increasingly
  transacted over the internet.
  
• These business that rely heavily on public
  education pay no sales tax and are subsidized by
  the rest of us.
  

38
Putting thought to action. What can you say to .
.
Wisconsin Businesses exist in a tax hell!!!
39

Make Taxes Fair

• Taxes are the dues we pay for living in a
  prosperous, civilized state. Fair taxes are the
  best way to support preserve our way of life.

40
PUBLIC EMPLOYEE PAY

• Public employees are overpaid and enjoy Rolls
  Royce Benefits.

41

• Teacher quality is at risk as teacher pay
  stagnates and falls further and further behind
  the pay of other occupations requiring a college
  degree.

Funding
42

Funding
43

Source http//inflationdata.com/inflation/Inflat
ion_Rate/HistoricalInflation.aspx?dsInflation_curr
entPage1 WEAC Collective Bargain
ing Division, BIS Database
Funding
44
Analysis of U.S. Census Bureau data by Decision
Demographics
45
The gap between the salaries of Wisconsin
teachers and the salaries of other
college-educated Wisconsin professionals has
widened dramatically.

• 61 (1940) vs. 11,692 (2000)
• Thats an eight-fold increase, after adjusting
  for inflation.
  

Analysis of U.S. Census Bureau data by Decision
Demographics
46
Rolls Royce Benefits?

• Public employees are not the cause of
  skyrocketing health care costs. These costs are
  crippling both private and public sector
  employers. Republican law makers are simply
  trying to divert attention away from their
  complete failure to do anything about the highest
  health care costs in the nation their solution
  is to take benefits from employees rather than
  deal with the underlying costs.

47
More on benefits . . .

• Attempts to make the insurance carrier a
  permissive subject of bargaining or fold school
  employees into the state insurance plan would
  allow employers to get a concession without
  negotiations which is an attack on collective
  bargaining.

48
Under the QEO teachers have paid for all
increases in health insurance.

• The Qualified economic offer requires package
  costing which includes the cost of health
  insurance. Teachers have had their salaries
  reduced each time they have bargained by the
  amount of increases in insurance. Now
  Republicans want to have their cake and eat it
  too both the low salaries from these
  concessions and now gut our insurance plans and
  give nothing in return.

49
Money in insurance is win-win

• Putting money in insurance during tight budgetary
  times has meant win-win bargaining for employers
  and unions. Both are not taxed on benefits and
  there were no roll up costs (i.e. WRS, UI,
  Workers Comp Ins, Life Ins, etc) associated with
  insurance enhancements. We collectively have
  foregone salary increases to maintain these
  benefits.

50
Responsible Insurance Changes

• School employees have made significant changes in
  their plans which are not the Rolls Royces
  asserted by talk show hosts
  
• 43 have moved to three tier drug cards
• 44 of teachers around the state adopted the
  Partners in Health Wellness program to
  help reduce preventable illnesses,
  
• 43 have moved to POS plans
• 86 of insured groups have between 100 and
  500 dollar annual deductibles.

51

• Education is a labor intensive industry with
  about 85 of the costs to run a school going
  toward salaries and benefits.
  
• Inadequate funding leads toward inadequate pay
  for school staff.

Lack of funds put teacher quality at risk as
public school pay stagnates and falls further and
further behind the pay of other occupations
requiring a college degree.

Funding
52
What goes around comes around the teacher ESP
connection.

• Its not just teachers who are affected by
  revenue caps and inadequate funding.
  
• ESP employees are the first to be laid off as
  districts seek to protect their core mission for
  which they are accountable.
  
• ESP employees benefits are often directly linked
  to those of teachers.
  
• ESP concessions in bargaining have been used
  against teachers (i.e. MPS recent decision).

53
Work is often shifted not eliminated.

• When ESPs are cut back or laid off, the work is
  often shifted to teachers without compensation in
  time or pay.
  
• That work which is not performed, such as school
  maintenance and cleaning, further contributes to
  a negative image of public schools.

54

Funding
Source http//ms.foundation.org/
55
ESP Pay and benefits undermined.

• The cost of an annual family health insurance
  plan is fast approaching, and (for nine month
  employees) surpassing the annual amount paid to
  ESP employees for salaries.
• Districts are adopting Wal-Mart like strategies
  to lower benefit costs by hiring more part-time
  ineligible employees and raising the cost of
  insurance to where having it is prohibitive.

56
Proposed legislation would make subcontracting
simple.

• Assembly Bill 268 would make subcontracting a
  non-mandatory subject of bargaining. It would
  allow employers - without negotiating with the
  union - to subcontract bargaining unit work to
  private companies that say they can do the job
  cheaper. The Union stopped subcontracting at
  nearby Montello. If passed this would create a
  constant threat to job security for both ESP and
  teaching staff completely undermine your
  ability to bargain and would create the Achilles
  heel through which employers seek concessions.

57
Putting thought to action. What can you say to .
.

• Before we increase funding for education we need
  to cut more fat. School employees pay and
  benefits are too high.

58

• We pay all this money to government schools and
  what do we get for it?

59
Despite adversity, Wisconsin public schools have
performed

• 98.6 of the teachers meet the "highly qualified"
  ESEA standards.
  
• For 16 consecutive years, Wisconsin high school
  students have scored 1st or 2nd on the ACT exam.
  
  
• Wisconsin's graduation rate is the second highest
  in the country.
  
• Wisconsin's 2.3 dropout rate is second lowest in
  the nation.
  
• Second in the world on an international science
  test comparison.
  
• Third highest SAT college entrance exam scores in
  the country in 2004. Wisconsin public schools
  consistently outscore Wisconsin private schools
  on the SAT

60
Tax-payer subsidized voucher schools have almost
no accountability.

• Theyve fought attempts to require giving
  standardized tests and disclosure of results
  
• They are not required to have certified teachers
  and many dont.
  
• They can discriminate against students due to
  handicapping conditions and do.
  
• They are not subject to open meetings laws nor
  many reporting requirements of public schools.

61
Business Handouts

• America needs to create a friendly climate for
  business!

62
Level Economic Playing Field

• In todays knowledge-based economy, the most
  effective economic development strategy is
  investing in public education Wisconsins human
  capital. An uneven economic playing field for
  business undermines our states ability to make
  this investment.

63
Governments Role

• State and local governments waste tax payers
  money on subsidies to big businesses, like
  Wal-Mart, while the community based momand-pop
  stores go out of business. The role of government
  is to level the playing field, not choose winners
  and losers through subsidies and tax breaks.

Economy
64
Economic Development Subsidies - Nationwide

• Using tax incentives and tax abatements to
  attract big business into a community costs
  taxpayers over 40 billion annually.
  
• These incentives are given with no strings
  attached, i.e., there are usually no claw back
  provisions.
  
• The education community generally has no say.

Economy
65
Economic Development Subsidies in Wisconsin

• The Milwaukee Journal reported that the state of
  Wisconsin gave away more than one billion dollars
  in tax subsidies to specific private corporations
  between 1987 and 1999.
• 35 million of those subsidies went to 112
  companies.
  

How many jobs were created with these subsidies? 
Economy
66
0

• No new jobs were created and no one was held
  accountable.
  

Economy
67

• Beaver Dams Wal-Mart distribution center
  received 7.7 million in subsidies, including
  reimbursement of the 5.4 million purchase price
  for the land, from city and state governments.
• Menomonie used TIF to pay half of Wal-Marts 1.5
  million purchase price for land for a
  distribution center.
  
• Milwaukee used TIF to subsidize 4.5 million for
  Midtown Center, where Wal-Mart is the anchor
  store.
  
• Tomah subsidized a Wal-Mart distribution center
  in the amount of 6.6 million for infrastructure
  improvements.

Shopping for Subsidies How Wal-Mart Uses
Taxpayer Money to Finance Its Never-Ending
Growth, Good Jobs First, May 2004.
68

• In 1999, Oconomowoc City Government created TIF
  District 2 for a new Target Distribution Center,
  approving 20 million in subsidies. Critics, such
  as 1,000 Friends of Wisconsin, argued that
  Target, a division of Dayton Hudson Corporation
  whose 1998 revenue was 31 billion, did not need
  this subsidy. But this argument went unheeded.

TIF At Its Worst Subsidies For Big Box
Retailers, 1000 Friends of Wisconsin, October
1999. http//www.1kfriends.org/Publications/Online
_Documents/TIF.htm
69
45 of TIFs Used to Develop Open Space

• The original intent of the TIF law was to finance
  urban redevelopment and blight elimination
  projects and to promote industry.
  
• But, according to public records, as of early
  1999
  
• of 661 active TIF districts in Wisconsin, 302
  were developed using some portion of land
  classified as "agricultural," "forest," or
  "swamp.
• These 302 districts included a total of about
  30,000 acres of open space land. The vast
  majority were classified as agricultural land.
  
• Thus, instead of improving blighted urban areas,
  TIF is often subsidizing sprawl and big box
  retailers.
  

TIF At Its Worst Subsidies For Big Box
Retailers, 1000 Friends of Wisconsin, October
1999. http//www.1kfriends.org/Publications/Online
_Documents/TIF.htm
70

• Investing additional money in education creates
  more high-paying jobs and economic prosperity
  than would providing tax subsidies. The
  following studies provide data to support this
  statement.

Economy
71

• Study 1.
• A study conducted by the former director of the
  Institute on Tax and Economic Policy that a 2
  increase in K-12 spending in Wisconsin will
  create 2,257 jobs and 98 million in personal
  income.

Economy
72
Study 2. East Stroudsburg University economist
s show that states investing more in public K-12
education over the last 30 years have a lower
income gap between rich and poor. For every 10
increase in a states public education spending,
about 1.5 of that states citizens are lifted
out of poverty.
Economy
73
Study 3. Jobs and incomes for residents in Easte
rn Oregon, showed in total, approximately 6,500
jobs and 200 million in personal income are
supported by school spending. This represents
approximately 9.2 percent of total employment and
12.1 percent of total income in that region.

• K-12 Spending the Oregon Economy
• PREPARED FOR THE OREGON EDUCATION ASSOCIATION,
• OREGON SCHOOL BOARDS ASSOCATION, AND
• CONFEDERATION OF OREGON SCHOOL ADMINISTRATORS
• ECONORTHWEST
• 888 SW FIFTH AVENUE - SUITE 1460
• PORTLAND, OREGON 97204
• PREPARED BY
• ALEC JOSEPHSON
• JOHN TAPOGNA
• JUNE2002

Economy
74
The Bottom Line for Wisconsin Spending on
Education Leads to More Economic
Development Than Tax
Cuts Do
Tax increase to fund a 2 increase in education
Tax cut resulting in a 2 cut in education
Jobs Lost -2,700
-5,000
Jobs Created 5,000 2,700
Net Jobs 2,300
-2,300
Sierra Institute on Applied Economics
75
Research Shows
Higher proficiency test scores
Higher spending per student Lower student-tea
cher ratios
Home prices are benefited by
Thomas Hungerford Robert Wassmer,
K-12 Education in the U.S. Economy, 2004
76

• Providing all students with an excellent
  education reduces costs associated with crime and
  poverty, saving the taxpayer money.

Funding
77
Comparison of Crime Statistics
10 Highest Spending vs. 10 Lowest Spending
States for Education in 2002 (Education measure
of population 25 years and older with at least
a high school diploma)
4,400 crimes
3,566 crimes
10 Lowest Spending
10 Highest Spending

Source Statistical Abstract of the United
States 2000
Funding
78
Investing in Education Savings in Crime
One more high school graduate
1,200 savings in crime and welfare costs

• Investment of 1.00 in after school programs
• savings of 3.00 in crime and welfare costs.

Investment of 1.00 in pre-k education
savings of 19.00 in crime and welfare costs.

SOURCE www.fightcrime.org
Funding
79
Putting thought to action. What can you say to .
.

• You say our tax dollars that pay for economic
  development could be better spent?

Tell me about that?
80

Fund Schools Adequately

• A strong democratic and economic future for our
  country depends on the capacity of our schools to
  provide all students with a fair chance to
  succeed.

81
The Challenge in a Nutshell
Schools are being held accountable for results

when they lack the capacity to deliver those
results
Accountability
when funding is inadequate and inequitabl
e
School Capacity
and when tax structures are out of sync wit
h the
economy

School Funding
and not everyone is aware.
Economy Tax Structure
Public Support
82

• Adequate school funding is necessary to build the
  capacity to deliver excellence.
  
• Accountability is only rational when schools have
  the capacity to do their job.

Funding
83
Estimates range from 21 to as much as 32 for
the additional funding required to achieve
adequacy and equity in Wisconsins school funding.
Institute for Wisconsins Future, Funding Our
Future An Adequacy Model for Wisconsin School
Finance, June 2002 Wisconsin Alliance for
Excellent Schools, Wisconsin Adequacy Plan, May
2004
84
Whats guaranteedby the Wisconsin Constitution
We further hold that Wisconsin students have a
fundamental right to an equal opportunity for a
sound basic education one that will equip
students for their roles as citizens and enable
them to succeed economically and personally.
Wisconsin Supreme Court Vincent v Voight (2000)

85
Why has there been no effective response in
support of public education?
86
School crisis Blame game
87
The solution is in Madison
Money for Wisconsin public schools is based on
decisions by the Governor and the Legislature.
88
Wisconsin needs a new systemto end annual cuts
and crises

• More revenue so all children receive the
  opportunity for a quality education.
  
• A fair funding system that covers all special
  needs, grows over time, and does not burden
  property owners.
  
• Local control of revenue and educational
  strategies and local accountability for academic
  success.
  

89
To ensure equal educational and economic
opportunity for all, we need to do three things

• Make Taxes fair
• Level the Economic playing field
• Fund schools adequately

90
Reality The 2005-07 state budget

• Bold vetoes by Gov. Jim Doyle kept revenue limits
  from being further tightened, and did so without
  raising school property taxes
  
• Aid for students with special needs remains very
  inadequate
  

91
It can be done

• Sources of revenue to meet school needs
• Exempt from property tax first 60,000 in value
  of owner-occupied home
  
• Financed by closing loopholes on sales and income
  taxes on services largely used by corporations
  625 million
  
• Additional money for schools
• One more penny for sales tax (from 5 to 6)
  would generate 800 million
  
• Or, increased income tax (from a range of 4.6 to
  7.75 to a range of 5.0 to 8.75 would generate
  600 million.
  
• Or, combinations of various tax adjustments.

Dept of Revenue 2005 Study on tax exemptions
www.dor.state.wi.us/ra/05sumrpt.pdf
92
The bottom line?
If the top 1 of income earners paid 1 more in
income tax rates, it would raise about 160
million dollars for Wisconsin and make the tax sy
stem more equitable.
93
Putting thought to action. What can you say to .
.

• But how can we fix the problem of inadequate
  funding for our public schools?

94
Do we want this to be the Voice of America?
95

• Go out and give voice to our concerns about
  public education and the economy.
  

96
While we must begin building local coalitions . .
.
Statewide power is needed
Thats why we need to organize with our allies
state wide.to build power that will matter in
the Capitol. WEAC is making this part of our
training for all UniServs during Winter
conference.
97
Where do we go from here?

• Spread the Word
• Material on LUC Web www.weac.org/luc/reso
  urce
  
• Set specific goals for your local
• Talk to colleagues and coworkers
• Sign up.
• Volunteer for future legislative and
  political action
  
• Write your legislator
• Join the WEAC Conduit put our money on
  our values.
  
• Second phase organize local coalitions.

98
More Information

• Lakewood UniServ
• Steve Cupery (cuperys_at_weac.org )
• NEA Research
• Ed Hurley (ehurley_at_nea.org )
• Dwight Holmes (dholmes_at_nea.org)
• Michael Petko (mpetko_at_nea.org )