June 22, 2012

PSEA Advertorial: School Funding and Corporate Taxes

If Governor Tom Corbett made Pennsylvania corporations pay their fair share of taxes, there wouldn’t be a $1 billion crisis in our public schools. It’s an amazing statement. And it’s a fact.

Hundreds of corporations are paying nothing in state taxes. At the same time, the public schools are cutting programs that work for our students, laying off teachers and support professionals, and increasing property taxes.

Raising taxes is politically unpopular in Harrisburg. But, the governor’s commitment to corporate tax breaks is forcing taxes on ordinary Pennsylvanians to go up.

Local school boards face deep holes in their budgets because Governor Corbett cut $860 million in state funding to the public schools this year. He has proposed to cut another $100 million next year.

To fill those budget shortfalls, school boards have no choice but to raise property taxes on the homeowners, shopkeepers, and retired Pennsylvanians who live and work in our communities.

By refusing to ask corporations to pay their fair share, the governor is asking the rest of us to pay more -and our students are getting less.

More than 70 percent of Pennsylvania corporations pay no state income tax, partly because of hundreds of millions of dollars in corporate tax loopholes and giveaways. Multistate corporations such as Walmart and Home Depot use loopholes to avoid paying their fair share of taxes. In 2006, a Pennsylvania family earning $36,000 paid more in state taxes than 84 percent of corporations in our state.

On the national level, the situation is just as bad. Federal tax laws are full of small adjustments that add up to big tax breaks. A significant percentage of Fortune 500 companies pay nothing in taxes. Wages have remained stagnant over the past 30 years, but corporate profits have skyrocketed, with the incomes of CEO’s increasing 200 times faster than family incomes.

Here in Pennsylvania, state laws allow this to happen. And the governor has promised to keep it that way. So, while corporations reap the windfall of this sweetheart deal, the public schools fall under the budget axe, and property taxpayers get stuck with the bill.

Elected officials can solve this problem. It just takes courage to do it.

What is the better policy?

Should we let corporations avoid their tax obligations, cut funding to the public schools, and increase local property taxes?

Or, should we make sure corporations pay their fair share, restore the governor’s $1 billion in school funding cuts, and give property taxpayers a break?

The choice is that simple.

A few months ago, the Coalition for Labor Engagement and Accountable Revenues (CLEAR) unveiled a common-sense revenue proposal. It identified $2.3 billion in untapped state tax revenues, ways to make government more efficient, and spending reforms.

That’s $2.3 billion.

That is more than enough new revenue to restore Governor Corbett’s school funding cuts. We see the consequences of the governor’s unprecedented cuts every day.

Nearly 400 newspaper articles have catalogued a litany of cuts, property tax increases, and layoffs. Seventy percent of the schools have increased class sizes, 44 percent have cut courses, and 35 percent have eliminated tutoring options. There are 14,000 fewer educators to teach our students.

This isn’t fair for the students who learn in our public schools or for local property taxpayers.

We can solve this crisis. We can fund our public schools. All we need to do is make sure that corporations pay their fair share.

The solution exists. We just need Governor Corbett to have the courage to act on it.



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