Wednesday, June 29, 2005

Schools

Schools are the silver bullet. I think that may be a line from the West Wing, but that doesn't make it any less true.

When conservatives try to slash school funding to the bone, they are – intentionally or not – harming the state and undermining essential American values.

In the 21st century, just like the 20th, and the 19th, and even the 18th centuries, America will succeed through ingenuity. We have natural resources beyond comparison, but this era isn't about resources. American scientists and plant and animal breeders have given the world crop yields beyond our necessity. Our domestic petroleum reserves are nearly depleted, and oil is the only natural resource that seems to matter anymore.

What we do have is smarts. Unfortunately, smarts need tending. The founding principle of America as a continent is that the little guy can lift himself up as long as he can get a fair shake. That's why my grandparents came here, and that's why Horace Mann spent so much time reforming public education.

I went to one of the many Horace Mann schools scattered around the country. Mann believed that public education should be non-sectarian (a step toward the non-religious schools of this day), and that bringing all walks of life together in with the best teachers would make all the students better. His was an egalitarian vision of America, one where the rich and poor were set out on the world on equal starting marks.

Like many states, Kansas guarantees a quality education to every child. The founders of this state knew that Kansas would only be as successful as its schools. They understood that schools are an investment in the future, one that pays huge dividends. They may even have known that long-term investments like schools are hard to justify in tough times. It's often easier to spend less than to raise more money to pay more teachers.

And that's why they wrote it into the Constitution, to guarantee that no jackass 150 years later would ruin the state by letting the schools moulder.

(Background on the current situation is here.)

One interesting observation is, if you read through the State Supreme Court's ruling, lots of other state's have gone through this same battle. Good education is expensive, and a bad one is worthless. Lots of states seem to have tried shaving off a little here and a little there, leaving the system bleeding from a thousand nicks.

On a related note, Doug Mays has pledged to block a bipartisan plan to increase funding by another $160 million. Mays wants to campaign as a fiscal conservative, and that means being the jackass his predecessors feared. One conservative commentator is so angry that there are Republicans willing to fund education, he's encouraging people to just vote for Democrats.

Remember, this money is 1/3 of what the Legislature's own study found would be necessary to provide an education that met their own definition of "satisfactory."

Once this compromise passes, the question remains how to fund it.

Kansans don't like taxes. In the booming 90's (remember that? Peace, prosperity, and a Democratic president) Kansas ran a budget surplus. Rather than upgrading infrastructure or setting money aside for a rainy day (and it's been 5 years of rain under a Republican president), the legislature cut taxes and went home.

Now, the sensible solution is to look back and say "This tax rate made sense when income levels were so high we were running a surplus, but we need money and we need the old tax rate." But that would be a tax hike, so it won't happen this close to the next primary season.

No, we're going to have to get creative. Governor Sebelius wants to put slot machines at race tracks and open casinos or some such thing around the state. The idea is to attract tourists and to take money from people who didn't study math quite enough, as well as compulsive gamblers.

I don't really care about gambling, and if it passes, it's fine. It isn't a terribly good solution, because I don't think casinos really bring much to the communities, and I'm not convinced that the one-armed bandit will make that much money at racetracks. Plus, taking money from the innumerate will not really help the education system in the broadest sense, and there are honest moral objections to be made.

One solution is to turn to Ohio. The brilliant minds there found brand new investment opportunities, like rare coins and "investment grade wines." Surely there's still room in the Hummel figurine market for the state to exploit some arbitrage, and all it would take is a couple people on eBay and a direct link between the Treasury and PayPal. Or maybe we should just play Powerball!

Another idea is taxing allowances. Kids have all this cash, and they get it tax-free. I can't see how that's fair.

On a less absurd note, we could tax special items. As someone who likes some wine with dinner, or a beer on the porch, or even the occasional mixed drink, I'm against taxes on liquor. That gives me an appreciation for people who oppose raising cigarette taxes. Maybe we should tax video games, and do it on a sliding scale according to the rating. Games rated E (for everyone) would have low taxes, but M (for Mature) would be taxed heavily.

That smells a little like censorship, so let's try again.

I propose that the state property tax be made progressive. If the progressive rates were set to a level that income was constant, the distribution of income is such that a substantial majority of people would pay less property tax (how many and how much less depends on how you implement it). By raising some rates above that level, the state could increase revenue while still giving a tax cut to a majority of households.

There are other advantages to a progressive property tax.

A sales tax can be treated like a property tax for short-lived goods, so we can lump those together for analysis. The traditional objection to sales taxes is that they are regressive, and so are property taxes. In particular, property taxes raise the bar on people buying their first home or car, and for poorer citizens replacing a car or home. Property taxes can also remove an incentive to upgrade a home.

By making taxes progressive, you can reduce that barrier to entry where it matters most. Someone with half a million dollars to spend won't be turned off by a couple points in property tax, but someone trying to scrape together $50,000 for a first home will worry about every penny.

In addition, this would encourage wealthier citizens to spend their money on the community, not hoard it in property. Companies would be encouraged to hire more staff rather than buying fancy desks. Rather than buying a bigger home, wealthy people will be encouraged to beautify their own homes.

Maybe there's a downside to this. I don't really see it. Most people get a tax cut, schools get more funding, and society is marginally better off.

I'm not even that certain the effects of the change would be geographically concentrated. Sure, Johnson County will get hit harder, but this could be arranged to ensure that much of JoCo would see no increase in property tax. This will target conglomerates that own farms more than it will family farms, and many family farms would see a decrease in their taxes as well.

I have neither the data nor the accounting degree to work out the numbers, but this is probably the least painful way to raise the necessary revenue.