By Maggie Thurber | Special to Ohio Watchdog
Is a sales tax increase the solution to funding Ohio schools?
Property owners — who currently fund schools with taxes on the value of their property — might think so, but trading one tax for another doesn’t really address the problem.
Ohio has been going back and forth for what seems like forever on how to adequately fund public education. There have been court cases and appeals, complaints and praise, new standards and testing to document performance, more complaints and praise, more court cases and appeals and still no one is really happy.
It’s been going on for so long now that most Ohioans don’t remember what it’s all about or what the final Supreme Court decision was. But they know that their local school systems are laying off teachers, cutting programs and asking for money while blaming the state for reductions in funding.
In my hometown of Toledo, the Toledo Public School Board decided to put a new, permanent 6.9-mill levy on the ballot in November. They say they really need more than 8 mills, but they don’t think Toledoans will support that big of a hit to their wallets, especially in this economy — and with six other levies on the ballot at the same time. Just for reference, a 6.9 mill levy will cost the owner of a $100,000 house about $211 per year.
So it’s no surprise that the idea of using Ohio’s sales tax to replace the property taxes is being raised again.
To come up with the more than $9.9 billion that would be needed to replace what is being collected, legislators would have to raise the sales tax from 5.5 cents on the dollar to 13.2 cents, the House Finance & Appropriations: Primary & Secondary Education Subcommittee was told Wednesday.
But it’s not that simple, because when you raise the sales tax, people don’t purchase as much — at least, not within the state if they have that option.
Since I’m only about a mile from the Ohio-Michigan state line, I could easily go to stores in Michigan and pay only a 6 percent sales tax, saving me 7.2 cents on every dollar I purchase. This might not make sense for small purchases, once you balance gasoline and travel time, but if it’s a major appliance or Christmas shopping, it would.
But numerous reports and studies say sales taxes hurt the poor more than other taxes do. Since the poor spend a larger proportion of their income on consumption goods, they end up paying a larger percentage of their income in taxes on those goods. When they have limited income to begin with, paying more of that income in taxes on items they cannot go without doesn’t sit well with many people, especially politicians who want votes.
The flip side of that is the property tax. Some complain that individuals who live in apartments prefer property taxes, because they don’t have to pay them. This is a common misperception as landlords must take into account property taxes when setting their rental rates. The renter doesn’t pay the property tax directly, but they pay their portion in their monthly rent. And in recent years, landlords have starting including a clause in their contract that allows for any voted property tax increase to be added to the rent automatically.
Regardless of the method of funding, the distribution will be an issue always — and that’s what the fight is constantly about: who gets the money.
If they raise the sales tax, will the state allocate it back to the counties from whence it came? Will it be split up equally among all the schools? Or will it focus on some complicated funding formula that takes into account numerous factors resulting in an allocation that only a rocket scientist could understand?
A better method might be to just take the total amount of money collected — regardless of which method — divide it by the number of school-aged children in the state and hand it over to the parents to spend on the child’s education as they see fit. This “let the money follow the child” scenario is so much easier for people to understand and gives parents the freedom to decide what is the best educational option for their children.
But such a common sense approach often meets with objections from school unions, school bureaucracies and elected school board members. Such a concept would require them to compete for the attendance of children, something many reject.
And we can’t forget the irresponsible parents who wouldn’t spend the money on their children as intended — children shouldn’t suffer because of the failure of their parents. So maybe instead of giving them money, we give them a voucher.
But such a loaded word in the educational system would never pass muster, so clearly that option is out.
In the end, the arguments always revolve around how much, who pays, who receives and who gets to decide. Special interests lobby for the method that benefits them the most, and politicians worry about what their vote means in terms of their re-election.
Just for once, wouldn’t it be nice to see the discussion focus less on the money and more on what is in the best interest of the children the money is supposed to be benefit?
I can only hope.