Former Cranston school committee member and current city councilor Anthony Lupino has an interesting letter in the Projo where he offers an idea for a better way to fund education:
[…] My idea for an alternative-funding source would be to base school funding on income reported on the Rhode Island income tax form.
My simple alternative method would be to find the total reported income for a school district. We could then take the total median Rhode Island school expenditure and calculate the percentage of the total income needed to raise that amount.
The legislature, with input from the House Finance committee along with the general treasurer or auditor general would take the reported income of each resident and multiply by that specific percentage to figure out an individual’s contribution to the General Public Education Fund.
The distributions would be deposited on a scheduled basis from the general treasury directly to the account of the local district. This method could also be used as part of a hybrid where a small portion of local education funding would be derived partly from a property tax based on the traditional tax rate/assessment formula.
The majority of state aid to education would be funded from the income tax derived from the new formula, along with defined percentages from lottery, sales, and other “consumer� taxes. We, as residents would then finally have an equal share in the cost of education. A mandated cap on school funding could be tied to the cost-of-living index or another index, and the local districts would be allowed a yearly legislatively limited increase. This would allow local officials some discretion to identify and justify enhancements to their local programs, but limit the burden on property taxpayers.
I AM NOT SUGGESTING A TAX INCREASE. On the contrary, I would expect property tax decreases due to the defined direct state aid to school districts.
If our legislators are serious about property-tax relief and a commitment to education, then I hope someone with the financial expertise which I lack will work with me to further develop this plan. I intend to work closely with our Cranston legislative delegation and anyone else showing the commitment to reach a beneficial solution.
I am resolute when I use the term “school district.� I believe the time has come to regionalize oversight of our public schools. Cities and towns should not expect to give up the identity of the local schools; however administrative functions must be consolidated. Cranston Project REDIRECT, under the direction of Mayor [Michael T.] Napolitano, Council President [Aram G.] Garabedian, members of the City Council and School Committee, is working on consolidating Cranston’s municipal and school functions — at the very least those functions which overlap.
We acknowledge that a statewide municipal healthcare plan, needed to realize economies of scale, is long overdue. Statewide special-needs transportation must be accomplished. Special-needs tuitions are out of control. If the Department of Education refuses to address and control this expense then maybe the legislature must. Many people are against lengthening the school day, but why are our schools empty all summer long? Instead of just offering remedial programs, why not use the same time to offer enrichment, arts and intensified sports training programs? Funding for these summer programs could be financed through grants and private sources with incentives to participate. [full text]
It’s an interesting concept, but it all boils down to taxing the rich, which is not a very popular idea these days. It seems to me that the only people this would get more money out of are the Steve Laffeys of the world who have several million dollars but choose to live in a house they paid $150,000 for. Are there really enough of these people that we would be able to collect more taxes by this method than by the current method, or is Lupino mainly making the argument that distribution would be fairer under his proposed system?
Councilman Lupino offers some other interesting ideas for reform, including regionalizing health care contracts and other services and cutting down on bureaucrats. With regard to cutting down on bureaucrats, I wonder if he would have felt the same way back when he was on the School Committee, a bureaucratic body that is coming under fire (at least on this blog) for being unnecessary and possibly targeted for elimination.
However, I agree that the property tax method is flawed in that it makes for problems in poorer cities.
Kmareka.com 
Perhaps I’m a bit thick, but I’m not entirely sure how using income tax vs property tax will make that much difference. I mean, areas with high incomes usually have high property values.
Yes, you would get the Steve Laffeys of the world, but those with money also have hundreds of ways of avoiding income tax, whereas property tax is a flat dollar amount (although valuations and percent of assessment can be manipulated).
We need to re-impose levels of taxation seen before the Bush admin. No matter what the wingnuts will tell you, tax rates DO NOT necessarily have an adverse effect economic growth. We’ve done very well in high-tax periods, and poorly in low-tax periods. Look at the difference between the late 90s and the current decade. The bottom fell out AFTER the first tax cut.
Plus, the amount of revenue lost just from people making over $1 million could pay for a lot of education. And there’s also all the tanks and ships that we’re building to fight the USSR. Much of that money could be much better spent.
OTOH, regionalization is, I believe, a legitimate source of savings. We have too many replicated officials; they cost money that could be put to better use.
Of course, the real solution are wages that actually go up.
Sorry to sound like a broken record, but stagnant wages and tax cuts are the real problems.
klaus:
The idea seems to be to broaden the tax base to pay for education. It’s a decent idea; my only objection to Mr. Lupino’s idea is that it will undoubtedly create a huge new bureaucracy in the state tax division — at a time when the goal is to lower the cost of government.
His idea for extended use of school buildings is something I’ve heard suggested before, but again, school contracts stand in the way — and such roadblocks could be removed by unifying the city council/school board function.
I’m not sure how many people know this, but school buildings are actually “leased” for $1 a year to the school departments. That $1 buys a lot of control over those properties — for instance, no events can be held without custodial services, often at time and a half. Now, I’m not saying that custodial services aren’t needed, but in most school districts, the number and hours are pre-established, which prevents many organizations and groups from using public school buildings.
In any case, I commend Mr. Lupino for suggesting new ways to look at funding education, and for supporting the idea of consolidating government functions.
If he is looking for additional funding by utilizing the actual brick and mortar school, why not install solar panels on the roof tops of each school? They could provide electricity to the schools while in use and during limited use periods (i.e. summer) the excess could be sold back into the grid to lower their overall energy cost?
Yes, there is an up front cost but one that is an investment and there must be federal grants available to help offset the overall cost.
We hear a lot about possible solutions some of which are quite insightful. But, do we actually know what the issues are that drives these spiraling budgets. Does anyone know what the average student cost is for the proposed budget and for the past 4 years? Total costs divided by student population. Is that something which is published by the school administration? Or readily available. Average total Cranston student population for the fiscal year divided into total costs to run the entire Cranston school system.
ri_guy:
Excellent idea! Maybe our district’s energy consultant (you’ll find Andrea Iannazzi’s explanation of this person on this thread: https://kmareka.com/?p=1680#comments) can look into it.
GCF:
Cranston has had about 11,000 students for several years — it’s at least a good enough estimate to use for purposes of discussion. To answer the second part of your question, this year’s budget was $126.4 million. That’s about $11,500 per student.
For the other numbers, you can find the city budgets online (which include the payment approved for schools). You can also go to the RI Dept. of Education website to see comparisons of “educational costs,” that is, non-administrative costs, among the school districts in RI. Of that $11,500 in Cranston, for example, something like $8,000 (this is just an estimate, I’m not certain of the actual number) goes to teachers, supplies and utilities in the actual classroom. Everything else is administrative salaries, benefits, etc.
So, yes, the information is out there.
ri_guy:
As you know, this idea is working for other communities. PBS did an excellent documentary on this at the beginning of January. Whole Foods does just what you suggest in certain communities and they are trying to make it so the Grid companies work with municipalities and put them on all state/city buildings. There are many European countries that are making money off this concept. E-mail Chris Whilhite at Sierra Club who has introduced Cool Cities concept to RI and Cranston Chris.Whilhite@sierraclub.org
We need innovative ideas such as this – –
Jesse-
If the administrators play such an important role should they not also be included in the per pupil numbers. The number is purposely devalued to create the illusion that the city is not supporting the children.
Numbers can be skewed to report almost anything…
Stop the talk and consolidate, redistrict and cut salaries. In the human services field I know of people taking $15,000 a year pay cuts to keep their jobs. Would that happen here? We are all sacrificing during this dire economic time. The school committee wants to award contracts without determining their economic impact and this is what happens, take some responsibility rather than trying to sue the taxpayers (because that is what in essence they are doing).
Oblomov:
The state DoE breaks those numbers out; I’m just stating how they’re reported. But, to address your point, I think it’s important for school buildings to have principals, more important than having four personnel clerks. Yet in Cranston they’ve proposed “mobile principals” (my term) who would oversee two separate schools and kept the number of upper administration staffers the same. Or, to use this year’s events, they’re cutting some 15 staff positions with the 6th grade move, including assistant principals.
So of the $3,000 (again, it’s just an estimate) we spend per student on admin costs, I’d consider it better spent on principals than office staff.
Looking at it from another angle, if you add up the costs of the superintendent, the assistant superintendent, the finance office and personnel office — including the benefits, supplies, etc. — you’d have a substantial amount of money that could, arguably, be cut with little pain caused.
I also agree that it’s time for the school committee to see reality and actually take responsibility for their actions. Since it’s almost inevitable that they won’t, though, we need more of a fundamental change to the entire system.
I never said anything about taxing the rich. Rich or poor we all pay income tax. The whole idea is to broaden the base for funding education. By defining a formula (per pupil or whatever) and a defined dollar amount or percentage the individual cities and towns can chose to expand on that funding or not. It certainly would take the burden off the most biased of critics of public education – the property taxpayers. Income tax is not the only solution. A defined amount from other “consumer” taxes could be entered into the percentage. The main problem with Caruolo is the question of “what is a basic education?” A formula would help to solve this primary issue.
The savings fron streamlining the local bureaucracy and Department of Ed. alone would result in more dollars for education.
I don’t have all the solutions, but McWalters never gets into the solutions – he just keeps adding to the problem. The funding source for ALL programs mandated should be identified. The passage of any mandate should be subject to this identification. I appreciate the discussion. I enjoy a healthy and serious discussion of the issues, and welcome any constructive criticism or possible solutions to make our City and State a better place to live.
OK, let’s talk about this.
I don’t mean to sound combative, or angry, but I do want to help flesh this out.
When you say “broaden the taxbase” the implication is that there are people who are not paying property tax.
To the best of my knowledge, the only class of individuals who don’t pay property tax that use the schools are renters. But the owner of the building does pay property tax, and, theoretically, the rent covers the property tax paid by the landlord.
Plus, bottom line is that most renters are renting because they can’t afford to buy. People at the low end of the income scale often pay very little income tax because they don’t make much money.
Am I wrong? Who else is there?
So then you talk about a consumer tax. These are horribly regressive. Those on the low end of the scale spend all of their income, which means all of their income is subject to tax. OTOH, people at the top of the scale don’t spend all of their income, so a sizeable chunk of their income is not subject to tax. That is patently unfair.
Or, if you use income tax and not property tax, won’t income tax have to increase to cover what’s lost in property tax? So that is simply shifting the burden. You’re still paying, but it’s just going to a different entity. Net change for the tax payer is probably close to zero.
Again, if I’m missing something, feel free to correct me. I want this all to work, too.
So let’s talk about who’s skating.
There’s an article in the current New Yorker about Steve Schwarzman, CEO of Blackstone Group. He’s got houses in Manhatten, Florida, Jamaica (which he never uses), Saint-Tropez, and Palm Beach. Is raising his tax rate back upt to 39%, where it was in the Clinton years, going to reduce him to penury?
How about another 3-4% on all incomes over $1 million? And treating capital gains and dividends as ordinary income. That will raise some serious $$. Put the tax rates back up to where they were before Bush and the Fed will be able to help the states again. And the tax cut we gave to people over $200,000? Put that back in place and the state can help the municipalities.
The top marginal tax rate under Ike was 91%. It’s now 35%. There is room. Cutting the tax rates has not helped the middle class at all. It has hurt it by shifting the tax burden onto the local property owners. The most efficient and effective way to relieve the burden on property owners is to repeal the Bush tax cuts.
Class warfare? What the hell do you think the wealthy have been waging to all of us for the past 30 years? And, by “wealthy,” I mean annual incomes over $500,000.
Look, I understand you are looking for solutions. So am I. But solutions have to address the problem. Shifting the burden around will not do so. The economy will not crash and burn because the top marginal rates go up, or because divs and cap gains are taxed fully. It didn’t happen before, it won’t happen again.
So I am talking about taxing the wealthy. They’ve been doing very well for the past 30 years. It’s time they contributed in proportion to the amount they’ve gained. They are better–way, way better–off than they were when Bush became president. Are you?
I agree with Klaus that consumer taxes (other than luxury taxes which impact people with lots of disposable income) are not a good idea.
Thanks for commenting, Mr. Lupino! You have valuable experience from your longevity on the school committee and I hope you can bring all that experience to the table as a city councilor and beyond.