It’s common to hear people say that the quality of students’ education shouldn’t depend on their ZIP code. But the Republican House and Senate tax bills would make ZIP codes matter more than ever. They would create an incentive to hoard opportunity by raising funds that remain close to home.
Why does our education system have so much at stake? A vast majority of funding for public schools, about 90 percent, comes from the money raised by state and local governments. Currently, taxpayers can deduct their state and local taxes, and that deduction makes them more likely to support higher spending on programs funded by those taxes, including public schools.
With its bills, Congress would significantly cut the deduction of state and local taxes, slicing into that incentive. This is why education advocates are fighting to keep the deductions, and why those who believe state and local governments are too big want to get rid of them.
After a consideration of eliminating all state and local deductions, current proposals have been marketed as a political compromise: Both bills take away taxpayers’ ability to deduct income taxes but allow a property tax deduction of up to $10,000 per year. The problem is that states depend more heavily on income taxes, and local governments on property taxes, so the compromise favors raising funds at the local level. Structuring it this way will only add to inequality in the school system.
