On Election Day, Maine voters will be asked to give a thumbs-up or a thumbs-down to Question 2, which would impose a 3 percent state income tax surcharge on filers with taxable incomes over $200,000.
Proponents project that the surcharge could raise $157 million in year one – to be channeled, under law, to the state’s public elementary and secondary education funding mechanism, with certain strings attached to ensure that the money doesn’t go to administrators.
Why should Maine citizens who believe that investing in education is the most important public policy challenge facing our state today vote “no” on Question 2? Let me count the ways.
• First, public initiatives are a terrible way to govern. They represent a de facto vote of no confidence in our system of government. They take decisions about the public good that we elect representatives to decide for us through deliberation, public hearings, discussions, careful thinking and voting procedures and transfer them to unelected interest groups with the most to gain and the largest marketing budgets.
• Second, this particular initiative, much like the “law” it is intended to replace – a goal that says the state should contribute 55 percent of the total cost of pre-K-12 public education – is almost certainly destined to become an equally futile feel-good gesture that will be ignored by future Legislatures in the heat of their own budgetary battles. Just imagine how secure this “lockbox” of “rich people’s money” will be when some future governor asks, “Well, shall we close the hospitals or the schools?”
• Third, this initiative totally ignores Maine’s long-standing tradition of local control. Even if this new tax were to be imposed and money collected and allocated to the state’s public education subsidy program, all the state can do is pass the money on to local school districts. What those bodies actually do with the money is entirely up to them.
The tradition of local control would mean that any additional money would simply be allocated as it is today – through a local budgetary process involving voters and a local bargaining process involving teachers and staff.
• Fourth, if passed, this law would have the economically catastrophic effect of raising Maine’s marginal income tax rate to the second highest in the nation.
Maine is a state in which the number of deaths each year now exceeds the number of births. It is a state in which public pre-K-to-12 school enrollment has been declining for years. It is a state in which nine of 10 new jobs projected to open over the next decade are to replace workers leaving the labor market rather than altogether new jobs.
It is a state that desperately needs to attract workers with high skills and high aspirations who expect high wages. These are workers whose children will help stem the enrollment decline that has turned even fixed educational spending into the inevitable reality of ever-rising cost-per-student ratios.
Without these workers, major Maine employers such as Wex, Unum, L.L. Bean and others will be forced to look to expand outside Maine. In a state desperate to attract new workers and their families, raising the top marginal income tax rate is an act of colossal, self-defeating stupidity.
• Fifth, and most importantly, Question 2 would pour more money into the existing, poorly understood school funding formula – one based on equality of property tax value per student while ignoring all other demands for community services – thus exacerbating the property tax inequities embodied in that formula.
In trying to put more money into education, this initiative would increase property tax disparities among communities and regions and further undermine and delay efforts to reform our out-of-whack property tax system.
Indeed, if Question 2 did somehow get more money into the school funding formula, the first choice available to voters would occur in the communities that voluntarily spend more than the minimum local commitment required for receipt of any state aid: e.g., “Should we reduce our property taxes by allowing state funds to replace the ‘local extra’ money we have been contributing?”
To the extent that this outcome should prove true, Question 2 would have the ironic effect of transferring money from rich income tax payers to rich property tax payers, leaving education untouched while inflicting serious damage on the causes of both economic development and property tax reform.
For all of these reasons, voters should reject the “clear, simple and wrong” solution embodied in Question 2. Instead, they should keep the goal: Raising an additional $157 million is as good a target as any.
But rather than continuing a “more of the same” policy, it’s time to launch a serious effort to identify an educational investment strategy, a series of new initiatives to connect schools to the knowledge, skills and attitudes that all Maine children will need to build and live successful lives in an increasingly different and vastly more complicated world than the one that created our current education funding system.
Charles Lawton is chief economist for Planning Decisions, Inc. He can be contacted at:
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