If a new contract is not agreed upon between the St. Paul, Minnesota teachers union and the St. Paul school district before this Tuesday, the union will go on strike. Broadly, the union is calling for increases in support staff positions, the expansion of new approaches to discipline, and reductions in class sizes. For the union, resolution of each issue comes down to one thing – school district funding.
The union believes that the main cause for the dearth of school district funding is that corporations headquartered in Minnesota have employed various forms of state tax evasion, resulting in lowered overall and per pupil school district funding. Coincidentally, Minneapolis hosted last week’s Super Bowl. To emphasize its point, capitalize on serendipitous timing, and to garner public support, the union has chosen to highlight the various forms of alleged evasion that Minnesota corporations on the “Super Bowl Host Committee” – a 20 member group comprised of some of Minnesota’s largest companies – have practiced. To this end, in December, the union released a report titled: “Sacked: How Corporations on the Super Bowl Host Committee Left Minnesota’s Public Schools Underfunded and Under Attack” in which the union outlines its allegations against the host committee and draws comparisons between the amount of money the committee contributes to state education (both in the form of taxes and donations/aid) and the amounts those same companies have given to sponsor the Super Bowl.
State funding for Minnesota’s schools is provided in three ways: state tax revenue, state aid, and levies (essentially property taxes that collect a certain amount of money over a defined number of years). From 2003 through 2012, state revenue and state aid on a per pupil basis fell by $1,000 and $2,000, respectively. Adding to this is the fact that Minnesota Department of Education data shows a 36% growth in statewide charter school enrollment since 2013. Because Minnesota school districts are funded based on the number of students enrolled, the more students enroll at charter schools, the less funding state public schools receive.
Since then, however, the funding situation has improved somewhat. Per pupil state aid to school districts across Minnesota increased from 2012 to 2017, mostly as a result of tax increases enacted in 2013. Furthermore, during this time period, the state was also able to increase school levies. Despite these increases, overall Minnesota school funding on a per pupil basis has declined for years and is projected to do so through 2019. According to The North Star Policy institute, a state non-partisan policy analysis group, state aid to public schools is nearly $1 billion a year less than it was in 2003. The St. Paul and Minneapolis school districts – the state’s largest – account for roughly $400 million of this reduction. Because there is a proposed average property tax increase of 23.6% – an increase proposed to shift the way city road maintenance is funded – already on the 2018 St. Paul ballot, passage of additional property taxes to further fund the district in 2018 and 2019 is unlikely.
The St. Paul teachers union argues that a good proportion of this budget shortfall could be made up if Minnesota corporations paid what the union calls a “fair share” of state taxes, thereby alleviating many of the larger funding dilemmas that the district is facing. According to the Minnesota Department of Revenue, in 1980, corporate tax as a percentage of total state and local taxes was 8.4%. As of 2016, that percentage has been cut close to half at 4.6%, mostly due to cuts in state taxes. By the union’s reasoning, those cuts came from aggressive lobbying as well as tax evasion – primarily by use of offshore accounts – and the use of tax loopholes.
Through employment of tax evasion, aggressive lobbying, and tax loopholes, the union believes that the sponsors of the host committee have avoided paying a total of $300 million in state income taxes in the last five years. According to the union, the dearth of tax payments and donations is not due to an overall lack of money on the corporation’s part: each of the 25 companies paid $1.5 million for spots on the host committee and pays its CEO’s multimillion dollar salaries.
The Minnesota StarTribune reports that the decline in pupil enrollments and concurrent increase in special-needs students – those who have learning disabilities, lack the requisite English skills, or require some other sort of additional support – has already caused several years of budget cuts and funding deficits. Reversal of this years-long trend will require lasting change.
Unfortunately for the teachers union, the Super Bowl and its ancillary events only lasted about a week. The crux of the union’s argument is valid, but by using an ephemeral event as the basis of comparison for its central argument, the union has wed itself to an analogy whose timeliness does not align with the duration of the union’s argument nor with the long-term nature of the proposed remedies. Remedies that the union proposes such as “negotiating with Minnesota companies to invest in schools” and having the “state of Minnesota increase funding that goes to public schools” take years to be agreed upon and voted in.
Both the district and the union ultimately have the same goal: to provide high-quality educations to the K-12 students of St. Paul. The numbers provided by the state education department and the department of revenue show a years-long trend of declining funding for the district. To garner more public support and to more effectively frame its argument, the union would be better served by tying the decades-long dearth of school funding to the problems that the lack of funding has caused the district and its students. Re-strategizing in this way would orient both the public and the school district around a universal cause and the reason why the union does what it does in the first place: educating St. Paul’s students.