Schools pay the price in property-tax shell game

PETER HUTCHINSON { I am reposting this from the Pioneer Press site }


Why? That was his only question. Why? He had just gotten the news that property taxes might be going up more than 22 percent to pay for schools in St. Paul. Why, in the land of no new taxes could such a thing be happening? He supported schools he said, but a double-digit increase. Why?

It's property tax hunting season again in Minnesota. Schools, cities and counties are setting their rates. When citizens hear about them, they start hunting for someone to blame. With these whopping increases (in some cases the largest increases ever), the hunt will really be on. This will be the year for blaming schools because their increases will be the biggest. Taxpayers who do so will have their sights set at the wrong target.

We have ended up in this mess because of the irresponsible actions of legislative leaders in 2001 compounded every year since by Gov. Tim Pawlenty and his legislative co-conspirators.

This sordid tale starts in 2001 when Gov. Jesse Ventura proposed a dramatic restructuring of our tax system combined with a change in how we pay for schools. The plan had three parts.
The state would take over more of the cost of schools. Property taxes would be reduced as a result. The sales tax would be broadened to make up the difference.

Ventura said it was a package — all three parts were needed to make it work. Republicans and Democrats disagreed. They did the easy part — changed school funding and lowered property taxes. But they dodged the harder proposal to expand the sales tax. That meant two things. First, the state made a promise to pay for schools without the money to do so. Second, it meant taking more of our school funding off the relatively stable property tax and making it dependent on the more volatile income tax. (Sales tax expansion would have been a safer bet.)

This all looked like a great deal when the economy was booming and the income tax was creating surpluses. It has turned out to be an irresponsible gamble with our schools and our kids' education.

When the recession hit, our schools paid the price. Class sizes soared, fees were imposed and programs were cut as the state in the name of "no new taxes" failed to deliver on its promise. The schools have struggled ever since.

This year, it got so bad the governor and Legislature finally had to respond. After practicing partisan gridlock, failing to get their work done on time, shutting the state down, and calling a special session, they passed the much-heralded "major increase" in school funding. They told us the size of the increase was "unprecedented." It sure was — an unprecedented attempt by Democrats and Republicans to take credit for spending while passing the buck to local school boards to do the taxing. That's because what they didn't tell us was that we only got the whole unprecedented increase if we coughed up unprecedented increases in property taxes.

So now we are more or less back where we started five years ago — except our schools have had to pay the price for this shell game. Taking aim at school boards won't get taxpayers the prey they seek. They should be looking for incumbent state politicians.

Hutchinson, founder of the Public Strategies Group, has been Minnesota's commissioner of finance and superintendent of schools in Minneapolis. He has indicated that he intends to be a candidate for governor next year.