Taxpayer outrage arguments are in style these days (as if they ever really go out of style). Two particular taxpayer outrage arguments that have existed for some time seem to be making a bit of resurgence of late. Or, at least I think I’ve been seeing these arguments a bit more lately in the blogosphere and on twitter. First, since now is the era of crapping on public school teachers and arguing for increased accountability specifically on teachers for improving student outcomes, there’s the “I pay your salary so you should cower to my every demand” argument (I’ve heard only a few warped individuals take this argument this far, but sadly I have!). Second, there’s the persistent I pay for those schools and don’t even use them argument, or the variant on that argument that I pay twice for schools because I send my kids to private schools.
I (the taxpayer) pay your (the teacher) salary
This is a strange, obnoxious and easily diminished argument. Not that it’s not important to be sensitive to the demands of school constituents, but rather, that it’s more important to be sensitive to the demands of the broader public regarding their preferences for public schools more so than it is to be hypersensitive to any one loud-mouthed individual who would invoke this obnoxious argument. I explain more about that broader public under the next topic below.
For this one, a simple hypothetical is in order. Let’s assume the individual invoking this argument owns a residential property valued at $350,000 in a school district serving 5,000 students, where that district spends about $15,000 per pupil per year and where the effective property tax for schools is about 1.5%. So, the school property tax bill on this house is 1.5% x 350k = $5,250. Meanwhile the school total budget is 5k x 15k = 75 million. So, this one household is contributing far less than 1% (about .007%) of the district budget (which is then about $4.20 of a $60,000 teacher salary). And other households and owners of other property types within the district, as well as the broader base of taxpayers contributing to the state aid pot and any federal revenue sources all play a part in paying the salaries of teachers in this school.
This is by no means to suggest that any one person’s “say” in a district should be proportionate to one’s tax bill as a share of the budget. But rather, that one voice is one voice from the broader mix of voices that contribute to the financing of and shaping of public goods and services like schools.
[implications of disproportionate philanthropic giving from within or outside a district raise other serious questions to be addressed another day]
I (the taxpayer) pay for those public schools and don’t even use them!
Thus is the nature of public versus private goods. In the simplest model, taxpayers in a municipality contribute property taxes for a mix of public services, including local parks, fire protection, police and schools. I probably use our public park much less than others, and I rarely get a chance to attend the summer concert series. Should I get a refund for my contributed share, so that I can put that money towards buying Broadway tickets or a family vacation instead? Hey, I’m paying twice for entertainment and don’t even attend those free concerts in the park. And, I never sat on one of those benches. Can I please get a refund for my share of the cost of installing those benches and maintaining them, so I can invest in my own benches in my own back yard? And about those fancy fire trucks. We’ve had a few house fires in my town in my time living there. Why am I paying for the fire trucks to go to someone else’s house? Let’s say I live in a town that has public tennis courts, but I decide I want to join a private tennis club. Should I get a refund for the public courts I don’t use? In the amount of property tax I contributed? How about roads? Should I have to pay for roads I don’t ever intend to drive on?
Of late, I’ve been seeing the private school parent argument that “I pay twice for schools, since I pay my taxes for the public schools and pay private tuition.” This one is frequently invoked in conversations involving voucher and tuition tax credit programs. It should be noted that many residents of any given community pay taxes for schools – and all of the other stuff above – but may or may not use any of all of it. Families without school aged children also pay for schools. Further, since schools are financed by a mix of local, state and federal revenues, lots of different people, within and outside of any given community, are contributing to the financing of that community’s schools (to the extent that the schools receive intergovernmental revenue). Thus is the nature of publicly financed services.
But there’s even more to it than that. The above statements make the uninformed assumption that one receives absolutely no benefit from the presence and quality of these public goods and services simply because one does not make direct use of them. In reality (as well as in economic theory – which doesn’t always match reality), there’s this thing called capitalization! There is value to living in a community with such amenities as nice parks, good schools and police and fire protection. That value exists whether you actually use those things or not. That value is reflected in property values. As the quality and mix of services changes, those changes may be reflected in property values. Communities that have relatively better schools over time (even as reflected in crude grading systems in state accountability systems) see increases to property values. Residential property owners, not just those with kids in the public schools, see this benefit.
In short, the “I pay twice”, or “I pay for a service or amenity I don’t use” argument presents a dreadful oversimplification and misunderstanding of very basic principles of the provision of public goods and services.
Instead, if taxpayers really want something to fuss about, read my previous post!