School boards usually lack the power to protect their tax base from corporate giveaways

A tiny grandmother from Toledo named Charlotte Cuno stood on the steps of the U.S. Supreme Court last March, enraged by questions the justices asked her lawyer.

Her lawsuit, Cuno v. DaimlerChrysler, sought to cancel much of a $281 million subsidy package Toledo and Ohio gave the auto company for a new plant. But the justices’ questions made it clear they were likely to rule against her on a technicality: that she was not harmed enough — and therefore lacked “standing” — to be heard in federal court.

“I have three grandchildren in Toledo public schools,” she said. “Their teachers have not had a raise in seven years. Each school only has two computers. How can they tell me I have not been harmed?”

In her grandmotherly rage, Cuno crystallized the corporate hypocrisy on jobs and taxes in America today. One moment, corporate lobbyists bemoan the poor skills of high school graduates and insist they must outsource offshore. The next moment, they defend massive “economic development” subsidies that often mean companies pay no property tax or income tax for a decade or more.

When large corporations dodge their taxes, only two things can happen. Either everyone else’s taxes go up, or the quality of schools and other public services goes down, or some of both. For the last 25 years in America, we’ve had lots of both, and that’s how Cuno’s grandchildren got an impoverished school and working families got higher taxes.

Luckily, a growing coalition of labor, community groups, tax watchdogs and environmentalists is pushing back. They’ve been joined by two of the nation’s largest unions — the 2.8-million-member National Education Association and the 1.3-million-member American Federation of Teachers.

The NEA’s board of directors has made tax reform, including economic development tax breaks, a priority issue for the next two years. AFT’s last convention passed three strongly worded tax reform resolutions. Already in many states, NEA and AFT affiliates have supported economic development reform efforts.

The educators’ decision to join the debate could not be more timely. In just two years the mass retirements of the “baby boom” generation — 76 million Americans — will begin. Already, many industries, including health care, manufacturing, aerospace and utilities, report moderate to severe shortages of skilled labor, and many professions are especially “gray.”

To compete globally — and just to replace the boomers — we must make massive new investments in education and training. Instead we get underfunded schools like those in Toledo.

First priority: Give schools control over their own revenues. Oddly, school boards usually lack the power to protect their tax base from corporate giveaways like Toledo’s DaimlerChrysler package.

A 2003 study commissioned by the NEA and performed by Good Jobs First found that in all but a handful of states, other bodies of government — such as city councils and county boards — grant long-term property tax abatements or property tax diversions called TIFs, while the school board has no say.

It’s a bizarre intergovernmental “free lunch” that begs for more accountability. Can you imagine a school board enacting a proposal that undermines funding for police, fire and sanitation services? So why do we allow that to happen in reverse? Why are our children — our economic future — any less important?

“Whether intended or not, these decisions hurt both schools and businesses in the long run,” said NEA President Reg Weaver when the study was released. “For long-term economic growth, communities should invest in both their children and their businesses by investing in public schools.” As an AFT resolution put it: “Educators have a special role to play to clarify the connections between tax cuts and declining support for public education and the general welfare.”

The list of reasons for cleaning up the corporate tax giveaway game just keeps growing. Add “save our schools” to “no more subsidies for Wal-Mart,” “stop paying for runaway shops’ moving vans,” and “get subsidies out of private, for-profit prisons.”

— Press Associates Inc.