Our economic future depends on strong schools, and experts agree that highly qualified teachers are the most critical ingredient. Recruiting and retaining talented educators must be a top priority. The teacher strikes gaining momentum around the country are a wake-up call, and Idaho should take heed.
Taking Oklahoma as an example, we can see many ways in which our state is following the path that caused teachers to reach their breaking point. Both Oklahoma and Idaho rank in the bottom 10 states for teacher pay, according to the National Center for Education Statistics. Since 2009, inflation-adjusted average teacher pay in Oklahoma fell 15.3 percent, while inflation-adjusted average teacher pay in Idaho fell 8.4 percent. According to vox.com, average teacher pay in both states fell more than the national average.
The strikes aren’t just about teacher pay. Images of worn-out textbooks and broken desks have flooded social media as Oklahoma’s educators try to bring attention to broader funding shortfalls.
Oklahoma’s problems result from a series of decisions by state lawmakers that chipped away at revenue. Tax cuts may be attractive, but only until folks have to decide what programs they want to cut. Since education takes up the majority of a state’s general fund, schools end up bearing the brunt of revenue cuts – whether or not that’s what voters intended.
Idahoans already pay less in state and local taxes per person than residents of Oklahoma, according to a 2017 report by the Idaho State Tax Commission. Yet state lawmakers still decided to cut Idaho’s individual and corporate tax rates by nearly half a percentage point this year.
Another major step in Oklahoma’s path came in 2004, when lawmakers enacted a new costly tax break in the form of an income tax deduction for any gain resulting from the sale of a property or stock of a company headquartered in the state.
Most Oklahoma residents of average means did not see extra money in their pockets from the tax break. More than 85 percent of the tax break was claimed by residents who had an annual income of $200,000 or greater. Over the past five years, Oklahoma’s capital gains deduction has reduced state tax revenues by $474 million and generated just $9 million in additional tax revenue, according to report created for the state’s program evaluation commission.
Idaho lawmakers followed in Oklahoma’s footsteps by proposing a capital gains tax deduction this year. Idaho’s bill is expected to come back next session and would cost our state roughly $50 million that could otherwise be invested in schools.
Oklahoma and other states where teachers have taken to the streets did not get to that place overnight. Short-sighted policy choices paved the way. In order to avoid becoming the next Oklahoma, Idaho lawmakers can start taking steps now to keep up recent investments in public education. Rejecting additional tax breaks that adversely affect education funding is a common-sense first step we should consider.
Chris Loucks is a professor and chair of the Department of Economics at Boise State University.