Via Diane Ravitch, this post by Jeff Bryant lays out how the GOP tax bill will cripple public education, which is the crown jewel of Massachusetts’ quality of life.
Both the Senate and House bills propose an excise tax on private college endowments with assets of more than $100,000 per student. Endowment funds are used to help pay for academic programs, campus facilities, and student services, private college leaders and advocates say.
The biggest threats to local schools in both plans are their proposals to end federal deductions for state and local taxes (SALT) that households take when they itemize. The House plan limits the pain with a $10,000 ceiling,
but the Senate plan does away with the deduction altogether.[This is apparently back in the Senate bill.]
Any reduction to the SALT federal subsidy will imperil the largest sources of school funding to education by eliminating the federal tax benefit to schools, discouraging new state and local tax initiatives to support schools, and pressuring state and local officials to cut local taxes to appease tax payers who can no longer deduct those taxes from their federal returns.
Another feature of the House bill that the Senate also proposes would increase how much schools pay for long-term debt by eliminating a tax exemption school districts get when they refinance their debts at lower interest rates using certain types of bonds.
According to Education Week, in the most recent year reported, districts carried $409 billion in long-term debt – a rate of $8,465 per student – and paid $17 billion in interest on those loans. Taking away any ability to write off some of that interest as a tax exemption would decrease money districts have to pay for teachers and student learning opportunities.
This is the federal government coming in and crushing us, on behalf of billionaires and no one else. The US Congress is “going Galt.”