State-Level Corruption And Theft
The Market Ticker - Commentary on The Capital Markets
2017-09-10 13:00 by Karl Denninger
in Education , 189 references Ignore this thread
State-Level Corruption And Theft
[Comments enabled]  

Ever wonder about property taxes, how they're set, and what they cover?

Specifically, the largest component of most property-tax assessments are for schools.

Virtually every State Constitution calls forth a State duty to provide a free public education.

Ok.  Fair enough.  I can argue against that quite-easily but so long as it's present in State Constitutions the law has to be followed in that regard.

But on whom should the funding costs fall?

Answer: Those closest to the output of the program, who thus have every incentive to do something about it if it sucks.

That's not you, as a common citizen.  If the schools suck in your local area you don't, for the most part, get the direct costs.  If you're a parent at age 18 your offspring are no longer your responsibility.  You can throw them out of the house -- literally.

Now it's certainly true that the indirect costs wind up on the citizens -- mostly through crime and social dependence.

The direct costs fall on the local employers.

How do you think the local electricians would response to there being no shop class? Or the local welding and machine shop?  The local construction companies would like people who can work with wood and metal too, right?  How would the computer software shop behave if schools failed to teach reasonably current computer programming languages?  Would any of the local businesses put up with High School graduates that can't write a business letter, make change for a $20 in their head or figure out sales tax on a piece of paper when the power goes out?

Nope.  They'd make a hell of a lot of noise and, in the extreme case, they could move their company and entirely de-fund the system.  That's a very effective and legal threat, which would serve to force the public education system to produce a quality product: Educated young adults.

Let me point out that when I ran MCSNet not only could not 1 applicant in 10 write said business letter while using proper English, make change for a $20 and compute the sales tax for a given amount on a piece of paper using nothing other than a pencil a good percentage of said applicants had been accepted to colleges in the area, including the University of Chicago, because they were current college students at the time!  How the hell do you both get a diploma and get accepted into college when you can't make change for a $20 in your head?

So why do we have a public school system that isn't funded by a tax on business in the state?

They are the direct beneficiaries of a good workforce and thus have the greatest incentives to make damn sure the money is spent well on people they are then able to employ!

There are many more reasons to do things this way, rather than through ad-valorem property tax levies.  One of the biggest is that it doesn't cost more to educate a rich person's kid than a poor person's.  In fact it's often the other way around; the poor kid is more-likely to be born into a broken and dysfunctional home, to have parents who are raging drug addicts or worse.  Yet today we demand that more-wealthy people subsidize these other children even though some of the parent's behavior is voluntary, often to the tune of 10x or more what the poorer family pays!  The poor family thus has no financial incentive to cut that crap out; they don't get the bill for their behavior in the form of higher school expenses, the rich bastard across town does!

The result is crap schools, especially in the cities.  It also results in schools that try to run the garbage that every kid needs to go college.  We then wonder why all the electrical and plumbing shops can't find good people to train and employ, and why all the framing and roofing seems to be done by illegal Mexican invaders.

The usual argument on the other side is that even the wealthy childless individual or couple benefits from an educated workforce.  That's true.  But that benefit is "soft" and impossible for the wealthy person to objectively measure where for the businessperson it's simple: EITHER THERE ARE QUALIFIED WORKERS IN THE LOCAL AREA TO HIRE OR THERE ARE NOT.

It's time to scrap the premise of funding schools with ad-valorem taxes.  Yes, schools have to be paid for, and yes, in a purely Libertarian world parents would pay for education on their own if they had kids, and only if they had kids.  But we don't live in that world and given State Constitutional guarantees of a free public education for all children we are left with the question of who is going to get taxed to pay for it, not whether it will happen.

There's nothing unconstitutional about a state-wide (rather than county-specific) levy for such a purpose, assessed on all employing businesses in the state.  Anyone with one or more employees (that is, other than a sole proprietor who has no employees on the payroll, whether part or full-time) should be getting the bill, from farmers employing people to pick oranges to the warehouse that pays people to move goods to the coffee shop on the corner, the lawyer's office downtown or the corporation that writes and sells software or provides Internet service.

It's in their best interest to make damn sure they have qualified workers available to them, and thus they're the best people to assess the quality of education and demand improvement because they will be like rabid dogs sicced on the County Education Boards to make damn sure they get their money's worth.

Go to responses (registration required to post)
 
Main Navigation
MUST-READ Selection:
A One-Sentence Bill To Force The Health-Care Issue

Full-Text Search & Archives
Archive Access
Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.

NO MATERIAL HERE CONSTITUTES "INVESTMENT ADVICE" NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY FINANCIAL INSTRUMENT, INCLUDING BUT NOT LIMITED TO STOCKS, OPTIONS, BONDS OR FUTURES.

The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

 
Comments.......
User: Not logged on
Login Register Top Blog Top Blog Topics FAQ
User Info State-Level Corruption And Theft in forum [Market-Ticker]
Goforbroke
Posts: 7036
Incept: 2007-11-30
A True American Patriot!
Drain the Swamp!
Report This As A Bad Post Add To Your Ignored User List
Ohio is one of the few states which permits income taxes for schools. Out of the 608 school districts, 190 have income taxes in addition to property taxes, and of those, 49 are earned income tax.

Schools LOVE earned income tax levies, because seniors collecting social security, retirees with income derived from pensions, investments, rentals vote on the levy but they don't pay a cent. So school districts suck up to the seniors/retirees with spaghetti dinners, etc. That's what makes it easier to pass than a regular income (or property) tax, and that's why districts go for it.

Our district has an earned income tax, and I have long been strongly adverse to it. Why should people be voting other peoples' money? It's just not right. There's a renewal of a .75% earned income tax on the ballot in November, and they will get three bites at the apple because it isn't up until next November. If it doesn't pass, the district loses roughly 10% of its revenue stream.

----------
Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our Light, and not our Darkness, that most frightens us. -- Marianne Williamson

Bodhi
Posts: 131
Incept: 2008-02-23

Georgia
Report This As A Bad Post Add To Your Ignored User List
In my county (Cherokee County, GA) I recently found out how much of my property tax goes to schools. I went to the tax office early this year to file for the senior exemption. The clerk told me I should see my property tax drop about 70%. I was truly stunned that the percentage was that high.
Wa9jml
Posts: 27
Incept: 2017-04-29

DeKalb, Illinois
Report This As A Bad Post Add To Your Ignored User List
The primary beneficiaries of the public school system are the parents, who get heavily subsidized daycare for their offspring. They also get sports events to attend. Some years ago, the Rockford high school teachers were threatening to strike. The local paper, the Register Star, had an unscientific poll for public sentiment. Most of the parents would not be upset, since they would not have to stay home from work to baby sit their own kids, and would only object if the strike affected sports events or the Prom.

Educations are highly portable, and it does not make sense to burden local homeowners and businesses to pay for it since most people leave their home towns to get higher education, and then to grow and prosper somewhere else. I have worked in a number of smaller rural communities, and very few of the high school graduates ever move back. So, since the parents get most of the benefits, the fairest way to fund public education would be to charge a fair amount of tuition to them. Parents who want a much better education for their kids, pay tuition to private or parochial schools in addition to onerous property taxes. Parents who want an even better education for their youngsters have to home school them, and pay for the materials, in addition to onerous property taxes.

In my local district, the teachers and administration desperately wanted a suburban class high school, and lied enough to hoodwink enough voters to pass a referendum. Since then, the plummeting enrollment at the local university has forced landlords to cater to the Section 8 market, largely urban underclass in composition. This is reflected in the enrollment in the local public schools, which are increasingly looking rather ghettoish. Last we heard, there were about 60 different street gangs calling Our Fair City home.

The referendum effort claimed that the new school was needed because of greatly increased building permit applications at city hall. This has stopped, and people with high end houses here in town are finding it very difficult to sell due to the declining schools. Most of the growth in the area are in those municipalities that still can claim decent school systems.

Now the taxes reflecting the bond issue to build the new high school are starting to hit our property tax bills. The state of Illinois gave them about 30 million dollars in a grant, so they could delay the impact. They burned through this money, instead of applying it to pay off some of the bonds, and did so funding sports facilities, and faculty and administrative salaries. We have had trouble even finding out how much money they spent to build it. Despite their demographic growth projections, the district has had to close some grade schools. Since high and more moderate income people are fleeing to nearby towns, and out of state, eventually the school board will find that their tax revenues are not keeping pace with spending. The bonds have priority over other spending, and I look forward to seeing the teachers and administrators take reductions in pay so that the bond payments can be met. I would especially like to be a safe distance away so I can really gloat!
Tickerguy
Posts: 149711
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
In general I agree that tuition is the right way to do it (parents pay) but the problem is that you have a Constitutional Requirement at each State level. So to do that you'd need to amend the State Constitution.

If you're NOT going to (or aren't able to) do that, then you must look for answers within what is permissible.

----------
Winding it down.
Emg
Posts: 101
Incept: 2012-11-20

Canada
Report This As A Bad Post Add To Your Ignored User List
"The primary beneficiaries of the public school system are the parents, who get heavily subsidized daycare for their offspring."

I'd say the primary beneficiaries are the public school employees (particularly those who've already retired on a fat pension), and the politicians who get masses of dumbed-down voters. Subsidized daycare is a small benefit in comparison.

Fortunately, education is ripe for automation over the next decade or two. Assuming the public school unions don't prevent it.
Thorvold
Posts: 198
Incept: 2013-09-12

NY
Report This As A Bad Post Add To Your Ignored User List
We here in NY are also obligated to educate children who are illegally here. Per the 5/8/2014 NY Times:

"Attorney General Eric H. Holder Jr. and Education Secretary Arne Duncan issued a strong warning on Thursday to public school districts nationwide not to deny enrollment to immigrant students in the country illegally.

The Justice and Education Departments jointly issued an update of guidelines they published three years ago, reminding districts that they may be in violation of federal law if they turn students away because the children or their parents do not have immigration papers."

LI is the land of 80-100k teacher pensions and school superintendents with 250-500k salaries. The word "theft" is way too mild for what goes on around here.
Thebirddog
Posts: 95
Incept: 2015-08-06


Banned
Report This As A Bad Post Add To Your Ignored User List
My friends and I have a long running debate as to when the Baby Boomer's will start complaining about property tax en masse. This article may be the tip of the spear.

KD wrote..
The result is crap schools, especially in the cities.

The condition of public schools are a reflection of the local society, not the other way around; when the school's are broken it's generally because the local society is broken while affluent and prosperous localities enjoy a thriving public education system. The culture and economy in many U.S. cities is on par with that of a 3rd world country.

KD wrote..
It also results in schools that try to run the garbage that every kid needs to go college.

This is a myth that's been swirling for years. High schools don't promote that every kid needs to go to college. However, it's the college's themselves that promote every kid needs to go to college and they do this via marketing dreams to dreamers and providing the financing to make it happen. People choose college on their own (albeit with some societal suggestion). Families believe (often naively) that a college education will make their children better off. Then you have the degree requirement by many industries and businesses. Young people pursue a college degree because they aspire a job that is NOT electrical and plumbing; they think that a college education will lead to something better. Many are wrong.

KD wrote..
We then wonder why all the electrical and plumbing shops can't find good people to train and employ, and why all the framing and roofing seems to be done by illegal Mexican invaders.

Electrical and plumbing shops can't find "good people" to train and employ because the "good people" pursue other professions. The trade shops often, but not always, get what's remaining; the leftovers are sometimes byproducts of degenerative living (tattoos, piercings, drugs, alcohol, etc.), those who were not prepared to enter the working world, or those who dreamed to "make it big" and focused their energy on sports, music, or some other speculative activity and lost. The "good people" that choose a trade will excel at their craft, open their own shop, and eventually become the winners.

KD wrote..
The usual argument on the other side is that even the wealthy childless individual or couple benefits from an educated workforce. That's true. But that benefit is "soft" and impossible for the wealthy person to objectively measure where for the businessperson it's simple: EITHER THERE ARE QUALIFIED WORKERS IN THE LOCAL AREA TO HIRE OR THERE ARE NOT.

Each locality enjoys a certain standard of living. People choose to live in a high tax area or a low tax area because they want the benefits (or lack thereof) from said locality. The urbanization trend has affected perception a bit and messes with the calculations, but at the end of the day people generally vote with their wallets.
Tickerguy
Posts: 149711
Incept: 2007-06-26
A True American Patriot!
Report This As A Bad Post Add To Your Ignored User List
Quote:
The condition of public schools are a reflection of the local society, not the other way around; when the school's are broken it's generally because the local society is broken while affluent and prosperous localities enjoy a thriving public education system. The culture and economy in many U.S. cities is on par with that of a 3rd world country.

Horse****.
Quote:
This is a myth that's been swirling for years. High schools don't promote that every kid needs to go to college.

Double horse****. Seen it with my own eyes and heard it with my own ears.

Bye-bye; calling your host a liar is something you only get to do once.


----------
Winding it down.

Mangymutt
Posts: 434
Incept: 2015-05-03

Vancouver WA
Report This As A Bad Post Add To Your Ignored User List
There are so many things wrong with our school system it is difficult to focus on just one thing.

First many/most 1-9th grade schools are mandated by law, parents may be forced to send their children to state institutions, but they can not be forced to provide (food, supplies, proper clothing.....) for their children while there.

Who picks up that tab?

Parents that do give a damn can not easily access their children while they are institutionalized and often times they are prohibited from participating in school functions. Classroom discussions are not made by the teacher, the school board gets very little say in what actually goes on in the classroom, which leaves much of the school curriculum mandated by the state and if the state receives money from the federal goberment, the school has to adhere to those mandates.

Who is really in charge of the child's education?

Teachers who have been known to prey on children are never fired, teachers who abuse the system are never fired.

Who is watching out for the children?

School bonds are never paid back and are increased every bond cycle, if the initial bond fails, the schools conduct any number of special elections until the bond is approved. Does that mean if a girl initially tells me NO!!! I can keep trying until I get what I want?

Who is looking out for the tax payers?

Public schools give kids homework assignments that are purposefully impossible to complete and then tell the kids and parents that they will pass the kid anyway.

How is a child supposed to have any self esteem?

State institutions are filled with corruption and theft, but sadly the worst theft is to the children's ability to reason, think critically and self esteem.

But hey at least the children of illegals are on the same playing field as American children....
Mangymutt
Posts: 434
Incept: 2015-05-03

Vancouver WA
Report This As A Bad Post Add To Your Ignored User List
Birddog - Sorry to see you go.

Although I am curious to know where you get your point of view....I was just kidding about being sorry to see you go....


Do you pull your knowledge from life's experience? Are you a teacher, a parent?

When you say "The condition of public schools are a reflection of the local society, not the other way around;" do you really believe that?

Schools have been, being centralized since I was a child. Have you seen the home work they give kids? There is no way most of the kids can or will do it without a proper role model (Usually in the form of a parent) and often times the role model is left befuddled with what to do with it.

Yet the child and role model is/are told they will be passed along to the next level anyway.

You state : "The trade shops often, but not always, get what's remaining; the leftovers are sometimes byproducts of degenerative living (tattoos, piercings, drugs, alcohol, etc.),"

WTF!!!!!!
Honestly it looks like I am reading a middle school homework assignment, where to start, what does all that mean and what is the main point?

As far as public leaning institutions go, they do try and push college and not just college, they are pushing college through the usage of student loans.

Do you really believe what you just wrote. If so you must be a product of public education LOL!!!
Nevertoolate
Posts: 1340
Incept: 2007-08-26
A True American Patriot!
San Antonio de Bexar de runover with illegals, Texas
Report This As A Bad Post Add To Your Ignored User List
Texas is a mess. 254 counties and over 1,000 school districts. Our forefathers (prior to property taxes) set aside when each county was formed so many sections of school land whose farm income was used to pay for grades 1-12. It was sharecropped 2/3 to 1/3. Usually with whatever was being grown in the area. Some counties (with sparse populations) had only a single school house with one teacher and all grades. Smart kids moved into higher grades based upon their ability.

Somehow that evolved into the mess we have today. School taxes are 2/3 of your total bill and are about $2.00 per hundred dollars of valuation and they don't teach cursive handwriting either. OBTW they sold off the school land many years ago. If the schools were smart enough to have kept the minerals (Wall school district just east of San Angelo, Texas )has it's own oil wells and no debt. But the poor school districts sued the rich ones and (the Robin Hood tax redistribution bill) was created.

My solution is that teacher retirement should be based upon a very small percentage of the wages each child you ever had in your classes earns. If they make a lot your get more. If they wind up on public assistance then that same percentage is deducted. I am not saying the student should pay for the retirement only how the amount is calculated. Problem solved and the kids are educated.

----------

Democracy is a conversation between 2 wolves & a sheep discussing what's for dinner. A Constitutional Republic is found when the sheep pulls out a gun & makes clear that his 2nd Amendment Right will be exercised should the wolves attempt to hold such a "vote."-KD 9-29-15
Dennisglover
Posts: 786
Incept: 2012-12-05

Huntsville, AL
Report This As A Bad Post Add To Your Ignored User List
Part of this conversation has been about the question, "Who will supply the 'skilled trades' talent for the next few decades?"

The aftermath(s) from Harvey and Irma might provide some insight toward answering that question, for it is transparently obvious that there is an awful lot of money to be made, hopefully honestly so, in Texas, Louisiana, Florida, Georgia, possibly South Carolina, Alabama, Tennessee, and...

If I could know the speed and quality of the upcoming repairs/recovery I might have an idea of just how much skilled trades talent we have already lost, and how much is required to restore that balance, but I'll probably never have a decent understanding of the dynamics of all of that.

You know, I had a decent education in the Navy's Class "A" Electrician's Mate service school, and a couple of Class "C" schools, and proved the usefulness of that education over a period of two and a half years. I was released from active duty in December, 1974, and had already decided to become a public school music teacher. There was some success in that, for four years. Then I decided to get an MS in computer science, reasoning that it was unreasonable to depend on a bunch of teenagers for my job and its security.

Little did I know that 35 years later most of the IT and CS "professionals" I have known have had little more emotional maturity and stability than "a bunch of teenagers"!

Had I undertaken an apprenticeship program in the civilian electrical trades (VERY different from Naval electrical practice) in 1975, I might never have had to stay awake for 40-44 hours finishing a proposal, listened to "business ethics counselors", held doors open for SESs and O9s and above, stood ground test watches in strange places during the initial buildup of the Missile Defense Agency, and a whole lot of other crap.

Yep, I might have fried myself by getting crossways with a 450VAC line at some point, sure enough. But I will guarantee I would have never fallen asleep thinking about how to solve a coding problem, or how to meet some RFP specification, or a whole lot of other crap.

Oh, well. It is what it is.

----------
TANSTAAFL
Ckaminski
Posts: 4198
Incept: 2011-04-08

Mass-Hole!
Report This As A Bad Post Add To Your Ignored User List
Quote:
If you're NOT going to (or aren't able to) do that, then you must look for answers within what is permissible.


OpenCourseWare K-12.

Ckaminski
Posts: 4198
Incept: 2011-04-08

Mass-Hole!
Report This As A Bad Post Add To Your Ignored User List
Quote:
This is a myth that's been swirling for years. High schools don't promote that every kid needs to go to college


This is bull****. My recent grad was HOUNDED since 9th grade on going to college, and prepping for college, and what college she wanted to go to and how long, and what she wanted to study.

Took a relatively carefree kid and made them an anxious nutcase when it comes school.

Vernonb
Posts: 1879
Incept: 2009-06-03

East of Sheol
Report This As A Bad Post Add To Your Ignored User List
Reminds me of the old adage those that can do - will do. Those that can not do - teach.

The best teachers IMO come from the world of experience. If local business were to pick up that tab I'd like see a hell of a lot of established "academia" flushed. But this will be a battle to the state and federal levels. This corrupted education does not stop at who is paying the bill.

You can bet a real business person would also concentrate on systems that matter in teaching - not high tech boondoggles designed for financial shock and awe that deliver ever more failing results at taxpayer expenses.

No tool is going to better educate students if the primary source of that information delivery - the teacher- is the biggest defective component.

These school districts are so isolated from accountability they feel they answer to no one from which they steal.


----------
"Mass intelligence does not mean intelligent masses."
Mangymutt
Posts: 434
Incept: 2015-05-03

Vancouver WA
Report This As A Bad Post Add To Your Ignored User List
Ckaminski - "Took a relatively carefree kid and made them an anxious nutcase when it comes school."

As the one who raise her, you above anyone should know her strengths, weakness, likes, dislikes. What she is truly capable of and if she is ready to head off to college now, in the future or maybe never.

Growing into and being an adult is full of uncertainty, but it is disheartening to see the institution of school adding a completely unnecessary layer of anxiety.

Best of luck to you and yours.

Vernonb - "Reminds me of the old adage those that can do - will do. Those that can not do - teach."

But what happens to those that can not teach? Do they become politicians?
Krzelune
Posts: 5769
Incept: 2007-10-08

Report This As A Bad Post Add To Your Ignored User List
Quote:
But what happens to those that can not teach? Do they become politicians?

Some of them become politicians but most become mainstream media liars.
Login Register Top Blog Top Blog Topics FAQ