Money Matters 10.3

What do charter schools, the for-profit firm Education Alternatives, Inc., and public schools have in common? Not much, some might answer.

Recent developments, however, have shown that these disparate forces, who often disagree politically, share one overwhelming reality: all are now arguing that to do a good job, more resources are necessary.

Surveys of the nascent charter school movement have shown that one of the top obstacles to success is inadequate facilities and funding. When EAI, the controversial for-profit firm, lost its contracts in Baltimore and Hartford recently, the key problem was differences over money. And a major federal study on facilities shows that a minimum of $112 billion is needed just to improve existing schools (see article page 3).

No matter how much conservatives may argue elsewise, the truth is that money matters. Ask elite private schools to suddenly educate students for $5,500 a year (the national average) rather than their average of more than $10,000, and see if they believe quality won’t suffer.

We know that asking for increased resources for schools is never popular, especially in an election year. We’re not asking for some outlandish change in the tax code. We’ll leave that to Steve Forbes. All we are asking is a reconsideration of tax policies that dominated in the 1950s — which, if you believe many conservatives, was the veritable golden age of America.

If Republican and Democratic lawmakers had not radically changed state and federal tax codes in recent decades, there would be literally billions more available for public services. On a federal level, the U.S. tax code was rewritten in the 1980s to drastically reduce corporate income taxes. In the 1950s and 1960s, for instance, corporate taxes provided 25% of all federal government revenues. By 1991, that figure was only 7%, according to Citizens for Tax Justice. When the group surveyed 44 major American companies in 1989, it found that none of them paid any federal taxes, despite a collective total profit of $53.6 billion.

Resources would also be available for social services if we reduced corporate welfare. According to one estimate by consumer advocate Ralph Nader, corporate welfare in the form of subsidies, tax loopholes and other government benefits exceeded $100 billion in 1994. (The total amount of federal money spent on Aid to Families with Dependent Children, food stamps and Medicaid, on the other hand, comes to about $85 billion annually.)

Then there is the question of the military budget. Despite the collapse of the Soviet Union, the Pentagon continues to absorb outrageous amounts of resources — about $265 billion this fiscal year, or nearly half of all discretionary federal spending. The United States now accounts for 37% of military spending in the entire world. Furthermore, we spent more in 1995, taking into account inflation, than we did at the height of the cold war in 1980.

Amid such dismal statistics, there is hope. Increased media and political attention on the growing income and wealth inequality in this country provides an opening to discuss the inadequate and unequal resources that are spent on education, particularly in urban and rural areas. Now, more than ever, it is time to speak up and demand what our children need.