Teacher Salary Information

TEACHER PAY AND PROPERTY TAX ISSUES

The myth, perpetuated by the media, some members of the business community and some politicians, that teachers are responsible for the tax frustrations of average homeowners needs to stop here and now.

Justifying caps on teacher salaries, editorials state that “school-related property taxes are being brought under control” (Wisconsin State Journal 10/29/97). Yet, school-related property taxes were never out of control.

Between 1970 and 1995, average annual growth in the gross property tax rate was 6.5%. However, the levy for K-12 schools only had an average annual growth rate of 6.2%, less than the average of the other levy rates which includes municipalities, counties, and technical college districts. Levy rates for schools did not grow faster than rates for other taxing jurisdictions.

Even within the schools, teacher salaries did not increase as fast as other factors. Health insurance, for instance, experienced double digit annual increases in the 1980s, but no one called for capping insurance companies. Interestingly, a national study by the Economic Policy Institute showed that, when the costs for educating special needs children are factored out, real spending on classroom teaching increased an average of only 1% annually between 1970 and 1990. An examination of teachers’ salaries, which account for less than half of school district costs in Wisconsin, yields similar findings.

Between 1970-71 and 1996-97, inflation increased 398.49%. The average teachers’ salary, which includes longevity and pay for advanced credits, increased 400.34%, from $9,729 to $38,950, barely out pacing inflation.

The average teacher in Wisconsin today has 17 years of experience teaching, is 44.1 years of age, and 50% have a master’s or higher degree. In the last ten years, however, average teacher salaries lost money to inflation. Between 1986 and 1996, the average teachers’ salary increased 40.03% while inflation increased 43.53%. This is hardly evidence of exorbitant pay.

Despite this, the legislature capped teachers’ salaries in 1993 when they agreed to pick up two-thirds the cost of K-12 schooling. Increased state funding for schooling produced a short-term reduction in property taxes.

As a result, average homeowners received a one-time 12% reduction in property taxes of $245, and the top ten manufacturers in the state received a 21% reduction in their taxes, saving $4.25 million in taxes. As further proof that teachers’ salaries were not the primary engine driving property tax increases, these reductions will not last.

The Legislative Fiscal Bureau reported that, even with cost controls on schools and caps on teachers’ salaries, property taxes are going up about 7% on the average home at the end of 1998. Obviously increases in home valuations, municipal rates and other factors are driving up property tax rates while the state pays more than it ever has for K-12 schooling.

Exorbitant spending on education is not the reason homeowners seek tax relief. They seek tax relief because average workers, due to federal and state changes in tax codes, are paying a larger percent of taxes overall than they have in the last 50 years.

Taxes for the wealthiest 10% and for businesses are declining as a percent of income. On top of this, wages have been essentially stagnant for middle income workers since 1980. It is this pressure cooker of stagnant wages coupled with an increasing tax burden that fuels the desire for tax relief. Rather than examine these issues, however, politicians use scapegoats like teachers in an effort to explicate and appease the economic frustrations of workers and homeowners.

Here is the truth of the matter. In 1970, the residential sector paid 50.6% of all property taxes in Wisconsin. Today they pay 64%. In 1970, the manufacturing sector paid 17.7% of all property taxes. Today they pay 5.2%. Including some breaks for farmers, the Legislative Fiscal Bureau states that business exemptions account for $30 billion, or about 15% of all taxable revenues in 1996. Justify it, if you will, as pro-business, but there is no denying that a shift in taxation burdens homeowners today more than ever.

In the eight year span between 1991 and 1999, the Department of Correction’s budget will increase 302%, from $232 million to $700 million. The state spent $22,000 per inmate in 1995. In the last eight years, per pupil spending in Wisconsin, a figure which includes teachers’ salaries, increased 40%, from $5,404 to $7,580 per pupil. That’s less than half the rate of increase for Corrections. Yet, no legislator has the fortitude to call for a cap on prison spending as they have, with less compelling evidence, for education.

If concern about taxation is honest as opposed to an effort to mask favoritism or to promote an ideological agenda, two propositions follow: (1) that all taxed sectors must pay their fair share so that workers are not over-burdened for the benefit of business and the wealthy; and (2) that all spending needs to be examined in light of its long-term benefit to society. For instance, do continued tax breaks and bailouts for big business, or huge increases in spending on corrections have more of a long-term benefit to society than spending on education? As the Great Bard once said, “that is the question.”