Teachers in deep-red states like Arizona, Kentucky, and Oklahoma may have won concessions from their Republican-controlled state governments, but there’s a catch.
In various states where teachers walked out in protest of steep cuts to K-12 public education dating back to the start of the Great Recession, state lawmakers partially acquiesced to educators’ demands for additional funding. However, while many teachers were calling on states to get the extra revenue needed from corporate welfare and the wealthy, Republican legislators opted instead to implement regressive tax increases that disproportionately harm working people.
As Vox recently reported, legislatures in Arizona, Kentucky, Oklahoma, and West Virginia all chose to raise taxes on working class residents as opposed to taking a bite out of the sizable corporate tax breaks written into state law.
In Arizona, where lawmakers lost out on roughly $5 billion in corporate tax breaks since 1993, when accounting for inflation, the Republican-controlled legislature recently agreed to put an additional $600 million toward teacher pay and education funding. However, the promised revenue is coming from higher property taxes on homeowners in low-income school districts, and an additional new car registration fee. These new taxes will hit working people proportionally harder than the wealthy, yet Arizona hasn’t raised income taxes (which are more progressive) in almost 30 years, according to a study by economists at Arizona State University.
Teachers in Kentucky, who mobilized in the thousands multiple times at the state capitol in Frankfort, had to swallow a tough pill of supporting an education funding bill that provided additional support to public schools by raising taxes on the poor and cutting them for the rich by implementing a flat tax. According to Vox, the top tax rate in Kentucky used to be six percent for the wealthiest, although that rate has been cut to five percent, with the poorest Kentuckians’ income tax rates also being raised to five percent. All of these tax increases come despite Kentucky giving out roughly $162 million in film tax credits, most of which has come in just the last year.
Oklahoma is home to some of the most generous tax breaks for the oil & gas industry. Prior to the drilling boom, Oklahoma taxed horizontal drilling at seven percent, along with new oil wells, though now drilling is taxed at just one percent, while the first three years of any new well is only taxed at two percent. As Grit Post previously reported, restoring the rates to seven percent could bring in an additional $300 million in new money.
However, Oklahoma’s Republican legislature and governor decided to fund teachers’ demands by raising the gasoline tax on both unleaded and diesel — which will hit lower-income Oklahomans harder than the state’s richest — and increasing the cigarette tax (the Truth Initiative reports that 72 percent of cigarette smokers are in low-income communities). Even though legislators raised the gross production tax for oil companies drilling on public land, Vox reported that the new rate is still one of the country’s lowest.
And in West Virginia, the state that kicked off the national movement of teacher strikes and walkouts, state lawmakers alluded to making cuts to general services and Medicaid in order to generate the revenue needed to meet teachers’ demands. These future cuts are particularly unnecessary when considering that West Virginia has been cutting top income tax rates for decades.
At least 8,000 teachers are expected to walk out next week in North Carolina to demand pay raises and more money in the public education budget. It remains to be seen whether or not North Carolina will increase the corporate tax rate to meet teachers’ demands, which is currently the lowest in the 44 states that levy a state corporate income tax.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.