N.S.B.A. Survey To Seek Data On Effect of Business Tax Breaks

June 19, 1991 2 min read

According to Thomas A. Shan non, executive director of the nsba, the survey will provide the first national data on the issue.

Educators have joined a grow ing chorus critical of the subsidies and tax breaks won by corpora tions--particularly in light of port for improving the nation’s schools.

In 1988, a study by the New York State comptroller’s office
called for a national study in an effort to rein in state and local governments’ use of tax breaks to lure new businesses or to assure that old ones do not move.

The report asserted that the practice had been overused, / draining government resources as a result. In deciding where to locate, the report found, businHL esses care more about such factors as the quality of an area’s educa tion and infrastructure than they do about tax breaks.

Mr. Shannon said the timing for a national study is right be cause tight budgets and a grow ing clamor from educators have focused attention on what many feel are unfair deals. ‘

In Washington State, for instance, corporate tax loopholes were a major issue in a statewide teachers’ strike this spring.+

In a number of states, including Kansas, Texas, Minnesota, and L4
- Ohio, legislation and lawsuits are being used in an effort to extract more taxes from the private sector.

“We’re not against abatements or tax deferrels,” Mr. Shannon said. “They are part of a state’s or locality’s strategy to attract jobs, and that’s positive.”

“But it’s a negative thing when it’s done on the backs of children,” he added.0

Mr. Shannon said the survey questionnaire will be sent to “sev eral hundred” affiliates of the ; nsba and possibly to local gov ernment organizations as well. The report on the survey findings, set for release in January, will explore corporate tax provisions at both the state and community levels.

The study is part of a new effort by the nsba to work to revise state and local tax systems to en0 sure that tax incentives for com0 munity development do not ad0 versely affect funding for schools, Mr. Shannon said.3

He said it is important, for ex0 ample, that education systems be weaned of their dependencies on revenue from local property tax0 es. He said government officials often negotiate property-tax breaks with businesses in an ef0 fort to attract them to a location or to assure that they do not leave.0

According to a recently pub lished book by Robert B. Reich, a political economist at Harvard University, the corporate share of local property taxes shrank from 45 percent in 1957 to about 16 per0 cent in 1987.--jw

A version of this article appeared in the June 19, 1991 edition of Education Week as N.S.B.A. Survey To Seek Data On Effect of Business Tax Breaks