Local school budgets are funded almost entirely through state and local taxes. The degree to which a local district is federally funded varies (usually in connection with student need), but even a district with a relatively high degree of federal funding like Worcester gets less than 8% of its district budget from federal funding.
|WPS FY18 budget, page 18|
Where does the rest come from?
In Massachusetts, the state's internal standard is that 51% of the foundation budget comes from local sources and 49% from state sources statewide. Districts, we know, are almost all paying more than the foundation budget towards their district budgets. That money comes largely from property taxes. Towns have few other sources of income. Even a city like Worcester, which does have other sources of revenue, recognize property taxes as the biggest source of local revenue.
|City of Worcester FY18 budget, page 5. Note, incidentally, that the second largest source of funds is the state's chapter 70 appropriation for Worcester, which passes through directly to the schools (WPS and charter).|
At the state level, Massachusetts had $26 billion of revenue projected for FY18 (this fiscal year); of that, over $15 billion was from income taxes. It's the largest single source of income for the state.
Both of the above--income taxes and property taxes--are deductible from federal taxes. You might remember that when you filed your federal income taxes, you filled in (or the software self-populated) what you paid the town in property taxes and the state in income taxes, among other things. The federal government then didn't tax you on that amount. That's the SALT (state and local taxes) deduction.
The tax bill passed by both the House and Senate removes that deduction. And what would that do?
I'll quote here from the Salon article, which they're sourcing from the Government Financial Officers Association report:
...the loss of the SALT deduction would apply significant pressure on states and municipalities to reduce taxes in order to offset the increases in federal taxes paid by their constituents. Using the 8th Congressional District in Texas north of Houston as a model, the GFOA estimates that the district would see an increase in federal taxes of $306 million dollars. Offsetting that with state and local tax decreases could impact $125 million in school funding. Simply put: education funding is an enormous local and state expenditure, and it would have to be cut in order to provide any relief to tax payers who lost SALT.In other words, the federal government just raised most of our taxes, and the only source of "relief" on that would be to cut local and state taxes. And those are the taxes that fund public schools.
So what can we do? Well, it still has to survive conference committee, so keep calling.