Tuesday, May 3, 2011

Poor Little Rich Kids—Beverly Hills Unified Goes Begging for $1 Million

Huck/Konopacki Labor Cartoons
California has cut $20 billion from K-12 education over the past three years, yet Beverly Hills Unified has been able to keep their elementary class sizes at 20 students per teacher and their secondary school classes at 29 to 1. Now that Gov. Brown has signed legislation that slashes the small amount of money the state gives to the wealthy basic aid districts, BHU faces the possibility of having to layoff 23 teachers from their tiny district of five schools and 4,700 students, according to the Los Angeles Times.

This would be a serious problem for most districts, but BHU parents hope to raise $1 million in one week to bail out their district and keep their privileged children learning in the luxury they have been accustomed to. And they are likely to succeed, not only because their parents are extremely rich, but also because they have hired a company to distribute donation requests to every residence. Teachers are being asked to hand out contribution envelopes to students and all parents are required to fill them out and sign them, even if they do not contribute (upping the pressure on parents to contribute since their names and contributions will be known).

Of course $1 million is chump change for millionaires and billionaires, especially when divided up between a few thousand of them. And it is certainly a better deal for them than a tax increase, which would help all schools in the state, but cut into their personal income. In fact, a donation to BHU would lower their taxes because charitable donations qualify as a tax deduction.

In reality, the finances are a little more complicated than this. Certainly raising the state income tax rate on the wealthiest Californians is necessary, not only to balance the state budget, but to create a surplus so that schools can be funded adequately and securely in the future, rather than continually having to face multi-billion dollar cuts each year. But Beverly Hills Unified, like other basic aid districts, relies on local property taxes for more than 80% of its budget. The bursting of the housing bubble brought down property values throughout the state, including in rich enclaves like Beverly Hills. Those most likely to petition for and receive reassessments of their properties have been the wealthy. Thus, some of the richest residents in the state have deliberately sapped their own city of resources by reassessing their properties to lower their tax liability, essentially raiding the commons to increase their own personal income. Now that the state is saying “No, the rest of California will no longer give Beverly Hills Unified 15% of its operating budget,” its residents are saying, “No problem, we’ll pay for it ourselves, take the tax deduction, and screw y’all anyways.”

Ironically, wealthy basic aid districts, despite having a lot of wealthy parents from the business and corporate world, often have pleasant relationships with their unions, primarily because they have more money and have not felt as much need to lay off teachers, implement furloughs, or cut wages and benefits. BHU, however, is now demanding union concessions, in addition to the layoffs, if their $1 million goal cannot be reached.

Ultimately, the rich don’t want to pay taxes at all and they really don’t want to pay taxes that benefit the rabble. So they lobby to keep income, personal gains and corporate tax rates low and then get their properties reassessed to lower those taxes, too, thus depriving all levels of government of revenues needed to keep basic services running, and allowing them more control over how their wealth is divvied up. Rather than allowing an untrustworthy liberal government to funnel some crumbs to the poor, elderly, immigrants and disabled, they can funnel their resources directly to the causes of their choices (like their children’s schools) AND get an additional tax deduction for their generosity (to themselves).

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