Tax incentive programs underfund schools

One of the biggest sources of funds for urban revitalization is tax increment financing.  Governments impute a likely increase in property value and tax revenue from a new development, but direct that increase to the developer as a source of finance, inducement, etc.

But that is all the taxes--city, county, schools, special districts, etc.

The argument can be made that the tax abatement shouldn't be total, that it should be more measured, especially when it comes to funding local schools ("Students lose out as cities and states give billions in property tax breaks to businesses — draining school budgets and especially hurting the poorest students," The Conversation).  From the article:

At James Elementary in Kansas City, Mo., principal Marjorie Mayes escorts a visitor to a classroom with exposed brick walls and pipes. Bubbling paint mars some walls, evidence of leaks spreading inside the aging building. 

The district would like to tackle the $400 million in deferred maintenance needed for its 35 schools, but it doesn’t have the money. The lack of funds is a result of tax breaks Kansas City lavishes on companies that do business there. The program is supposed to bring new jobs but instead has starved schools. Between 2017 and 2023, those schools lost $237.3 million through tax abatements, according to the Kansas City Public Schools. 

That city is hardly an anomaly. An estimated 95% of cities provide incentives to woo corporations. A 2021 review of 2,498 financial statements from schools across 27 states revealed that in 2019 at least $2.4 billion was redirected for tax incentives, according to the academic research that appeared in Community Development. 

Yet that downplays the magnitude: Three-quarters of the 10,370 districts did not provide any information on tax abatement agreements. Abatements have long been controversial, pitting communities against one another in beggar-thy-neighbor contests. Yet their value is unclear: Studies show most companies would have made the same location decision without subsidies. 

... In Kansas City, for example, nearly $1,700 per student was redirected in 2022 from poorer public schools, while between $500 and $900 was taken from wealthier schools. Other studies found similar demographic trends elsewhere, including New York state, South Carolina, Texas, and Columbus, Ohio. The funding gaps often force schools to delay needed maintenance, increase class sizes, lay off teachers, or close. 

All told, tax abatements can harm a community’s value, with funding shortfalls creating a cycle of decline. Researchers agree that a lack of adequate funding undermines educational outcomes, especially for poor children.

Aerial view from the west of a stadium-anchored redevelopment master plan proposed by the Chicago Bears. (Courtesy Hart Howerton/Chicago Bears)

In Chicago, the Bears football team wants to move to the suburbs, to the site of an old race track.  But there is contention with the local governments and school districts about how much the property is worth, and how much tax incentive would be provided ("Bears, suburban school districts $100M apart in valuations of Arlington Heights site," "The Chicago Bears' Battle Over Arlington Heights Property Taxes, Explained," NBC Chicago).  The team says the property is worth much less than the local government. 

-- Arlington Park project, Chicago Bears
-- "Chicago Bears reveal tentative plans for mixed-use development in Arlington Heights anchored by domed stadium," Architect's Newspaper
-- "The new Chicago Bears Arlington Heights stadium will benefit Chicagoland," Evanstonian

From the Chicago Tribune, "Bears stadium development could hinge on TIF money":

For decades, TIFs have been used in Chicago and across the suburbs to help develop real estate. They have been criticized by some as a “slush fund” for municipalities to use as they wish, while diverting money from schools and other taxing bodies. 

 And they have been praised by officials of towns large and small as economic engines that bring jobs, development and an improved tax base. TIFs work by using any increase or “increment” in property tax revenues in the TIF district for the municipality to redevelop that site, typically by building infrastructure such as roads and utilities. 

Other taxing bodies, such as schools, parks and libraries, typically get only the same amount of property taxes as when the TIF took effect, with no increased revenue during the 23-year duration of the TIF. 

The Bears’ say they will pay to build a new stadium, but would only proceed with their planned $5 billion mixed-use development if they get tax “certainty” and public funding for infrastructure such as roads, utilities and stormwater management. Apartments, condominiums and other development planned for the site would be built by private developers — and could mean the added expense of more students for local schools.

I argue that TIFs should be more targeted, and school tax revenue streams not be included.

School closure and consolidation planning needs to focus on integration planning at the outset as a separate process

This past entry, "National Community Planning Month: Schools as neighborhood anchors," discusses how I think schools fail to embrace a planning approach to what they do, and how communities fail to prioritize elementary schools as key civic assets anchoring thriving neighborhoods.

I think it's pretty common that most school districts don't have robust planning functions.  

Sure they have demographic enrollment planning functions, but big issues like the use of special curricula (beyond "arts" and STEM) as a way to recruit and retain students (eg language immersion, IB, math), how to deal with the competition from charter and private schools, how to maintain strong connections between neighborhoods and schools, especially as the number of families drops, how to help schools market, etc. are planning initiatives not really taken up in systematic ways.

Obviously it's not a new finding that high quality schools track to housing values etc. So these kinds of planning decisions can really matter to communities.

Salt Lake.  A friend of mine here is a school teacher, and we've talked for many years about school "planning" issues, I've shared with her past writings, etc.  In short Salt Lake school "planning" is not unlike school "planning" in DC in that few urban/school planners seem to be on the staff of the school district.

Eg a few months back I went to a high school rebuilding meeting (the site shares the square on which Sugar House Park lies, and I am on the board of the park), and I was appalled that the leader of the school system "planning" initiative was a well experienced teacher/administrator, but with zero formal planning background--they contract out a lot to architectural firms, but miss many issues that go beyond facilities.  That was typical of DC too. 

Anyway, Salt Lake has to close some elementary schools, because enrollment is dropping commensurate with the demographic changes common to center cities--more residents, many no children households, smaller households with fewer children--so that even as population increases, school enrollment decreases.  

-- Population and Boundary Study, Salt Lake Ciy Schools

This is different from the issue of how many traditionally urban school districts are closing schools in part because of enrollment issues, but also over quality issues, with the idea that the schools that close aren't performing academically, and that students will benefit by re-enrolling in better schools.

There are many good writings about that, how students don't necessarily perform better when schools are closed and they relocate, and the impacts on neighborhoods.  

This makes sense to me, based on the chapter of "use value of place," in Urban Fortunes: Towards a Political Economy of Place. A lot is lost when neighborhood institutions shut, and relationships are disturbed and redistributed.

-- Should Failing Schools be Closed? What the Research Shows, Manhattan Institute

Which is why I argue that sometimes, maybe it's better to invest in existing schools and keep them open, despite smaller enrollments, as a kind of equity planning measure.

-- "One way in which community planning is completely backwards," 2011
-- "Missing the most important point about Clifton School closure in Fairfax County," 2011
-- "Rethinking community planning around maintaining neighborhood civic assets and anchors," 2011
-- "The bilingual Key Elementary School in Arlington County as another example of the "upsidedownness" of community planning," 2019

-- "Social urbanism and equity planning as a way to address crime, violence, and persistent poverty: (not in) DC," 2021
-- "An outline for integrated equity planning: concepts and programs," 2017
-- "Equity planning: an update," 2020

The Salt Lake school system has been called wasteful by the state government because they haven't been proactive in closing schools, and simultaneously a number of school districts in the region have been closing schools as the population shifts from east to west (surprisingly Salt Lake is an outlier, here the issue isn't east to west migration, but the increase of households without children, especially in the center city).

Salt Lake schools face more competition than a typical school district in other states, because the State of Utah has open enrollment across school district borders--although it doesn't seem to affect the city that much.  Acording to demographic data, it captures most of the students living within the city.

(Interestingly, the high schools don't face closure--in fact they are planning to rebuild two of the three--because they get a lot of in-bound students from nearby school districts, a benefit of the state open enrollment policy.)

On the other hand, the school charter movement isn't strong in Utah, despite the best efforts of the State Legislature (which face it, compared to political efforts elsewhere, aren't very "best"--if they tried hard they could destroy public schools, but probably in general the average person of means is fine with the public schools, so there isn't great pressure to wreck them, other than particularly highly motivated interest groups), but there are some charter schools in the city nonetheless, which capture students, as well as a number of well regarded religious and private schools (some for profit!), that capture many students as well.

1.  School versus school competition to remain open

My friend has made the point that as the school district has identified schools facing closure, based on 12 criteria, what happens is that this pits school communities against each other to "save our school," creating winners and losers and animus even though in the end, the student populations and parents will be joined together, regardless of which particular school is closed.

Note that the dissertation "Where Is the CommUNITY? A Qualitative Case Study of a School Closure in an Urban School District" evaluating the closure of a declared underperforming school in Colorado illustrates the rancor that results when the process isn't developed in a collaborative way.

My friend suggests that the process be organized in a collaborative way.  It hasn't been but the school district has organized the process into four "areas," that don't necessarily map to city council districts, but in a more natural pattern of how the schools, neighborhoods, and communities interact.

2.  Integration planning should be the top priority resulting in robust highly functioning "receiving" schools

I went with her to a public meeting on this process a couple weeks ago, and one of the consultants mentioned that it usually takes two to four years for schools and neighborhoods to reach a new equilibrium after schools are closed and student populations consolidated.

-- "Chicago promised students would do better after closing 50 schools. That didn’t happen," Chicago Sun-Times
-- "School Closings: Challenges for Students, Communities, and Litigators," American Bar Association

I immediately thought that integration planning should be going on now, not specific to any one school, but to the process of combining schools so that students, families, teachers, and administrators can combine and work together in the best, substantive, and "quickest" possible ways, resulting in thriving schools that don't take four years to recover and stabilize. 

Starting the transition planning process in January or February, once final decisions have been made on what schools to close, seems very late in the process and too circumscribed in terms of time.

Fortunately, an article, "Surviving a School Closing," from Educational Leadership, published by the Association for Supervision and Curriculum Development, describing the closure of a school in a school district in Upstate New York, and all the measures to unite the students and families by the "receiving school" with the support of the "closing school," lays out a robust framework for student and classroom consolidation.

Of course such practice is complicated by politics, but also labor contracts with teachers and other personnel, and that sense of winners and losers, In the article, they really tried to move away from the idea of winning and losing.

I remember when I was a child in Pontiac Schools, which had bus bombings in an attempt to ward off integration a year before, and they had us sixth graders at the end of the year visit the junior high schools where we would be going in the fall.

I think that a lot of schools do this kind of pre year introduction as students move from elementary to middle/junior school.  If not they should.

-- Transitioning From Elementary to Middle School, University of Hawai'i