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Letter to the Senate Finance Committee on Education Tax Incentives

July 24, 2012

Dear Senator:

The National Education Association, representing more than three million educators across the country, would like to provide you with the following comments in advance of this week’s hearing in the Senate Finance Committee on “Education Tax Incentives and Tax Reform.”  NEA calls on the Finance Committee to:

  • Extend the educator tax deduction

  • Provide tax incentives for new building, refurbishing, and technology upgrades in post-secondary and K-12 education, including by extending the Qualified Zone Academy Bond program

  • Expand access to and affordability of higher education through expanded tax credits.

NEA strongly supports an extension of the educator tax deduction. This critical deduction, which expired at the end of the 2011 tax year, helps recognize the financial sacrifices made by teachers and education support professionals. 

Educators often reach into their own pockets to purchase classroom supplies because they want to make sure students have what they need to succeed.  Studies show that educators are spending more of their own funds each year to supply their classrooms and purchase essential items.  According to NEA’s most recent survey, 97 percent of educators surveyed indicated that they had spent some of their own money to meet the needs of their students -- an average of $477 a year to purchase classroom supplies such as books, pencils, paper, and art supplies.1

According to a 2010 report by Office Max, seven in ten teachers report their schools are not able to provide them with all the necessary tools to effectively teach their students, and 79 percent of educators say their classrooms are in need of more items that they currently lack such as essential classroom supplies, paper products, and arts and crafts supplies.  The majority (82%) of teachers think it is their responsibility to ensure students have the best learning experience possible – no matter the price tag – spending their own money on supplies for their students each year.  Everyday classroom supplies such as pencils and pens (78%), prizes and incentives (72%), and arts and crafts supplies (72%) top the list of purchases teachers make using their own cash. 2

Many educators are finding the need to buy supplies for their students has increased in these difficult economic times, as funding cuts lead to shortages in essential materials and more students come to school without basic learning tools.   A large majority of educators also spend an average of $15 a month out of their own pockets to feed students.  (Status of the American Public School Teacher 2005–2006, March 2010.)3

The need for these expenditures is not surprising.  According to First Focus:
  • 2.7 million more children lived with an unemployed parent during a typical month in 2011, compared to 2007 (an increase of 71%), bringing the 2011 total to 6.5 million children; 

  • 3 million (47% of those living with an unemployed parent) lived, during a typical 2011 month, with a parent unemployed six months or longer;

  • 8 million more additional children relied upon SNAP for food in 2011, compared to 2007, bringing the total number of children receiving SNAP to 21 million (one in four);

  • 16 million children (more than one in five) currently live in poverty4

  • One in three working families today find that employment does not guarantee a decent living standard. Forty percent of all children – 30 million kids – grow up in such households.5

The educator tax deduction is a bipartisan recognition of educators’ financial sacrifices as well as of the needs of students who lack even the basic necessities for success in school.  Extending it will make a real difference for many educators, who often must sacrifice other personal needs in order to pay for classroom supplies and instructional materials.

NEA also supports providing tax deductions for new building, refurbishing, and technology upgrades. To this end, we support:

Extending the Qualified Zone Academy Bond (QZAB) Program

On average, the buildings that house our public schools are more than 40 years old.6 The American Society of Civil Engineers gives the condition of our schools a grade of “D” and attributes the failure to upgrade them to “problems in the financial sector and declining revenues for states and local governments.”7

According to Fix America’s Schools Today (FAST!), a project of the Economic Policy Institute and the 21st Century School Fund schools need an estimated $500 billion in repairs and upgrades.  

The QZAB program has proven to be an efficient and cost-effective way to help disadvantaged communities address pressing renovation and repair needs.  QZABs assist school districts in rural and urban communities by providing a financing mechanism to renovate buildings and invest in equipment and technology.  Investors receive a federal tax credit equal to the amount of interest payable on the bonds, thereby relieving local taxpayers and municipalities of the interest burden.  A school that is awarded a QZAB may use the funds to renovate and repair buildings; invest in equipment and up-to-date technology; develop challenging curricula; or train quality teachers. 

Providing Tax Incentives for Higher Education Infrastructure Investments
Investments in higher education infrastructure will save and create jobs in the construction and supporting industries and will help ensure postsecondary students access to the state-of-the-art learning environments so critical for the 21st Century. 

NEA believes that anyone who is qualified and interested in post-secondary education should have the opportunity, regardless of ability to pay.  To that end, NEA supports:

  • Expanding Existing Tax Credit Programs to Augment Access and Affordability

Having more college educated workers in the American workforce is crucial to growing our economy. In order to compete in the 21st century global economy, we need to give all Americans the opportunity to pursue a college degree. 

Tax credits like the American Opportunity Tax Credit (AOTC) are critical to increasing access to and affordability of higher education, particularly for lower income students.  The AOTC, created as part of the American Recovery and Reinvestment Act, provides a $2500 per year tax credit for working families and students attending college.  The tax credit is partially refundable, meaning it can help lower income students afford a college education that might otherwise be out of reach.  The AOTC covers many of the expenses associated with sending a child to college, including textbooks and computers.  Making this tax credit permanent would mean students could get up to $10,000 for four years of college. 

  • Expanding Loan Forgiveness Programs for Educators

NEA supports expanding loan forgiveness programs for students who enter public service careers.  Spiraling college costs have made it increasingly difficult for many students to afford postsecondary education.  And, far too many of today’s students rely on loans in order to attend college.  The resulting debt burden often limits career choices and prevents many talented students from pursuing careers in public service, including as teachers. 

We thank you for the opportunity to provide these comments. 

Sincerely,

Kim Anderson                                                                                      
Director, Center for Advocacy

Mary Kusler
Director of Government Relations


1 National Education Association, Status of the American Public School Teacher 2005–2006, March 2010.

2OfficeMax Teacher Survey, May 2010, http://multivu.prnewswire.com/mnr/officemax/43900/   
3 Ibid.   
4 The Recession’s Ongoing Impact on America’s Children: Indicators of Children’s Economic Well-Being Through 2011, Julia Isaacs, Brookings Institution, December 2011.   
5Living on the Edge: America's Low-Earning Families, Sophia Parker, The Resolution Foundation, September 2011.   
6 National Center for Education Statistics  
7Report Card for America’s Infrastructure, 2009