Letter to the Senate Finance Committee on the tax extender package
April 02, 2014
On behalf of the three million members of the National Education Association and the students they serve, we would like to express our strong support for elements of the bipartisan tax extender package, scheduled for mark-up this week. Specifically, we urge you to:
- Support the two-year extension of the educator tax deduction. As funding cuts lead to shortages in essential materials and more students come to school without basic learning tools, educators continue to reach into their own pockets to purchase classroom supplies – such as pencils, glue, scissors, and facial tissues – as well as instructional materials. During the 2012-13 school year, 99.5 percent of all public school teachers dipped into their own pockets to help equip their classrooms. Together, they spent $1.6 billion on classroom supplies and instructional materials. Individual teachers’ out-of-pocket expenditures averaged $485 nationwide, and one in 10 teachers spent $1,000 or more – double the percentage previously reported (Source: National School Supply and Equipment Association, 2013 Retail Market Awareness Study).
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. More than 16 million children under age 18 – nearly 22 percent of all children – live below the official poverty threshold (Source: U.S. Census Bureau). Extending the educator tax deduction will provide important financial relief for the many educators who sacrifice other personal needs in order to help pay for necessary classroom supplies and instructional materials for their students.
- Support the two-year extension of the Qualified Zone Academy Bond (QZAB) program. Too many of today’s students are housed in yesterday’s buildings with out-of-date technology and often unsafe, crumbling infrastructures. More than 40 years old on average, our nation’s public schools could need as much as $500 billion in repairs and upgrades (Source: Economic Policy Institute). Our nation invested just $10 billion in school construction in 2012, half the amount spent prior to the Great Recession (Source: 2013 State of Our Schools Report, Center for Green Schools).
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 update technology.
- Continue the federal deduction for state and local income and sales taxes. Ending this deduction would undermine our nation’s promise of equal educational opportunity. State and local public spending would decline, and the federal tax burden would shift from low-tax states and to high-tax states, exacerbating the inequities that already exist. “For example, in 2008, potentially deductible state and local taxes in New York comprised approximately 9.1 percent of total personal income whereas deductible taxes in nearby Delaware accounted for approximately 4.7 percent of total personal income …” (Source: Congressional Research Service, Federal Deductibility of State and Local Taxes, September 2012)
While the majority of states assess income taxes, more than 20 percent of our nation’s population resides in the eight states that instead use sales taxes to finance state and local services: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Since residents of these states cannot claim a deduction for state income taxes, extending the sales tax deduction is essential to ensure that millions of Americans are not penalized for their state’s preferred tax structure.
On behalf of our nation’s students and educators, we urge you to support the two-year extension of the educator tax deduction, the two-year extension of the QZAB program, and continuation of the federal deduction for state and local income and sales taxes in the tax extender package.
Director of Government Relations