Roads vs.Education

By Jim Erkel, MCEA Attorney and Director, Land Use and Transportation

Last session, the Minnesota Legislature statutorily directed about $250 million/year from the general fund to the highway user tax distribution fund.  Road interests argued that roads were a priority for Minnesota and should be entitled to support from the general fund as are other priorities such as health care, education, and aid to local governments.  This session, the Legislature is considering an amendment to Minnesota’s constitution that would take the monies directed to roads, increase the total by 50%, and constitutionally dedicate it only to roads so that it is not available to health care, education, and aid to local government.


Having argued that roads should be weighed equally with other priorities, road interests now argue that the general fund proceeds directed to roads should be permanently protected from them.  In fact, the coalition supporting the proposed amendment is now arguing that “(w)e need to keep the money to improve roads and bridges in a lockbox so politicians can’t use these funds for other projects(.)”  This is bait-and-switch, pure and simple.  It also runs against the recent experience of other states that have had to balance all priorities in the use of their general funds particularly in the context of meeting the critical needs of education.      


Starting only three months ago, a number of states have experienced walk-outs and other political action by teachers frustrated by each state’s chronic lack of funding for education.  It began in West Virginia and has spread to Kentucky, Oklahoma, and Arizona.  In other states such as Utah and Colorado, budget solutions for education are also being considered in an effort to fend off ballot initiatives teachers have been pursuing to raise substantial amounts for education through income tax increases.  All of the states direct monies to roads from the general fund.  To date, the legislative solutions passed by states other than West Virginia and Colorado have relied on road-related taxes to raise new monies for their general funds or to backfill for general fund proceeds that are being re-directed from roads to education.


Walk-Outs  


West Virginia -- Teachers walked and demanded 5% raises.  The budget solution relied on cuts to other portions of the general fund.


Kentucky -- Teachers walked out when the Legislature unexpectedly made detrimental changes to their pensions.  They demanded the repeal of the pension changes and increases in per-pupil funding levels.  The changes were repealed and the budget solution relied on a 50-cent increase in the cigarette tax and a 6% sales tax that was extended to specific services including auto repairs.  


Oklahoma – Teachers walked out and demanded $3.3 billion for education.  The Legislature passed a $447 million package that will give teachers raises of $6,100 and smaller raises for other school staff.  The package is funded by increases in an oil and gas production tax, cigarette taxes, hotel taxes, and a 3-cent gas tax.  The gas tax increase is intended to backfill for sales tax proceeds that are being re-directed from roads to education.


Arizona – Teachers walked out to protest low salaries and budget cuts to education.  They demanded 20% raises for teachers, raises for school staff, and restoration of budget cuts to education since the Great Recession.  The Legislature passed a package proposed by the Governor which should give teachers 20% raises by 2020 and restore about 25% of the budget cuts to education.  One of the mechanisms used to fund the raises is a new estimated $18 highway safety fee, an add-on to vehicle registration fees, which will support the Arizona Highway Patrol.  The new road-related fee is intended to backfill for proceeds from the general fund that are being re-directed to education.


Colorado - Teachers walked out after the Legislature quickly moved a bill that would have cut teacher raises, raised their retirement age, and increased employee contributions to the pension fund.  In a final budget bill, an additional $150 million was directed to education and $225 million was directed to the pension fund.  The monies came from a surplus in Colorado’s general fund.


North Carolina - Teachers have received small raises in recent years but average pay remains below the national level.  Teachers walked out and rallied on the first day of the Legislature’s work session.  They demand that per-pupil spending and pay for teachers and school staff be increased to the national averages and that new school construction be undertaken to meet the needs of growing student populations.  To fund their demands, teachers propose rescinding tax cuts on businesses and high-income households.


Initiatives


Arizona – Teachers are not satisfied with the package of funding passed by the Legislature and are pushing a ballot initiative to increase income tax rates on the wealthiest 1% of Arizona residents to more adequately fund education.  The initiative would annually raise $690 million which would be split 60% for teacher salaries and 40% for school operations and maintenance which would fund all-day kindergarten.  Signatures are being collected to put the initiative on the ballot this November.


Colorado – Teachers were not satisfied with the legislative package that the legislature passed and are continuing to push for a ballot initiative that would increase income tax rates on the highest income households and on corporations to more adequately fund education.  The initiative would annually raise $1.6 billion.  Signatures are being collected to put the initiative on the ballot this November. 


Utah – Teachers did not walk out but they are pushing for more funding for education.  The Legislature passed a package that included adjustments to several sales taxes to raise more funding for schools and put an advisory question on the ballot this November to increase the state’s gas tax by 10¢/gallon.  If the question is supported by the public and the Legislature raises the gas tax, it would backfill for general funds that would be re-directed from roads and, with some property tax reforms, annually raise $375 million for education.


As long as it is willing to abdicate its role and engage in budgeting at the ballot box, the Legislature should drop its proposed roads-only constitutional amendment in favor of an advisory question that asks voters which priority of the state should benefit the most from increased funding that is constitutionally protected -- education, health care, social services, transit, aid to local governments, or roads.  Either straight up or with ranked choices, the trend in Minnesota polls suggests that roads would not win that contest.
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