Senior Director of State Fiscal Research
Not only have many states imposed deep funding cuts for K-12 schools since the recession hit, as our recent report explained, but most of the states that cut the deepest also cut income tax rates, reducing revenue that might have gone to schools.
Five of the seven states that have cut general school aid per student by more than 15 percent since 2008 also cut personal or corporate income tax rates during this period (see chart):
Not all the states that cut income tax rates also imposed big cuts in school funding. (By the same token, two states that cut school funding by more than 15 percent — Alabama and South Carolina — didn’t cut broad income tax rates, though South Carolina did cut rates on business income at a cost of $20 million last year.) But there’s no question that tax cuts leave less revenue for schools and make school cuts more likely. Most serious studies find that state tax cuts produce little if any additional economic growth, let alone enough growth to offset fully the decline in state revenues.
Moreover, as the economy improves, states that cut school funding deeply will find it harder to restore that funding if they’ve permanently reduced their revenue by cutting income tax rates. And no state wants to face the future with underfunded schools.