School budgets strangled by corporate tax breaks

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In a three-month investigation, The Conversation has unraveled the full scope of the financial damage inflicted on school districts by corporate tax breaks. Financial records from urban areas around the country show the impact of these exemptions over multiple years. All told, an analysis of 10,370 districts indicates that tax breaks to large businesses drained $2.4 billion from schools in 2019 alone. The investigation shows that the money is diverted in far greater amounts from schools that serve low-income families who are racial minorities.

The result is crumbling buildings, shrinking numbers of teachers and staff, unaddressed environmental hazards, and demonstrable lifetime damage to students’ future wages and their ability to find a place in the workforce.

Despite all the damage tax breaks inflict, they do little to bring new jobs or new businesses to communities. Indeed, the most frequent beneficiaries are just the corporations, whose decisions on where to locate often do not change because of tax breaks. Yet they succeed in pushing bidding wars between states and localities, which offer more and more exemptions in the hope of influencing corporate strategies.

The project brought together an investigative reporter and three renowned academics who specialize in urban economics, school finances and educational outcomes. It reveals how America is failing its most vulnerable children all to add more profits to the bottom line of billion-dollar corporations.

Listen to the story of Kurt Eichenwald’s personal journey on Guy Kawasaki’s Remarkable People podcast.

Kurt Eichenwald

Senior Investigative Editor

Exxon Mobil Corp.’s campus in East Baton Rouge Parish, left, received millions in tax abatements to the detriment of local schools, right. Barry Lewis/Getty Images, Tjean314/Wikimedia

Students lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students

Christine Wen, Texas A&M University; Danielle McLean, The Conversation; Kevin Welner, University of Colorado Boulder; Nathan Jensen, The University of Texas at Austin

An estimated 95% of US cities provide economic development tax incentives to woo corporate investors, taking billions away from schools.

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