• Confessions of a Community College Dean

    In which a veteran of cultural studies seminars in the 1990s moves into academic administration and finds himself a married suburban father of two. Foucault, plus lawn care.

Title

The View from Here

The tax bills, community colleges and the middle class.

December 3, 2017
 
 

I don’t usually do overtly political posts. Part of that is because I’m not convinced that they would help, and part of it is that I need to be able to make common cause with people whose politics are different from my own in order to help my college, and other community colleges, thrive.

That said, the combined impact of many of the provisions of the two tax bills floating around Congress now could be backbreaking for the entire sector.  It’s as if they were written out of spite. I feel ethically obligated to offer the view from here.

A few specifics:

Disallowing the deduction for state and local taxes would drive a stake through the heart of our appropriations. State and local government budgets don’t have a lot of discretionary spending in them, once you take care of law enforcement, K-12, and Medicare. Taking away the federal tax deduction for money that people have already paid in taxes to states, counties, or towns would amount to a drastic tax increase on them. (One version of the bill even disallows the deduction for property taxes. New Jersey has the highest property taxes in the country.  It would be devastating here.) We’ve been dealing with austerity for years, but this would take cutting to a new level, and abruptly. 

Reducing the impact of deductions for charitable contributions would make it much harder to maintain, let alone increase, our philanthropic fundraising.  Coming at the same time as a direct attack on our appropriations, this is doubly disturbing. Community colleges have been late to the game in terms of fundraising, but in the aftermath of the recession, they’ve been getting somewhat better. This is a kick in the teeth.

Repealing the individual mandate for health insurance will inevitably drive up its costs, and it’s climbing at an unsustainable rate now. At my own college, for instance, “family” coverage for an employee costs about $30,000 per year (split between the employee and the college), and it’s set to increase 13 percent next year. It amounts to a viciously regressive tax on employment, with predictable effects on full-time hiring. The only thing keeping it from going up even faster is the presence of relatively low-cost young people in the insurance pool. They contribute more than they use.  Allow them to opt out, and the cost for those remaining will increase even faster. I’ve seen that called “adverse selection” or a “death spiral.” Whatever you call it, it’s unwelcome.

One of the few perks we’ve been able to afford to offer employees is tuition waivers for themselves and their dependent children. One proposal calls for taxing those as income. I don’t see proposals for taxing “employee discounts” in other industries, though. Just education. Given that a dollar is a dollar, one has to wonder at the real motivation. Granted, the impact would be greatest on graduate students; in many cases, their tuition waivers are nominally higher than their stipends, so their tax increases would be by several multiples. (Eventually, that could reduce the pool of adjunct faculty, driving up costs even more.) It could also do a number on our non-credit corporate training side, where employers often pay for employee training. Given that we keep hearing about the need for colleges to be responsive to employers, that’s counterintuitive at best.

All of this in the context of bills that allow a tax deduction for private plane maintenance. Honestly, I couldn’t make this up.  

Over the past few years, I’ve mentioned repeatedly that one reason for community colleges’ struggles is that they’re built to create a middle class for a country that no longer wants one, or that no longer understands where middle classes come from.  I’ve been accused of hyperbole for that, but based on the bills currently under consideration, I’m actually guilty of understatement. These provisions would be devastating for public higher education and for the people who need it. And they’re specific enough that it’s hard to ignore motive. They’re direct, precise attacks on people who devote their careers to creating a middle class.  

At some level, we either believe in a middle class society or we do not. I do. I hope enough others do, too.  

That’s how it looks from here.

 

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