Economy thrives, but schools go begging
STARTING TOMORROW, traffic in and around every major city including Boston will once again be congested due mainly to two seasonal phenomena: school buses packed with children and cars of executives back from vacationing through the lazy days of August.
But something is different this year. Very different. The children are returning to many public school systems that are strapped for cash, and the executives are returning to businesses that are overflowing with cash.
As a capitalist, I believe in free markets, reasonable tax rates, competition, high compensation for performance and I am all for businesses being incredibly successful. But there is something disturbing - really disturbing - that while Treasury Secretary Henry Paulson recently said, "This is far and away the strongest global economy I've seen in my business lifetime," our public school systems are suffering beyond comprehension.
Business, particularly large corporations and private equity funds, will spend billions each year on reinvestment in products, technology, distribution, advertising, and an endless array of tools. Yet, they are not directly assessed to subsidize their overwhelming reliance on our education system to feed them high quality, educated adults who will fuel their growth.
Their counterargument is that part of their personal and business taxes find their way back to schools. And, of course they will quickly point out "this or that" voluntary corporate public education initiative. But the growing disparity between their growth and schools' budget problems seems particularly and fundamentally wrong.
Let us consider just a few indicators:
Despite some recent credit market issues, the Dow Jones Industrial Average hit record levels over 13,000 this year. And even touched 14,000 in contrast to bottoming at less than 7,300 just five years ago. Record profits the last few years have been a big driver.
Armed with hundreds of billions of dollars, private equity firms have been dominating the acquisition landscape. They have scooped up thousands of companies including many high profile ones like Hertz,
So, if there is that much money running around, why does the National Education Association report that we are facing a potential nationwide teacher shortage with more than a million teachers retiring in the near future and the need for more than 2 million teachers in the next decade? As alarming as that is, the NEA says 50 percent of new teachers leave within five years. Among the reasons for this turnover is inadequate pay compared to other professions with the same training requirements.
Why, according to a 2007 Boston Globe examination of property tax rates in 298 Massachusetts cities and towns, has the average homeowner's tax bill gone up 49 percent since 2000?
Why are so many communities being forced to consider overrides to improve school buildings, provide basic services, and maintain after-school and sports activities? When towns like Stoneham are almost forced to eliminate all competitive sports activities, there is something terribly wrong.
While the politicians debate options from "cheeseburger taxes," increased highway tolls, casinos, and Governor Patrick's new bond debt proposals, both the federal and state governments need to rethink who are the true benefactors of our education system. In all fairness, if businesses are being properly assessed for these windfalls, then more current tax dollars should find their way to education. If not, then the government should step up and fix it.
Naturally, corporate America will say that the problem is inefficient school systems. And while that may very well be correct, most corporations are not particularly efficient either. This is primarily a diversionary tactic to shift focus away from the corporate coffers.
Corporate executives will also contend that reinvesting large profit sums in public education would not be in the direct interests of their investors. Well, they would be wrong. A highly educated American work force ready to compete with the emerging economies of countries like India and China is very much in the interests of shareholders.
If we are going to be globally competitive and continue to attain record profits in this ever-evolving competitive globalization, that same corporate America has to "cough up" and take more financial responsibility for our greatest asset: our children and their education.
David D'Allesandro, a guest columnist, is former CEO of 