Would you vote for a one percent Florida state income tax, with all revenues dedicated exclusively to education? By the time you read this, Coloradans will have decided on a somewhat similar legislative proposal.
“The (Colorado) referendum will … replace the current flat state income tax rate of 4.6 percent with a two-tier system,” writes Jack Healy in the New York Times. “Residents with taxable incomes below $75,000 would pay 5 percent; taxable incomes above $75,000 would be taxed at 5.9 percent.”
Floridians pay no state income tax. Not true in most states, including Colorado. The Colorado legislation, which taxes higher earners at a greater rate, differs from our fictional Florida proposal, which would tax everyone one percent across the board. The caveat is that the adjusted gross income of many Floridians is already too low for such an educational tax to be imposed on them. Thus, the burden of paying for increasing educational costs across the state would again fall to those who are better able to afford it.
There are a lot of good reasons to oppose this type of increase.
One, you might argue that higher earners already pay more in property taxes to support local education, so why should they be socked again? Two, Florida is the unofficial U.S. Retiree Capital, and many Floridians have no children in school.
Floridians without school-aged children often resent the portion of their taxes earmarked annually for local education. Many Floridians would object to our fictional proposal because the Florida Lottery was originally designed to serve as a supplementary statewide educational funding vehicle. Some Coloradans opposed their increase because they feared the new revenues would be reallocated toward increasing teacher pay or funding pension programs, instead of being utilized directly to benefit students. Floridians might harbor similar concerns.
Conversely, whether one has children matriculating or not, schools provide a powerful public service. Besides the obvious benefits of better job opportunities and higher lifetime salary levels, according to The Institute for Higher Education Policy, advanced education can lead to improved health and increased life expectancy.
Education is often commensurate with lower crime rates. Good schools can lead to increased property values, as new residents seek out neighborhoods in high-ranking school districts. Lastly, schools offer adult education, community meeting space, and a variety of related services that are vital, but sometimes difficult to quantify.
A former educator I know contends that instead of a tax, we should charge every Florida family $100 per student annually. Because we “give” our public education away, he says, Florida families don’t value it, and thus, we demand less of our children in the areas of study and behavior. That idea might have a better chance of passing.
Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (850-608-6121—www.arborwealth.net), a fee-only registered investment advisory firm near Sandestin. Arbor Wealth specializes in portfolio management for clients with $250,000 or more of investable assets.