House and Senate Republicans moved in mid-December toward a final vote on a $1.5 trillion tax plan that could cost the nation’s public schools dearly. In the next decade, the sweeping changes to the tax code could put $370 billion worth of state and local revenue and 370,000 education jobs at risk, according to a state-by-state analysis by the National Education Association. 

Handing a school choice victory to Betsy DeVos, the tax bill would allow individuals to use 529 savings accounts — currently reserved for college-related expenses — to also cover expenses at K–12 private schools, including religious schools.

The tax plan’s sharp limits on state and local tax deductions will mean a tax increase for many families in high tax states such as New York. The final plan caps the deduction for any combination of state and local property, sales and income taxes at a total of $10,000. The average state and local tax deduction in New York is $22,169, according to a Government Finance Officers Association report.

The new cap on local tax deductions is likely to cripple local governments’ efforts to finance public schools. To raise taxes or pass bond measures for school funding, those governments often make the case that sales or income tax increases can be deducted from federal income taxes. 

Teachers would still be able to deduct some of their out-of-pocket expenses for school supplies they buy their students.

“I didn’t think it was possible, but the Republicans have managed to use their conference committee to make the tax bill even sweeter for the rich and worse for working families,” said AFT President Randi Weingarten. “Middle-class families are still left with a state and local tax ‘deal’ that’s still going to raise their taxes while cutting important local services like public schools.”

 ChalkBeat, Dec. 8
U.S. News & World Report, Dec. 15