Tax-base sharing and racial capitalism in school finance
Three years ago, a friend and comrade Julie McIntyre sent me a call for papers, soliciting proposals for a special issue of The Journal of Educational Human Resources. The theme was school finance and social justice. I sent the editors a proposal, which they accepted. After years of collecting data with graduate students, analyzing, writing, and editing this paper has finally come out.
It's my first quantitative essay, which is exciting and nerve-wracking for me. I'm trained as a philosopher but I actually did study basic research methods for my master's degree and I've been advising all kinds of dissertations for my faculty job. Plus, I think socialists, marxists, and leftists in general shouldn't be afraid of numbers. They're the language of power in capitalism and quantity need not be essentially politicized one way or another. So let's work in this terrain!
In the paper, called "Cooperation Analysis of Tax-base Sharing in the Twin Cities: School Districts, Human Resources, and Structural Justice," I use a mixture of Marxist theory and statistical analysis looking at one of my favorite school finance policies in the US: Minnesota's tax-base sharing program.
The paper starts with a juxtaposition: As the George Floyd rebellions broke out, I had something in my the back of my mind: Minnesota has a great redistributive school finance scheme. What does this tell us about the racial capitalism of school finance?
Again, the program is called tax-base sharing. Basically, all the municipal governments in the Twin Cities metro region put 40% of the growth in their property revenues into a shared pool, which gets redistributed based on property value fluctuations.
One of the authors of the original legislation from 1971 explained it this way: imagine Paul Bunyan comes out of the forest chops up the property value from different towns and puts some of it here, some of it there, based on need.
The policy has significantly compressed property value inequality in the region over the last 50 years.
It has a great history, too. Municipal bond salesman-turned-school board member F. Warren Preeshl was in a group of local wonks called the Fiscal Disparities Committee in the late 1960s. Before their monthly meeting in December of 1968, Preeshl met fellow wonk Paul Gilje at a pancake house. Preeshl gave Gilje a three-page document outlining a scheme that would combat the "tyranny of the local property tax." Gilje loved the idea and brought it to the committee. They made it a priority for their work advising local and state politicians and published a report called "Breaking the Tyranny of the Local Property Tax."
After a two-year fight at the state house, a law based on this report passed the state senate by one vote. Proponents called it the Minnesota Miracle. Opponents called it "prairie socialism."
I think it's both actually! Indeed, the Fiscal Disparities programs the law created are some of the only cases of redistribution I've found that don't rely on any upward centralization to the state or federal level. Rather than punting to a higher level of government (which can be the promise and downfall of redistributionist schemes in the US) takes up and takes on the tyranny of 'local control' through property taxes, which ultimately render school districts into segregated fortresses of inequity.
The paper uses a methodology I call cooperation analysis to show the strength of the legislation using recent data on school district demographics. I include thirteen variables and run a coefficient of variation (CV) at the regional level, reported in the table below. Doing a coefficient of variation means finding the standard deviation of a set of variables, then dividing that standard deviation by the average of those variables.
The CV is common in studies of inequality, but I use it with an uncommon interpretation: I argue that it captures the extent of resource super-expropriation across district lines. A higher overall number means more super-expropriation. A lower one means more cooperation. I use the concept of super-exploitation in the theory of racial capitalism, with Nancy Fraser's articulation of expropriation, to build the concept of super-expropriation. I think it describes what we tend to think of as 'inequity' from a Marxist perspective.
Rather than thinking about school finance in terms of a technocratic malfunction in distribution, super-expropriation highlights the political theft of resources by/from racialized groups at the structural level. As historian of school finance Esther Cyna argues, the differences between school district resources in the US is not an issue of inequality or inequity. It's about theft of resources by one group from another, which tends to be racialized.
In a data set of seven other metro regions, I found that the Twin Cities region had the lowest index, indicating the lowest super-expropriation in the dataset (.449). I correlate this with the tax-base sharing program and I find some interesting shades of gray too. The Twin Cities' CV for debt service is actually really high. And that's because (I think) tax-base sharing isn't credit sharing. Districts don't share the burden of school bonds, which increases overall super-expropriation.
I conclude, following Stuart Hall & Cedric Robinson, that though the Twin Cities region has the least super-expropriation of school finance nationally, George Floyd was murdered there due to other tendencies within US racial capitalism, namely the overzealous police repression of Black communities. Thus, I argue, we can't rely on distribution alone to solve the uneven problems of US racial capitalism.