Wednesday, December 13, 2006

Teacher Supply Tax Deduction to End

Disclosure: My wife is a teacher who spends her own money on supplies.

From the Waterbury Republican-American:

Since 2002, teachers such as [kindergarten teacher Carol] Fitzgerald have gotten a bit of relief on their taxes for purchasing classroom supplies out of their own pockets. But the code that allowed educators to take up to a $250 deduction on their income taxes is set to expire at the end of this year.

"That $250 is a drop in the bucket. You can see just looking around how much money we're spending on supplies," Fitzgerald said. "But at least they're recognizing the fact that we're spending money on our own."

The National Education Association is working with Congress to get a two-year extension on the tax deduction, said Al Campos, a lobbyist for the organization.

The number of teachers using the deduction has grown since 2002, according to Internal Revenue Service spokeswoman Dianne Besunder. In 2002, 2.9 million teachers claimed some or all of the deduction, increasing to 3.2 million in 2003 and 3.4 million in 2004. Numbers for 2005 are not yet available.


Those 3.4 million teachers each taking their $250 deduction represents a total of $850 million in tax deductions - 0.039% of the 2004 federal budget of $2.2 trillion.

That $850 million, as the article notes, also only represents a fraction of what teachers actually spend out of their own pockets on school supplies:

In this veteran teacher's classroom, she has purchased most everything out of her own pocket: the sand in the sand table, books on her overstuffed shelves, colorful posters, arts and crafts supplies, supplementary workbooks and more.
...
Patrick Ospalek, president of the Waterbury Teachers Association and an English teacher at Waterbury Arts Magnet School, said the tax deduction has been popular among teachers despite many spending more than $250 on supplies each year.

"From personal experience, the $250 deduction is welcome, but I know that I spent probably four times that on supplies over the course of last year," Ospalek said. "It can't be seen as representative of what's actually" spent.
...
"At the elementary level, the enrichment stuff that the teachers find so useful is the stuff that the district isn't buying," he said. "The district is buying the necessities. Some might say the bare necessities."


Click on the link and read the whole article. This tax deduction has been scheduled to end before and survived; hopefully, it will survive again.

Update: Anon, in the comments, has alerted us to Susan Collins' announcement, dated 12/11/06, that an extension of the tax deduction has passed the Senate. For some reason, neither Thomas nor GovTrack has updated the status of either the House or the Senate version of the bill. It is unclear whether the extension has passed the House. Senator Collins' website alludes to a bill that extends the existing deduction and makes no mention of how long the extension is for - her bill as originally introduced (and its House companion) increased the deduction to $400 and made it permanent. I will try to figure out what has happened with this bill as information becomes available.

Sources:
Megan Broderick, Teachers who buy own supplies hope IRS extends tax deduction, Waterbury Republican-American, December 12, 2006.

Fiscal Year 2004 Budget, Summary Tables, Government Printing Office.

42 comments:

Anonymous said...

Perhaps the Superintendents, and their legions of assistants and curriculum specialists, should take a pay cut so that teachers can put the money in the classroom where it really belongs.

Anonymous said...

I wonder how many teachers across the country take the deduction and never spend a dime

Anonymous said...

Yaa-its gotta be tough working 9 months a year, getting guarenteed raises annually, and retiring after 20-30 years. Cry me a river.

Gabe said...

Anon 9:12 - Given that all CT teachers (after certification) have advanced degrees, their salary reflects the 10 months; the guarenteed annual raise, at least where I live, amounts to less than half of the annual increase in the CoL; and CT teachers do not pay into nor receive social security and their state pensions, which are contractually obligated, are underfunded by something like $5,000,000,000, so anyone retiring after 20 years has made incredible investment decisions or started out rich - two things that have nothing to do with being a teacher.

Genghis Conn said...

Yeah, easy times, anonymous 9:12. You should try it. A stress-free life would be yours! That's why young teachers so rarely burn out after three miserable years and seek employment in other fields. Better yet, you could get a fun and backbreaking summer job to make ends meet, because your salary will suck.

What is it with the society-wide belief that teachers are lazy, incompetent, greedy or worse? I encounter this a lot.

Gabe said...

Anon 9:03 - That is certainly possible, but is possibly balanced by teachers who spend their own money and don't take advantage of the tax deduction (because they don't know it exists, do their own taxes, take a standard deduction, etc.).

Anonymous said...

What CT teacher has never received his or her pension? The account needs to be funded but nobody's payout has ever been in danger.

Genghis Conn said...

Young teachers are in a lot of danger, A9:34. The money simply won't be there for them.

Anonymous said...

Gabe--In the evil private sector (Or what I like to call "the real world") cost of living annual raises are not necesarily at the inflation rate--in fact they can be well below the inflation rate. In the real world, people also get fired. In the real world pensions are not guaranteed and many, many people do not have pensions...they have to work 40 years--not 20--and rely on Social Security. Your teacher can retire after 20 years, go work in the dreaded private sector, and get into Social Security. The teachers (indeed all public sector employees) have not only their own public sector pension to rely upon, they also get to double dip by working after they leave their public sector gig, and work themselves into Social Security. Public sector employees also get great medical benefits--often for life. Teachers go into teaching knowing full well that salaries are not great, but the fringe benefits are excellent. As for the teachers pension-=-if you think the state is going to stiff the teachers out of their pensions, I got a bridge to sell you. Its the tax payers and the evil private sector which are paying for the largess and bloat that is the public employment scheme.

Dave Mooney said...

I've never understood the anti-teacher sentiment either.

Why are these supplies not considered unreimbursed business expenses? Why was there a need for a special code?

Gabe said...

Five billion is a big enough number that all of their future pensions are in danger. And even if recent rumblings are taken into account (that the state should pay 100% of its obligation each year), that would not account for the five billion dollars that the state is in the hole on the teacher's pension fund.

Anonymous said...

GC-They leave cause the salary sucks--so what??? That's called life.

How many private sector employees leave their jobs for better jobs???

Anonymous said...

How about a tax credit for parents, who now are expected, if not required, to "donate" supplies to the classroom? I've got two kids in elementary school, and after sending in school supplies, paper products, extra snacks, etc, not just for my kids, but for the entire class, where's my tax break?

Anonymous said...

No doubt all teachers do not spend the money on supplies. Certainly, some do, most likely those starting out in their career or in the elementary grades. But why single out this deduction? Why not simplify the entire tax code?

Gabe said...

Anon 9:35 - My fourth year working after college, with no advanced degree, I was getting paid more than my 35-year teacher father who had reached the top salary step and maxed out. Perhaps you are overselling teacher salaries?

cgg said...

If teaching is such an easy job why doesn't everyone do it? If it's such a gravy train why don't schools have waiting lists for positions?

Gabe said...

Anon 9:38 - How about we give schools all the supplies they need (especially in areas where the parents can't financially bear the burden of providing supplies) and then parents do not have to bear that burden?

Anonymous said...

"My fourth year working after college, with no advanced degree, I was getting paid more than my 35-year teacher father who had reached the top salary step and maxed out."

Gabe, what year was this? Was it pre- or post- Teacher Enhancement Act? There is a big difference.

Anonymous said...

gabe: Take home pay often doesn't reflect the cost of benefits, etc. Depends where you live but there are plenty of school districts turning away applicants in CT.

Anonymous said...

gabe--I pay my taxes, and 60% of those taxes are supporting the local schools. Well after paying my taxes, which increased 35% this year, I still have to raise $$$ so that little anon can have books, and playgrounds, and teachers aides in the clasroom.

Where the hell is all that money going??? The school budget is eating up our taxes, and the school budget is vastly tilted towards salary and pension costs--the whole system is a bloated,inefficient mess, perpetuated by a culture that wants more inputs (in the form of dollars) and has no responsibity for the sorry results.

We spend a fortune on a system that is failing to do its job-educate our children.

Gabe said...

Anon 9:49 - It was 2002 and my father taught in NYC which, if it was in Connecticut, would be somewhere in the middle to lower end of teacher salaries for cities (obviously not of comparable size).

Anon 9:53 - Little anons grow so fast, don't they?

Anonymous said...

Just to clarify, the Teachers' Pension Fund is $7 Billion in the hole, not $5 Billion. The required State contribution to begin to rectify this problem is north of $1/2 billion per year beginning in F/Y 2008 and continues to rise each year thereafter for the next 30 or so years.
When this is added to an even higher pension deficit and retirement health care deficit of $21 billion for State employees, the taxpayers are in hock to these groups to the tune of $35 Billion +. ( These are by all "present value" numbers so the cumulative cost is significantly higher.)
The people that are in danger are the taxpayers- Mortal Danger.

Anonymous said...

Gabe,

CT avg teacher salary is highest in nation = $57,000 (a year or two ago)

Concern here is likely toward CT salaries, not NY salaries. Are they comparable?

Genghis Conn said...

I wish it had been a gravy train, or an awesome "public employment scheme." But it wasn't. Period.

Long hours, few rewards, incompetent administrators, societal disdain (like what you see above), parents, angry taxpayers, not to mention a shaky retirement fund and lack of access to Social Security, doesn't make for the easy life.

I know people are upset about high taxes. But slashing away at teacher salaries would be a disaster. The best and the brightest already shy away from teaching because they can go elsewhere and earn much, much more money. If salaries were lower (by the way, raises are not always guaranteed--arbitration froze my ex-district's salaries for three years once) it would be impossible to recruit new teachers. Even top districts like Simsbury would have trouble.

That said, the educational system is by and large in crisis. But many of the problems facing it are cultural in nature.

Anonymous said...

9:53, you may wish to write your legislators and tell them that you want the state to rely less on the property tax to fund schools; chances are the 35% increase in taxes has more to do with the increase in enrollment and revaluation than an actual 35% increase in spending per enrolled student in your district. And that's not to disvcount the cultural probelms and the bloated administrative (non-teaching) jobs.

Anonymous said...

News of this deduction having been extended was posted on Susan Collins's website as of 12/11/06:
http://collins.senate.gov/public/continue.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=7357b843-802a-23ad-4534-1f3c2ffaaf03&CFID=22669135&CFTOKEN=92108369

Gabe said...

Anon 10:10 - If you consider NYC, Westchester and Long Island as seperate from the rest of NY state, they are very comparable - a big city with lower salaries surrounded by affluent suburbs with higher teacher salaries (no rural of course in what we just pulled out of NY).

I believe that Rosalyn and Jericho (on Long Island) are the two highest paying school districts in the country. My understanding has always been (with absolutely nothing to back it up) that teachers in Connecticut's affluent neighborhoods (like Greenwich and Darien) are paid less than you would expect based on the affluence of the neighborhood because of a proportionately higher number of private school students than similiar districts in NY (like Rosalyn and Jericho).

Gabe said...

Update above.

Anonymous said...

Darien and Greenwich have exceptional school systems with happy teachers but Boards of Education who aren't loaded with a bunch of dumb saps!!!!

Mirror said...

This latest gift to "teachers " is nothing more than another success of the teacher's unions constant "heroisation" of their due paying members. For years teachers were and are claiming deductions for "home offices" even though the taxpayers had and have paid billions for their "offices". There is no doubt that some teachers spend some of their own money to provide extra's in their classrooms. I did it also while working in the private and public sectors -I suspect most of us do it. When, however, a highly organized special interest carves out a special tax exemption, due to years of public lobbying, it is a cheat on the rest of us and a farce and sets the stage for the next "grab". PS. the average work year of teachers, with all the school holidays, is nine months.

Matt said...

Much of the opposition to teachers comes from right-wing conservatives who oppose public education -- in part because they see it as part of the welfare state, in part because teachers unions (along with police / firefighters unions) are a major part of what prevents them from eliminating unions entirely, from a PR perspective, and in part because they know that well-educated populations tend to be broadly liberal.

Ignorance is a pre-requisite for conservative government to exist in a democratic society. Every teacher is practically a Eugene Debs in the conservative worldview.

Grumpy said...

Sorry about this long and snarky post, but I feel compelled to respond to the anonymous nitwits who seem fundamentally opposed to the idea of their tax dollars being used to educate other people's children.

"Perhaps the Superintendents, and their legions of assistants and curriculum specialists, should take a pay cut so that teachers can put the money in the classroom where it really belongs."

I must say that it's refreshing to see someone advocate for cutting administrative costs so more money can go towards classroom teachers. Usually the suggestion is that these cuts would come straight out of the local BOE's bottom line without putting more resources into the classroom.

"I wonder how many teachers across the country take the deduction and never spend a dime"

I wonder how many anonymous commenters on this blog are stealing from their employer by reading and posting to CTLP on company time? Or heaven forbid, on General Assembly (taxpayer) time?

"The teachers (indeed all public sector employees) have not only their own public sector pension to rely upon, they also get to double dip by working after they leave their public sector gig, and work themselves into Social Security."

Yeah. That kind of double dipping really ticks me off too. You know what else does? Private sector employees with pensions and/or 401k plans (often including generous matching contributions from their employer) who double dip by also getting Social Security. Talk about mooching off the taxpayer!

"Public sector employees also get great medical benefits--often for life."

Teachers don't get lifetime medical. (At least not in my town.)

"They leave cause the salary sucks--so what??? That's called life."

Damn straight! Why the hell should kids be taught by someone with the qualifications and ability to get a better job than teacher? If they want highly qualified teachers capable of preparing their kids for college, parents should suck it up and pay for a private school.

"How about a tax credit for parents, who now are expected, if not required, to "donate" supplies to the classroom? I've got two kids in elementary school, and after sending in school supplies, paper products, extra snacks, etc, not just for my kids, but for the entire class, where's my tax break?"

Next time, maybe you won't vote against your town's budget so the BOE won't be forced to cut the classroom supplies budget to avoid laying off your kid's teacher.

"the school budget is vastly tilted towards salary and pension costs"

Completely unlike the private sector where annual operating budgets are vastly tilted towards wages and benefits.

"We spend a fortune on a system that is failing to do its job-educate our children."

Connecticut's public schools have lower drop out rates, higher test scores, and more graduates going on to college than public school systems in most other states.

"Darien and Greenwich have exceptional school systems with happy teachers but Boards of Education who aren't loaded with a bunch of dumb saps!!!!

They also have astronomically high median family incomes and property values that allow them to easily fund all the school programs their hearts desire while also keeping local property taxes relatively low as a proportion of family income.

"When, however, a highly organized special interest carves out a special tax exemption, due to years of public lobbying, it is a cheat on the rest of us and a farce and sets the stage for the next "grab".

Oh crap. I actually agree with that statement!

Authentic Connecticut Republican said...

>> CT teachers do not pay into nor receive social security and their state pensions, which are contractually obligated, are underfunded by something like $5,000,000,000,

And probably will remain so seeing as no Democratic Gov in over 20 years has seen fit to properly fund it, while after Jodi did the CEA endorsed whatshisname from New Haven.

Gabe said...

As far as I'm concerned, everyone involved in letting the pension fund get 5 billion dollars in debt is at fault here, regardless of party.

On the other hand, even a moderate Republican like Rell (who didn't actually properly fund the pension given its massive debt load) has to work hard to overcome the perception (rooted in recent history) that her party wants to abolish the Department of Education. So its hard for me to be shocked, SHOCKED, when a teachers' union endorses a Democrat over a Republican when they are similiar on education issues.

Authentic Connecticut Republican said...

>>that her party wants to abolish the Department of Education.

Seeing as the federal DoE does little (nothing?) other than issue proclamations and unfunded mandates; why would anyone want to keep it around?

When even my more-conservative-than-me and quite Republican, public school teacher daughter explains to me the shortcomings of how No Child Left Behind is implimented; even I "get it".

Gabe said...

DoE implements the Title 1 school program, providing funds for schools whose student base is disproportionately poor - in my town, half of the elementary schools (including the one my wife teaches at) get Title 1 funds that are used to buy computers for the school, pay for free and reduced breakfasts and lunches, and supplement the supplies that the schools recieve so that parents don't have to buy as many supplies.

So thats why I would want to keep it around.

bluecoat said...

Social Security isn't properly funded as Alan Schlesinger pointed out to all of us. The CT Teachers Pension is in lieu of SS, so why should teachers be treated any differnetly that the rest of us saps?

Authentic Connecticut Republican said...

So thats why I would want to keep it around.

You're not considering the cost of running the place (ie: waste).

I've no idea how much or what percentage that is - but it's probably over half.

Consider this - the CT sales/use tax costs off 130 million just to run.
IOW's - the 1st 130 million raised does NOTHING for the taxpayers at all.

It's a safe bet that the Federal DoE wastes something in the neighborhood of 60-70% of their total funding.

Authentic Connecticut Republican said...

bluecoat said...
so why should teachers be treated any differnetly that the rest of us saps?


Good point.

Besides that they're unionized and if their union fails to get the job done for them as it regards retirement, what do they expect from the rest of us?

My daughter's a 3rd year teacher and makes 10K more than my base. In fact I'll only make 3 or 4K more than her and we had a banner year with a 20% bonus. Seeing as she both attends graduate school (already picked up her Masters this spring(4.0)) and works two part time jobs thanks to summers off; her total income will exceed mine by about 15K.

I have 5 years of college and hold the highest award in my industry - I'm by no means abused or under paid by industry standards.

Teachers are under paid?
Couldn't prove it by me.

Gabe said...

I've no idea how much or what percentage that is - but it's probably over half

Well, at least we are dealing with facts.

Authentic Connecticut Republican said...

>>Well, at least we are dealing with facts.

Please show me anywhere the Federal Gov't. operates with any efficiency.

Gabe said...

You are making an argument, so I should prove the negative?

If you are right that more than half of the DoE's budget is eaten by overhead, it shouldn't be too hard to find. By the person making that argument.

Put that ahead of saying that more than half of the DoE's budget is eaten by overhead on your To Do list.

Then we can go on to debate whether the benefit (computers, supplies, food to schools in poor neighborhoods - my position) is worth the cost (inefficient management of more than 50% of the budget - your position).