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Taxpayers vs. Teachers


There just never seems to be enough money to fund public education. During the boom years teachers and their unions were constantly complaining that taxpayers were too stingy. That drumbeat was heard throughout the nation. The more money school districts received, the more they asked for.

Imagine if your property taxes set you back $43,000 a year, with 86% of that going to the school system. You justify it if you have two kids in school and it beats paying the freight for private school in the city. But if your kids have flown the coup, why pay?

That’s the dilemma in wealthy New York enclave Bronxville. Despite having wealthy residents and tax money gushing in, the school district there is having to cut back. The district cut their janitors loose last year, outsourcing that work to eliminate pension costs.

The teachers threw a fit when the janitors were sacked, believing that school funding comes magically from heaven. Bronxville’s 150 teachers have been working without a contract since last June, the New York Times reports. The educators believe the two percent salary increase they’ve been offered to be inadequate.

Teachers with a master’s and 30 years on the job make nearly $118,000 in Bronxville and are entitled to retire with an $80,000 a year state pension, or more than two-thirds his or her final salary. Try finding that deal in the private sector. Bronxville teachers don’t have to worry about saving their own money for retirement, or about doubling as investment analysts, combing through the fund choices a 401k plan might offer, hoping to make the right picks to ride the booms and avoid the busts so enough will be there for their golden years.

This is a simple math problem. Paying the 150 teachers that are on the job is one thing, but taxpayers are paying retired teachers at the same time who aren’t teaching anyone. And as the Times piece makes clear, the empty-nester taxpayers that are crying “uncle” and leaving town are selling their homes to young families with kids and lower incomes. They are moving there for the great schools, but their incomes can’t take the tax pain.

“We are in a very different world today, no question about that,” Earl Leiken, mayor of tony Shaker Heights, Ohio told the NYT. “Maybe if you go back to the Great Depression, there was a similar resistance to local tax increases, but not since then.”

Indeed there was, as David Beito writes in his wonderful book Taxpayers in Revolt: Tax Resistance during the Great Depression. Farmers organized and overran tax sales and urban property owners banded together to stage tax strikes. For instance, Chicago city government was helpless as over half of the property taxes due for 1931-32 went unpaid. Those who did pay their taxes were made fun of by their friends and neighbors.

Emboldened teachers vs. squeezed taxpayers. There’s a fight brewing.


Douglas French

Douglas French is President Emeritus of the Mises Institute, author of Early Speculative Bubbles & Increases in the Money Supply, and author of Walk Away: The Rise and Fall of the Home-Ownership Myth. He received his master's degree in economics from UNLV, studying under both Professor Murray Rothbard and Professor Hans-Hermann Hoppe. His website is DouglasInVegas.com.

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