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Tuesday, January 2, 2001

Tax break
proposed for
state’s teachers

But some say LeMahieu's plan
is unfair, cuts revenue and
has uncertain effects

By Crystal Kua

Providing teachers a state tax credit for being teachers and professionals would be a way to show them how much they are appreciated in Hawaii, according to the state's public schools superintendent.

"At some point, this place is going to have to take a stand that educators, generally, and teachers in particular, are a valued commodity that sets them apart from everybody else," said Superintendent Paul LeMahieu.

LeMahieu will be asking state lawmakers to take that stand this legislative session by approving a tax break specifically aimed at teachers.

But critics of the tax credit proposal say that if teachers get this, other groups -- firefighters and police officers, for example, -- would likely seek similar treatment, which could mean a reduction of millions of dollars in the state's pocketbook.

"It would be a very slippery slope," said Lowell Kalapa, executive director of the Tax Foundation of Hawaii.

While LeMahieu didn't have details on how a Hawaii tax credit would work, he said the idea comes from California, which approved a tax break for teachers last year.

"It impacts discretionary income. It sort of frees up, in a sense, after-tax dollars," he said.

Credentialed public and private school teachers in California are eligible for a tax credit of $250 to $1,500 a year, depending on years of service.

LeMahieu said "teacher" would have to be defined in statute here. For example, California doesn't extend the tax credit to administrators, school counselors or credentialed teachers who aren't working in the classroom.

LeMahieu said he believes the basis for a tax credit here is logical.

"The research is clear; the average teacher puts about $2,000 of her own money or his own money back into the education system in classroom supplies or what have you," LeMahieu said. Teachers should get a credit for at least that, he argued.

LeMahieu said that in collective bargaining, it's difficult for the governor to target just teachers when there are other bargaining units also waiting for pay raises.

"He (the governor) cares about teachers -- I know that for a fact -- but every time he talks to teachers ... about negotiations possibilities, in the back of his mind is the multiplier effect," LeMahieu said. "We've got to have some legal structure through which it becomes possible to do something for just the teachers."

The governor declined to comment on the tax credit proposal because of the pending contract talks between the state and the teachers' union, his press secretary said.

But others see problems with the proposal.

State Budget Director Neal Miyahira said the state's fiscal picture would be affected by tax credits.

"This means revenue loss," he said. "In the end, it will impact the (state's) financial plan."

Miyahira said collective bargaining is the proper venue to address compensation issues.

Kalapa said collective bargaining is also a way that provides direct accountability of elected officials because the public can decide whether to vote them back into office based on their stand on public employee pay raises.

A tax credit would not have that kind of impact, and no one would know the exact price tag from year to year, he said. "You mask the true cost of how much we appreciate our teachers."

Kalapa said the tax system was set up to raise money to operate government programs and that it shouldn't be used as a "social tool."

While LeMahieu can lobby for teachers, he doesn't have any control over other groups that could head to the Legislature to seek the same thing as teachers, Kalapa said. "Where do you draw the line? He has no control over what SHOPO (the police union) would do or the firefighters would do."

Anticipating this reaction, LeMahieu said: "The only answer to the question, 'Where does it stop?' -- it stops with teachers because these people are this important. They are actually more important than people who fix the roads ... in terms of what they're doing for us."

Kalapa, who has followed the events in California, said tax credits open up a Pandora's box of unforeseen circumstances.

"Our opinion on tax incentives and tax breaks is that they usually don't work the way we think it's going to work," he said.

For example, when housing developers received a tax break in the early 1990s to build affordable homes, the housing construction boom came at the beginning of an economic bust, leading to a glut of homes on the market and falling property values, Kalapa said.

The same thing could happen with an overabundance of teachers, something that happened in the 1970s, he said.

Also, if Hawaii follows California's lead, extending tax credits to private school teachers could be seen as a back-door approach to school vouchers -- instead of giving public funds to students to attend private schools, the funds would go to their teachers. "Same difference to me," Kalapa said.

And giving tax credits based on length of service isn't a reflection of how well teachers are doing their jobs, Kalapa said.


Here are the four elements from the legislative agenda of state schools Superintendent Paul LeMahieu:

Bullet Compensation and rewards for professionals: Includes tax credits for teachers and other rewards and incentives, such as providing a tax credit for computer hardware.

Bullet Quality of Learning Environment: Calling it a learning issue, LeMahieu wants to see a more focused approach to the repair and maintenance of school facilities. By concentrating funds on one school complex or school at a time, the job gets done at that particular site.

Bullet Standards: Finish the design of the accountability system and seek money to fund rewards and the assistance portion of the system; obtain funding for standards-based instructional materials, including textbooks; invest in professional development.

Bullet Increase authority over the Department of Education's administrative affairs: Clear roadblocks to the department's ability to organize itself. "I still can't reorganize the department without every other executive branch (department) commenting on whether or not they'll allow me to do it."

Star-Bulletin staff

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