Economic Stimulus Will Bail Out Public Schools to Avoid Local Tax Hikes, Says Senator

By Penny Starr | January 15, 2009 | 4:06 PM EST

Sen. Charles Schumer (D-N.Y.)

Capitol Hill ( – Sen. Chuck Schumer (D-N.Y.) said that the economic stimulus package Congress is preparing will serve as a kind of tax cut for state and local government by providing federal dollars to shore up public schools and eliminating the need to raise property taxes.
“To raise taxes at a time when the economy is going south makes no sense at all,” Schumer said at a press conference on Wednesday.
Schumer, joined by Sen. Robert Menendez (D-N.J), Laborers’ International Union President Terry O’Sullivan, and Randi Weingarten, president of the American Federation of Teachers, said the package will create jobs through infrastructure projects and help public schools.
“At the top of the list, of course, is a four-letter word,” Schumer said. “Jobs. And there are a handful of provisions in the package which are about education.”
“It’s also going to include funding for education block grant programs, which will send more federal dollars to our schools, and that’s going to preserve learning programs, prevent teacher layoffs and should help prevent increases in property tax,” Schumer said.
Schumer said raising property taxes – a major funding source for public schools in most states -- is “counterproductive” to what the economic stimulus program is trying to accomplish.
“Property taxes are a major tax that most people pay,” he said. “It makes no sense for the federal government to be pushing money into the economy while the state and local governments are taking money out of the economy by raising taxes or laying people off. It’s like robbing Peter to pay Paul. It’s sort of counterproductive.”
“As any economist will tell you, it’s doesn’t matter who is putting money into the economy, whether it’s federal, state or local -- it’s money into the economy,” Schumer said. “So this is supposed to mitigate that. The president-elect and all of us believe that this is a partnership between the federal, state, and local governments to get the economy going again.”
Schumer said the incoming Obama administration is committed to fixing both the nation’s infrastructure and improving the public schools, including by using federal, if not local, taxpayer money.
“It’s the president-elect’s goal that we have something to show at the end,” Schumer said. “In some cases we’ll have a bridge, but in some cases we’ll have a student who is much better educated.”