High-quality and equitable education opportunities, ranging across early childhood, K-12, technical education, higher education and apprenticeships, are pivotal for the economic prospects of working people and their children. Disparities in education funding and the resulting inequities in the programs and services provided to children and adults of different incomes and races can determine the earning potential for someone’s entire life. EARN groups analyze how state and local school taxes are raised and how education funding is parceled out, showing the impact of current education policies and suggesting reforms that can improve educational outcomes and economic conditions for working families.
Building a Strong Economy: The Roles of Education, Transportation, and Tax Policy
- January 15, 2017
- Massachusetts Budget and Policy Center
- Phineas Baxandall, Colin Jones, and Kurt Wise
Effective economic policies can expand opportunity and improve the economic security of working families. When everyone in the workforce has access to the education and training needed to reach their full potential, the productivity of those workers and the overall economy improves. When a state has high-quality transportation infrastructure, the economy is also more productive because goods can more easily get to market, employees can get to work more quickly, consumers can more easily reach vendors, and less money is wasted by overdue repairs.
Improving the quality of the education our children receive and the transportation infrastructure our economy relies on requires up-front investments for long term pay-offs. Determining whether and how to raise revenue for these long term investments is a critical challenge for state policy makers. This paper analyzes the evidence on the short and long term effects of investments in the education of our people and in improving our roads, bridges, and public transit systems. It also examines the effects of tax policies that could fund these investments. Currently in Massachusetts the highest-income households pay the smallest share of their income in state and local taxes. We examine the evidence on the likely economic effects of tax reforms that would bring the overall level of state and local taxation for very high-income households close to that of other residents.