tag:theconversation.com,2011:/uk/topics/bluescope-1296/articlesBlueScope – The Conversation2024-02-15T13:35:30Ztag:theconversation.com,2011:article/2229402024-02-15T13:35:30Z2024-02-15T13:35:30ZStudents lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students<figure><img src="https://images.theconversation.com/files/575520/original/file-20240214-20-j3e0d8.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C1684%2C678&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Exxon Mobil Corp.'s campus in East Baton Rouge Parish, left, received millions in tax abatements to the detriment of local schools, right.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/oil-refinery-owned-by-exxon-mobil-is-the-second-largest-in-news-photo/1225711980">Barry Lewis/Getty Images, Tjean314/Wikimedia</a></span></figcaption></figure><p>Built in 1910, James Elementary is a three-story brick school in Kansas City, Missouri’s historic Northeast neighborhood, with a bright blue front door framed by a sand-colored stone arch adorned with a gargoyle. As bustling students and teachers negotiate a maze of gray stairs with worn wooden handrails, Marjorie Mayes, the school’s principal, escorts a visitor across uneven blue tile floors on the ground floor to a classroom with exposed brick walls and pipes. Bubbling paint mars some walls, evidence of the water leaks spreading inside the aging building.</p>
<p>“It’s living history,” said Mayes during a mid-September tour of the building. “Not the kind of living history we want.”</p>
<p>The district would like to tackle the US$400 million in deferred maintenance needed to create a 21st century learning environment at its 35 schools – including James Elementary – but it can’t. It doesn’t have the money.</p>
<h2>Property tax redirect</h2>
<p>The lack of funds is a direct result of the property tax breaks that Kansas City lavishes on companies and developers that do business there. The program is supposed to bring in new jobs and business but instead has ended up draining civic coffers and starving schools. Between 2017 and 2023, the Kansas City school district lost $237.3 million through tax abatements.</p>
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<p>Kansas City is hardly an anomaly. An <a href="https://www.cambridge.org/core/books/incentives-to-pander/E0003C20215EDA5047EA0831FEEB6D92">estimated 95%</a> of U.S. cities provide economic development tax incentives to woo corporate investors. The upshot is that billions have been diverted from large urban school districts and from a growing number of small suburban and rural districts. The impact is seen in districts as diverse as Chicago and Cleveland, Hillsboro, Oregon, and Storey County, Nevada.</p>
<p>The result? A 2021 <a href="https://doi.org/10.1080/15575330.2022.2148171">review of 2,498 financial statements</a> from school districts across 27 states revealed that, in 2019 alone, at least $2.4 billion was diverted to fund tax incentives. Yet that substantial figure still downplays the magnitude of the problem, because three-quarters of the 10,370 districts analyzed did not provide any information on tax abatement agreements.</p>
<p>Tax abatement programs have long been controversial, pitting states and communities against one another in beggar-thy-neighbor contests. Their economic value is also, at best, unclear: Studies show most companies <a href="https://research.upjohn.org/up_workingpapers/289/">would have made the same location decision</a> without taxpayer subsidies. Meanwhile, schools make up the largest cost item in these communities, meaning they suffer most when companies are granted breaks in property taxes.</p>
<p>A three-month investigation by The Conversation and three scholars with expertise in <a href="https://scholar.google.com/citations?user=RO4oI-8AAAAJ&hl=en">economic development</a>, <a href="https://www.colorado.edu/education/kevin-welner">tax laws</a> and <a href="https://liberalarts.utexas.edu/government/faculty/nj4353">education policy</a> shows that the cash drain from these programs is not equally shared by schools in the same communities. At the local level, tax abatements and exemptions often come at the cost of <a href="https://www.schoolfinancedata.org/the-adequacy-and-fairness-of-state-school-finance-systems-2024/.">critical funding</a> for school districts that <a href="https://cdn.theconversation.com/static_files/files/3062/2024-01-31_Good_Jobs_First_Abating_Our_Future.pdf?1707953373">disproportionately serve</a>
students from low-income households and who are racial minorities.</p>
<p>In Missouri, for example, in 2022 <a href="https://www.kcpublicschools.org/about/tax-incentives-kcps#:%7E:text=As%20of%202022%2C%20nearly%20%241%2C700,%24500-%24900%20per%20pupil">nearly $1,700 per student was redirected</a> from Kansas City public and charter schools, while between $500 and $900 was redirected from wealthier, whiter Northland schools on the north side of the river in Kansas City and in the suburbs beyond. Other studies have found <a href="https://journals.sagepub.com/doi/abs/10.1177/08912424231174836">similar demographic trends elsewhere</a>, including <a href="https://goodjobsfirst.org/wp-content/uploads/2023/02/How-Tax-Abatements-Cost-New-York-Public-Schools.pdf">New York state</a>, <a href="https://goodjobsfirst.org/wp-content/uploads/2022/07/South-Carolinas-Corporate-Tax-Breaks-2022.pdf">South Carolina</a> and <a href="https://doi.org/10.1080/15575330.2023.2217899">Columbus, Ohio</a>.</p>
<p>The funding gaps produced by abated money often force schools to <a href="https://doi.org/10.2307/3325345">delay needed maintenance</a>, <a href="https://doi.org/10.1002/ets2.12098">increase class sizes</a>, <a href="https://districtadministration.com/teacher-layoffs-enter-k12-outlook-school-districts-budget-deficits/">lay off teachers</a> and support staff and even close outright. Schools also <a href="https://www.nytimes.com/2018/04/16/reader-center/us-public-schools-conditions.html">struggle to update or replace</a> outdated technology, books and other educational resources. And, amid a nationwide teacher shortage, schools under financial pressures sometimes turn to inexperienced teachers who are <a href="https://learningpolicyinstitute.org/product/state-teacher-shortages-vacancy-resource-tool">not fully certified</a> or <a href="https://www.dallasnews.com/news/education/2023/10/16/dallas-relies-on-international-teachers-more-than-any-other-school-district-in-the-us/">rely too heavily</a> on recruits from overseas who have been given special visa status.</p>
<p>Lost funding also prevents teachers and staff, who often feed, clothe and otherwise go above and beyond to help students in need, from <a href="https://worldpopulationreview.com/state-rankings/teacher-pay-by-state">earning a living wage</a>. All told, tax abatements can end up harming a community’s value, with constant funding shortfalls creating <a href="https://www.cbpp.org/research/a-punishing-decade-for-school-funding">a cycle of decline</a>.</p>
<h2>Incentives, payoffs and guarantees</h2>
<p>Perversely, some of the largest beneficiaries of tax abatements are the politicians who publicly boast of handing out the breaks despite the harm to poorer communities. Incumbent governors have used the incentives as a means of <a href="https://www.cambridge.org/core/books/incentives-to-pander/E0003C20215EDA5047EA0831FEEB6D92">taking credit for job creation</a>, even when the jobs were coming anyway.</p>
<p>“We know that subsidies don’t work,” said <a href="https://www.elizabethmarcello.com/">Elizabeth Marcello</a>, a doctoral lecturer at Hunter College who studies governmental planning and policy and the interactions between state and local governments. “But they are good political stories, and I think that’s why politicians love them so much.”</p>
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<figcaption><span class="caption">Academic research shows that economic development incentives are ineffective most of the time – and harm school systems.</span></figcaption>
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<p>While some voters may celebrate abatements, parents can recognize the disparities between school districts that are created by the tax breaks. Fairleigh Jackson pointed out that her daughter’s East Baton Rouge third grade class lacks access to playground equipment.</p>
<p>The class is attending school in a temporary building while their elementary school undergoes a two-year renovation.</p>
<p>The temporary site has some grass and a cement slab where kids can play, but no playground equipment, Jackson said. And parents needed to set up an Amazon wish list to purchase basic equipment such as balls, jump ropes and chalk for students to use. The district told parents there would be no playground equipment due to a lack of funds, then promised to install equipment, Jackson said, but months later, there is none.</p>
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<a href="https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Cement surface surrounded by a fence with grass beyond. There's no playground equipment.." src="https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575426/original/file-20240213-28-rkjkme.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The temporary site where Fairleigh Jackson’s daughter goes to school in East Baton Rouge Parish lacks playground equipment.</span>
<span class="attribution"><span class="source">Fairleigh Jackson</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
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</figure>
<p>Jackson said it’s hard to complain when other schools in the district don’t even have needed security measures in place. “When I think about playground equipment, I think that’s a necessary piece of child development,” Jackson said. “Do we even advocate for something that should be a daily part of our kids’ experience when kids’ safety isn’t being funded?”</p>
<p>Meanwhile, the challenges facing administrators 500-odd miles away at Atlanta Public Schools are nothing if not formidable: The district is dealing with <a href="https://atlanta.capitalbnews.org/chronic-absenteeism-aps/">chronic absenteeism</a> among half of its Black students, many students <a href="https://atlantaciviccircle.org/2023/08/28/more-atlanta-students-homeless-this-school-year/">are experiencing homelessness</a>, and it’s facing a <a href="https://www.fox5atlanta.com/news/teacher-retention-an-issue-in-georgia-situation-could-get-worse">teacher shortage</a>.</p>
<p>At the same time, Atlanta is showering corporations with tax breaks. The city has two bodies that dole them out: the Development Authority of Fulton County, or DAFC, and Invest Atlanta, the city’s economic development agency. The deals handed out by the two agencies have drained $103.8 million from schools from fiscal 2017 to 2022, according to Atlanta school system financial statements.</p>
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<p>What exactly Atlanta and other cities and states are accomplishing with tax abatement programs is hard to discern. <a href="https://research.upjohn.org/up_workingpapers/289/">Fewer than a quarter</a> of companies that receive breaks in the U.S. needed an incentive to invest, according to a 2018 study by the Upjohn Institute for Employment Research, a nonprofit research organization. </p>
<p>This means that at least 75% of companies received tax abatements when they’re not needed – with communities paying a heavy price for economic development that sometimes provides little benefit.</p>
<p>In Kansas City, for example, there’s no guarantee that the businesses that do set up shop after receiving a tax abatement will remain there long term. That’s significant considering the historic border war between the Missouri and Kansas sides of Kansas City – a competition to be the most generous to the businesses, said Jason Roberts, president of the Kansas City Federation of Teachers and School-Related Personnel. Kansas City, Missouri, has a <a href="https://www.kcmo.gov/city-hall/departments/finance/earnings-tax">1% income tax</a> on people who work in the city, so it competes for as many workers as possible to secure that earnings tax, Roberts said.</p>
<p>Under city and state tax abatement programs, companies that used to be in Kansas City have since relocated. The AMC Theaters headquarters, for example, <a href="https://www.bizjournals.com/kansascity/news/2011/09/14/amc-entertainment-will-move-hq-to-ks.html">moved from the city’s downtown</a> to Leawood, Kansas, about a decade ago, garnering some $40 million in <a href="https://www.kansascommerce.gov/program/business-incentives-and-services/peak/">Promoting Employment Across Kansas</a> tax incentives.</p>
<p>Roberts said that when one side’s financial largesse runs out, companies often move across the state line – until both states decided in 2019 that <a href="https://www.kansascity.com/news/business/article233725152.html">enough was enough</a> and <a href="https://www.brookings.edu/articles/the-end-of-kansas-missouris-border-war-should-mark-a-new-chapter-for-both-states-economies/">declared a cease-fire</a>.</p>
<p>But tax breaks for other businesses continue. “Our mission is to grow the economy of Kansas City, and application of tools such as tax exemptions are vital to achieving that mission, said Jon Stephens, president and CEO of Port KC, the Kansas City Port Authority. The incentives speed development, and providing them "has resulted in growth choosing KC versus other markets,” he added.</p>
<p>In Atlanta, those tax breaks <a href="https://www.ajc.com/news/fulton-authority-gives-tax-breaks-to-projects-in-hot-markets-ajc-finds/PHR5H4SXNRAGRNWHBUUCIPHFQM/">are not going</a> to projects in neighborhoods that need help attracting development. They have largely been handed out to projects that are in high demand areas of the city, said Julian Bene, who served on Invest Atlanta’s board from 2010 to 2018. In 2019, for instance, the Fulton County development authority <a href="https://saportareport.com/fulton-agency-approves-nearly-100-million-in-property-tax-abatements/sections/reports/maggie/">approved a 10-year, $16 million tax abatement</a> for a 410-foot-tall, 27,000-square-foot tower in Atlanta’s vibrant Midtown business district. <a href="https://1105westpeachtree.com/">The project</a> included hotel space, retail space and office space that is now occupied by <a href="https://blog.google/inside-google/company-announcements/atlanta-office/">Google</a> and <a href="https://www.ajc.com/business/economy/invesco-plans-add-500-jobs-new-midtown/CX8ubABcCfK2IuqrJu5nMJ/">Invesco</a>.</p>
<p>In 2021, a developer in Atlanta <a href="https://www.wsbtv.com/news/local/ponce-city-market-developer-pulls-request-8-million-tax-break-its-expansion/DYWYAKHVTNH5PPVHFBD5QCZDXY/">pulled its request</a> for an $8 million tax break to expand its new massive, mixed-use Ponce City Market development in the trendy Beltline neighborhood with an office tower and apartment building. Because of community pushback, the developer knew it likely did not have enough votes from the commission for approval, Bene said. After a second try for $5 million in lower taxes was also rejected, the developer went ahead and <a href="https://poncecitymarket.com/directory-view-all">built the project</a> anyway.</p>
<p>Invest Atlanta has also turned down projects in the past, Bene said. Oftentimes, after getting rejected, the developer goes back to the landowner and asks for a better price to buy the property to make their numbers work, because it was overvalued at the start.</p>
<h2>Trouble in Philadelphia</h2>
<p>On Thursday, Oct. 26, 2023, an environmental team was preparing Southwark School in Philadelphia for the winter cold. While checking an attic fan, members of the team saw loose dust on top of flooring that contained asbestos. The dust that certainly was blowing into the floors below could contain the cancer-causing agent. Within a day, <a href="https://www.inquirer.com/education/philadelphia-school-asbestos-closed-southwark-20231027.html">Southwark was closed</a> – the seventh Philadelphia school temporarily shuttered since the previous academic year because of possible asbestos contamination.</p>
<p>A 2019 inspection of the John L Kinsey school in Philadelphia found <a href="https://www.philasd.org/capitalprograms/wp-content/uploads/sites/18/2019/11/6280_Building_21_@_John_L_Kinsey_School_2018_2019_3_Year_AHERA_Report.pdf">asbestos in plaster walls, floor tiles, radiator insulation and electrical panels</a>. Asbestos is <a href="https://www.inquirer.com/education/asbestos-closure-philadelphia-school-district-20231027.html">a major problem</a> for Philadelphia’s public schools. The district needs <a href="https://www.philasd.org/capitalprograms/wp-content/uploads/sites/18/2017/06/2015-FCA-Final-Report-1.pdf">$430 million</a> to clean up the asbestos, lead, and other environmental hazards that place the health of students, teachers and staff at risk. And that is on top of an additional <a href="https://www.philasd.org/capitalprograms/wp-content/uploads/sites/18/2017/06/2015-FCA-Final-Report-1.pdf">$2.4 billion</a> to fix failing and damaged buildings.</p>
<p>Yet the money is not available. Matthew Stem, a former district official, <a href="https://pubintlaw.org/wp-content/uploads/2023/02/02.07.23-Memorandum-Opinion-Filed-pubintlaw.pdf">testified in a 2023 lawsuit</a> about financing of Pennsylvania schools that the environmental health risks cannot be addressed until an emergency like at Southwark because “existing funding sources are not sufficient to remediate those types of issues.”</p>
<p>Meanwhile, the city keeps doling out abatements, draining money that could have gone toward making Philadelphia schools safer. In the <a href="https://www.documentcloud.org/documents/24362508-final-acfr-2022-with-artwork-as-of-022423">fiscal year ending June 2022</a>, such tax breaks cost the school district $118 million – more than 25% of the total amount needed to remove the asbestos and other health dangers. These abatements <a href="https://www.phila.gov/media/20180524153805/City-of-Philadelphia-2018-Abatement.pdf">take 31 years to break even</a>, according to the city’s own <a href="https://www.phila.gov/documents/property-tax-abatement-studies/">scenario impact analyses</a>.</p>
<p>Huge subsets of the community – primarily Black, Brown, poor or a combination – are being “drastically impacted” by the exemptions and funding shortfalls for the school district, said Kendra Brooks, a Philadelphia City Council member. Schools and students are affected by mold, asbestos and lead, and crumbling infrastructure, as well as teacher and staffing shortages – including support staff, social workers and psychologists.</p>
<p>More than half the district’s schools that lacked adequate air conditioning – 87 schools – had to <a href="https://whyy.org/articles/philadelphia-schools-early-dismissals-lack-air-conditioning-extreme-heat/">go to half days</a> during the first week of the 2023 school year because of extreme heat. Poor heating systems also leave the schools cold in the winter. And some schools are overcrowded, resulting in large class sizes, she said.</p>
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<a href="https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Front of a four-story brick school building with tall windows, some with air-conditioners" src="https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575461/original/file-20240213-28-1b0wxq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Horace Furness High School in Philadelphia, where hot summers have temporarily closed schools that lack air conditioning.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Horace_Furness_High_School_1900_S_3rd_St_Philadelphia_PA_%28DSC_3038%29.jpg">Nick-philly/Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
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<p>Teachers and researchers agree that a lack of adequate funding undermines educational opportunities and outcomes. That’s especially true for children living in poverty. <a href="https://www.jstor.org/stable/26495136">A 2016 study</a> found that a 10% increase in per-pupil spending each year for all 12 years of public schooling results in nearly one-third of a year of more education, 7.7% higher wages and a 3.2% reduction in annual incidence of adult poverty. The study estimated that a 21.7% increase could eliminate the high school graduation gap faced by children from low-income families.</p>
<p>More money for schools leads to more education resources for students and their teachers. The same researchers found that spending increases were associated with reductions in student-to-teacher ratios, increases in teacher salaries and longer school years. Other studies <a href="https://hep.gse.harvard.edu/9781682532447/educational-inequality-and-school-finance/">yielded similar results</a>: <a href="https://www.nber.org/system/files/working_papers/w25368/w25368.pdf">School funding matters</a>, especially for children already suffering the harms of poverty.</p>
<p>While tax abatements themselves are generally linked to rising property values, the <a href="https://doi.org/10.1002/pam.21862">benefits are not evenly distributed</a>. In fact, any expansion of the tax base due to new property construction tends to be <a href="https://doi.org/10.1080/15575339809489773">outside of the county granting the tax abatement</a>. For families in school districts with the lost tax revenues, their neighbors’ good fortune likely comes as little solace. Meanwhile, a poorly funded education system is less likely to yield a <a href="https://nap.nationalacademies.org/catalog/13398/education-for-life-and-work-developing-transferable-knowledge-and-skills">skilled and competitive workforce</a>, creating <a href="https://doi.org/10.1093/acprof:oso/9780199982981.003.0014">longer-term economic costs</a> that make the region less attractive for businesses and residents.</p>
<p>“There’s a head-on collision here between private gain and the future quality of America’s workforce,” said Greg LeRoy, executive director at Good Jobs First, a Washington, D.C., advocacy group that’s critical of tax abatement and tracks the use of economic development subsidies.</p>
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<a href="https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Three-story school building with police officers out front and traffic lights in the foreground" src="https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575449/original/file-20240213-26-7jhmm1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Roxborough High School in Philadelphia.</span>
<span class="attribution"><a class="source" href="https://drive.google.com/file/d/1X4dQQT50psqFFY1sPKeUz_wAk8eOtZ44/view?usp=sharing">AP Photo/Matt Rourke</a></span>
</figcaption>
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<p>As funding dwindles and educational quality declines, additional <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3739064">families with means often opt for</a> alternative educational avenues such as private schooling, home-schooling or moving to a different school district, further weakening the public school system.</p>
<p>Throughout the U.S., parents with the power to do so <a href="https://www.tandfonline.com/doi/full/10.1080/0161956X.2015.988536">demand special arrangements</a>, such as selective schools or high-track enclaves that <a href="https://www.nyulawreview.org/wp-content/uploads/2018/10/NYULawReview-93-4-Miller.pdf">hire experienced, fully prepared</a> teachers. If demands aren’t met, <a href="https://doi.org/10.1177/0895904818802106">they leave</a> the district’s public schools for private schools or for the suburbs. Some parents even <a href="https://doi.org/10.1111/j.1747-4469.2009.01166.x">organize to splinter</a> their more advantaged, and generally whiter, neighborhoods away from the larger urban school districts.</p>
<p>Those parental demands – known among scholars as “<a href="http://dx.doi.org/10.1596/978-0-8213-6991-3">opportunity hoarding</a>” – may seem unreasonable from the outside, but scarcity breeds very real fears about educational harms inflicted on one’s own children. Regardless of who’s to blame, the children who bear the heaviest burden of the nation’s concentrated poverty and racialized poverty again lose out.</p>
<h2>Rethinking in Philadelphia and Riverhead</h2>
<p>Americans also ask public schools to accomplish Herculean tasks that go <a href="https://www.tandfonline.com/doi/full/10.1080/15575330.2023.2217881">far beyond the education basics</a>, as many parents discovered at the onset of the pandemic when schools closed and their support for families largely disappeared.</p>
<p>A school serving students who endure housing and food insecurity must dedicate resources toward children’s basic needs and trauma. But districts serving more low-income students <a href="https://edtrust.org/resource/equal-is-not-good-enough/">spend less per student</a> on average, and almost half the states <a href="https://files.eric.ed.gov/fulltext/ED596199.pdf">have regressive funding structures</a>.</p>
<p>Facing dwindling resources for schools, several cities have begun to rethink their tax exemption programs.</p>
<p>The Philadelphia City Council recently passed a scale-back on a <a href="https://www.phila.gov/2018-05-24-city-releases-study-of-10-year-property-tax-abatement/">10-year property tax abatement</a> by decreasing the percentage of the subsidy over that time. But even with that change, millions will be lost to tax exemptions that could instead be invested in cash-depleted schools. “We could make major changes in our schools’ infrastructure, curriculum, staffing, staffing ratios, support staff, social workers, school psychologists – take your pick,” Brooks said.</p>
<p>Other cities looking to reform tax abatement programs are taking a different approach. In Riverhead, New York, on Long Island, developers or project owners can be granted exemptions on their property tax and allowed instead to shell out a far smaller “payment in lieu of taxes,” or PILOT. When the abatement ends, most commonly after 10 years, the businesses then will pay full property taxes.</p>
<p>At least, that’s the idea, but the system is <a href="https://nysfocus.com/2023/10/11/riverhead-ida-tax-breaks-aquarium-school">far from perfect</a>. Beneficiaries of the PILOT program have failed to pay on time, leaving the school board struggling to fill a budget hole. Also, the payments <a href="https://nysfocus.com/2023/10/11/riverhead-ida-tax-breaks-aquarium-school">are not equal</a> to the amount they would receive for property taxes, with millions of dollars in potential revenue over a decade being cut to as little as a few hundred thousand. On the back end, if a business that’s subsidized with tax breaks fails after 10 years, the projected benefits never emerge.</p>
<p>And when the time came to start paying taxes, developers have returned to the city’s Industrial Development Agency with hat in hand, asking for more tax breaks. A <a href="https://www.newsday.com/business/ida-tax-breaks-nestle-aquarium-steel-i30377">local for-profit aquarium</a>, for example, was granted a 10-year PILOT program break by Riverhead in 1999; it has received so many extensions that it is not scheduled to start paying full taxes until 2031 – 22 years after originally planned.</p>
<h2>Kansas City border politics</h2>
<p>Like many cities, Kansas City has a long history of segregation, white flight and racial redlining, said Kathleen Pointer, senior policy strategist for Kansas City Public Schools.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575513/original/file-20240214-16-znl7f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">James Elementary in Kansas City, Mo.</span>
<span class="attribution"><span class="source">Danielle McLean</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Troost Avenue, where the Kansas City Public Schools administrative office is located, serves as the city’s <a href="https://www.nbcnews.com/news/us-news/decades-dividing-line-troost-avenue-kansas-city-mo-sees-new-n918851">historic racial dividing line</a>, with wealthier white families living in the west and more economically disadvantaged people of color in the east. Most of the district’s schools are located east of Troost, not west.</p>
<p>Students on the west side “pretty much automatically funnel into the college preparatory middle school and high schools,” said The Federation of Teachers’ Roberts. Those schools are considered signature schools that are selective and are better taken care of than the typical neighborhood schools, he added.</p>
<p>The school district’s tax levy was set by voters in 1969 at 3.75%. But successive attempts over the next few decades to increase the levy at the ballot box failed. During a decadeslong desegregation lawsuit that was eventually resolved through a settlement agreement in the 1990s, a court raised the district’s levy rate to 4.96% without voter approval. The levy has remained at the same 4.96% rate since.</p>
<p>Meanwhile, Kansas City is still distributing 20-year tax abatements to companies and developers for projects. The district calculated that about 92% of the money that was abated within the school district’s boundaries was for projects within the whiter west side of the city, Pointer said.</p>
<p>“Unfortunately, we can’t pick or choose where developers build,” said Meredith Hoenes, director of communications for Port KC. “We aren’t planning and zoning. Developers typically have plans in place when they knock on our door.”</p>
<p>In Kansas City, <a href="https://kcbeacon.org/stories/2021/11/29/kansas-city-tax-incentives/">several agencies administer tax incentives</a>, allowing developers to shop around to different bodies to receive one. Pointer said he believes the Port Authority is popular because they don’t do a third-party financial analysis to prove that the developers need the amount that they say they do.</p>
<p>With 20-year abatements, a child will start pre-K and graduate high school before seeing the benefits of a property being fully on the tax rolls, Pointer said. Developers, meanwhile, routinely threaten to build somewhere else if they don’t get the incentive, she said.</p>
<p>In 2020, BlueScope Construction, a company that had received tax incentives for nearly 20 years and was about to roll off its abatement, asked for another 13 years and <a href="https://www.kcur.org/news/2020-06-25/kansas-city-council-rejects-incentives-for-a-company-that-threatened-to-move-across-state-line">threatened to move</a> to another state if it didn’t get it. At the time, the U.S. was grappling with a racial reckoning following the murder of George Floyd, who was killed by a Minneapolis police officer.</p>
<p>“That was a moment for Kansas City Public Schools where we really drew a line in the sand and talked about incentives as an equity issue,” Pointer said.</p>
<p>After the district raised the issue – <a href="https://www.kansascity.com/news/business/development/article243798657.html">tying the incentives to systemic racism</a> – the City Council rejected BlueScope’s bid and, three years later, it’s still in Kansas City, fully on the tax rolls, she said. BlueScope did not return multiple requests for comment.</p>
<p>Recently, a <a href="https://kcbeacon.org/stories/2023/07/18/port-kc-waldo-plaza-tax-breaks/">multifamily housing project</a> was approved for a <a href="https://www.kcur.org/news/2023-08-30/port-kc-approves-20-year-tax-incentive-deal-for-plaza-apartments">20-year tax abatement</a> by the Port Authority of Kansas City at Country Club Plaza, an outdoor shopping center in an affluent part of the city. The housing project included no affordable units. “This project was approved without any independent financial analysis proving that it needed that subsidy,” Pointer said.</p>
<p>All told, the Kansas City Public Schools district faces several shortfalls beyond the $400 million in deferred maintenance, Superintendent Jennifer Collier said. There are staffing shortages at all positions: teachers, paraprofessionals and support staff. As in much of the U.S., the cost of housing is surging. New developments that are being built do not include affordable housing, or when they do, the units are still out of reach for teachers.</p>
<p>That’s making it harder for a district that already loses about 1 in 5 of its teachers each year to keep or recruit new ones, who earn an average of only $46,150 their first year on the job, Collier said.</p>
<h2>East Baton Rouge and the industrial corridor</h2>
<p>It’s impossible to miss the tanks, towers, pipes and industrial structures that incongruously line Baton Rouge’s Scenic Highway landscape. They’re part of Exxon Mobil Corp.’s campus, home of the oil giant’s refinery in addition to chemical and plastics plants.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Aerial view of industrial buildings along a river" src="https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575171/original/file-20240213-20-ey3jk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Exxon Mobil Corp.’s Baton Rouge campus occupies 3.28 square miles.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/3c6e5c10434a44c48929197377f7a717?ext=true">AP Photo/Gerald Herbert</a></span>
</figcaption>
</figure>
<p>Sitting along the Mississippi River, <a href="https://corporate.exxonmobil.com/locations/united-states/baton-rouge-area-operations-overview#Safetyhealthandenvironment">the campus</a> has been a staple of Louisiana’s capital for over 100 years. It’s where 6,000 employees and contractors who collectively earn over $400 million annually produce <a href="https://corporate.exxonmobil.com/-/media/global/files/locations/united-states-operations/baton-rouge/2022-brrf-fact-sheet.pdf">522,000 barrels</a> of crude oil per day when at full capacity, as well as the annual production and manufacture of <a href="https://corporate.exxonmobil.com/-/media/global/files/locations/united-states-operations/baton-rouge/2022-brpo-fact-sheet.pdf">3 billion pounds</a> of high-density polyethylene and polypropylene and <a href="https://corporate.exxonmobil.com/-/media/global/files/locations/united-states-operations/baton-rouge/2022-brcp-fact-sheet.pdf">6.6 billion pounds</a> of petrochemical products. The company posted a <a href="https://www.reuters.com/business/energy/exxon-smashes-western-oil-majors-earnings-record-with-59-billion-profit-2023-01-31/">record-breaking</a> <a href="https://corporate.exxonmobil.com/news/news-releases/2023/0131_exxonmobil-announces-full-year-2022-results">$55.7 billion</a> in profits in 2022 and <a href="https://corporate.exxonmobil.com/news/news-releases/2024/0202_exxonmobil-announces-2023-results">$36 billion</a> in 2023.</p>
<p>Across the street are empty fields and roads leading into neighborhoods that have been designated by the U.S. Department of Agriculture as a low-income <a href="https://www.ers.usda.gov/data-products/food-access-research-atlas/go-to-the-atlas/">food desert</a>. A mile drive down the street to Route 67 is a Dollar General, fast-food restaurants, and tiny, rundown food stores. A Hi Nabor Supermarket is 4 miles away.</p>
<p>East Baton Rouge Parish’s McKinley High School, a 12-minute drive from the refinery, serves a student body that is about 80% Black and 85% poor. The school, which boasts famous alums such as rapper Kevin Gates, former NBA player Tyrus Thomas and Presidential Medal of Freedom recipient Gardner C. Taylor, holds a special place in the community, but it has been beset by violence and tragedy lately. Its football team quarterback, <a href="https://bleacherreport.com/articles/2709703-mckinley-high-school-qb-bryant-lee-fatally-shot-days-before-graduation">who was killed</a> days before graduation in 2017, was among at least four of McKinley’s students who <a href="https://www.theadvocate.com/baton_rouge/news/crime_police/mckinley-high-student-shot-and-injured-near-baton-rouge-campus-school-placed-on-lockdown/article_f1025d24-2f07-11e9-9d4e-2789b90eae2f.html">have been shot</a> <a href="https://www.nola.com/archive/suspects-in-up-and-coming-baton-rouge-rappers-november-slaying-not-indicted-or-cleared/article_c18af908-164c-5c16-b871-55e7fbe3dbf8.html">or murdered</a> <a href="https://www.theadvocate.com/baton_rouge/news/crime_police/he-played-tuba-baseball-at-mckinley-and-dreamed-of-college-a-shooting-cut-it-all/article_0f5fa014-9e73-11ec-941e-0f819ca7bca1.html">over the past six years</a>.</p>
<p>The experience is starkly different at some of the district’s more advantaged schools, including its magnet programs open to high-performing students.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Black-and-white outline of Louisiana showing the parishes, with one, near the bottom right, filled in red" src="https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=543&fit=crop&dpr=1 600w, https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=543&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=543&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=683&fit=crop&dpr=1 754w, https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=683&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/575533/original/file-20240214-26-gvctzn.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=683&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">East Baton Rouge Parish, marked in red, includes an Exxon Mobil Corp. campus and the city of Baton Rouge.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Map_of_Louisiana_highlighting_East_Baton_Rouge_Parish.svg">David Benbennick/Wikimedia</a></span>
</figcaption>
</figure>
<p>Baton Rouge is a tale of two cities, with some of the worst outcomes in the state for education, income and mortality, and some of the best outcomes. “It was only separated by sometimes a few blocks,” said Edgar Cage, the lead organizer for the advocacy group Together Baton Rouge. Cage, who grew up in the city when it was segregated by Jim Crow laws, said the root cause of that disparity was racism.</p>
<p>“Underserved kids don’t have a path forward” in East Baton Rouge public schools, Cage said.</p>
<p>A <a href="https://urbanleaguela.org/wp-content/uploads/2019/10/BR-Equity-Report-Online.pdf">2019 report</a> from the Urban League of Louisiana found that economically disadvantaged African American and Hispanic students are not provided equitable access to high-quality education opportunities. That has contributed to those students underperforming on standardized state assessments, such as the LEAP exam, being unprepared to advance to higher grades and being excluded from high-quality curricula and instruction, as well as the highest-performing schools and magnet schools.</p>
<p>“Baton Rouge is home to some of the highest performing schools in the state,” according to the report. “Yet the highest performing schools and schools that have selective admissions policies often exclude disadvantaged students and African American and Hispanic students.”</p>
<p>Dawn Collins, who served on the district’s school board from 2016 to 2022, said that with more funding, the district could provide more targeted interventions for students who were struggling academically or additional support to staff so they can better assist students with greater needs.</p>
<p>But for decades, Louisiana’s <a href="https://www.opportunitylouisiana.gov/business-incentives/industrial-tax-exemption">Industrial Ad Valorem Tax Exemption</a> <a href="https://www.opportunitylouisiana.gov/business-incentives/industrial-tax-exemption">Program</a>, or ITEP, allowed for 100% property tax exemptions for industrial manufacturing facilities, said Erin Hansen, the statewide policy analyst at Together Louisiana, a network of 250 religious and civic organizations across the state that advocates for grassroots issues, including tax fairness.</p>
<p>The ITEP program was created in the 1930s through a state constitutional amendment, allowing companies to bypass a public vote and get approval for the exemption through the governor-appointed <a href="https://www.opportunitylouisiana.gov/boards-reports-and-rules/louisiana-board-of-commerce-and-industry">Board of Commerce and Industry</a>, Hansen said. For over 80 years, that board approved nearly all applications that it received, she said.</p>
<p>Since 2000, Louisiana has granted a total of <a href="https://fastlaneng.louisianaeconomicdevelopment.com/public/reports">$35 billion in corporate property tax breaks</a> for 12,590 projects. </p>
<h2>Louisiana’s executive order</h2>
<p>A few efforts to reform the program over the years have largely failed. But in 2016, Gov. John Bel Edwards <a href="https://gov.louisiana.gov/assets/ExecutiveOrders/JBE16-26.pdf">signed an executive order</a> that slightly but importantly tweaked the system. On top of the state board vote, the order gave local taxing bodies – such as school boards, sheriffs and parish or city councils – the ability to vote on their own individual portions of the tax exemptions. And in 2019 the East Baton Rouge Parish School Board <a href="https://www.theadvocate.com/baton_rouge/news/education/itep-critics-defeat-exxonmobil-tax-break-requests-at-school-board-here-are-next-steps/article_09cb2d54-1a68-11e9-a672-7f6ee09f1f74.html">exercised its power</a> to vote down an abatement.</p>
<p>Throughout the U.S., <a href="https://doi.org/10.1080/15575330.2022.2148171">school boards’ power over the tax abatements</a> that affect their budgets vary, and in some states, including Georgia, Kansas, Nevada, New Jersey and South Carolina, school boards lack any formal ability to vote or comment on tax abatement deals that affect them.</p>
<p>Edwards’ executive order also capped the maximum exemption at 80% and tightened the rules so routine capital investments and maintenance were no longer eligible, Hansen said. A requirement concerning job creation was also put in place.</p>
<p>Concerned residents and activists, led by Together Louisiana and sister group Together Baton Rouge, rallied around the new rules and <a href="https://www.nytimes.com/2019/02/05/us/louisiana-itep-exxon-mobil.html">pushed back</a> against the billion-dollar corporation taking more tax money from the schools. In 2019, the campaign worked: the school board rejected a $2.9 million property tax break bid by Exxon Mobil.</p>
<p>After the decision, Exxon Mobil reportedly described the city as “<a href="https://www.businessreport.com/business/exxonmobil-calls-baton-rouge-unpredictable-for-investment-after-itep-requests-rejected">unpredictable</a>.”</p>
<p>However, members of the business community have continued to lobby for the tax breaks, and they have pushed back against further rejections. In fact, according to Hansen, loopholes were created during the rulemaking process around the governor’s executive order that allowed companies to weaken its effectiveness.</p>
<p>In total, <a href="https://fastlaneng.louisianaeconomicdevelopment.com/public/reports">223 Exxon Mobil projects</a> worth nearly $580 million in tax abatements have been granted in the state of Louisiana under the ITEP program since 2000.</p>
<p>“ITEP is needed to compete with other states – and, in ExxonMobil’s case, other countries,” according to Exxon Mobil spokesperson Lauren Kight.</p>
<p>She pointed out that Exxon Mobil is the largest property taxpayer for the EBR school system, paying more than $46 million in property taxes in EBR parish in 2022 and another $34 million in sales taxes.</p>
<p>A new ITEP contract won’t decrease this existing tax revenue, Kight added. “Losing out on future projects absolutely will.”</p>
<p>The East Baton Rouge Parish School Board has continued to approve Exxon Mobil abatements, passing $46.9 million between 2020 and 2022. Between 2017 and 2023, the school district has lost $96.3 million.</p>
<p><iframe id="8PBGX" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/8PBGX/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Taxes are highest when industrial buildings are first built. Industrial property comes onto the tax rolls at <a href="https://ascensionedc.com/local-incentives/#">40% to 50% of its original value</a> in Louisiana after the initial 10-year exemption, according to the Ascension Economic Development Corp.</p>
<p>Exxon Mobil received its latest tax exemption, $8.6 million over 10 years – an 80% break – in October 2023 for $250 million to install facilities at the Baton Rouge complex that purify isopropyl alcohol for microchip production and that create a new advanced recycling facility, allowing the company to address plastic waste. The project <a href="https://go.boarddocs.com/la/ebrp/Board.nsf/files/CV7LXR562D7C/$file/ITEP-Exxon%20Mobil%20Corporation%2020230071-ITE%20Application.pdf">created zero new jobs</a>.</p>
<p>The school board <a href="https://www.youtube.com/watch?v=k-Ry-veRlM4">approved it by a 7-2 vote</a> after a long and occasionally contentious board meeting.</p>
<p>“Does it make sense for Louisiana and other economically disadvantaged states to kind of compete with each other by providing tax incentives to mega corporations like Exxon Mobil?” said EBR School Board Vice President Patrick Martin, who voted for the abatement. “Probably, in a macro sense, it does not make a lot of sense. But it is the program that we have.”</p>
<p>Obviously, Exxon Mobil benefits, he said. “The company gets a benefit in reducing the property taxes that they would otherwise pay on their industrial activity that adds value to that property.” But the community benefits from the 20% of the property taxes that are not exempted, he said.</p>
<p>“I believe if we don’t pass it, over time the investments will not come and our district as a whole will have less money,” he added.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/E-9hbVfhZRQ?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">In 2022, a year when Exxon Mobil made a record $55.7 billion, the company asked for a 10-year, 80% property tax break from the cash-starved East Baton Rouge Parish school district. A lively debate ensued.</span></figcaption>
</figure>
<p>Meanwhile, the district’s budgetary woes are coming to a head. Bus drivers staged a sickout at the start of the school year, refusing to pick up students – in protest of low pay and not having buses equipped with air conditioning amid a heat wave. The district was forced to release students early, leaving kids stranded without a ride to school, before it acquiesced and provided the drivers and other staff <a href="https://www.theadvocate.com/baton_rouge/news/education/lost-class-time-due-to-baton-rouge-bus-crisis-to-be-made-up/article_f5666e24-4694-11ee-8f5d-87183159ce0e.html">one-time stipends</a> and purchased new buses with air conditioning.</p>
<p>The district also agreed to reestablish transfer points as a temporary response to the shortages. But that transfer-point plan has historically resulted in students riding on the bus for hours and occasionally missing breakfast when the bus arrives late, according to Angela Reams-Brown, president of the East Baton Rouge Federation of Teachers. The district plans to purchase or lease over 160 buses and solve its bus driver shortage next year, but the plan could lead to <a href="https://www.theadvocate.com/baton_rouge/news/education/baton-rouge-school-bus-crisis-could-lead-to-budget-crisis/article_a24d6502-5fdb-11ee-ad9c-c378e2276bbf.html">a budget crisis</a>.</p>
<p>A <a href="https://www.wafb.com/2023/06/20/program-aimed-help-teacher-shortage/">teacher shortage looms</a> as well, because the district is paying teachers below the regional average. At the school board meeting, <a href="https://www.youtube.com/watch?v=k-Ry-veRlM4">Laverne Simoneaux</a>, an ELL specialist at East Baton Rouge’s Woodlawn Elementary, said she was informed that her job was not guaranteed next year since she’s being paid through federal COVID-19 relief funds. By receiving tax exemptions, Exxon Mobil was taking money from her salary to deepen their pockets, she said.</p>
<p>A young student in the district told the school board that the money could provide better internet access or be used to hire someone to pick up the glass and barbed wire in the playground. But at least they have a playground – Hayden Crockett, a seventh grader at Sherwood Middle Academic Magnet School, noted that his sister’s elementary school lacked one.</p>
<p>“If it wasn’t in the budget to fund playground equipment, how can it also be in the budget to give one of the most powerful corporations in the world a tax break?” Crockett said. “The math just ain’t mathing.”</p><img src="https://counter.theconversation.com/content/222940/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christine Wen worked for the nonprofit organization Good Jobs First from June 2019 to May 2022 where she helped collect tax abatement data. </span></em></p><p class="fine-print"><em><span>Nathan Jensen has received funding from the John and Laura Arnold Foundation, the Smith Richardson Foundation, the Ewing Marion Kauffman Foundation and the Washington Center for Equitable Growth. He is a Senior Fellow at the Niskanen Center.
</span></em></p><p class="fine-print"><em><span>Danielle McLean and Kevin Welner do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An estimated 95% of US cities provide economic development tax incentives to woo corporate investors, taking billions away from schools.Christine Wen, Assistant Professor of Landscape Architecture & Urban Planning, Texas A&M UniversityDanielle McLean, Freelance Reporter and Editor, The ConversationKevin Welner, Professor of Education Policy & Law; Director of the National Education Policy Center, University of Colorado BoulderNathan Jensen, Professor of Government, The University of Texas at AustinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/116662013-01-17T03:30:38Z2013-01-17T03:30:38Z2013: The battle between the taxpayers and the manuocrats<figure><img src="https://images.theconversation.com/files/19304/original/ct3yzssd-1358384669.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Prepare for more handouts: the taxpayer is the meat in the sandwich between politicians and manuocrats - those who believe the source of all our wealth is manufacturing.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>The battleground between business, taxpayers and government for 2013 is taking shape. It is manufacturing and jobs.</p>
<p>On Wednesday, building materials company Boral <a href="http://www.smh.com.au/business/boral-cuts-700-jobs-to-avert-costs-tragedy-20130116-2ctqr.html">announced</a> at least 700 job cuts in Australia.</p>
<p>This followed <a href="http://www.smh.com.au/business/bluescope-starts-year-with-job-cuts-20130114-2co7y.html">Bluescope’s</a> announcement on Monday that it was cutting 170 jobs at its Western Port plant in Victoria.</p>
<p>The reaction from various vested interests has been swift and predictable. Paul Howes, the secretary of the Australian Workers Union <a href="http://www.businessspectator.com.au/bs.nsf/Article/Labor-behind-Boral-job-losses-Mirabella-3Z32B?OpenDocument&src=hp2">stated</a>, “Australian manufacturing is being hit for six”. Opposition parties at both federal and state level have blamed their relevant governments.</p>
<p>The Federal government has said that it will respond in the near future. And that is where the battle will heat up.</p>
<p>Formally, the government will respond to the report issued by non-government members of the Prime Ministers <a href="http://www.innovation.gov.au/Industry/Manufacturing/Taskforce/Documents/SmarterManufacturing.pdf">Manufacturing Taskforce</a> in August last year.</p>
<p>This report is a mixed bag. Indeed, it is exactly what you would expect from a group of representatives from business, unions and academia who have a vested interest in the manufacturing sector. It suggests reducing business tax, regulation and red tape (p.60). </p>
<p>It calls for increased government investment albeit on a “targeted” (i.e. picking winners) basis (p.61). To keep the academics happy, it calls for a (government supported) program that “will fund Industrial Transformation Research Hubs and Industrial Transformation” (p.68). Bizarrely, given recent overseas experience of housing bubbles, it calls for “measures to stimulate residential and commercial construction” (p.61).</p>
<p>Of course there is plenty of room for “incentivisation” (that is, handouts). Indeed, recommendation 2 (p.89) states that:</p>
<blockquote>
<p>“The non-government members of the Taskforce recommend that a package of short-term measures be considered to help counter the cyclical factors confronting key manufacturing subsectors as set out in this report.”</p>
</blockquote>
<p>Based on recent history, the government’s response to the report is likely to focus on short-term handouts. Recent examples include $42 million to <a href="http://www.geelongadvertiser.com.au/article/2012/06/28/334861_news.html">Alcoa</a>, and with the help of the Victorian and South Australian government, $275 million to <a href="http://www.leadingcompany.com.au/news/$275m-holden-lifeline-not-a-handout%E2%80%9D-gillard/20120322398">General Motors</a>.</p>
<p>Of course, they won’t be called handouts but rather, “strategic investment that will boost our economy, foster innovation, build new business opportunities and promote adoption of new … technologies”.</p>
<p>Call them what you will, they are funds from the taxpayers’ purse into the profits of private interests.</p>
<p>And in an election year, with the shadow of further job losses hanging over the government, the car industry is already lining up for its 2013 <a href="http://finance.ninemsn.com.au/newsbusiness/motley/8594166/car-makers-ask-for-more">“strategic investment”</a>.</p>
<p>But are these handouts bad?</p>
<p>Yes – because they ignore how and why modern economies like Australia are changing.</p>
<p>Manufacturing is only a minor part of the Australian economy. The report shows that services account for around 80% of Australia’s output, manufacturing and mining about 8% each, and the rest, agriculture. Manufacturing’s share of output has been steadily declining over the past century. And this pattern is observed in all developed economies.</p>
<p>Why has this occurred? Two European researchers, Schettkat and Yocarini <a href="http://ftp.iza.org/dp964.pdf">reviewed</a> the economics literature on the shift to services about a decade ago.</p>
<p>Their report, which covers studies back to the 1930s, suggests three inter-related reasons:</p>
<ul>
<li><p>As we grow richer, we demand relatively more services (e.g. high quality health care) and relatively less manufactured output;</p></li>
<li><p>Changes in the way business is organised has seen manufacturing employees contracted out and reclassified as service employees, despite them doing the same tasks;</p></li>
<li><p>Productivity has risen faster in non-service sectors so we need fewer employees in manufacturing and agriculture to have the same – or even more - output.</p></li>
</ul>
<p>While we can argue about which of these reasons is more or less important, they all lead in the same direction. The manufacturing sector has shrunk and will continue to shrink relative to the service sector. And this is a good thing. It means more people in better, safer, more stimulating jobs producing the things that consumers want.</p>
<p>Our obsession with manufacturing is reminiscent of the <a href="http://en.wikipedia.org/wiki/Physiocracy">physiocrats</a>, a group of 18th century economists who believed that agriculture was the source of all wealth.</p>
<p>While I suspect the National Party may still harbour some physiocrats, it is clear that our current politicians are largely “manuocrats”, people who believe that the source of all our wealth is manufacturing. Just like the physiocrats of three centuries ago, today’s manuocrats are wrong.</p>
<p>However, none of this helps the government. The temptation to hand out taxpayer funds to prop up dying jobs in manufacturing is strong. So expect to see more handouts in 2013 as the manuocrats and vested interests in manufacturing argue that, without them, we will all be ruined. And the taxpayers will have to fight back with their only weapon – their ballots at the federal election.</p><img src="https://counter.theconversation.com/content/11666/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen King does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The battleground between business, taxpayers and government for 2013 is taking shape. It is manufacturing and jobs. On Wednesday, building materials company Boral announced at least 700 job cuts in Australia…Stephen King, Professor, Department of Economics, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/89672012-08-21T04:05:01Z2012-08-21T04:05:01ZGlimmers of hope in the steel industry’s darkest hour<figure><img src="https://images.theconversation.com/files/14441/original/7zjm4wz6-1345460864.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The closure of BlueScope's no 6 Blast Furnace at Port Kembla was an acknowledgement that Australia simply cannot compete with our cheaper Asian rivals.</span> </figcaption></figure><p>The <a href="http://www.smh.com.au/business/earnings-season/bluescope-steel-annual-loss-tops-1-billion-20120820-24h3u.html">$1 billion dollar annual loss announced by BlueScope Steel</a> confirmed what is common knowledge: the Australian steel industry is in crisis and fighting for survival. The latest statistics show that steel production in this country has dropped by over 30% since 2011 as the high Australian dollar and low cost imports from China have largely wiped out our export market and created problems in local markets for Arrium and BlueScope. </p>
<p>The closure of the giant No. 6 Blast Furnace at Port Kembla last year was a momentous occasion and an acknowledgement that in the current climate, Australian steel simply cannot compete with our cheaper Asian rivals.</p>
<p>As discussed in an <a href="https://theconversation.com/why-australia-must-forge-a-future-in-chinas-age-of-steel-6278">earlier article</a>, these problems reflect not just the distortion to our dollar induced by the mining boom but also a failure to innovate and develop products and downstream industries that build on our significant advantages with raw materials and technological know how. </p>
<p>The No. 6 Blast Furnace was one of the most technologically advanced in the world and we have plentiful supplies of good quality ore and coking coals. Our steel industry makes relatively stock standard grades of steel – grinding media made by Arrium being a notable exception - that the aggressive and low cost Asian steelmakers easily undercut. Of course, the high Australian dollar makes the whole situation worse but the underlying problems are not new.</p>
<p>Is there hope for this ailing industry?</p>
<p>Yes, history does show that ailing steel industries can bounce back. The story of Nucor is a case in point. Nucor developed as a successful steel company during the 1970s and 1980s, when the American steel industry was in a deep crisis. During this era, the American steel industry had become slow and costly. </p>
<p>It lagged behind the Japanese and other new players, in both technology and management practices. As wonderfully described by the Pultizer prize-winning John Strohmeyer in <a href="http://www.amazon.com/Crisis-In-Bethlehem-John-Strohmeyer/dp/0822958112">Crisis in Bethlehem</a>, many executives in the top-heavy American steel industry at the time were more interested in the politics of the company golf club than they were in technical innovation.</p>
<p>Ken Iverson, the charismatic president of Nucor, turned the problems of the traditional large corporation on their head by breaking down the hierarchical structures associated with companies like Bethlehem Steel and US Steel and emphasising teamwork, performance-based compensation, shared benefits and community involvement. </p>
<p>These innovations in management structures were also matched by taking the lead in the development of mini-mill technology, which at the time was undergoing a revolution. In particular, they moved mini-mill technology closer to the high-value end of the steel product range, producing high quality flat products from scrap feed materials. </p>
<p>These energetic and innovative approaches produced high performance in terms of profits, worker satisfaction and environmental impact. Many companies have copied Iverson’s approach and his ideas are still being discussed in the boardrooms of steel companies around the world.</p>
<p>What lessons can we draw from the Nucor story?</p>
<p>We need new ideas. Our steel industry needs to look for innovation, not just in terms of products but also, in terms of management structures and community engagement. I support efforts by the federal government to help our ailing steel industry through this difficult time, we should not let such a vital industry pass away so easily, but for a long term future we will need new players and ideas.</p>
<p>Can we use our plentiful natural gas supplies to make direct reduced iron in Western Australia? Where are the next generation of coated products? Could we develop mini-mills in the north of Australia to service the growing steel demand in south-east Asia? How do we move our existing mini-mills towards higher grade products? </p>
<p>Given our excellent nickel resources, could we develop a new ferro-alloy industry (we closed our only stainless steel plant in the 90s)? Is it time to develop a high tech. steel recycling industry in Queensland? Is there a future for ultrafine grain steels being produced in Australia?</p>
<p>In my own laboratories at the moment, we are exploring the idea of using concentrated solar energy for mineral processing. </p>
<p>The idea is that we could value add to our minerals at the mine site using our abundant solar resources to smelt minerals and produce metal close to the source. Production of iron is an obvious candidate. In Australia, we have plenty of iron ore, coal and sun. It is early days and there are many challenges to get such an idea working – capital costs, optimising the solar energy effectively, reactor design – but it is in looking for these types of natural advantages that some sort of new future could be found.</p>
<p>Are there any Ken Iverson’s out there? Your time has come.</p><img src="https://counter.theconversation.com/content/8967/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoffrey Brooks receives funding from various steel companies around the world for research into fundamental aspects of steelmaking, including from Tata Steel and OneSteel.</span></em></p>The $1 billion dollar annual loss announced by BlueScope Steel confirmed what is common knowledge: the Australian steel industry is in crisis and fighting for survival. The latest statistics show that…Geoffrey Brooks, Professor of Engineering, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/30222011-08-28T20:43:08Z2011-08-28T20:43:08ZWhy businesses aren’t buying it when it comes Australian made<figure><img src="https://images.theconversation.com/files/3180/original/buyoz.jpg?ixlib=rb-1.1.0&rect=116%2C77%2C4081%2C2650&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Are Ministers Kim Carr and Martin Ferguson are wasting their time calling for industry to buy Australian?</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>The Federal Government’s new <a href="http://minister.innovation.gov.au/Carr/MediaReleases/Pages/BUYAUSTRALIANATHOMEANDABROADJointMRFerguson.aspx">Buy Australian campaign</a>
comes amid growing concern that further layoffs will follow the loss of 1000 BlueScope jobs and that the mining boom is crushing manufacturing.</p>
<p>But Ministers Kim Carr and Martin Ferguson are wasting their time calling for industry to buy Australian.</p>
<p>The idea that a government should lobby consumers to buy ethnocentrically is nothing new. The Buy Australian campaign has been pushed for nearly 20 years by various governments, although the idea first emerged in the 1920s. The Kiwis have been doing it since 1988 and the British have been doing it since 1931. </p>
<p>While such programs may have a slight impact on consumer preferences, the evidence is pretty clear that they do not make significant differences to market share of locally made products. </p>
<p>Even <a href="http://www.dicksmithfoods.com.au/?d=main&p=why">entrepreneur Dick Smith</a> accepts that the majority of what goes into an Australian supermarket trolley is not made by Australian companies.</p>
<p>Academic research suggests that consumers are more concerned about product quality and price than country of origin. So why do we expect them to buy Australian?</p>
<p>Aside from the fact such campaigns have little real effect, we need to keep in mind that when governments are keen to join the WTO and reduce trade barriers, such programs are nothing more that hypocritical public relations exercises for the electorate. </p>
<p>Governments are clearly wasting tax revenue on a marketing campaign that is unlikely to have any real effect: perhaps aside from patronising unions.</p>
<p>The recent demand by the Federal Government for Australian businesses to buy Australian is no different. These businesses are expected by their shareholders to buy materials at the best possible price in order to get the best return for their money. </p>
<p>As many of these shareholders are offshore, no CEO is going to be popular if he or she allows a purchasing department to use company revenue to subsidise Australian industry. </p>
<p>The government who is making this demand is the same government that complained when the United States implemented a “Buy American” campaign as part of its financial stimulus bill. </p>
<p>If we want to reduce trade barriers and become part of the global community, then we have to accept that jobs will be lost in industries that are not competitive. </p>
<p>Unfortunately, the difference between being competitive and not being competitive could be as simple as a swing in the value of the dollar, as we are experiencing now. </p>
<p>Australian companies who export are suffering enough; to ask them to lose more revenue to support other Australian businesses just won’t work. </p>
<p>The research demonstrates consumers are more concerned about product quality and price than country of origin. </p>
<p>When the evidence over years suggests consumers do not respond to buy locally campaigns, there is no reason to think that businesses would do any different. </p>
<p>In short, the Federal Government is wasting their time. Australian companies that export are already facing more difficult trading conditions because of the dollar; asking them for a handout to support other Australian companies is just not going to happen.</p><img src="https://counter.theconversation.com/content/3022/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maxwell Winchester is a member of the Liberal Party.</span></em></p>The Federal Government’s new Buy Australian campaign comes amid growing concern that further layoffs will follow the loss of 1000 BlueScope jobs and that the mining boom is crushing manufacturing. But…Associate Professor Maxwell Winchester, Discipline Leader, Marketing , Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/29672011-08-24T03:33:33Z2011-08-24T03:33:33Z‘Once upon a time, when Australia had a steel industry …’<figure><img src="https://images.theconversation.com/files/3126/original/steel.jpg?ixlib=rb-1.1.0&rect=67%2C96%2C4130%2C2660&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">BlueScope has fallen victim to a changing export market, high Australian dollar and gradual structural shift to free trade policies.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Once upon a time, 30 years ago, when we still thought the steel industry was an endless and bottomless well for economic growth and employment, many of us also believed in industry policy, corporate responsibility to communities, and the right to stay in the same place and space as long as we wanted. </p>
<p>We were happily unaware that “restructuring” would become inevitably intertwined with “job losses” or that the inheritors of the <a href="http://gallery.oldholden.com/d/170907-1/1976+HOLDEN+HX+KINGSWOOD-1.jpg">Kingswood</a> (which many of us drove back then) would soon be driving cars neither built in Australia nor made from Australian steel.</p>
<p>But that was 30 years ago. Shortly after, the Australian steel industry began to spin into crisis, an early home-grown casualty of the globalisation of production.</p>
<p>Indeed, the crisis should probably have happened sooner but in those days there was a fair investment in Australian steel production and the low Aussie dollar meant good steel export prices – the US even accused Australia of dumping cheap steel – and profit levels were generally accepted at lower rates than today.</p>
<h2>Shock to the system</h2>
<p>Even so, when it came, that first steel crisis was pretty shocking – postwar Australians were not yet used to major job losses, nor the allied multiplier effects that devastated towns and communities. </p>
<p>I remember writing in the introduction to the <a href="http://www.abc.net.au/rn/playingthe20thcentury/stories/2011/3087132.htm">Katherine Thompson play, Diving for Pearls</a>, (set in an industrial town experiencing major job losses) that Christmas 1982 was a time of fear and spending, as people avoided each other, fearful of hearing bad news or telling it, and spending up big because of redundancy pay – or fear of job loss.</p>
<p>Yet, sooner than we hoped, most of us bounced back. That was because they had a wonderful instrument in those days called industry policy. </p>
<p>In those distant decades, governments were not wedded to day trading for policies – they took longer term views, knew “the market” could be as mindless and destructive as <a href="http://www.bleedingcool.com/wp-content/uploads//2010/10/they-are-coming-to-get-you-barbara.gif">Triffids</a>, and also took it as their responsibility to intervene so the polity, society and economy were not mere flotsam among the blips and bumps of market fluctuations.</p>
<h2>Industry plan</h2>
<p>And that was the case in 1983 when the <a href="http://www.rba.gov.au/publications/confs/1995/demura.pdf">Steel Industry Plan (SIP)</a> was proposed, debated and implemented over a few months. </p>
<p>The SIP was not just a comprehensive and integrated set of assistance, responsibilities, goals and gains for the steel stakeholders, it was even a tripartite policy (that is sooo 20th century!) and had the commitment of the steel company, the trade unions and communities, and the government. It worked – at least for a time.</p>
<p>Now again in 2011, we have a steel industry crisis. After reports of an annual loss of nearly $1 billion (nearly ten times the average profits of 20 years ago), 1000 redundancies and a major reduction of contractors have been announced at BlueScope Steel. The causes are fourfold. </p>
<h2>Paradox</h2>
<p>The most important factor has been the high Australian dollar – paradoxically driven by the resources boom – which has raised the price of steel exports. </p>
<p>The paradox is that the second factor leading to the current steel crisis has been increased input costs – notably iron ore and coal. The drivers of the very mining boom which has raised the Australian dollar have also raised the costs of production – coal prices for example have tripled in the last decade. </p>
<p>The effect of these factors has meant the crisis has been more pronounced on BlueScope, which has less favourable access to inputs than has its former sister company, OneSteel. </p>
<p>Third, there is pressure on steel companies throughout the developed world – the Brazilian company Usiminas is in trouble, and even ArcelorMittal, the biggest steel company of them all is struggling.</p>
<h2>Market shift</h2>
<p>Export markets are shifting. Japan is planning to buy steel for post-earthquake reconstruction from China or Korea, and many former customers of Australian steel are now exporters. And on top of all of that, in Australia, the fall of steel is tied to the inexorable decline of local manufacturing.</p>
<p>When manufacturing booms, steel bounces, but employment in manufacturing has fallen to well less than 10% of employment in the last decade, and its contribution to the national economy has fallen similarly.</p>
<p>So it is perhaps not surprising that we have another steel crisis. The job losses may be fewer and the impact on buyer, supplier and contractor firms may be less, but we have a steel crisis that will once again weaken and depress the steel communities of the Illawarra. Brave words are being spoken of resilience and hope, but the options in steel are few.</p>
<h2>Anti-competitive </h2>
<p>Certainly we won’t have a Steel Industry Plan this time around – the WTO has put paid to that. Giving preference to local product for construction is now “anticompetitive”, and so are tariffs and subsidies. </p>
<p>Governments can support the steel communities – at least a little – but they cannot support the steel industry, they cannot offer carrots to encourage capital investment or enforce requirements on major new projects to buying Australian made products. </p>
<p>They can ask nicely, but in the brave new world of free trade, governments are tied to the higgling of the market. </p>
<p>Chillingly, perhaps the story books of the future might begin – “Once upon a time, when Australia had a steel industry …”</p><img src="https://counter.theconversation.com/content/2967/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Diana Kelly does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Once upon a time, 30 years ago, when we still thought the steel industry was an endless and bottomless well for economic growth and employment, many of us also believed in industry policy, corporate responsibility…Diana Kelly, Associate Professor, School of History and Politics, University of WollongongLicensed as Creative Commons – attribution, no derivatives.