SCHOOLS AND THE ECONOMY

Schools are suffering because of the general economic situation. In this bleak time of unemployment, fund cutting and the near bankruptcy of urban governments, it is becoming all the more apparent to parents and teachers that the welfare of school systems is heavily dependent on the state of the economy as a whole, and on the fate of their fellow-workers in sectors other than education. The survival of public services such as schools depends on a revitalization of the entire economy. The lines of economic interdependency become clearer at times of fiscal disaster. Such a disaster is now upon us.

Teachers recognize, for example, that high unemployment in Detroit seriously affects the ability of that city to raise desperately needed taxes. The impact of a housing slump on property values, property taxes and, ultimately school revenues is becoming increasingly clearer. Shortages in government funds in one area are pressuring states and localities to attempt to jockey funds out of education into other things.

As the economy continues to decline school funding problems continue to take their toll. Teachers have never faced problems of such magnitude; yet they have never been as organizationally well-equipped to do something about them as now. Since such issues are profoundly relevant to teachers and to their fellow AFL-ClO members, the current disaster makes teacher participation in a national campaign for economic reform imperative.

There are three major areas in which teachers can work to help improve this grim economic picture:

1. Use any appropriate direct action to maintain decent salaries, proper classroom conditions and integrity of contacts.

2. Pressure the federal government to provide financial relief to state and local governments. If state and local governments are forced to increase taxes, the federal tax cut policy will fail. Taxpayers will get the federal rebate and pay it out in taxes at the local level. They will be left with roughly the same amount of take-home pay they had before--and no tax cut rebate to spend. There will, therefore, be no stimulation to the economy as a result of the federal tax cut.

And if state and local governments are forced to lay off public service workers, those layoffs not only cut essential services, they diminish the tax income of local governments even further, and at the same time put the heavier burden of additional unemployed on the public sector.

Therefore, state and local governments must be provided with additional federal funds so that they can support schools and other services.

3. Support and publicize the AFL-CIO program for improving the economy. The AFL-CIO program adopted in January called for a substantial progressive tax rebate plan; a more equitable oil policy that would eventually reduce U.S. dependency on imported oil; reduction in interest rates and allocation of credit for high priority social and economic activities; massive federal efforts to create jobs for the unemployed; action to protect existing jobs from unfair foreign competition; measures to provide government assistance to the unemployed; and the following important measures to provide government assistance to revitalize the public sector:

• Emergency welfare reforms. Because of the worsening economic picture, more and more people are on the welfare rolls. States and cities have had to take funds from other needed services to pay the rising cost of welfare. The federal government should assume the additional costs of welfare caused by the recession. This would enable states and localities to finance other services, such as schools.

• Municipal debt management. City budgets have suffered greatly as a result of the astronomical interest rates cities have been forced to pay for long-term and short-term borrowing. Cities pay rates such as 8 percent and 9 percent, while at the same time the federal government is lending funds to the Soviet Union and Arab states at rates of 6 percent and 3 percent respectively. Part of the monies the cities are now spending on interest rates could be used for schools and other essential services, if the federal government would lend money more quickly at lower rates, such as through a new federal municipal financing agency.

• Public service jobs. The Comprehensive Employment Training Act should be fully funded at a level of at least 5 billion dollars instead of the 1 billion now proposed by the administration. CETA monies should be available for the continued employment of workers threatened with layoff and dismissal, as well as for new jobs. New public work funds would create additional public service jobs.

• Accelerated release of public works and construction funds. Impounded public works and construction funds should be released immediately, not just to cover past commitments, but also to allow cities to keep pace with their housing, highway and transit demands. These funds would provide a needed economic boost by putting people back to work.

• Emergency revenue sharing and countercyclical aid. Immediate federal revenue sharing assistance should be provided to local governments and school systems to reduce the growing tax gaps and to enable cities to keep pace with the rising cost of living without having to raise taxes further. This assistance should be reenacted annually until the economy revives. Combined public jobs, public works and revenue sharing should produce a "ripple effect" in the economy that would increase production and in turn wages, profits, and tax collections.

These measures will provide major help to needy school systems. The welfare of the public schools is dependent on a prosperous economy. The members of the American Federation of Teachers vigorously join in this fight for economic policies which will ensure the prosperity of all Americans.