BBPDX: Investment in education is best bet for economic growth
This year, Oregon's political leaders are presenting businesses with an investment opportunity unlike any we've seen for a generation.
After years of mediocre graduation rates, ever-shorter school years and growing classroom sizes, leaders in the Oregon Legislature are proposing corporate tax reform to fund a transformation of public education in Oregon. It's time for business to seize this opportunity for the benefit of our companies and communities.
Oregon's economy continues to change. From our traditional strengths in natural resources to the innovation in clean energy, advanced manufacturing and software driving the next wave of job growth, businesses depend on an educated workforce with technical and communication skills.
Cutting corners on graduation requirements and college admission standards results in losses for everyone — not only students, but employers and the Oregon economy as a whole.
In 2018, the Oregon Legislature's bipartisan Joint Committee on Student Success spent months touring the state, seeking input from communities and education leaders on solutions to boost Oregon's perpetually-lagging schools.
The verdict: Oregon's unstable and inadequate education funding system is at the heart of our problems. The report recommended an increase of nearly $2 billion in the next biennium just to bring the state up to a minimum quality standard.
Constitutional constraints on property taxes and Oregon's obstinance on the prospect of a sales tax leave business taxes the most obvious path forward to raise the revenue we need to fully fund education. Investing $2 billion of their tax expenditures in education is a big ask of business — but it's the right ask.
Data in state after state shows a strong correlation between the educational attainment of a state's workforce and median wages in the state. As a result of increases in public education spending, states see their tax bases grow, and their state becomes more attractive to out-of-state employers as well as to out-of-state investment.
Beyond financial returns, investment in public education improves health outcomes, reduces crime and creates stability for families. And education spending has the added benefit of bringing everyone along, combatting the trend of increasing economic inequality facing not just Oregon but the country as a whole.
According to the Institute for Policy Research at Northwestern University, when per-pupil spending increases, students see higher graduation rates, higher adult wages, and a lower likelihood of adult poverty.
Low-income students benefit the most from increased spending on education.
When a district's per-pupil spending increased by 10 percent, low-income students spent about six more months in school over the course of their education, were 10 percentage points more likely to graduate high school, had 13 percent higher wages as adults, and were six percentage points less likely to live in poverty. Further out, their family incomes increased by 17 percent.
More money in the pockets of Oregon families should drive a trickle-up effect that will fuel business growth and expansion.
Smart investors take the time to perform substantial due diligence before a commitment.
Members of Business for a Better Portland are engaging with lawmakers and sharing constructive ideas for revenue reform that drives the funding our schools desperately need while helping our businesses, large and small, continue to innovate and thrive.
Public education is part of the state's social and economic infrastructure that needs a stable, permanent source of funding. We won't see the return without the investment. The opportunity in 2019 is too big to pass up.
Jenn Lynch is board treasurer of Business for a Better Portland, and Managing Director at Portland Seed Fund. She can be reached at: bbpdx.org/contact-us