Asbestos

• (1) Core underwriting income (loss), Core net services income, Core income and Core combined ratio are non-GAAP financial measures.
• Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures.
• Income for the three months ended December 31, 2023 consists of underwriting income of $37.0 million (93.4% combined ratio) and net services income of $9.3 million, compared to underwriting income of $31.2 million (94.8% combined ratio) and net services income of $2.8 million for the three months ended December 31, 2022.
• Core underwriting income, Core net services income, Core income, and Core combined ratio are non-GAAP financial measures.

• Bubbling paint mars some walls, evidence of leaks spreading inside the aging building.
• The lack of funds is a result of tax breaks Kansas City lavishes on companies that do business there.
• The program is supposed to bring new jobs but instead has starved schools.

Property tax drain

• Read more:
  Students lose out as cities and states give billions in property tax breaks to businesses − draining school budgets and especially hurting the poorest students

  Abatements have long been controversial, pitting communities against one another in beggar-thy-neighbor contests.

• A three-month investigation by The Conversation and experts in economic development, tax laws and education policy shows that the cash drain is not equally shared by schools in the same communities.
• In multiple cities examined, tax abatements often take critical funding from districts that disproportionately serve low-income students from racial minorities.

In Kansas City, for example, nearly $1,700 per student was redirected in 2022 from poorer public schools, while between $500 and $900 was taken from wealthier schools. Other studies found similar demographic trends elsewhere, including New York state, South Carolina and Columbus, Ohio.

The result

• All told, tax abatements can harm a community’s value, with funding shortfalls creating a cycle of decline.
• Researchers agree that a lack of adequate funding undermines educational outcomes, especially for poor children.
• The study estimated a 21.7% increase could eliminate graduation gaps faced by children from low-income families.
• Perversely, some of the largest beneficiaries are politicians who boast of handing out breaks that inflict so much pain on poorer communities.
• In Philadelphia public schools, asbestos is a major problem, and the district needs $430 million to clean up such environmental hazards.

A tale of two cities

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. “Underserved kids don’t have a path forward”

• Dawn Collins, a district school board member from 2016 to 2022, said that with more funding, the district could provide targeted interventions for academically struggling students.
• The campus of Exxon Mobil, which has received $580 million in tax abatements since 2000, sits not far from schools in desperate need of maintenance.
• The company received its latest tax exemption, $8.6 million, to install facilities at the Baton Rouge complex that recycle plastic and purify isopropyl alcohol.
• Meanwhile, school bus drivers staged a sickout in protest of low pay and a lack of air-conditioned vehicles.

• Christine Wen worked for the nonprofit organization Good Jobs First from June 2019 to May 2022 where she helped collect tax abatement data.
• 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.

• Bubbling paint mars some walls, evidence of the water leaks spreading inside the aging building.
• “It’s living history,” said Mayes during a mid-September tour of the building.

Property tax redirect

• 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.
• Between 2017 and 2023, the Kansas City school district lost $237.3 million through tax abatements.
• An estimated 95% of U.S. cities provide economic development tax incentives to woo corporate investors.
• Tax abatement programs have long been controversial, pitting states and communities against one another in beggar-thy-neighbor contests.
• All told, tax abatements can end up harming a community’s value, with constant funding shortfalls creating a cycle of decline.

Incentives, payoffs and guarantees

• Incumbent governors have used the incentives as a means of taking credit for job creation, even when the jobs were coming anyway.
• Fairleigh Jackson pointed out that her daughter’s East Baton Rouge third grade class lacks access to playground equipment.
• The temporary site has some grass and a cement slab where kids can play, but no playground equipment, Jackson said.

• “When I think about playground equipment, I think that’s a necessary piece of child development,” Jackson said.
• 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.
• What exactly Atlanta and other cities and states are accomplishing with tax abatement programs is hard to discern.
• Under city and state tax abatement programs, companies that used to be in Kansas City have since relocated.

Trouble in Philadelphia

• 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.
• Within a day, Southwark was closed – the seventh Philadelphia school temporarily shuttered since the previous academic year because of possible asbestos contamination.
• A 2019 inspection of the John L Kinsey school in Philadelphia found asbestos in plaster walls, floor tiles, radiator insulation and electrical panels.

• The study estimated that a 21.7% increase could eliminate the high school graduation gap faced by children from low-income families.
• 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 yielded similar results: School funding matters, especially for children already suffering the harms of poverty.
• For families in school districts with the lost tax revenues, their neighbors’ good fortune likely comes as little solace.

• Throughout the U.S., parents with the power to do so demand special arrangements, such as selective schools or high-track enclaves that hire experienced, fully prepared teachers.
• If demands aren’t met, they leave the district’s public schools for private schools or for the suburbs.
• Some parents even organize to splinter their more advantaged, and generally whiter, neighborhoods away from the larger urban school districts.

Rethinking in Philadelphia and Riverhead

• 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 spend less per student on average, and almost half the states have regressive funding structures.
• Facing dwindling resources for schools, several cities have begun to rethink their tax exemption programs.
• The Philadelphia City Council recently passed a scale-back on a 10-year property tax abatement by decreasing the percentage of the subsidy over that time.

Kansas City border politics

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.

• Meanwhile, Kansas City is still distributing 20-year tax abatements to companies and developers for projects.
• Developers typically have plans in place when they knock on our door.” In Kansas City, several agencies administer tax incentives, allowing developers to shop around to different bodies to receive one.
• “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.
• After the district raised the issue – tying the incentives to systemic racism – the City Council rejected BlueScope’s bid and, three years later, it’s still in Kansas City, fully on the tax rolls, she said.
• Recently, a multifamily housing project was approved for a 20-year tax abatement by the Port Authority of Kansas City at Country Club Plaza, an outdoor shopping center in an affluent part of the city.
• All told, the Kansas City Public Schools district faces several shortfalls beyond the $400 million in deferred maintenance, Superintendent Jennifer Collier said.

East Baton Rouge and the industrial corridor

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.

• The company posted a record-breaking $55.7 billion in profits in 2022 and $36 billion in 2023.
• A mile drive down the street to Route 67 is a Dollar General, fast-food restaurants, and tiny, rundown food stores.
• 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 experience is starkly different at some of the district’s more advantaged schools, including its magnet programs open to high-performing students.

• 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.
• “Underserved kids don’t have a path forward” in East Baton Rouge public schools, Cage said.
• “Baton Rouge is home to some of the highest performing schools in the state,” according to the report.

Louisiana’s executive order

• John Bel Edwards signed an executive order 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 exercised its power to vote down an abatement.
• 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.
• In 2019, the campaign worked: the school board rejected a $2.9 million property tax break bid by Exxon Mobil.
• 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.
• By receiving tax exemptions, Exxon Mobil was taking money from her salary to deepen their pockets, she said.

• Christine Wen worked for the nonprofit organization Good Jobs First from June 2019 to May 2022 where she helped collect tax abatement data.
• 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.

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