Arizona teachers on strike (left); David Koch, one of the billionaire Koch brothers (right)
The ongoing wave of teacher strikes across the US is changing the conversation about public education in this country. From West Virginia to Arizona, Kentucky to Oklahoma, Colorado to North Carolina, tens of thousands of teachers have taken to the streets and filled state capitals, garnering public support and racking up victories in some of the nation’s most hostile political terrain.
Even though the teachers who have gone on strike are paid well below the national average, their demands have gone beyond better salary and benefits for themselves. They have also struck for their students’ needs – to improve classroom quality and to increase classroom resources. Teachers are calling for greater investment in children and the country’s public education system as a whole. They are also demanding that corporations, banks, and billionaires pay their fair share to invest in schools.
The teachers’ strikes also represent a major pushback by public sector workers against the right-wing agenda of austerity and privatization. The austerity and privatization agenda for education goes something like this: impose big tax cuts for corporations and the .01% and then use declining tax revenue as a rationale to cut funding for state-funded services like public schools. Because they are underfunded, public schools cannot provide the quality education kids deserve. Then, the right wing criticizes public schools and teachers, saying there is a crisis in education. Finally, the right wing uses this as an opportunity to make changes to the education system that benefit them – including offering privatization as a solution that solves the crisis of underfunding.
While this cycle has put students, parents, and teachers in crisis, many corporations, banks, and billionaires are driving and profiting from it. The key forces driving the austerity and privatization agenda are similar across all the states that have seen strikes:
- Billionaire school privatizers. A small web of billionaires – dominated by the Koch brothers and their donor network, as well as the Waltons – have given millions to state politicians who will push their pro-austerity, pro-school privatization agenda. These billionaires lead a coordinated, nationwide movement to apply business principles to education, including: promoting CEO-like superintendents, who have business experience but little or no education experience; closing “failing” schools, just as companies close unprofitable stores or factories; aggressively cutting costs, such as by recruiting less experienced teachers; instituting a market-based system in which public schools compete with privately managed charter schools, religious schools, for-profit schools, and virtual schools; and making standardized test scores the ultimate measure of student success.
- Regional corporate forces. Major corporations in each state, often from the fossil fuel industry, are key drivers and beneficiaries of the pro-austerity, tax-cutting policies that have gutted school funding – and now they are opposing the teachers trying to fix the mess these corporations created. Many of these corporations also fund and lead charter schools (which can drain funding from traditional public schools), donate to pro-austerity/pro-education privatization school board candidates, and advocate for policies like increased standardized testing, using inexperienced teachers to cut costs, and outsourcing school functions to private companies.
- Koch-backed think tanks. A slew of state-level front groups – many tied to the State Policy Network, a national network of think tanks funded by the Kochs, Mercers, Waltons, and other billionaires – serve as a key PR wing for the anti-teacher privatization agenda.
We put together the following list to begin identifying which corporate actors are driving and profiting from austerity in the states where teachers have gone on strike. For each state we asked: Who are the main power players? What banks or corporations are taking money out of the public budget? Who are the major donors to politicians who are slashing public education budgets while doling out big tax breaks to corporations? Which 1%ers are bankrolling education privatization?
This article lays out some information about the corporations, banks, and billionaires that teachers in Oklahoma, Arizona, West Virginia, Kentucky, and Colorado are up against. (We also include a table at the end that shows the biggest corporate beneficiaries of public subsidies).
Arizona’s Koch-funded Gov. Ducey & corporate-backed Arizona Education Project
In Arizona, top individual tax rates have plummeted from 7% to 4.54% since 1990, and revenue from corporate incomes taxes have been more than halved in the past decade, dropping from $986 million in 2007 to $368 million in 2017. This austerity agenda has cut funding per student by nearly a fifth over the past decade – from $4,949 in 2008 to $4,157 in 2018.
Arizona Governor Doug Ducey is a longtime Koch ally and a big proponent of school privatization. The Koch brothers poured $1.4 million into Ducey’s 2014 gubernatorial run, and he recently headlined a Koch donor retreat. Ducey’s chief of staff used to be president of the Koch-funded Americans for Responsible Leadership. Last year, ALEC hosted a luncheon for a third of Arizona’s GOP state legislators, and Rep. Debbie Lesko is an ALEC member.
The Koch donor network also funds the Goldwater Institute, Arizona’s anti-teacher SPN affiliate. Trump backer Rebekah Mercer is on the Goldwater board, and a former Ducey official now heads up the Institute. Today, Arizona has proportionally more charter school students than any other state, and ALEC puts Arizona at the top of its Report Card on American Education. Furthermore, the Walton Foundation has funnelled a whopping $4,294,000 (and possibly more) to pro-charter forces in Arizona since 2009 (more on the Waltons below).
Arizona corporations fund the Arizona Education Project, which spent more than $1 million on pro-Ducey education ads before the teachers’ strike. AEP is backed by the Arizona Chamber of Commerce, the Service Group of America (a private food service company), and Pinnacle West Capital, the parent company of Arizona Public Service, the state’s largest electric utility. Pinnacle West has poured big money into Arizona politics – top executives have already given Ducey over $130,000 for his 2018 run, not to mention millions of dollars in dark money that APS has put in play in other elections. Pinnacle supported Ducey during his 2014 campaign – its CEO even chaired Ducey’s inauguration committee. Both Pinnacle and Service Group of America have ties to the Koch network.
Oklahoma’s pro-austerity fossil fuel industry & Koch-backed Gov. Mary Fallin
Since 2004, Oklahoma has cut the top personal income tax rate from 6.65 percent to 5 percent, abolished the estate tax, and exempted capital gains income from being taxed – all while the state faced a billion-dollar budget shortfall.
The fossil fuel industry drives the state’s austerity agenda. Three companies – Devon Energy, Chesapeake Energy, and Continental Resources, whose CEO Harold Hamm is worth $18.8 billion – succeeded in getting an ultra-low tax rate of just 2% on new drilling wells for the first three years of operations. In 2015 alone this amounted to a $470 million subsidy for the industry. All told, general funds are down 35 percent in Oklahoma since 2006. Meanwhile, spending on students has dropped 28% per pupil since 2008, and teacher salaries are ranked 48th in the nation.
Oklahoma Governor Mary Fallin has close ties to the Koch network. She received an award from ALEC in 2013, spoke at an ALEC summit in 2008, and has been an ALEC “Legislator of the Year.” The Koch-backed SPN has three affiliates and associates in Oklahoma – the Oklahoma Council of Public Affairs, the 1889 Institute, and the EFoundation. The EFoundation’s advisory council includes Todd Lamb, the current Lieutenant Governor, and oil and gas industry billionaires like T. Boone Pickens. The head of the 1889 Institute used to be at the Goldwater Institute, and many staff from the OCPA have ties to the Koch donor network-backed web of think tanks.
Nor is it just SPN affiliates pushing the privatization agenda in Oklahoma – billionaire charter school pusher Eli Broad has been a key backer of school privatization there.
West Virginia’s coal barons push tax cuts that gut school funding
West Virginia has steadily slashed corporate taxes since 2006. It cut its corporate net income tax rate from 9% to 6.5% and phased out its business franchise tax. The West Virginia Center on Budget and Policy estimates that these and other cuts have gutted state revenue by more than $425 million a year. Because of this, funding per student has dropped 11% in West Virginia since 2008, and teacher salaries are ranked 49th in the nation.
Oil, gas, and coal dominate West Virginia and are key pushers of austerity. For example, Bob Murray – CEO of Murray Energy, the state’s largest coal company – pushed hard for cuts to the state’s severance tax on oil, gas and coal companies (the state legislature passed a 40% cut the severance tax in 2016). Murray has been a major GOP donor – in 2014 alone, he spent $250,000 trying to get Republican lawmakers elected. Current Governor Jim Justice is a coal baron – and the state’s only billionaire – who owes $15 million on taxes even though he’s received $379,799 in public subsidies.
The Koch-backed SPN has two affiliates in West Virginia – the Cardinal Institute and the Public Policy Foundation of West Virginia. The Cardinal Institute’s leaders have ties to other billionaire-backed groups like Americans for Tax Reform and the Center for Individual Freedom. Its social media profile steadily pushes school privatization and it has made the rounds in the Virginia media, writing op-eds with titles like “Teacher pay system institutionalizes mediocrity.”
In Kentucky, the Koch brothers & coal industry have systematically defunded public education
In Kentucky, Governor Matt Bevin has pushed tax cuts for corporations and the ultra-wealthy and cuts to public services since he took office in 2015. A Lexington Herald-Leader investigation found that Kentucky gives away $13 billion in tax expenditures (a mix of accumulated tax breaks, tax credits and incentive payments involving tax money) every year–more than the state collects. In the early 2000s, subsidiaries of the now now-bankrupt coal giant Peabody Energy received $266 million in tax subsidies from Kentucky. Amazon has received $111 million in tax subsidies from the state.
Who has helped drive these cuts to education and corporate tax giveaways? The Koch brothers and the coal industry.
Even though Governor Bevin wasn’t the Koch’s first choice for Kentucky governor, he has loyally pushed the billionaire donor network’s agenda. Bevin recently spoke at a Koch donor retreat, and the Koch-backed American for Prosperity praised his new work requirements for Medicaid recipients. Americans for Prosperity has orchestrated the systematic defunding of Kentucky’s public education system – it has played an integral role in bringing charter schools to Kentucky and advocated for tax cuts for the ultra-wealthy that rob Kentucky’s schools of desperately-needed revenue.
In Kentucky, the coal industry has extracted natural resources and community wealth from the state for decades. One of the most powerful men in Kentucky is billionaire coal magnate Joe Craft, CEO of Alliance Resources. Craft and his wife Kelly Knight Craft are two of Bevin’s biggest supporters. While Bevin was running for governor, they hosted a private event to introduce him to the biggest Republican donors in the state. Once Bevin won, the couple chaired his inauguration fundraising committee.
Craft also chairs the Kentucky Chamber of Commerce, which has again and again advocated for tax cuts for corporations and the wealthy that have left Kentucky’s schools underfunded. Craft has also emerged as an outspoken Trump supporter. He gave $1 million to the Trump inauguration committee and “sat front and center as the president signed an executive order and declared the ‘war on coal’ over.”
In Colorado, billionaires Philip Anschutz & Charles Ergen, oil and gas companies, and Well Fargo avoid taxes to keep schools underfunded, while advocating for privatized education
Out of the 44 states that levy a corporate income tax, Colorado ranks the 3rd lowest. The state has doled out at least $732 million in tax subsidies to corporations over the past ten years. The single largest subsidy, worth $300 million, went to the Gaylord Rockies Resort and Convention Center, owned by Starwood Property Trust, the largest commercial mortgage Real Estate Investment Trust in the United States. Starwood is run by billionaire Barry Sternlicht, whose investment empire includes single-family rental homes and Westin Hotels.
Teachers in the state are supporting a ballot initiative that would fund public education by raising taxes on corporations and people earning more than $150,000. The ballot initiative would certainly ensure that Colorado’s 11 billionaires and other wealthiest residents pay their fair share to fund the state’s public education system. These billionaires include Philip Anschutz, the fossil fuel and real estate billionaire who is worth $13 billion, Charles Ergen, the DISH Network Chairman who is worth $13.4 billion, and Kent Thiry, the politically-active CEO of DaVita Healthcare. Anschutz and his family have spent hundreds of thousands in campaign contributions to elect state legislators and school board members, while also financing charter schools in the region, including KIPP:Colorado. Thiry has spent over $75,500 in school board elections, while DaVita executives have influential positions at organizations including KIPP:Colorado and Colorado Succeeds, an organization for businesses aiming to transform Colorado’s education system.
Similarly to other states on this list, Colorado’s oil and gas industry has played a central role in defunding education. It has successfully campaigned for deregulation and low tax rates, spending more than $80 million over the past four years to influence ballot initiatives, elections, and public opinion. In 2016, BP won a court ruling that amounted to an estimated $100 million tax refund to oil and gas companies across the state.
Anadarko Petroleum and Noble Energy, the top energy producers in the state, have been major donors to the pro-corporate agenda in Colorado. The two companies have spent over $22 million combined in campaign contributions – primarily to various pro-business ballot initiatives and Republican candidates – at the state level. Anadarko and Noble are also leaders in several corporate trade organizations, including the Colorado Association of Commerce and Industry, the Metro Denver Chamber of Commerce, and Colorado Concern. These corporate trade groups have advocated for keeping taxes low for corporations and the ultra-wealthy, as well as leaving corporate tax loopholes intact, while simultaneously promoting education privatization and charter school expansion.
Wells Fargo, Colorado’s biggest bank, Xcel Energy, the state’s largest utility, and Molson Coors are also driving forces behind the Colorado Association of Commerce and Industry and the Metro Denver Chamber of Commerce. Wells Fargo saved $3.35 billion in taxes last year due to the federal tax reform bill – even as it avoided paying taxes in Colorado that could help fund public services.
The Walton Family also has Colorado ties. Nationally, the Walton Family Foundation has been one of the biggest funders of charter schools and education privatization. The foundation estimates that it has provided startup funds to 1 out of every 4 charters in the country. The foundation also funds the State Policy Network (mentioned above). In 2016, it announced a $1 billion initiative to expand charter school and other choice initiatives even more over 5 years. In 2016 alone, the Walmart Family Foundation provided $60,000 to the Colorado League of Charter Schools, $250,000 to education privatization organization Colorado Succeeds, and at least $100,000 to KIPP:Colorado.
While many of the Waltons live in California and Arkansas, Denver has its very own Walton family heir – Ben Walton, a board member at the Walton Family Foundation. Of course, Walmart is also a major beneficiary of the decades-long strategy to cut corporate taxes.
Strike Against Austerity & Privatization
As all this shows, striking teachers across the US are taking on some powerful forces – the billionaires and corporations that are driving austerity, propping up far-right politicians, and pushing school privatization. The strikes may be occuring in different states, but they all face similar corporate forces and a similar agenda that is the source of the chronic underfunding of public education. Teachers get this – and it’s part of the reason their demands have gone well beyond things like (well-deserved) pay raises and protection of benefits. As the teachers’ fight continues, it will be important to continue to identify and map out the key corporate players behind austerity and school privatization – so as to better challenge their damaging agenda.
Recipients of largest corporate subsidies by state
|State*||State & local corporate subsidies 2008-present||State & local revenue lost to tax abatement programs (FY 2016-FY 2017)||Notable recipients of large corporate subsidies|
|Oklahoma||$4.5 billion||$155 million||OGE Energy – $1,012,428,948; Koch Industries – $170,978,522; Devon Energy- $76,380,574; Chesapeake Energy- $44,165,556|
|Kentucky||$4.6 billion||$177 million||Clean Coal Power Operators – $550,000,000; Peabody Energy – $266,200,000; Amazon – $111,789,976|
|Colorado||$732 million||$275 million||Starwood Property Trust – $300,000,000; NextEra Energy – $23,520,611; United Continental – $17,438,823; Xcel Energy – $15,545,303; Suncor- $12,582,433|
|West Virginia||$299 million||$4.5 million||Bass Pro- $127,523,480|
|Arizona||$232 million||$16.3 million||Thomas Kluznick Co – $97,400,000; Intel – $99,806,143|
|*All data compiled from the Good Jobs First Subsidy Tracker 1 and Subsidy Tracker 2. The quality of subsidy disclosure data varies significantly from state to state, so in some cases these numbers are likely significantly lower than the actual amount states are devoting to corporate subsidies. Thinks of these numbers as “at least,”; for example, Oklahoma has given corporations tax subsidies totaling at least $1.5 billion since 2008.|