SEIU Local 284 has issued a report titled “I.O.U.: How Wells Fargo and U.S. Bank Have Shortchanged Minnesota Schools” that lays some of the blame for a $2.4 billion school shift and other shortfalls in school funding on the practices of the state’s largest banks and their executives.
School staff at Westonka Schools are working to highlight key findings of the report for school officials. They also are embarking on a multi-district effort to ask school districts across the state to examine whether the banks they do business with practice responsible lending and lobbying policies.
“We believe that it makes sense for the district to look at how it might use its financial relationships to strengthen the economic foundation for education in the community. This foundation is largely built on stable home ownership and of course jobs,” said Desiree Hemstock who works for the Westonka school district as a paraprofessional.
The report argues that Wells Fargo and U.S. Bank benefited from billions in taxpayer bailouts after playing a role in the subprime crisis that crashed the economy and reduced state budgets. Yet they have hurt public revenues by not doing enough to help end the foreclosure crisis or lend to small businesses. Further, the report argues, top executives of US Bank and Wells Fargo have played leadership roles in the Minnesota Chamber of Commerce and the Minnesota Business Partnership as these organizations “spend millions of dollars lobbying against tax increases on corporations and wealthy Minnesotans,” causing a revenue shortfall that led to a budget deal with a “school shift” in which the state borrowed $2.4 from the schools.
“Thanks in part to their efforts; the state of Minnesota issued an enormous IOU to its schoolchildren to balance the state budget. The Chamber and the Partnership later helped scuttle a plan to pay back the IOU by ending tax breaks to corporations that shelter profits in offshore tax havens, also known as the Pay Back Our Kids Act,” the report states.
Even as the schools are under financial strain due to delays in state payments, their second-largest source of revenue—property taxes—is also being squeezed as a result of state cuts to local governments, lost property value, and the cost of foreclosures. “With 21,298 foreclosures in Minnesota in 2011, the cost of foreclosures to taxpayers last year alone was more than$409 million. Based on their share of foreclosures, $74 million of that can be attributed to Wells Fargo and $37 million to U.S. Bank,” the report states.
Representatives of SEIU Local 284 say they will ask school districts across the state to consider banks’ records in deciding where to put their money during contract bargaining in the coming months.
Download the whole report here.