St. Paul teachers want companies, nonprofits to pay more for schools

The St. Paul teachers union says tax breaks long enjoyed by the city's businesses, colleges, hospitals and other nonprofits are letting those institutions off the hook when it comes to paying their fair share for schools.

Union leaders say that money belongs in schools, and they're pressing the St. Paul school board now to help ratchet up the pressure. They've made it part of the negotiations on a new teachers contract.

It's a bold tactic that was on loud display last week as union members chanted "Students' needs, not corporate greed!" outside the glass-walled St. Paul skyway offices of U.S. Bank, Securian and Wells Fargo. The teachers also held an outdoor rally in front of Ecolab's downtown building.

While the union says some firms are starting to pay attention, critics warn it could alienate executives at companies and nonprofits who believe their institutions already do plenty — and pay plenty — for St. Paul schools.

Besides businesses, the St. Paul federation wants local colleges and other nonprofits that are exempt from property taxes to voluntarily pay into the district. The teachers haven't said how big the contributions should be.

Union leaders, though, say there's no other choice in an era of uncertain public school funding.

"Traditional negotiations of just negotiating with a district that's strapped with cash are done," said St. Paul Federation of Teachers President Nick Faber. "We need to do that and we need to talk with our corporate partners and negotiate with them about how they can be better partners in St. Paul Public Schools."

Faber says in the past, when teachers have tried pressing legislators and district officials for more resources for schools they've been told there's not enough money in state and district budgets.

The union says it has a specific problem with a business incentive program called Tax Increment Financing, or TIF. When property in designated "TIF districts" increases in value, the additional tax revenue goes to pay for development of the site, which teachers argue siphons revenues from schools.

U.S. Bank's operations center near downtown St. Paul, Wells Fargo Place and Securian Center are in TIF districts.

But state law says TIF districts can only be established if the development in question would not otherwise have happened. The Securian and U.S. Bank properties were declining in tax value prior to the establishment, said Hannah Burchill of the city Planning and Economic Development Department.

"It's difficult to confirm or deny the exact sum of taxes the St. Paul Federation of Teachers states the St. Paul School District is owed, as the buildings would not have been developed but for the establishment of the TIF district," Burchill said in a statement.

In contract negotiations that are now in mediation, the union asked the St. Paul school district to join its demands for funding.

District officials, though, have responded by pushing a different revenue source: a state program called "quality compensation" or Q-Comp that funds teacher training and merit pay. The union, though, has resisted Q-Comp for years. There's also no money for new program participants right now. The state says 22 districts and charter schools are on a Q-Comp waiting list.

If hashing out funding sources during contract negotiations seems unusual, that's because it is in the United States, University of Minnesota Carlson School of Management professor John Budd said.

"Traditionally, U.S. unions have been very bread-and-butter focused," Budd said. However, Budd said lately more unions have taken to bargaining like the St. Paul teachers, on issues beyond wages and benefits. Budd said the approach can be used to win gains and build momentum in a political and economic climate that's become more hostile to unions.

In St. Paul, the approach is irking some of the singled-out companies.

"For one thing we're one of the largest taxpayers in St. Paul, and also we've been a strong supporter of the St. Paul Public Schools for a long time," Ecolab Vice President of Global Communications Kari Bjorhus said.

Bjorhus said the Ecolab Foundation has given more than $3.6 million dollars to the district over the last five years. The St. Paul school district released a statement defending Ecolab, noting the more than $240,000 in grants to teachers this year.

"It's completely untrue that Ecolab is using tax breaks or loopholes to avoid paying city and state income taxes that would otherwise be used to support public education," Bjorhus said.

Wells Fargo spokesperson John Hobot said in 2016 Wells Fargo made $3.5 million in education support grants in Minnesota, a figure that includes contributions to post-secondary programs as well as PreK-12 programs. He said that year Wells Fargo branches in Minnesota raised $114,000 for financial literacy programs at nearby schools. Wells Fargo also sponsors programs through the Minnesota State High School League.

As of Wednesday, Hobot and a spokesperson for Securian said those companies hadn't been contacted by the St. Paul teachers union.

Ecolab has agreed to meet with the union. U.S. Bank declined comment except to say they are planning a meeting with the teachers for early 2018.

A spokesperson for SPFT said union members have also met with HealthPartners, Allina, Macalester College and St. Catherine University.

Editor's note (Dec. 14, 2017): This story has been updated to add information about Wells Fargo's contributions to Minnesota education programs.