More than 1,000 students might be out of school next week, and an unlikely cuprit may be responsible: Obamacare.
Clay County Schools, in northern Tennessee, is struggling financially and has decided to close the district’s three schools indefinitely. Administrators are blaming the high costs of Obamacare for hurting the district financially.
“The Affordable Care Act being a totally unfunded mandate is devastating the finances of the Clay County school system,” Clay County Schools Director Jerry Strong told WZTV Nashville. “We are also in a county that just doesn’t generate a lot of tax revenue.”
The district’s line of reasoning is a good reminder that while regulation debates typically focus on businesses and economic effects, regulations also affect public schools.
For example, when the minimum wage rises or paid leave legislation is passed, those regulations apply to schools too. Unlike businesses, school districts can’t pass those costs on to customers through higher prices, or pay for it out of their profits. Schools have to find a way to pay for the higher cost of employees, either through tax increases or by sacrificing spending elsewhere in the school budget.
When businsses can’t afford to keep operating, they have to shut down. The same is true of schools.
Many school districts already complain about not having enough funding. Passing regulations onto them makes it worse.
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The county commissioner opposes raising property taxes to help fund the schools, since the country already has the seventh-highest property taxes in Tennessee. He also insists that that district has enough funding to keep schools open through the academic year. A voter referendum on a vehicle tax will take place in March.
A lawsuit has been filed by two students and their parents hoping an injunction will force schools to remain open. Even if the schools close for an extended period of time, state law requires the district to provide 180 days of instruction in the school year.
The next time someone proposes a costly regulation — whether an insurance mandate, paid sick or maternity leave or a higher minimum wage — just remember that the costs to businesses apply to schools as well.
Jason Russell is a commentary writer for the Washington Examiner.
