Wednesday, May 14, 2014

Fund PA Schools without Property Taxes? The Idea Has Its Critics

Tom Joseph, Public News Service-PA

HARRISBURG, Pa. - A bill making its way through the Pennsylvania Senate would base school funding dollars not on property taxes but on state sales and income taxes. Opponents say it doesn't add up.

Senate Bill 76 is aimed at eliminating property taxes. In the process, however, some are concerned it would place school funding in Pennsylvania on shaky ground.

"So, at a time when maybe the economy isn't doing as well, the state isn't going to have as much money to then give to the school districts," said John Neurohr, a spokesman for the group Keystone Progress. "It's really going to place the disproportionate burden for filling those gaps on the school districts - and that's just not fair."

The proposal would raise the state personal income tax by more than 1.25 percent and the state sales tax by 1 percent, but not for items on the WIC food list. Backers of the bill call it a critical component to long-overdue property tax reform in the state, but Neurohr said it would have a disproportionate effect on low- and middle-income taxpayers.

Neurohr said the measure also threatens to put local control of school districts in jeopardy.

"We're not allowing the elected school boards in our districts across the state, if SB 76 becomes law, to do what they need to do to make sure that they are fully funding schools," he said.

A vote on SB 76 is expected in the Senate soon. The bill's text is online


  1. Unfortunately, the property tax based solution has been an unreliable source of revenue for the school districts as well.
    When the economy weakens, homeowners (as well as business property owners) have are unable to make their property tax payments. So while there is school revenue from an accrual accounting perspective, from a cash flow perspective it simply isn't there. Foreclosures and tax sales tie up these delinquent tax payments for years and years. Meanwhile, although the accountants say there is revenue, the administrators on the ground know that there isn’t the required cash to pay the salaries, bills, etc. needed to operate the schools. Very simply - property tax receipts are no more divorced from the economy than sales or income taxes.
    As long as we have this "split" approach to paying for our children's educations, with some percentage of revenues coming from the state's coffers, while the remainder comes from local property taxes, we will forever be stuck in a finger pointing situation. The state will continue to reduce the amount of funding it provides (down to 34% from the 50% it used to provide in the 70's), leaving local school boards to do the dirty deed of making up the difference with local property and other taxes. Until we make a single group (i.e. Harrisburg's legislators) responsible for ALL funding, more and more of the burden will be sloughed off to the local level. By replacing local school property taxes with a state-collected alternative (e.g. SB76), we can finally see the WHOLE funding picture in one place - a single calculation that includes both discretionary state funding AND fixed percentages of income and sales tax revenues.
    Most importantly, moving all funding to the center finally lays the foundation for a more equitable education funding distribution formula. Past and current formulas have been flawed and politically manipulated by the fact that a portion of total funding came from differing levels of local property tax revenues. But, with a single point of responsibility for funding, a true COLA-adjusted per-diem solution could be developed. Regardless of whether a child is in a rural district, a suburban district, or an urban district, an equitable per-child cost to operate based on industry standard COLA adjustments, could break the cycle of poor district self-fulfilling failures and suburban district privilege.

    It’s time to start moving our education funding solution into the 21st century. Jettisoning our property tax based funding approach is the first step.

    1. Sorry for the occasional grammatical errors above. Editing in the tiny edit box makes it difficult to see mistakes (including one right up top in the second sentence!!!!)