- Pennsylvania Among 'Terrible 10' Most Regressive Tax States
- February 4 Non-Partisan Training: HOW TO RUN FOR ELECTION BOARD IN 2013: HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Republican Governors Opt-In to Medicaid Expansion
- The Reports of Unions' Death Are Greatly Exaggerated
- Ask Allyson Schwartz to run for Governor
- Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind
- Jan. 14 Workshop:HOW TO RUN FOR ELECTION BOARD IN 2013; HOW TO RUN FOR COMMITTEEPERSON IN 2014
- Seth Williams on Guns, Jasmine Rivera on School Closures @PFC Meetup Wednesday
- PA Revenue Strong Midway Through Year; Tax Cut Could Have Big Impact
- What to Make of the Fiscal Cliff Deal?
Why It Matters: property taxes and school funding
Sunday’s Inquirer laid out one of the best reasons for why reform in property taxes has to go hand in hand with school funding.
In a study of more than 500,000 tax records, the Inquirer reports that “wildly disparate property tax rates are widening the economic divide between have and have not towns.”
For instance, in some economically distressed parts of eastern Delaware County, such as the six towns of the William Penn School District, the tax rates are nearly six times higher than those in West Conshohocken, a Montgomery County borough jam-packed with office towers. Just five years ago, the rates were 31/2 times higher.
Those poorer communities also tend to have lower-achieving students and far fewer resources than wealthy neighbors. The William Penn district - composed of Aldan, Colwyn, Darby Borough, East Lansdowne, Lansdowne and Yeadon - spends $12,701 per pupil. West Conshohocken is in the Upper Merion district, which spends $18,158.
Between 2002 and 2007 in poorer towns in the suburban counties, increases in millages - the taxes per $1,000 of assessed property value - were double those in affluent communities.
So the famous line touted by Philadelphia Student Union organizers in 2001 during the state takeover was that the quality of a child’s school system shouldn’t have to depend on their zip code. But that is indeed what happens here.
It’s important to remember that over the last couple of decades the state share of funding for education has declined from about half to currently 35% of district education costs. Under the Ridge administration, state funding for schools declined to its lowest point ever, hovering under a third. Rendell has made efforts to boost education spending in the state to its current level. Despite these efforts, Pennsylvania still ranks near the bottom of the nation, 44th in fact, in the amount of state contribution to school districts.
Because Pennsylvania refuses to adequately fund education, local districts rely upon their number one source of funds – property tax. The wealthier the district, the more funds they generate for schools. More important though, the wealthier the District, the less each individual homeowner is taxed since each homeowner can generate more taxes. It gets even better when the township is attractive enough to host businesses which also contribute to schools.
Great if you live in King of Prussia or Lower Merion. But when you live in Chichester or Colwyn, this system stinks. If the local property wealth is low, less money goes to schools, which forces townships to increase taxes on homeowners. Here’s how it feels:
Its [Coatesville Area School District] poorest part by far is the city of Coatesville; there, the average home price in 2006 was $120,000, compared with $294,800 across the other towns. Devastated by the loss of the steel industry that once defined it, Coatesville has a painfully sparse tax base, which forces higher rates on everyone in the district.
The circumstances are similar - and the taxes even higher - in the Chichester School District in eastern Delaware County. The district consists of Lower and Upper Chichester Townships and the ravaged riverfront boroughs of Marcus Hook and Trainer.
Upper Chichester, where Karl and Jean Dorschu live, is relatively well-off, with an average home price of $220,165. But in the other three municipalities, the tax base is paper-thin; houses average less than $95,000.
So the district's residents are forced to dig deep at tax time, paying up to $3,300 for every $100,000 in property value.
Had they stayed in Radnor, the Dorschus would be paying $1,138 per $100,000 in value. That district includes just one township, with $3.6 billion worth of real estate. That's four times the total for all property in the Chichester district.
One thing I appreciate about reporter Anthony Wood’s work is that he took the extra step of pointing out that in most school districts there’s not a whole lot of fat. Now I might struggle a bit with the notion that Lower Merion which spends over $20,000 a student is barely holding on, but what’s clear is that most district costs are locked into certain fixed costs: salaries and benefits, buildings, and legal mandates.
And as much as I take to task the spending within the School District of Philadelphia, at the end of the day, this system is underfunded by almost a billion dollars a year – and that’s just to attain adequacy. I can rip the SRC for having its p.r. consultants and high priced lawyers, but that alone won’t pay for the ten billion dollars in facilities upgrades that former CEO Paul Vallas once mentioned. Or an increase in teacher salaries so we’re competitive with our suburban neighbors.
What the article doesn't point out so much are the limitations of the legislative and grassroots attempts to address the situation. Both Act 1, which passed in 2006, and HB1275 (replacing property tax with sales tax and shifting school funding to the state-a bill currently stuck in committee) have separated issues of property tax reform and school funding.
Act 1, for example, is a property tax rebate for homeowners that does absolutely nothing for actually reducing property taxes and furthermore does nothing to ensure that schools receive their adequate funds. HB1275, by shifting the burden of school funding to a state that doesn't fund schools adequately, eliminates school funding options and potentially locks in a system of inequity for poorer communities. In addition, by eliminating property levies, it eliminates a stable source of funding as well as lets businesses off the hook for contributing a fair share of their wealth.
Rendell has argued that Act 1 in combination with his plan to boost spending for schools to a 44% share in six years will address the problem. While state legislators acknowledge interest in a first year effort to address the legislative costing out study on school funding, not enough show interest in sticking with the six year school funding plan -- and that's a problem.
A complicated issue like this needs less knee jerk reactions and some solid thinking. Act 1 is now in place, but education funding is not. There’s fewer compelling reasons for supporting a six year education formula than the tens of thousands of people living with the failures of government to address the situation.
The cliché in school circles is to say “it’s about the kids.” But the reality is it’s really about all of us.