By Thomas J. Gentzel, Executive Director
Pennsylvania School Boards Association
October 2005

The property tax relief debate now taking place in the Pennsylvania General Assembly provides the best opportunity in many years to initiate a public dialog about comprehensive school funding reform that is fair to Pennsylvania taxpayers and addresses the funding demands placed on school districts.

All of the special session discussions have focused on cutting school property taxes. As it stands today, the greater share of public education funding is derived from local property taxes rather than from state funding In fact, the commonwealth's share amounts to only 38 percent of the total needed to effectively operate Pennsylvania's public schools. To change the imbalance in this funding formula, taxpayers deserve much more than a quick fix of property taxes. Any solution that results from this special session must account for the purpose which the taxes are collected – to provide children with a “thorough and efficient system of public education,” as the Pennsylvania constitution demands.

The property tax relief plans now before the state House and Senate only address part of the commonwealth's challenge for funding public education. A comprehensive resolution must contemplate several issues, including the need for community investment, cost containment of state mandates and a revised mechanism that guarantees future funding for public education. Any new taxing system that does not consider all of these critical needs will fail.

Several property tax relief proposals call for the total elimination of property taxes in favor of other revenues to support public education, including expansion of the current state sales tax. The association believes these proposals would eliminate meaningful community investment in public schools, resulting in state control of public education.

Community investment is a critical element of a state-local funding partnership, and reflects the expectations and goals a community sets for its schools. Without the means to make significant local contributions, communities no longer will have input in the areas of academic programs, transportation, class size and a host of other important elements of an effective education program.

Elimination of community involvement results in one-size-fits-all approaches that often fits no one. A system relying on a statewide tax doled out by a new Harrisburg bureaucracy as the primary source of public school funding effectively results in a state-run school system, raising the potential every school district to become a ward of the state.

Throughout the property tax debate, many state officials have tried to make school boards convenient scapegoats by claiming that their “unrestrained spending” is the cause of high property taxes. In truth, elected school board members hate raising taxes, working diligently to avoid it and doing so only when they have no other responsible choice.

The real funding crisis is a dramatic increase in education costs, including the steady and unchecked growth in new unfunded state mandates and spiraling costs of necessities such as fuel, equipment, facilities, construction, textbooks, health care insurance, retirement system contributions and special education requirements, to cite just a few. This is aggravated further when funding for existing programs is eliminated as a way of trimming state budgets, while leaving in place the mandate that local schools provide such programs. To “fix” school spending and taxes, the legislature must address the costs that drive school budgets, not just the revenues that fund them.

Finally, a reliable and predictable state contribution is just as important as community investment and cost containment. Unfortunately, the commonwealth has been unable for more than a decade to devise an equitable and adequate means of providing essential state aid after abandoning a previous formula that had never been fully funded. Rather than having a system that facilitates reliable and responsible budgeting, school districts routinely wait for last minute announcements of state funding allocations contained in an ad-hoc patchwork of across-the-board percentage increases, “hold harmless” provisos and special supplements that rarely are the same from year to year.

The result is shot-in-the-dark budgeting for local school boards unsure what the state will contribute, unable to engage in effective strategic budgeting, with little or no flexibility about major drivers of school costs, and with constraints on most kinds of local taxing authority that force school boards to turn to property taxes in order to plug unpredictable fiscal gaps.

To implement a workable solution for all these challenges, the state legislature and the governor must provide taxpayers with true property tax relief that creates a comprehensive public education funding system. To achieve anything less would be a disservice to the citizens of Pennsylvania.