Fixing School Funding Inequities!

In a recent Letters to the Editor in the Lebanon Daily News the proposal of School Property Tax Elimination through HB/SB 76 was dismissed as merely an effort of robbing Peter to pay Paul.

The logic used to reach this conclusion is confusing to me because that’s exactly how the current system of Property Taxation works.  We penalize home ownership and force home owners to pay the lion’s share of education funding in the Commonwealth which results in some very harmful aspects when it actually comes to educating our children.

In 1972 a presidential study was conducted on education finance that reached the following conclusion:

“Significant disparities in the distribution of educational resources have developed among school districts. Though every State has made some effort over the years to reduce the disparities, the results have been only partially successful at best. That, we believe, is because the States have relied on local district financing for the bulk of educational revenues….” 1972 – The President’s Commission on School Finance, Final report.

45 years later and nothing substantial has been done to deal with the inequities in school funding in Pennsylvania.  In fact, in those 45 years things have become worse in Pennsylvania.   Pennsylvania now ranks 3rd highest in the nation for reliance on the local school property tax for education funding leading to some gross inequities in education funding across the Commonwealth.

Should the quality of a child’s public education in the most fundamental areas of Reading, Math and Science skills in Pennsylvania be based on their zip code or on the economic status of their parents?

The reliance on local property taxes to fund education has created gross inequities in education funding in Pennsylvania.   Until those inequities have been successfully capped, those inequities will only continue to grow especially under the current economic status.

Across the commonwealth state-funding at the local level varies from school district to school district.  It is true that, in most cases, the property-wealthy school district will see less money from the state than the property-poor school districts.  That’s why we have a state funding formula but even with the recent changes to that funding formula the state funding never balances the funding to school districts to reach some form of equity in funding per student.

A symptom of the so-called “Traditional School Finance Problem” is characterized by high spending and lower tax rates for property wealthy districts and low spending and high tax rates for property poor districts.

For many living in the property poor districts moving is not an option.  Choosing which school districts to raise their children isn’t a possibility.  They are restricted by their economic means.

The arguments made by wealthier school districts of local control through property taxation so that wealthier districts can continue to spend more with lower tax rates while property poor districts spend less with higher local tax rates ignores the fact that we are talking about all of the children in our Commonwealth when it comes to providing them with reading, math and science skills.   None of those educational aspects should be local.  Where you live should not determine your ability to obtain proficiency in those educational skills.

The longer we rely on the Traditional School Finance mechanisms or…the status quo, the greater the inequities.

If we ever want to achieve equitable funding of students in our schools, a critical step begins by locking down the current inequities and not allowing them to grow further through local property taxation.

What if we created a situation where we could change the status quo in such a startling way that things like Reading, Math and Science skills could be equitably funded at the state level while other more local decisions like the local sports and music programs could be more locally funded?

Is it thorough and efficient funding of public schools to have a funding system that allows for some school districts to succeed while others fail?

Doesn’t our Commonwealth Constitution REQUIRE a thorough and efficient system of public education FOR ALL STUDENTS, not just the wealthier school districts?

HB/SB 76 creates a stable number to build a fair funding formula around.  It caps the current inequities so they can be more efficiently dealt with at the state level through a funding formula.  Future increases based on inflation in years to come would not see the irregularities generated by the current system of property taxation or the constant need to modify the  funding formula.

In doing so we could see proficiency leveling in Reading, Math and Science skills when the money starts following the student and stops being centered on zip codes.

The more local aspects of public education can be adjusted through local Income Taxes with voter approved referendums where the community begins to decide how much they want to put into their more local curricular programs.

It’s a common sense solution to a very serious problem in education funding.

 

 

 

 

 

 

Growing Government by Raising Property Taxes

In a publication from Lebanon County it states that “Unfortunately, there are a rising number of households on public assistance. According to US Census data from 2014, 10.8% of the 9,956 households in Lebanon City receive supplemental security income, up from 8.9% in 2010.  9.3% of households receive cash public assistance income, up from 5.2% in 2010.  29.4% of households have received food stamp/SNAP benefits in the past 12 months, up from 21.1% in 2010.”  In looking at other 3^rd Class cities like Lebanon, this seems to be more common than uncommon.

This publication is part of a program meant to revitalize Lebanon.  It’s called the Business Improvement District (BID) program.

However well intended this program is I don’t feel as though they really understand some of the existing problems that contribute to the issues they cite above.

I find it incredibly ironic that in these types of publications no correlation is made between the rising school district property taxes and the impact this has on the families in our communities.

Many of the people mentioned in the above statistics aren’t home owners so we often mistakenly think that, since they don’t pay an actual property tax bill, they don’t pay towards the property tax.

It continually amazes me that so few understand that when the property tax goes up on the property of a landlord, the cost of rent will increase to accommodate for that cost.  This is just one aspect of the Cascade Effect of the property tax.  And no, that increase doesn’t automatically make a landlord a bad person.

A landlord must make a profit on the property they rent or they won’t be landlords very long.  A least they have to be breaking even.  Higher property taxes results in higher rent. As rent increases the spending ability of the individual decreases unless their wages also increase to make the increase necessary to meet that rental increase.  That’s not the case as we’ll see later.

When the school district raises the property tax on a landlord, the rent goes up for the renter.  For many working families, this means less disposable income which contributes to the rise in supplemental security income, cash public assistance income and Food Stamp/SNAP benefits.  The money to provide for these services doesn’t just fall off trees.

As those revenue needs grow, that money has to come from Federal and State programs which means that we have to pay the taxes that support these programs.  As a result, the State and Federal government must either increase existing taxes, look for new things to tax or cut services in other areas.

The same applies to a business owner who rents their property.  When the land owners school property taxes increase, the business owner sees an increase in their rent.  That revenue has to be made up somewhere so it’s either cut operating costs (less employees, lower wages, fewer jobs) or raise the cost of the goods or services they provide. Any increase in that cost means less money for the consumer to spend on other goods.  That reduces consumption which reduces jobs.

Look, this isn’t rocket science.  This is simple common sense but let me explain.

In essence we have a constantly rising property tax that cuts in to more people’s disposable income making more people dependent on government programs that have to be paid for from other taxes.

Because the constantly rising property tax has a Cascade effect, every business or service provider that must pay that tax has to pass that cost down to the consumer.  This raises the cost of everything from clothing, food, milk, diapers, baby sitters, doctors, lawyers…you name it.

The constantly rising property taxes are helping to contribute to the need for higher prices on everything we purchase and every service we use.  This creates a greater need for people to turn to government programs to supplement their income in order to provide for the essentials they need to survive.  That greater need creates a revenue problem that results in more taxation that only continues to further drive up the cost of the things we need.

A recent website was launched that tries to defend the property tax in its attempt to stop the passage of HB/SB 76, a bill that would eliminate the school property tax by raising the PIT and Sales Tax to raise the same revenue currently generated by the school property tax.  This modest shift in taxation, which is overtly exaggerated by the anti-76ers, is a revenue neutral tax shift.  That differs from maintaining the status quo which needs constant increases to meet its spending growth.

The shift is a one-time shift that actually undoes a myriad of other tax-shifting programs already in place by the government.  It ends the need for the number of KOZ, LERTA and other programs;  Seriously cuts into the need for Clean And Green; Makes constant and expensive county-wide property reassessments less necessary; Makes property tax abatement programs less costly and necessary and so much more!

That anti-76 website makes the claim that we will see annual increases statewide of $1 billion dollars in the property tax.  That’s annual increases, not a one-time shift to alternate methods of taxation like we would see with HB/SB 76, and yet they somehow think that this is okay…that the existing path is somehow sustainable.

Taking $1 billion more out of the economy next year is a travesty.  It will grow the numbers of families who will need to become more dependent on government supplemental services in order to survive.  Taking $10 billion out of the economy over the next ten years will be devastating which will result in school property taxes almost doubling from their current $12.8 billion statewide to $22.8 billion.

The website that attacks HB/SB 76 makes sure to use pictures of children while making the claims that the passage of HB/SB 76 will hurt the children.  The education industrial complex always does this.  The one thing they don’t want you to do is the math!  They want to appeal to an emotional level that distracts you from looking at what they are really saying.

You see little Johnny and Susie who are 12 years old now and in the 6th grade will be out of school in 10 years when the school property tax will virtually double to hit that $23 billion mark.  They’ll be 22.  If they’ve gone to college they will probably already be facing a massive college debt.  Won’t adding $6 billion in property tax burden by the time they are 18 result in fewer children being able to afford a college education?

Certainly increasing mom and dad’s property tax burden so that that it adds more than half to what they are paying now will make college funding less affordable for many.   If they are paying $3,000 in school property taxes now and this increases like the anti-76ers claim, their school property tax will be approaching $5,000 annually.  By the time these children reach 22 years of age their parent property taxes will have doubled.

For those who haven’t gone to college it’s out into the workforce in a dwindling job market in the Commonwealth.  Stagnate wages and rising taxes will have made things more difficult for jobs to stay in Pennsylvania making it more difficult to find a job with family sustaining wages.

From 1970 to 2014, Pennsylvania ranked a dismal 49th in job growth, 45th in personal income growth, and 48th in population growth according to the Commonwealth Foundation. Granted that doesn’t put us in last place in each category yet but maintaining the status quo and doing what the anti-76ers want will keep us on the path to getting there.

For many the status quo for the future will mean home ownership will be less affordable with an additional $10 billion in statewide school property taxes to pay so they will turn to renting.  Rather than investing in their own future through the purchase of a home, they will be investing in the future of others.  Rather than becoming more independent they will become more dependent on others.

With a job market that cannot keep up with the population demands, even with a population that is shrinking as people out-migrate to other states, Pennsylvania faces a bleak future.

As property taxes rise, so will the rent and so will the cost of everything else these children will need to survive now that they’ve reached the age of 22.  The dollar will buy less so they can pay more in taxes to an educational system that said they cared about the future of these children.

Children in school today will be facing the payment of a growing pension debt that is around the $100 billion mark.  Add that to the doubling of school property taxes for an additional $10 billion dollars a year just from the property tax alone according to the anti-76ers.

The $1 billion increase represent the numbers from the anti-76ers.  They admit to this so this is the legacy they want to force on our children:  An unsustainable future where the American Dream of Home Ownership is virtually crushed for a very large portion of the Commonwealth population.

Frankly I’m really tired of the way the school districts and those who choose to protect the status quo exploit children by not being honest with us about the future they are knowingly giving them.  They are the first to roll out the rhetoric of “It’s all for the children” as their excuse for irresponsible actions.  In reality, they are willing to pass on a debt to our future generations that will be virtually impossible to repay and this doesn’t seem to matter to them in the least.

Looking at the statistics from flyer in Lebanon City about this BID program we can add some additional informational data for comparison.

In 2010 the median household income in the city of Lebanon was $33,840.   Today the median household income is, according to census data, $34,072.  In other words, median household income has increased by only $232 in the last six years.  In January of this year the Lebanon Daily News cited the possibility of yet another increase in the city school district property taxes.   They projected that this would amount to an average $119 tax increase for the families of Lebanon City…that’s just for one year.  (http://www.ldnews.com/story/news/education/2016/01/11/taxes-increasing-lebanon-school-district/78622850/)

That represents more than half of the increase the average family has seen in their wages over 6 years; That amounts to a $10 monthly increase in rent, at the bare minimum.

While a later article stated the tax increase wouldn’t be as drastic it would average to an $81 annual increase for the average family in Lebanon City.  $81 times 6 is $486 so if income growth stays the same as its been during the previous six years it will easily outpace that median household income growth in the next 6 years and that’s if there are no increases to go along with this year’s increase over the next 6 years.  That’s not very likely.  Taxes will continue to go up annually in the city just as they always have.

Lebanon City School Property taxes have increased annually since 2010.  Those School Property Tax increases have far outpaced the increase in median household income in the city.   Maybe that’s why the city is also seeing increases in the need for supplemental security income, up from 8.9% in 2010; Maybe that’s a contributing factor for 9.3% of households needing cash public assistance income, up from 5.2% in 2010.  Maybe that helps to explain why 29.4% of households have received food stamp/SNAP benefits in the past 12 months, up from 21.1% in 2010.

Statewide, since 2010, school property taxes went from $11,153,412,489.73 to $12,614,113,562.32.  That’s an increase of $1,487,701,072.59 billion dollars.  That was for 6 years.

Now the anti-76ers are telling us that this is going to go up to $1 billion annually and they think this is sustainable.  They think that, in the next six years, paying an additional $6 billion dollars while median household income stagnates for many families is doable.  It would total an increase of $4,512,298,927.41 billion dollars more than the previous 6 years.

Consider what this has already done to Lebanon City and the impact it’s had on families where those children these organizations claim to care so much about originate; Consider the future they are giving to these same children that they claim to care so much about.

As a resident of the city who lives in the heart of the city we’ve seen more than our share of small apartments that are over-crowded as families double up to save on the cost of increasing rent.  That over-crowding is not conducive to generating a quality education in the classroom:  It’s counterproductive.

School districts cry for smaller classroom size (same size rooms but with less students in them) and the cost of this for many families in our 3^rd class cities is over-crowded living conditions when they get home.  Tell me again how that’s all for the children.

In a recent Lebanon Daily news Article related to increasing property taxes it states that the tax increase will include the hiring of include three elementary school teachers to ease overcrowding at a total cost of about $252,000.  Who eases the overcrowding when these children return home to an overcrowded house because families had to double up to meet the rising cost of rent?

Then, to add insult to injury, while families are being forced to do less as their school property taxes far exceed their income growth, we’re told that the hoarding of money in school district reserve funds is rapidly growing.

The State Department of Education tells us that school districts statewide have $4.4 billion dollars in reserve funding at the end of fiscal year 2015-16.  That more than 30% of the total amount of property taxes collected for the year.  It’s an amount equal to 75% of the additional monies in the state budget ear-marked for education.

In just five years the amount of reserve funding in our schools alone grew by $1 billion dollars.  That reserved fund revenue even increased in some school districts that exceeded the Act 1 limits that was supposed to keep things like this in check.

The current system simply isn’t working but that won’t stop the naysayers from piling on in their attempts to protect the status quo.

In this case, however, protecting the status quo will result in growing government.  It will result in creating more people dependent on government programs to make ends meet.  That can only happen for so long before the number of people who need that revenue exceeds the number of people able to pay for it.  When that happens the system implodes on itself.  It is unsustainable.

Many would argue, and I am among them, that this is where we are with the school property tax already.  The growing number of tax delinquency, property seizures, bankruptcy and foreclosures and all indicators.  The growing number of people fleeing Pennsylvania for more tax-friendly states is another indicator.  The reduction of home-owners statistically compared to the growth in renters is another one.

Looking at the growing number of people more dependent on government just to live is alarming.  Perhaps of even greater alarm is the inability to connect these numbers to the rising school property taxes.

Aren’t the statistics in this flyer from Lebanon already an indictment of the failure of the educational system in providing for an education that moves children into a more positive and secure future?  If this is what is happening now….if this is where we are now, I shudder to think what happens when the cost of education in public school doubles statewide but incomes for a large portion of the Commonwealth remains stagnate.

 

 

 

 

 

 

 

 

 

 

Citizens To Protect PA Jobs Attacks HB/SB 76 With Erroneous Claims!

The latest hit piece on SB 76 comes from a group calling themselves Citizens To Protect PA Jobs who claims sole responsibility for the hit piece.

Just who is Citizens To Protect PA Jobs.  One would think, based on the name, that this is a citizen led advocacy group but nothing could be further from the truth.

In 2015, ABC27 ran a story about the group (http://abc27.com/2015/05/29/who-is-behind-pro-drilling-tv-ads-that-questions-taxes-on-the-industry/) which directly tied this group to the Pennsylvania Chamber of Business and Industry.  In that instance they targeted $425,000 for buying television and radio spots across the state, according to the article.  They also launched a similar website to advocate their point of view.

Look, I have no problem with freedom of speech but I’d like to see far more honesty in these types of attack pieces.  This latest attack on SB 76 is anything but honest.

In a form letter they ask you to sign to further create the illusion that this is a citizen led effort and not the lobbyist machine that it is, they make this claim  that we need “$12 billion to make up for the steady stream of revenue that would be lost – and that figure is expected to increase by almost a billion dollars every year.”  They then go on to state “This scheme seems even more risky in today’s uncertain economy and with the monthly fluctuations in sales and PIT returns.”

The claim of $12 billion dollars needed in replacement revenue is partly true.  It’s not, however, revenue lost.  It is revenue that would be collected through a means other than the property tax.   Remember that the number needed for replacement revenue is closer to $10 billion since existing retained debt remains in each school district until that debt is paid off so they are already inflating numbers by more than 2 billion dollars.

That is the first misrepresentation but not nearly as egregious as what follows.

The egregious erroneous claim is the statement that future increases in the school property taxes would amount to $1 billion annually.

I went to the Department of Education website to get my information and the following figures reflect actual numbers, not some number pulled out of thin air to generate fear.

40 years ago, in 1985-86 local property tax revenue statewide was $2,685,042,553.  Over the next 40 years the property tax grew by almost $10 billion dollars to reach the 2015-16 number of $12,614,113,562 currently collected through the local school property taxes.

The Department of Education numbers demonstrate that the average annual increase in property taxes has been $310,680,427 over the last 40 years.  The difference between 2014-15 and 2015-16 school years represents an increase in property taxes of $333,358,460, very close to the annual average cited by the Department of Education.

This letter makes that claim that in the future these increase will suddenly triple going to $1 billion dollars a year.  If that was true, and it isn’t, this would mean that over the next ten years the revenue need from property taxes taxes will almost double going from $12.6 billion to $22.6 billion.

If this were true, and again….it’s not, let’s look at what impact this will have on the economy.

Property taxes will have to almost double over the next 10 years to meet that obligation.

Rental prices will also increase to reflect the increase in property taxes that landlords must pay.

The cost of all the goods and services we use will also dramatically increase.  You see, the property tax becomes a part of a business operating expense.  Any increase in the property tax results in higher prices on the goods and services we use because that expense must be passed on to the consumer.  That will include the cost of the gas we put in our cars, the legal services we use, diapers, food, clothing, healthcare, everything….

This additional cost is multiplied because there is a Cascade effect related to property taxation.  In short, a property tax is levied on every property at every stage of the production of every good we purchase.  That adds layers of increased cost to those goods. You can read more about that on a previous blog (link).

Protecting the state quo, in my opinion is the riskier scheme yet that is what this organization advocates.

Ask yourself, can you afford to see your school property taxes double over the next ten years.

Last year, Pennsylvania saw a massive out-migration of population.  That means that there are less people to pay the school property tax than there were in the previous year.  That places a great responsibility to meet that revenue want on fewer people.  As was reported, this was nothing new.  This is part of an ongoing trend as families move to other more tax-friendly states to live.

At the same time we are seeing a growing need for more government run services to provide tax-payer funded rent relief for low-income families who are seeing their rents become more and more unsustainable.  By doubling the property tax over the next ten years we will make rent even less affordable creating more need for more government programs to subsidize the increasing property tax.  As this increase drives up the cost of food and clothing (and diapers) we will see more people turning to tax-payer funded government assistance just to make ends meet.

In order to protect the status quo of property taxation, we are going to have pay more in taxes through other programs.

Doubling the property taxes over the next ten years will mean more working families will never be able to realize the dream of home ownership.  They will be forced into renting where the cost of the increasing property taxes will force more families to seek out government forms of subsidized rent.

Where is all that additional revenue that will be needed to maintain the status quo going to come from?

Is the purpose of taxation really supposed to be for the purpose of making more and more people dependent upon the government for their very survival?

Yet this is what this letter, without saying so, is advocating for!

To my way of thinking the status quo is unsustainable and it is irresponsible to continue to advocate for the status quo forcing more people into dependency on the government to make ends meet.

Then again, if your bread and butter was coming from school districts and social service programs wouldn’t you want to see those programs grow even if that means destroying the economic future for thousands of Pennsylvania working families?

The fact of the matter is that if property taxes continue to increase by $333 million a year things will be bad enough for those working families.  Triple that and you have devastated the homes of thousands of families.  You will create an environment where only the wealthy will be able to afford a home and forcing everyone else into rental servitude in the recreation of a new society of feudal lords and serfs.

Without a consumer base to support the business and industry community, they will no longer be able to survive unless the government intervenes with more corporate welfare programs and tax-payer support funding of private commercial entities.

Is that the future we want for Pennsylvania?  I don’t know about you but it isn’t the future I want for myself or for my grandchildren!

 

 

 

 

Who Is To Blame?

Note: This is part two of a series about the current opposition to the school property tax elimination bill HB/SB 76.   See this link for part one!

I previously published a post framed around the public educational complex and the depths they will go to hold on to their power.

As unfortunate as that is, the responsibility for this legislation rests on the shoulders of our legislators.

We can get as angry as we want as the special interest’s self-serving opposition to this legislation but the blame rest solely on those we elect to represent us.

The thing about lobbyists and other special interest power is that their power is only enabled by legislators who are willing to cave to their demands.

From the day we started this fight we’ve had very little legislative effort to take this issue to the public.  All of that has happened through the grassroots efforts.  From the door-to-door canvassing efforts to the town halls, to advertising….it has all happened because the grassroots advocacy to make it happen.

We’ve taken time away from our jobs and our families to fight for this issue.  The town halls and every effort to advance this legislation has come from the pockets of those fighting to make it happen.   There is no corporate funding, no special interest funding, it’s been us all the way.

Recently we were told that we aren’t doing enough to fight for this issue at this critical time and while there may be more each of us can do, the fact remains that this issue has not been driven by our legislators the way it should have been.  If there is a change in the strategy, it must the legislators who change.

We’ve seen the countless articles from the educational complex attacking this legislation and we’ve seen letters from citizen advocates trying to set the record straight but what we aren’t seeing is the legislators fighting back.

We’re told that the legislators are getting beaten up by these self-serving special interests but I’d like to know why the misrepresentation of this legislation by these self-serving campaign-funding groups isn’t being challenged by our legislators.

Are they so afraid to take a principled stand to do the right thing? Do they really not care about what is happening to homeowners?

I know there are a few out there who are standing up and fighting back but the reality is that they are so few in number because the illusion of power is what rules and for too many legislators, everything they do is measured by how it will impact their chance at re-election.  Doing the right thing because it’s the right thing to do is, sadly, not an option for them.

That, of course, doesn’t mean we shouldn’t hold them to that standard.  It just means that the reality of the situation is that most legislators won’t.  They don’t have the political will.

Too many of these issues become little more than campaign rhetoric.   They hold these issues out in front of us when they run for office but when it comes time to deliver on their promises they run and hide.

During the 2016 vote on the bill Kim Ward complained because she was told that, while she ran on the issue, while she used it to get re-elected, she was told that she’d never have to vote on it.  In other words, she misrepresented her actual position on this legislation in order to help win the election but she had no intention of supporting it when push came to shove.

Think about that.  How many other issues that face this commonwealth are little more than campaign re-election tools; how many other issues are just campaign rhetoric?

At the state level, the two most pressing issues in poll after poll across the commonwealth continues to be the property tax and the pension issue.   Other regular issues that are stated by constituents include paycheck protection and prevailing wage.

Those issues have been in the forefront of campaign rhetoric for more than a decade and nothing has happened.   When legislation does advance it always fails to deliver on the promise to working families while always leveraging out special advantages to campaign-funding special interests that only make the situation worse for working families in the Commonwealth.

Just look at the much heralded Privatization Bill that passed.   Look at the Small Games of Chance bill that were supposed to help small clubs in the Commonwealth.

When it comes to the property tax we need look no further than the Gambling push in Pennsylvania that was supposed to bring about major reductions in the property tax.   It is just another in a very long series of promises that never happened.

The Pension Debacle exists because our legislators caved to the public sector to give them extended benefits to their Pensions that far exceeded pensions in the private sector.  At a time when most business were abandoning the defined benefit plans for defined contributions and working families in Pennsylvania saw their pensions stripped from them, our legislators greased the wheels of the political machine to go in the opposite direction leaving the rest of the state with an unsustainable pension debt that is still expected to be funded on the backs of home-owners.

When the private sector complains we are always told the same thing.  There is a contract clause in our Constitution that can’t be broken.   We ignore that we changed that contract to give them more and while that contract exists, we are obligated to meet that obligation, however that contract can be changed in the future.  Changes to that contract should only be ignored when they public sector benefits at the expense of the private sector.

The Contract Clause is found in Article 1

• 17. Ex post facto laws; impairment of contracts.

No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed.

In fact, the current contract did exactly that.  It provided special privileges to the public sector that are not available to the private sector.

That should come as no surprise to us.  Most of Title 22 of the Pennsylvania Code and the Public School Code of 1949 is about granting special privileges to the public sector that are not available to the private sector.

Since our politicians and the Courts who would rule on this are a part of that public sector, we have little hope of seeing this resolved until the people of this Commonwealth actually begin to realize what they are doing to us.

That’s always been the problem.  The people are too busy in their normal lives to get involved enough to make the difference that is needed to bring about real reform.  As Thomas Jefferson explained “accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

The ugly underbelly of lobbyist/special interest Power that resides in Harrisburg exists because our legislators allow it to exists because they benefit from it.   The legislators can then hide behind this because we allow them to do so.   So it becomes this long train of abuses that produces little more than a blame game.  Legislators blame the special interest powers while caving in and enabling that power and the lobbyists special interests use their non-profit fronts to blame the legislators all the while creating an image of them fighting against one another for all of us when in reality they are all fighting against the rest of us.

It is a situation where we are just the collateral damage of a political system that has been perverted to extend their power over us in a spirit of subjugation.

It doesn’t matter where you turn, from school districts to local government to the national level, government is more concerned about regulating us and keeping us under their thumb than they are with allowing actual principles of liberty to prevail.  At the same times these institutions will fight against any self-regulating efforts to create actual accountability or responsibility to the people they are supposed to be serving.

If they want to spend more, they do.  We don’t measure the cost while promoting the alleged benefits.

You can’t have a sustainable society working like this.  There is no cost benefit if it costs more to implement than it returns no matter how they spin it.  The KOZ and LERTA programs are perfect examples.  We simply don’t measure the cost of implementation.  We only measure the return.

By not measuring the cost, we never really know how much we are losing, we just live under the delusional falsehood of some return.  If you win $100 at the casino but it cost you $500 to do so, you lost $400.   Unfortunately, that’s how government is working.  We read about the winning but not about how much is cost….about how much we lost.

We watched in Pennsylvania as a fee was attached to gas that made Pennsylvania the most expensive place in the Commonwealth to buy gas.  We were told that it would have no impact at the pumps and they were wrong.  We were told that this money was going to pay for much needed infrastructure repair but we then discover that much of the money is going to pay for State Police overtime.

We watched as Pennsylvania levied a retroactive tax on the vaping industry and we were promised a return through that tax to help balance the budget.  What we saw was vaping shops closing at that revenue disappearing.

We continue to watch as unemployment numbers are manipulated to make it look like things are okay in Pennsylvania when in reality the Census bureau says that only 64% of those between the ages of 18 and 65 who are eligible to work are actually in the workforce.

We continue to watch as Pennsylvania population dwindles.  Last year we saw a population loss of more than 7,000 people which, if the trend continues, will impact the number of congressman Pennsylvania has in Washington to represent us.   It will also impact the number of house reps we have in Harrisburg.

That loss of population impacts a loss in PIT and Sales Tax revenue to the state and a loss of revenue to our school districts through the property tax that will have to be replaced by those who remain.

We see, in study after study, where Pennsylvania ranks at the bottom of the lists regarding business climate, tax burdens, job creation and just about anything where we could and should be doing far better.  At the same time, we are in the top percentage of state where political corruption is a pattern and natural outcome of a commonwealth bent on perpetuating a system of tyranny.

The time for depending on campaign promises as a measure for politicians is rapidly coming to an end.  They might still be able to wallow in that delusion for a while but eventually the piper expects his due and the piper they’ve hired is playing the sound of an unsustainable future.

We can continue to ignore that or we can face it.  It doesn’t have to be bad news if we are willing to do what we must to change the direction of the state and that’s going to require all of us to stand up and do something about it.

Since this change must happen legislatively, and it’s not happening under our current legislators than we have to strategically weed out those who are prone to cave to the special interests or like to make campaign promises they aren’t willing to fight for with the passion these issues deserve.

When it comes to HB/SB 76, we’ve been allowing legislators to get away with lip service for far too long.  We trusted them when they told us they supported the issue but when they didn’t fight for it through their own town halls or in taking it to the media, we turned the other way.

I’ll go so far as to say the following.  This issue is where it is because of the hard work of the citizen advocates who have made it so.  We got it there with damned little help from the majority of the supporting legislators.

While we’ve been out there taking this issue to the public; while we’ve been out there sacrificing our time, energy and resources, at times even reinforcing that we had our legislators backs on this issues, where were the majority of them.  Instead of fighting for the issue they maintained their photo-ops and public image while doing damned little to get this done.

To those legislators who have stood up I give a thankful nod but I repeat, the issue is where it is because we put it there and now we face the potential of losing it all because legislators will not stand up to the educational complex which has resorted to misrepresentation of the bill in their attempts to stop it.

In survey after survey we see that when it comes to the court of public opinion, while the misrepresentations from the education complex has been hard, the public support for the passage of this bill has not wavered.   Instead of looking at those surveys, legislators are willing to cave to the pressures of the special interests who can’t tell the truth about this bill either out of ignorance or by intentional misrepresentation.  There is no excuse for legislators who once supported and now cave other than mere political cowardice to stand up to the campaign funding special interests and their campaign based on deceitful misrepresentation.

If this bill does not move this year, we can be angry at the special interest opposition and we should be, but the failure of the bill to move will rest solely on the shoulders of our legislators.

This bill has been in front of them with very little changes for the past 7 years and if they don’t know the bill well enough by now to defend it, that’s not our fault….that’s their fault.   The fact remains that there are more people in this Commonwealth who can defend this bill better than the majority of the legislators who have claimed to support it.

The question for us is simple, what will we do about it?

The Educational Complex: Is It Really All About The Power?

Pennsylvania is in serious trouble.

A hard fought effort by grassroots advocates across Pennsylvania is now under attack by an educational complex that has one clear message to communicate even when that message is veiled in Chicken Little rhetoric.  That message is clear:  “We don’t care what it costs and we intend to make homeowners pay for it!”

School Board officials love to talk about the unfunded mandates and there was a time that I felt they were truly concerned about the costs but the reality is that they do little to nothing to fight against the unfunded mandates, their argument is only about funding.  It’s simple, it’s not about cost, it’s about funding.

The same is true with the pension problem.  In spite of the fact that the pension system is unsustainable, it’s not the cost, schools just want more funding for it.

In a recent letter from West Chester School Superintendent, he talks about cost and puts it in context:

(HB/SB 76) would cap increases at that rate, except for cost of living. Cost of living increases simply do NOT cover the mandated expenses that our public school system faces.

This new funding system would leave public schools dramatically under-funded and would force them to cut programs and staff.

You see, they have every intent of continuing to spend above the inflationary rates.  If their spending exceeds the cost of living so be it.  What that means to the rest of us is that the cost of education will increase beyond our ability to keep up with it.

While their wages and benefits keep getting better, exceeding far above the rate of inflation, working families across the Commonwealth are expected to do without so they can do with more.

Like the school district, I have an issue with the unfunded mandates.  Unlike the school districts, I despise the fact that our homes are expected to be the funding source to pay for them.  The school districts know very well that as long as the school property tax remains in place, our legislators will not tackle the problems with the unfunded mandates.  They have no incentive to do so.  That’s always been the problem.  An unfunded mandate, whether from the state or the federal level is another assault on homeownership.  It’s a way for the legislature to appease the special interests of the educational complex without raising taxes at the state or federal level.  Instead the taxes get increased locally.

The problem is actually much more complex.  The education industry talks about unfunded mandates as though it’s the single driving reason for property tax increases and that’s simply not the case.  Today’s school budgets see 70% to 80% of their funding going to wages and benefits.   Every time the Unions fight for higher wages, the cost of the unfunded liability to Pensions goes up.

But it’s all about the children isn’t it?

National Education Association’s retiring top lawyer, Bob Chanin, speaking at the NEA’s annual meeting in July, 2009:

“Despite what some among us would like to believe it is not because of our creative ideas. It is not because of the merit of our positions. It is not because we care about children and it is not because we have a vision of a great public school for every child. NEA and its affiliates are effective advocates because we have power.”

“And we have power because there are more than 3.2 million people who are willing to pay us hundreds of millions of dollars in dues each year, because they believe that we are the unions that can most effectively represent them, the unions that can protect their rights and advance their interests as education employees.”

The Union believes that it is their right to tax people out of their homes.  They believe it is their right because they have the power to do so.  The belief in that right is not founded on any basic principle of rights.  It is founded on one thing….POWER!

And it’s that power they are exerting right now to stop HB/SB 76.   Once again, they are resorting to using tax-payer funded resources to make that happen.  Your taxes are helping to pay for their meetings to stop HB/SB 76.  Your taxes are being used as some of these school districts use their tax-payer funded web pages to fight against HB/SB 76.  Your tax dollars are being used to send home prepared letters that include misleading information about HB/SB 76 to families across the commonwealth.

I say once again because our tax dollars are used to collect the dues of the Union members. While they claim that this costs us very little, it still costs us.  It is an additional expense that we have to pay for through our homes.  They tell us this amounts to very little money but if it’s so little why do they fight so hard every time a paycheck protection bill advances in the legislature.

It’s just another one of those things where they don’t care about the cost to us; they just care about maintaining their power.

The fact is that many of these superintendents and school board officials who are passing resolutions and sending these letters homes to our kids haven’t even read the bill.  That’s just too inconvenient for them.  They are told that it is a threat to their power and so they repeat what they are told, true or not.

It really makes me wonder how many other decisions are made because of the internal powers that be in the education complex that become repeated mantra when advancing the agenda’s being put forth by the educational complex.

We are told that school districts are being advised to increase their debt in case HB/SB 76 passes.  We are told that school districts are being advised to increase property taxes in case HB/SB 76 passes.   In both cases it’s not about addressing an educational need, it’s about spending and the lack of control to limit that spending on the schools.  No matter how much they get, they always need more.

It doesn’t matter if that additional spending actually produces results in the classroom because if it did they would have done some serious reanalysis of what they are doing.  It all seems to keep coming back to the same thing: maintaining their power!

That power includes being able to use the tax-payer funded collection of dues to fund re-election campaigns of legislators and then using that funding to help to convince legislators that they can’t win or keep their seats if they lose the Educational Complex Union Funding and support.

The powerful unions built that power by tipping the scales.  They grow their member numbers to increase their power even when student population doesn’t warrant such growth.  They do so through legislative measures that protect these jobs even when a teacher in the classroom may be underperforming.

Now I know that teachers will get offended by that but I’m offended by the fact that more teachers, administrators and school board officials are unwilling to stand up to the unions in dealing with bad teachers and bad policy.  That’s not to say that all teachers are bad…they aren’t but quality education needs good teachers who aren’t hiding behind excuses when the children in their classroom continually under-perform.

No matter how uncomfortable the truth, we must face the facts if we really want to fix the problem and this is a fact that the educational complex will do everything in their power to ignore.   They will constantly frame debates away from this hard hitting issue because it simply doesn’t fit into their narrative.

We are sold a narrative that smaller classrooms and more teachers results in better education.  The actual results tells us something very different.  After 40 years of pursuing this rhetoric, we see no official results demonstrating that the rhetoric is true.

The public educational complex has done everything in their power to remove competition.  They do so because it’s about the power, not because it’s in the best interest of the children.  The despise school choice almost as much as they despise losing their power over our homes

The latest attack by the public educational complex against alternate funding sources for education is about one thing…Power.   It is a power they will cling to and if they have to use misinformation to hold on to that power; if they have to misdirect tax-payer resources away from the children to spread that misinformation, they will.   They will do all that they can to hold on to their power in the protection of a system of taxation that is regressive and uniformly unfair.   It’s like a very bad game of king of the hill and they will use any means possible to make sure that when it comes to controlling our lives through our homes to advance that agenda of power.

Evidence of the misinformation can be found in the rhetoric from the West Chester School Superintendent when he states:

The new plan would allow school districts to go to voter referendum for capital improvements but not for operating expenses. Within a few short years, we will simply not be able to operate at our current levels, and the quality of our educational system will dramatically suffer.

The statement is completely untrue.  HB/SB 76 allows for local referendum for normal operating costs.  Section 306 of the bill explains the referendum but this school superintendent has apparently chosen to disregard the actual facts in the language of the bill to assist in spreading the misinformation about the legislation.

We’ve seen a great deal of this type of misinformation.  The problem here is that this misinformation is coming from people who have a position of trust in their community who will take the superintendent at his word without checking the facts.   Why would he misrepresent the truth?

We’re told that about $14 billion a year is collected through the property tax.  Another $15 billion is collected through state taxes to further provide for education.   That’s almost equivalent to the entire budget to run the entire state and yet our school districts are telling us that isn’t enough.

At the current rate of growth, school funding will soon exceed the budget for the entire state and the number of people at risk of losing their homes through sheriff auctions, bankruptcy and foreclosure will only continue to grow.   Apparently our school districts are fine with that.  If it helps them maintain their power, why wouldn’t they if all you really care about is holding on to that power.

After all it’s not the school board who shows up at your house to through you out, it’s not the Administrators.  No, they have the local sheriff to do their dirty work.  They can just look the other way and pretend it’s not their fault or, even worse, that’s it’s not happening.

In the public education complex’s rhetoric, they talk about losing their ability to collect previous delinquent taxes if this passes.  Those delinquent taxes will still fall due.  They will still have to be paid.  It’s just more misinformation and misdirection to try a kill a bill that will benefit many in the Commonwealth.  Again, it’s about power.  It’s about their mistaken belief in a right to take away our homes.

While the public educational complex may be responsible for education maybe they should go back and look at the founding principles of our nation which included a strong protection of our individual right to property.   At every step, the property tax remains the greatest violator of those inherent rights and as our Declaration of Independence explains, such violations are how we determine the difference between a just and an unjust government.    As it stands now, the public school system is supporting a system of tyranny in the advocacy of an unjust form of government.

Note: A second article on this topic will follow tomorrow.  As angry as I am at the educational complex for their misinformation and their continual assaults on home-ownership in the protections of their power over us and our homes, the ultimate blame rests on the shoulders of legislators who fear the power of the educational complex more than they are concerned about doing what is right!

 

 

 

 

 

 

Who Watches The Watchers?

News broke over the weekend that the Climate Change data used to create the Paris Agreement on Climate Change was intentionally manipulated using flawed methods and a computer system with bugs that has become so unreliable that none of it’s data can be verified (source: http://www.dailymail.co.uk/sciencetech/article-4192182/World-leaders-duped-manipulated-global-warming-data.html)

I know that I usually remain focused on the issue of School Property Tax Elimination but bear with me for a moment….

What we are seeing is institutional  falsehood and manipulation to promote a preconceived conclusion where it is claimed that “the science is settled” but that science relies on models that are manipulated to reach those preconceived ends.

I’m not a scientist.  This data is too complicated for me to fully grasp so I am reliant upon those charged with supplying me with the correct information that I can process to reach my own conclusions.  When that has been stolen from me by the very people I am supposed to trust, the blame rests solely on them.

We would think that this story would be in every media outlet in the world, especially in America where the free press is still supposed to be the bulwark of our foundation in the principles of Liberty.

What is the common citizen to do when both the institutions and the media that is in place becomes a propagator of falsehoods in these tactics of indoctrination.

I am neither a Climate Change denier not a blind supporter…all I ask is the truth!

You see, when government, or any agency of the government, is more interested in promoting propaganda than they are with telling the truth coupled to a media that promotes the propaganda as fact, where do the people go for the truth?

To my way of thinking, the fear isn’t really that there is fake news out there, because there is fake news.  The fear is that people will stop believing the fake news (propaganda) sanctioned by the government and the many-tentacled-monstrosity they’ve created through their organizations and bureaucracies.

The information about the falsehood’s and manipulation of scientists should be alarming to all of us.  These are people that we should be able to trust.  They have no reason to look any further then in their own mirror for the blame for that lack of trust.

Responsibility and Accountability should be an integral part of Integrity.  That Responsibility and Accountability should be framed around being honest!

This type of activity is becoming all too commonplace.  We can see it happening in our own Commonwealth!

So what does this have to do with the School Property Tax Elimination effort?

As an ardent activist for School Property Tax Elimination, listening to the falsehoods about this legislation, largely from people who haven’t taken the time to actually read the bill, has become commonplace.  It was to be expected.  In the desperation of clinging to the status quo, regardless of how harmful the status quo is, challengers of the status quo must be ostracized.

The issue of school property tax elimination is neither a left or right issue although, as an advocate I have been called both socialist and neo-con.  That is because protectors of the status quo are firmly entrenched on both sides of the aisle.   They simply don’t care if the status quo actually works or not….they will fight protect their treasured status quo while pretending to be fighting for us!

However, two weeks ago school organizations banded together to launch a virile attack against HB/SB 76 largely using falsehoods to promote their claims.  A recent letter from these organizations went out carrying this image on their letterhead:

Our school organizations have partnered with the PSEA, the powerful state teachers union, in their attempts to trash the school property tax elimination efforts.   Like the alleged “scientists” who stooped to manipulating data to push their climate agenda; these organizations, who we have charged with the education of our children in the public school system, have resorted to propaganda that has been carefully crafted to push an agenda….facts be damned!

The news media has jumped on board to carry their water for them.  Forget fact checking; they just give them the room they need to kill this necessary reform to how Pennsylvania funds public education.

The goals of this agenda are simple to see for anyone who is actually watching:

(1) Stall the efforts of the advocates and the supporting legislators by forcing them to redirect energy away from their priorities.   By using their manipulation as fact utilizing a media as their water boys to create a false legitimization of their information they force us into a defensive position.  A day spent fighting these untruths is a day not spent on getting this bill across the finish.  After all, we have limited resources and they know that.  We aren’t a well-funded machine like their organizations.   We don’t have tax-payer funded advantages like making others pay for their dues collections that can then provide revenue to participate in campaigns such as this.  Nor do we have tax-payer funded websites that can propagate the falsehoods (http://www.nwlehighsd.org/spotlight.cfm?sp=17246&school=0).  If they want to hold a town hall to spread their misinformation they can do so making use of tax-payer resources.  Unlike us, the cost for these promotions doesn’t come out of their personal pockets.

(2) Sap Representatives’ will to support or drive necessary change.  Unfortunately doing the right thing because it’s the right thing to do is not high on the legislative priority list.  Re-election is that priority.   When organizations like this combine to fight the will of the people polls don’t matter nearly as much.   In spite of the fact that in poll after poll, the overwhelming majority of the people support elimination of the school property tax those numbers don’t matter as much as this one:

That’s just the Union contributions and does not include the spending by other the organizations.  How do we compete with that?

(3) Reaffirm the illegitimacy of the HB/SB 76 advocates: Every time a falsehoods is propagated as fact, a public who doesn’t understand the legislation the way we do is more susceptible to perceive the falsehood as fact.  Unfortunately we also have some legislators who support the concept of property tax elimination but have not taken the time to study the bill nor the issue in detail.  They too, will buy into the falsehoods because, after all, the information is coming from supposedly informed and reliable sources.

These three steps are now commonplace strategies used by propagandists in driving agenda’s where the truth becomes irrelevant.  It’s not so much the three steps that I have a problem with.  My problem is with the tactics used in advancing those steps.

When truth in this equation becomes irrelevant, there is nothing legitimate about those three steps!  The end, in their way of thinking, must always justify the means.

In the past I have attempted to defend the school boards and, truth be known, we do have some school board officials fighting with us.  I have also defended teachers.  I can not defend what is happening now.

How can we trust them?  If we can’t trust them for the reliable information on this legislation why should we believe them when they tell us the reasons for the next school property tax increase?

As I look at that image of logo’s included on their letter I am struck with this question:  Where do we, the working families who pay their bills through our taxes, turn to find our real representation?  It should be obvious to us that we aren’t being represented anywhere here.  Yes, we vote for our schools boards but how much do we really know about them when we cast that vote?

Do we really know if there is conflicts of interest like spouses in the public educational system?  Do we know if they operate a business that personally benefits from the school district?   The fact remains that, as important as these people are in the education process, there is very little vetting of them.  They will then go on to hire our teachers, promote our principals, hire our administrators and choose our curriculum.  Worst of all, they get to decide if we can stay in our homes.  If what they want or concede to exceeds your ability to pay you become part of the collateral damage of a failed and unfair system of taxation!

Why do they fear allowing the public, through no-exemption voter referendum, to participate in the decision making process that will impact our ability to keep our homes?

Why do they refuse to acknowledge this as real local control or, as Thomas Jefferson put it, the consent of the governed?

Do they has so little respect for us that they think we will fail to recognize real need?

This rhetoric of misinformation has resulted in leaving a very bad taste in my mouth.  It has only reinforced my will to fight back!  Unfortunately, it has also weakened my faith in those we have entrusted to oversee the education of our children.

I started this blog by asking a question:  Who Watches The Watchers?

The fact of the matter is that we can not trust them for this information nor can we trust the media to do the journalistic work of digging into the details to tell the truth.  They have demonstrated that we have as much reason to trust them as we would have in trusting a parrot.  All we are going to get is the regurgitated information that’s been fed into them and in this case, Polly wants a cracker…that cracker is the authority of your home sold to us in the guise of “local control”.  They want to control us through our homes and they will go to great lengths to protect that authority over us!

Granted many who are repeating this information are simply fulfilling the role of parrot in blindly repeating the talking points they have been handed.  Perhaps some may think we should blame the parrot because the parrot is just doing what it is supposed to do.  These people, however, aren’t parrots….they have a responsibility to us to demand the truth. Unlike the parrot who can only, by design, repeat what they’ve been told, these are people capable of reason and logic tied to a responsibility to those who have entrusted them to be factual and honest.

Who Watches The Watchers?   That’s our job!   By that I don’t simply mean the leadership of the PTCA/PTCC or leaders of other like-minded organizations who support this legislation .  I mean you and me!  We must remain vigil.

We do have the truth on our side and in this case, we can afford to allow the truth to be silenced!

An Open Letter To The Taxpayers of Pennsylvania

I am writing to respond to the letters dated January 30, 2017 currently being sent out by a variety of school related organizations to legislators in opposition to HB/SB 76.   I have chosen to include their text (in red) with a response (in italics) to this recent letter.  I apologize for the length of this letter but I felt it was necessary to address these claims as written.

________________________________________

Their letter begins with this header.  The first image is that of the PSEA.  The PSEA and these other educational institutions are clearly in partnership leaving us all to ask the reasonable question:.  Where, in this massive conglomeration, is the voice of the tax-payer?

The letter begins:

On behalf of our organization and the more than 200,000 Pennsylvanians we represent, we urge you to oppose a plan to eliminate school property taxes (commonly referred to as SB 76). While we recognize an over-reliance on property taxes for school funding exists, complete elimination has dangerous, unintended consequences, and simply goes too far. The proposal would destabilize our public education funding system, create greater inequities, and enhance the divide between state-determined winners and losers.

Response:  It is made clear in their opening sentence that they do not, nor do they intend to, represent the taxpayers.  Their representation is solely for their own interest; Not for the 12 million people of this commonwealth.  Oddly enough the statement actually denies the inclusion of the student population.  The letter is a reflection of their self-serving interest, not in the interest of the students, or the rest of the Commonwealth.

While speaking about dangerous unintended consequences we have been asked to ignore the consequences (both intended and unintended) of allowing this form of taxation to continue for as long as we have.  It has destabilized our homes and our communities adding to the problems of blight and the decline in population as people leave this state for friendlier tax environments.    

It has artificially driven up the cost of rent.  Due to the cascade effect of the property tax it also artificially drives up the cost of everything we purchase.

They have created the very inequities that they now claim to oppose.  If the school property tax is not eliminated those inequities will continue to grow at the sole discretion of those organizations fighting to protect the status quo. 

The passage of HB/SB 76 will actually cap these inequities allowing the General Assembly to address the basic education funding formula using a more stable measure of revenues collected by the replacement revenue through a statewide PIT and SUT.  Since the funding replacement is driven out as a dollar for dollar exchange of the existing property tax revenue collected, the state is not determining the winners and losers.  That amount was predetermined by the school districts themselves.  It is time for these organizations to stop deflecting their accountability to others while denying their own responsibility in creating many of the problems we face. It can’t always be everyone else’s fault!  Deflecting the blame is not a solution!

 We do believe that the Basic Education Funding Formula needs to be adjusted to better reflect cost per student, population and inflation but we also believe that we can never control the inequities until we cap local authority’s ability to raise taxes at will often outpacing inflationary rates.  Our goal, however, was to address the unfairness of the school property tax.  The other problems associated with education funding requires unique solutions and should not be tackled through one massive piece of legislation.  It is irresponsible and unconstitutional in this Commonwealth to expect one piece of legislation to address all of the problems.  These other problems must be tackled individually and we encourage these educational organizations to come up with solutions to the other areas that we can get behind and fight for. 

Based on my past experiences I will not hold my breath for this to happen through the organizations listed in their letter.  Instead we will probably see more citizen advocacy in seeking the solutions to those problems as we have seen with the advancement of HB/SB 76.  You cannot claim to stabilize education funding by creating instability for those who must pay for the bill.  The path we are on is insolvent leading to an unsustainability that these organizations continue to ignore in order to protect their ability to raise taxes at will.  That attitude is simply irresponsible creating adverse effects that extend far beyond the impacts of the school property tax itself.

STABILITY

The property tax is a stable and predictable source of funding for the schools. Unlike personal income or sales, the property tax base is less prone to fluctuate in response to short-term changes in the business cycle or economic recessions. According to the Independent Fiscal Office (IFO), during the Great Recession Pennsylvania’s income tax revenue dropped by 6.5 percent in FY 2008-09. This was compounded by lost sales tax revenue during the same period. The same IFO report indicates that sales tax revenue declined 4.2 percent in FY 2008-09. Over the same period, school property tax revenue grew more slowly but did not decrease. Reliance only upon state taxes would have reduced the amount of money available to public schools to pay for necessary programs during a critical time when many children were facing economic upheaval within their families as well.

Response:  The property tax is only a stable and predictable source of funding for the schools.  That stability is predicated on the instability it creates in the lives of those who must pay for it.  Of course they aren’t even pretending to represent us so why should we think they would care.  

In down economic times, jobs are lost through no fault of the individuals losing those jobs and, as the same report cited by the school groups you’ll note that spending increased during this recession even though people had less money to spend.   The increased school property tax during this time period slowed down the recovery and had a negative impact on the sales tax.  With less money to spend and more owed to the school property tax, tax-payers had less revenue to put back into the business community.  This had an adverse impact on jobs making restoring jobs in the market place more difficult.  By eliminating the school property tax that, by their own admission, increased during a recession, we could see easing in the loss of jobs and decline in sales tax providing for a more rapid recovery at critical times like economic recessions. 

The private sector, in many cases, has seen their wages stagnate since the recession.  They have seen their benefits cut, loss of retirement investments and more difficult times.  This is unlike their public sector counterparts in the public educational system.  It is ironic to me to see the PSEA and the PSBA partnering in their opposition to this important legislation.  Rather than accept changes to the current pension system they are fighting to maintain their status quo and fighting for higher wages.  This is with little regard to the consequences, unintended or otherwise, on those who actually have to pay these taxes to provide for these wants.  At the same time, rather than allow for time for tax-payers to recover from the recession, many school districts went ahead with school building projects, replacing sport playing fields with astro-turf and other projects that could have been postponed, often against the wishes of the majority of the residents in their community.

While, in many cases, our county, municipal and other state governing bodies restrained from increasing the tax burden on the residents during the recession, this was not so with our school districts.  Spending increased.  Wages increased which added to the pension cost.  How many of those increases were not mandated by the State?

They will bemoan that they can’t control the costs and then, as we will see later, complain because of the loss of local control.  What they have refused to do is accept their own responsibility in the increased cost of local property taxes to protect the status quo placing more and more people at risk of losing their homes.

WINNERS/LOSERS

If the property tax is eliminated, not all communities will be winners. Taxpayers in some districts will pay simultaneous increases in the state personal income tax and sales and use tax while still paying school property taxes. In these districts, taxpayers will be subject to double taxation, paying significant state tax increases while continuing to pay some or all of their current school property tax bill and all of their county and municipal property taxes. Additionally, 215 school districts (43 percent of all districts statewide) will retain at least 20 percent of their existing school property tax, and 23 districts will keep at least 50 percent of their current property tax to pay for existing debt. A few school districts will still need all or nearly all of their current property tax levy to fund existing debt payments.

We understand that people generally hate the property tax and the threat it causes to people on fixed incomes. However, there are ways to address that problem without wholesale elimination.

Response:  The last paragraph of this section summarizes the disconnect these organizations have with those who are struggling this unfair and egregious tax.  This is not simply a threat to families or individuals on fixed incomes.  It is a threat that prevents many young families just starting out from purchasing a home to invest in their own future.  Those families must turn to renting.  As the property tax continues to increase it continues to drive up the cost of rent making it harder and harder to move from renting to home ownership.  At the same time, it is forcing others out of their homes.

In the last three years alone median rent has increased by 5.47% according to the Census ACS survey.   The largest factor in the increase of this rent is the property tax.  If those trends continue we would see a 27.4% increase in rent over the next 15 years.  The Study tells us that the median rent today is $848 in Pennsylvania.  If the trend continues in 15 years that median rent would rise to $1080.35. adding an additional increase of $2,248.2 to the average annual rent if we maintain and protect the status quo.  This has the impact of pushing more families into seeking government assistance to help pay for the rent associated with increased as a result of rising property taxes.  That increased the state’s need for revenue forcing cuts in other services or a need to raise taxes in other areas. 

There will always be winners and losers but under this system of property taxations, the working families are always the losers to the benefit of those in the educational industry.

Nowhere in their opposition do these organizations address the inherent inequities that make the majority of homeowners losers under the current system.

Studies by the National Taxpayers Union have demonstrated that as many as 60% of assessed home values are actually higher than the price the home could be sold for in the open market.  In the county that I live in a recent re-assessment was conducted on the 54,000 properties.  60% of 54,000 properties would be 32,400 properties.  A higher assessment than actual selling price results in paying taxes on property we don’t actually own (something that cannot happen with a PIT or SUT, neither of which require constant and expensive reassessments).   Following the reassessment, thousands of appeals went forward and, according to our County Commissioners the overwhelming majority of those appeals were ruled in favor of the homeowner proving the inherent flaw of assessments in leveling the playing field.  I was one of them.  Our home was assessed at $40,000 more than it was actually purchased at the year before the assessment.  Our assessment was lowered but it was still much higher than the price we paid for it.

If the average home is only assessed at $5,000 more than it can be sold, it is generating revenue that is unjustly being levied.  In my town that would mean an additional $136.00 a year in taxes for property value that I do not actually possess.  I have been told by realtors in my area that home values in the area I live have actually declined since the reassessment.    

If the study by the National Taxpayers Union is correct, it is generating more than $4 million dollars a year in taxes on property that the people in my district do not actually own.  Even if that 60% number is too high; even if that number is only 10%: How can anyone justify that as a reasonable form of taxation?

Again, this is something that cannot happen through a PIT and SUT tax.  Only elimination can rectify that unjust method of taxation.  

LOCAL CONTROL

This legislation will have the commonwealth assume virtually all the authority once held by local school boards, effectively eliminating local control. With no ability to raise revenue or make financial decisions at the local level, the state will be responsible for ensuring that districts have the resources to comply with all mandated costs. By removing a local school board’s authority and ability to respond to the needs of its students and residents, the state will be responsible for the financial health of all 500 school districts. As a result, the state will own all cuts to school district programs, staff, and services that occur under this type of legislation.

Response:  Making the claim that school district would have no ability to raise revenue or make financial decisions at the local level is simply not true.  It is an irresponsible claim.  HB/SB 76 has a built in mechanism that allows school districts to levy a local PIT or EIT tax with the consent of the voters for any special project the school board may be considering.  HB/SB 76 also does not remove any of the current Act 511 options in local taxation providing them with other alternatives that our homes to generate income.

While we all agree that unfunded mandates are a problem, how many of these unfunded mandates were put in place at the insistence of the PSEA and the Department of Education?  How many of these unfunded mandates are unique protections and benefits to Public Sector Unions that continue to drive up the cost of Education.  You cannot continue to claim to be opposed to unfunded mandates while fighting against Pension Reform, Prevailing Wage, Paycheck Protection and changes to the current Healthcare system in the Public Sector to bring it more in align with the Private Sector.

In the crafting of HB/SB 76 we went to great lengths to allow school districts to make use of a local Income Tax for special purposes with the consent of the people in the district.  we understood that special needs would arise and we included a section in this bill to allow for those circumstances.  In exchange for that, these educational organizations have chosen to misrepresent that portion of the bill because it doesn’t give then sole authority for the increase.  In other words, it doesn’t allow them to control the locals but, instead, requires local input in their decision making process which truly restores local control.  

This bill does nothing to regulate how the school district spends the money they get through the replacement funding. It is disingenuous to claim otherwise.  Either they are critiquing a bill they haven’t read or they know better and simply don’t care.  

Again, it is the first sentence of their statement in this section that is so revealing.  They admit that fear losing their authority over the locals rather than allow the citizens in their community to become a part of the decision making process.  

The consideration of local taxing options, as some of these bodies have suggested will, only allow inequities to continue and to grow.  Many of our 3^rd class urban city schools do not have the resources available to them to make use of local options in the funding of their schools making them more and more reliant on state funding.   Their wealthier rural counterparts may be able to shift to this type of funding since they aren’t land-locked and have the room for business expansion.  If we want to force existing businesses to option out of the 3^rd class cities to relocate into the wealthier rural communities, the local option would be the way to do it. 

I would also like to contend that our school districts were granted an independent taxing authority by statutory law.  While our school boards govern our local schools they are not an actual governing body.  They have no authority to pass laws that regulate our communities and their authority is restricted to the local school only with that authority strictly regulated and controlled by the Department of Education and the General Assembly (Public School Code of 1949 and Title 22 of the Pennsylvania Code).  

 I question the granting of independent authority to control local taxation through the school board.  In doing so I contend that, as a result of the rising cost of education funding, our municipal government have had to make cuts in necessary functions such as police, fire and safety protections making our communities less safe.  This has led some rural municipalities to remove local police protection completely to become reliant on State Police protections adding to the cost of maintaining the state police force resulting in higher taxes elsewhere.  The school property tax is putting our homes at risk in more ways than the direct financial burden of the tax itself.  The School Property tax has also led to the implementation of other government supported programs that are paid for through other tax programs.  Rent Subsidies are more necessary because there is a Property Tax, County Taxes are impacted by the need for reassessments, Property Tax relief programs like Clean and Green, KOZ, LERTA, Homestead and Farmstead exemptions and more have all become necessary because there is a property tax.

 I would also like to remind these institutions who administer in the education of our children that our Commonwealth Constitution is still the rule of Law in Pennsylvania.  Article 3, Section 14:

The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.

 If these organizations wish to change our Constitution, there is a process for that.  Let’s not engage in an argument of continuing to undermine our Constitution through questionable means and put this before the people of the Commonwealth rather than continue to blatantly disregard the rule of law in the Commonwealth. While we worked very hard to make sure that HB/SB 76 is in full compliance to our Commonwealth Constitution, this is, apparently, not something our school boards want to consider.  They have suggest taxing business property different from homes which would violate the constitution.  They have suggested making isolated relief, usually focused on seniors, which may garner senior votes but is in violation of the Constitution.  

 It is long past time that we restore an accountability to the tax-payer for how our money is being spent.  When it comes to education funding that requires a radical departure from the path we are currently pursuing. 

I know of three opportunities that were granted by our legislators to allow opposing views to 76 to address their concerns and provide solutions to the problems of taxation.  I participated in one of those round-table discussions.  While they may agree that there are problems with the property tax they have not offered any substantive solutions to the problem.  They choose, instead, to protect the status quo where they benefit only adding to the financial burdens of the rest of us.

 In looking at the header of the letter I am referencing and then in looking at the rhetoric….who, in this conglomerate of educational organizations, is actually watching out for the tax-payers?  One would think that would be the responsibility of the School Board but from their current advocacy against us I am forced to question that.  I am instead reminded of a grievance in our Declaration of Independence which states “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.”

In the past, letters written by other opposing groups have revealed that these groups have been working behind the scenes in ways that are counter-productive to the best interest of the working families of this Commonwealth.  These organizations have now joined that rank and file.  In the preservation of their own self-interest they are sacrificing the best interest of the entire state by exploiting us for their personal gain.

I say that with great pains.  I take no pleasure in bringing this issues to the forefront.  I also say that understanding that if we don’t confront these things honestly, it will only get worse.   

In closing, I would ask the School Boards, Principals, Administrators, Business Officials, Unions, and others who have contributed to the rising cost of education to justify one simply chart:

After all, is it really all about the children or the community as it is made to appear in their rhetoric through misdirection or is it just about them and their ability to profit while continuing to abuse the home-owner in support of an unfair and inequitable system of property taxation?

  

 

Breaking Free From The Shackles of Property Taxation!

When America was establishing itself as a Nation, the institution of slavery was a black eye in contradiction to the very principles of Liberty which was supposed to be the foundation of our governing bodies.  When some arose to discuss the deplorable nature of slavery the supporters of slavery always returned with the same deflection….they defended their right to hold others in slavery based on economy and benefit to the slave owner in total disregard of the fact that they were holding a people in chains.

Slavery was beneficial to the slave owner because it provided inexpensive and stable labor (income) for the slave-holder regardless of the loss of Liberty and person-hood in the life of the slave.   The rights of a slave were to be ignored because they were viewed as the property of their masters.  They belonged to someone else as property.

The elite class of the slave-owner was provided unique protections over their inferior class of slaves who were expected to lead meager lives to provide for the wealth and well-being of those who claimed the privilege of owning others.

An 1850 publication provided slaveholders with guidance on how to produce the “ideal slave”.  This included things like:

• Maintain an unconditional submission.
• Create a sense of personal inferiority, so that slaves “know their place.”
• Instill fear.
• Teach servants to take interest in their master’s enterprise.
• Steps were taken to ensure that slaves remain helpless and dependent.

Slaves were conditioned to submit to their owners granting the owner unconditional power over them.  The slave owner was to be revered, elevated above the importance of the slave and a fear through a threat of personal violence was used on those who would not comply.  Slaves were conditioned to believe that they were helpless in removing themselves from this abhorrent state of slavery.  Slavery was, after all, the law of the land.

The slave was accountable to the slave holder but there was little accountability to the slave.

The inhumane and immoral treatment of slaves was justified solely on the economic advantage of the slaveholder.  The ability to hold on to others as their possession could be framed around the slave owner’s ability to provide goods to the greater community regardless of the cost to the slave.

A war ended slavery but the notion of some having absolute power over the lives of others with disregard to the consequences of the power over those being oppressed never really died.  It would take a social revolution before women were recognized as equal partners in society.  It would take another social revolution to recognize the civil rights of persons once viewed as slaves.

The one institution, however, that has survived though these social upheavals restoring individual rights has been the preservation of the notion of using property (real estate) as a method for taxation.

As a student of history I am troubled by the rhetoric that I’m hearing from those in place to oversee the educational institutions in Pennsylvania because, frankly, I’m hearing arguments similar to the justification of slavery while ignoring the moral implications.

We hear that property taxes are stable sources of revenue.  So was slavery;   Stable, however, only for the Slave holder.  Stability was never looked at through the instability it caused in the life of the slave.

The stability argument of the property tax supporters is only within the context of the stability for the tax collector.  It is an economic argument that ignores the adverse impact on the economic abilities of those forced to pay the tax.  It is an economic debate devoid of the moral implications.  When the argument is framed in this way the justification for the abuse many suffer because of the property tax is solely through the eyes of the economic gain of the oppressor.

The property tax has become the vessel which has allowed wages, pensions and healthcare (the three major causes of increases in property taxes) in a large portion of the public sector to far outpace the rate of inflation for other in the private sector.  It is allowing for those who benefit from property tax to prosper while denying those same “entitlements” to many in the private sector.  As the private sector has moved away from defined benefit plans, the property tax allows this sector of public employees to remain in such a system regardless of the economic peril it causes to those who actually pay the bills.

To maintain the status quo, the public sector needs to increase the burden on property owners often denying many in the private sector the ability to invest in their own retirement or healthcare.  The needs of those who pay the property are then ignored through a justification that, in order to have what those in the public sector want, others must make the sacrifices.  When it comes to the property tax, that sacrifice may include your home!

Those sacrifices are being made.  As we’ve gone around the state we’ve talked to people who are making choices between food and healthcare in order to hold on to their homes.  We’ve met others who have lost their homes, either through tax seizures or by being forced into bankruptcy and foreclosure because the tax has exceeded their ability to pay.

Listening to the opposition to school property tax elimination it is almost as though those being crushed by the property tax are viewed simply as the collateral damage and that somehow it is all justifiable simply because the property tax is a stable source of revenue for the tax collector.

It’s an attitude that embraces a notion that people who lose their homes do not matter.  They are expendable because it’s more important to protect the status quo than it is to do the morally right thing.

Consider the statement made at a public hearing by Michael Wood of the Pennsylvania Budget and Policy Center on the matter of abolishing the property tax.  He stated that 10,000 people losing their homes to the property tax each year is not a significant enough number to do something about it.

That’s an expendability mentality where the homeowner, as long as they are healthy and able, are welcome but once the tax exceeds the ability of the homeowner to pay, the homeowner is insignificant and must be ignored.  They are to be tossed aside with no regard.

It is the same rational the defenders of the slave industry welcomed.

It may seem harsh to some to compare property taxation to slavery but, in my opinion, that is a disconnect to the many who are struggling under this form of unfair taxation.  Their lives do matter and no arbitrary tax should have the ability to take your home away from you.  After all, if they have such power, who really owns your home.

Imagine yourself in a situation where you purchased a home 20 years ago with 10 more years to go until that home is paid for.  Now an unforeseen event, a loss of a job or health issue that will temporarily set you back.  You can still meet your mortgage obligation but your property tax is now outside your ability to pay.  Eventually you will lose that home.  You may lose your 20 years of investment in that home in the process because the priority is only to recoup taxes and pay off the bank loan.

Imagine a senior who actually completely owns their home being forced into a situation, perhaps through the death of a spouse or other health related issue, who will have their home stripped from them, pillaged of their investment in that home and stripped of a lifetime of memories stored in that home simply because they couldn’t afford to keep up with the demands of those benefiting from the property tax.

If they can strip you from your home and then sell that home on an auction with no regard for your investment in that home; if they can sell that home for pennies on the dollar seeking only to pay the back taxes and settle the remaining balance, if any, of the bank; who really owns your home?

Taxes are a necessary part of life but that does not mean that all taxes are justifiable.  There must be an accountability, a justification, for taxation in the funding of the necessary functions of government.   The methods of taxation should reflect a person’s ability to pay.  Taxation should never be based on some arbitrary justification that actually makes the tax-payers a slave to system with little accountability to the taxpayer.

I believe that education is a necessary part of government funding.  I believe that it is our responsibility to help in providing for the future education of our children.  I also believe that using property is the most unfair method of taxation in the funding of a public education.  It makes the homeowner subservient to the demands of an institution whose highest priority should be the education of our children.

Property tax is derived from an artificial measure of property worth that, especially during down economic times, does not reflect actual home value.  When home values drop, assessments do not adjust to reflect the decline in property worth.  Individuals must go through a lengthy and often costly system of appeals to have their assessments lowered.  This will also involve time off work.  For many lower income families this is not an option for them.

In county-wide reassessment we continually see large numbers of appeals made.  The majority of those appeals are successful meaning that the assessed value of the property was wrong.  When the assessed value of your property is higher than your properties worth, you are paying property taxes on property you do not actually own.  While assessors use the terminology of fair-market value, such terminology is a misdirection.  Fair-Market Value is a price agreed upon by a willing seller and willing buyer.  In the assessment process there is neither.  Your home will be valued for the purpose of taxation based on an arbitrary decision that has nothing to do with a buyer or seller.

The assessed value is accepted by the tax collector as fact.  It becomes the burden of the property owner to prove that this is wrong regardless of how costly it is to the homeowner.  For those who cannot afford to do so:  Too bad!   The defenders of the property taxation will tell us this is justifiable.

How does this arbitrary means impact you?

Let’s say that the taxes you pay on your property is only $10,000 more than your actual property worth in the open market.  Multiply your current millage rate by 10 (adjusted by your area’s common level ratio) and you’ll see how much more you pay it takes as a result of inflated assessment.  It may not seem like a lot but you’ll be paying that inflated rate for as long as you own that property.   If there are 1,000 homes in your district paying taxes on an additional $10,000 of property worth we begin to see the devastating impact of the assessment process.

My millage rate is 27.1735.  If my property is assessed at $10,000 more than I can sell my home in the open market, I’m paying $271.735 more annually in taxes than my property is actually worth.  If only 1,000 other properties in my district are doing the same, $271,735 in taxes are being collected that cannot be justified through actual fair market prices.

Studies by the National Taxpayers Union have demonstrated that as many as 60% of assessed home values are actually higher than the price the home could be sold for in the open market.  In the county that I live in a recent re-assessment was conducted on the 54,000 properties.  60% of 54,000 properties would be 32,400 properties….not just 1,000 properties as used in the example above.  It changes that into a potential of raising $8,804,214 in taxes based on property that is not actually owned by the property owners.

This only happens with the property tax and its part of the built in mechanism of the so-called “stability” of the property tax for the tax collector.

It cannot happen with your Income tax.  Your income tax is based on an actually and accurate number that is a one-time tax in new income earned.

It cannot happen with the sales tax because it involves the willing exchange between the buyer and seller based on an actual price, never on some governmentally established estimated value of the item purchased.

If the assessed value of my home is inflated, I will pay an annual inflated tax on that property for as long as I own that property.   So will the other 60% of the homeowners according to the National Tax Payers Union.

Are we to ignore these studies simply because the tax is stable for the tax collector regardless of the instability it creates for those who must pay it?

Those who opposed shifting from property tax to Income and Sales tax say that this will hurt renters.  The argument is framed as though the supporters of maintaining the property tax actually care about renters.

In the last three years alone median rent has increased by 5.47% according to the Census ACS survey.   The largest factor in the increase of this rent is the property tax.  If those trends continue we would see a 27.4% increase in rent over the next 15 years.  The Study tells us that the median rent today is $848 in Pennsylvania.  If the trend continues in 15 years that median rent would rise to $1080.35.  Why is this never a part of their discussion when they claim to care so much about the renters?

That’s not some hypothetical increase.  That is trends.  This is what will happen if we continue down this path.  Obviously, in protecting the status quo, they don’t care about the 27.4% increase in rent over the next 15 years.  Nor do they care that by shifting to a PIT and SUT tax we can greatly reduce the burden on renters in future years because the property tax will no longer be there to drive up the cost of rent.

Looking at those numbers median annual rent would go from $10,716 annually to $12,964.2 for an increase of $2,248.2 if we maintain and protect the status quo.

The most alarming part of the supporters of the status quo; the part that seriously undermines my respect for those making these arguments is the contention that my home is theirs to tax as the will as though my property is their property to do with as they please.  In using the same defense that were made to justify slavery while misrepresenting the inequities and the inherent flaws of using property taxes to fund education they are doing our communities and Commonwealth a great disservice.

In all these arguments against property tax elimination through HB/SB 76, not a single argument has been made that spending more has produced dramatic results in the quality of the education our students are currently receiving.  The arguments can be boiled down to the same rhetoric.

They want to spend even more to protect the benefits of those in that group regardless of the damage it does to everyone else.   If you can’t afford to provide for you own retirement so you can pay for theirs, so be it.  If you can’t afford healthcare so you can pay for theirs, so be it.  If your employer can’t give you a raise because the economy isn’t recovering and jobs are leaving the state because of the negative tax environment, to bad…that doesn’t mean they won’t give themselves raise making your tax burden even more difficult.

No we aren’t in physical chains and they can’t beat us into submission with whips but it’s still slavery to a system that insists on rewarding itself to the peril of many who must pay the bills.  It is slavery to a system that gives itself rewards that are far out of the reach of those who must pay the bills.

Oddly enough, in reading those points listed from the 1850 publication on how to create “ideal slaves”, I find the current rhetoric of property taxation supporters ironically similar as I do the same stability debates that ignored the cost of that instability to the slave in order to promote the benefits and stability to the slave-owner.

Until we free ourselves from the shackles of property taxation we will continue to be slaves to a system that is easily manipulated predicated on creating instability for those who must pay the bills with little to no accountability for how that money is actually being spent or concern for the injustice of using an arbitrarily determined home value that taxes you on property you don’t actually own.

Eliminating the property tax frees us from those shackles opening doors of opportunity to make our own decisions rather than having our decisions made through the enforcement of an unfair system of taxation.  It will allow us more Liberty in deciding what to buy and when rather than forcing thousands to determine that for them because the property tax bill is due.

HB/SB 76 also allows schools districts to go to their community and make a request for special funding for local projects.  It brings the community into the decision making process to determine factors of new school construction, stadium construction and expansion, or any other project.  It restores a level of local control putting the control into the hands of the community, not the arbitrary decision of an administrator and the 5 school board directors who want to make that happen.   Rather than controlling the locals we will see a restoration of real local control in the decision making process.  Maybe, that’s what they fear the most-accountability to the people they serve!

They are fighting back.  They are encouraging their members, those who benefit, to keep the shackles of property tax securely wrapped around our ankles.  Now, more than ever, we need to to take a stand.

Contact your legislators and thank them for their support of School Property Tax Elimination through HB/SB 76.  We need to flood their offices with letters, emails and phone calls.

For all you have done, thank you…..for all you will do, thank you again!

The Inherent Inequity of Property Taxation to Fund Education

The following information is specific to Lebanon County but it can be applied in most areas of the Commonwealth of Pennsylvania.  The data is intended to show the current inequities inherent in using property taxation to fund education.

Note: Median Income and house value taken from city-data.org. The median income and house value data corresponds to the U.S. census data.

Lebanon City:

• Estimated median household income in 2013: $33,485
• Estimated median house or condo value in 2013: $87,620
• 19.3 mills go to school property tax ($19.30 for every $1,000 in assessed home worth)

The current school property tax millage for the median house value of $87,620 is $1,690.68 or 5% of the median household income. The school property tax represents 71% of the total property tax bill in the city.   The total property tax on a home valued at the city average of $87,620 would be $2,380.94.   This represents 7.1% of the median household income.

To further demonstrate the regressive nature of the tax. A city household at the median income for the county would be $55,973 according to city-data.com.  Their school property tax on a home valued at $87,620 would be $1,690.68 or 3.02% of the $55,973 county average for household income.

The same priced home for a household at the median household income level for the city of $33,485 pays 1.08% more of their income towards the school property tax.  A family earning below the median income level, say at $30,000 median household income, would pay 5.6% of their household income to the school property tax or 0.6% more of their income towards the school property tax than a household at the median household income level for the city.

This is the truly regressive and inequitable nature of the property tax.  This is compounded by the inequities that exist in the methods of re-assessment or the application of the Common Level Ratio, both of which do little to rectify the inequity problems inherent in those systems.  That, however, is a discussion for a different day.

Even though everyone pays the same millage rate for county property taxes it reflects a higher impact in Lebanon City.  The millage rate for County property taxes would total $288.49 for a home valued at $87,640 which would be 0.86% of median household income.  The same tax levied in nearby Cornwall on the same priced home would still be $288.49 but that represents 0.33% of median household income.

How does this impact the cost of rental properties?

The Property Tax, by necessity, will inflate the cost of rent as landlords must pass that expense on to the renter.  Median gross rent in the city is $656 according to city-data.org.  Median gross rent is $620 for the county or $36 more in the city.  This translates into a cost of $432 more in the city annually where median incomes are lower.  This means, on average, that city residents who rent will pay an additional months rent every 15 months rent compared to elsewhere in the county.

Let’s look at three neighboring areas in the same county.

Cornwall:

• Estimated median household income in 2013: $85,736
• Estimated median house or condo value in 2013: $216,927
• 3512 mills go to school property tax ($14.35 for every $1,000 in assessed home worth)

Total school property tax on median value home: $3,113.16 or 3.6% of median household income for Cornwall.

A home in Cornwall that is assessed at $87,620 (Lebanon City Median Value) would pay $1,257.45 in school property taxes. That would be $433.23 less than in the city even though the median household income is $52,251 more in the Cornwall area.

Annville:

• Estimated median household income in 2013: $54,054
• Estimated median house or condo value in 2013: $144,223
• 13.5094 mills go to school property tax ($13.51 for every $1,000 in assessed home worth)

Total school property tax on median value home: $1,948.37 or 3.6% of median household income

A home in Annville that is assessed at $87,620 (Lebanon City Median Value) would pay $1,183.69 in school property taxes. That would be $506.99 less than in the city.

Palmyra:

• Estimated median household income in 2013: $54,471
• Estimated median house or condo value in 2013: $144,223
• 13.52 mills go to school property tax ($13.52 for every $1,000 in assessed home worth)

Total school property tax on median value home: $1,949.89 or 3.6% of median household income.

A home in Palmyra assessed at $87,620 would pay $1,184.62 in school property taxes.  That would be $506.06 less than in the city.

Taking these three areas compared to the city, Lebanon City households would be paying an average of $482.09 more in taxes annually than their neighboring areas for a home assessed at at the same price of $87,620 (Lebanon City’s average home value).  In just three years this amounts to $1,446.68 more in school property taxes in the city where the median household income is much lower or enough to pay an additional year of school property taxes in the other three neighboring areas.

The average median household income in the three neighboring areas is $64,753.67 or $31,268.67 more than the city median household income of $33,485. As I stated above, this data deals specifically with Lebanon County but the same research can applied in most places of the commonwealth.  It took several hours to compile this data and to do so in every county would take much more time and, more importantly, space than this blog would allow for.

It was necessary to show you the number data in order to make the following summary statements.

This demonstrates the inherent flaw of using estimated property values to fund education.  The inequity in levels of income creates an inequity in ability to fund education that places a higher burden on working families in lower income areas resulting in a greater percentage of their income going to fund that education.  Using property taxes to fund education often results in higher millage rates paid on homes of lesser values translating into a higher tax per thousand dollars of home worth.

This is an inherent flaw that can only be corrected with the complete elimination of the property tax by shifting to a more equitable method of funding education. Until this is accomplished the inequities will continue to grow forcing more school districts into an unstable and unsustainable future.

Many homeowners have already realized this unsustainability as the property tax has led to sheriff sales, while contributing greatly to foreclosure and bankruptcy.

With the school property tax at 70% or more of the current total property tax, Municipalities have had to face serious cuts in services that includes police, fire and safety protections which makes our communities less safe.

As the school property taxes have increased home-ownership has declined.  Rental properties in Lebanon City is above the state average.  To fail to make the correlation in decline of home-ownership and the increase in property taxation is economically foolish.  The U.S. Census tells us that the owner-occupied housing unit rate, 2011-2015, for the city of Lebanon is 42.4%.  That’s down 7.8% from 50.2% in 2000. For the County that rate is currently 70.4%.

As rents increase as a result of property taxation the need for subsidized housing also increases placing greater financial burdens on working families through other forms of taxation.

The choice is clear.  We either continue down this unsustainable path that grows the tax burdens on working families leading to more property seizures, bankruptcies and foreclosures growing the number of rental properties while losing more owner-occupied homes or we change the future.

We have the ability of opening doors of opportunity by transferring to an alternate form of funding for education.  We can open the doors making home-ownership more accessible to more people or we can protect the status quo and close more doors to more people. We can open doors of opportunity for small family owned businesses as well creating more job opportunities for everyone.

Educational institutions in this state want to keep those doors closed in order to protect the status quo.  They insist on doing so in spite of the fact that all evidence shows that the path we are on is unsustainable.

We are watching as the state institutions of higher learning are now finally considering reviewing their policies after a six-year decline in student population at those 14 state funded institutions.   Administrators claim, even after the state has increased funding to these schools by 2.5%, there is a $60 million dollar shortfall in funding for these schools.  What they don’t’ want to remind you is that in December of 2016 the State System of Higher Education approved $77 million in employee pay raises.  Those raises will also place a higher burden for pension compensation on the rest of us.

We have the same problems in our local schools. The 2016-17 enacted state budget included $5,895,079,000 for the 2016-2017 Basic Education Funding appropriation.  This amount is a $200,000,000 increase (3.51 percent) over the 2015-2016 appropriation.  School Administrators and School Boards claim this is a funding shortfall because it doesn’t meet revenue wants even though it is a substantial increase.  Even with the increase, local property taxes continued to rise.

Salary increases, pensions and healthcare that far outpace anything in the private sector are a major factor in driving up local school costs.  While this may open doors for those employed in those institutions, it does so by closing doors of opportunity for the rest of the working families in this commonwealth.  It makes it more difficult for them to provide for their own retirement and, in some cases, it robs them of their very home.

If we protect the status quo we go further down an already unsustainable path for working families in this Commonwealth.   It’s time for a change, albeit a radical change.

For more information on what that change is visit www.ptcc.us and become a part of the movement that will open doors of opportunity for hard working families across this state. Or you can listen to the rhetoric of others who want to keep spending at the current rate to maintain their wants at your peril.  The choice is yours!

PSBA REBUTTAL #4: Chicken Little Comes Home to Roost!

Most of us are aware of the children’s story of Chicken Little.  You know, the story of the little chicken who warned everyone that the sky was falling because he was persuaded by the Big Bad Wolf (Foxy Loxy) to fool the other chickens and assorted fowl into a panic to be exploited by the wolf in order to have them over for dinner…his own dinner, not as guests at the banquet.

There is a striking parallel between the flood of PSBA and PASBO (Pennsylvania School Board Association and Pennsylvania Association of School Business Officials) op-eds and this classic children’s story.

Using mostly fear and falsehoods, talking points have been developed in an attempt to defeat HB/SB 76, the School Property Tax Elimination bills.  Those talking points reveal a very clear lack of understanding concerning this legislation or, perhaps more to the point, a failure to actually read the bill before critiquing it.

Normally this sort of thing is to be expected by I am particularly concerned here because talking points that require falsehoods to reinforce is a bad enough action of civil discourse but when this tactic is being used by those who are directly involved in the education of children it should raise some very serious concerns.

These talking points claim that passing HB/SB 76 will exacerbate inequities in school funding.

Actually the opposite is true.

The truth is that the current system of the school property tax created these gross inequities.  If the school property tax is not eliminated those inequities will only continue to grow since poorer, low income school districts can not continue to increase their school property taxes at the same rate as the wealthier school districts.

HB/SB 76 will cap this growth of inequities in school funding allowing for a stable funding measure to be put in place that will allow the state to adjust the Basic Education funding formula to reign in the inequities.  This is something they can’t do now because there is no real predictability to the increases in the school property tax.  We only really know that they’ll go up.  Chapters 11-13 of the bill clearly explains the funding of this legislation.

It is disingenuous to point to the inequities that exists because there is a property tax and demand that the status quo be maintained if they really are concerned about those inequities.

In 2012, Pennsylvania spent $26.5 billion on K-12 education. Only five other states — California, New York, Texas, Illinois, and New Jersey— spent more.  In 2012, Pennsylvania spent $13,653 per student compared to a national average of $11,735.  Pennsylvania’s K-12 education system is funded through a combination of local (53 percent), state (36 percent), and federal (11 percent) sources. In 2012, Pennsylvania ranked 44th in the percentage share of education costs covered by the state. Its 36 percent contribution rate falls below the national average of 45 percent. (1)

The state average of $11,735 is just that, an average.  Under the system of school property taxes we can see the inequities that have come into being because there is a school property tax.

According to openPAgov.org the 2014-15 spending per student in our school districts ranges from $7,648 per student to $41,858 per student.  That inequity exists, in large part, because there is a school property tax.  That inequity will continue to grow as long as we keep the school property tax in place.

Albert Einstein is attributed for the following…Insanity: doing the same thing over and over again and expecting different results.

The letters from PSBA and PASBO members insist that if we keep doing the same thing over and over again we’ll get different results. That’s ridiculous.  Their failure to actually recognize the the gross inequities that exist because of the property tax in inexcusable.  That failure is exacerbated when they blame a bill that will stop this growth of inequity for doing the very thing that our schools boards have done…grown those inequities.

Another objection states that sending the money to Harrisburg would somehow remove the school districts ability to determine how that money is spent locally.

This is simply untrue.  HB/SB 76 puts that money in a special designated fund in the Treasury Department that is separate from regular budget appropriations.  State legislators will have no say in reapportioning the distribution of those funds.  Each school district will receive exactly what they are currently receiving.  That amount will be adjusted annually based solely on economic growth factors.  Recently the Independent Fiscal office (IFO) stated that schools would see annual increases between 2.5% and 4%.

Let’s be clear.  Each school district would receive the same percentage increase but the variance between 2.5% and 4% will be based on economic factors.

There is ABSOLUTELY NOTHING in HB/SB 76 that changes how the school district spends that money.  There are no restrictions placed on any School Board except in their ability to levy taxes above and beyond inflationary rates.

The implication here is that we lose local control, as though such a thing currently exists.

School Boards complain about cost drivers like pensions, healthcare and Special Education costs claiming these things are out of their control.  They are right.  Those things are out of their control.  To then turn around and complain that HB/SB 76 removes a local control that isn’t there and cry about a loss of local control is again disingenuous.

There is a problem with unfunded mandates in this state.  On that we all agree, except for the PSBA, PASBO and PSEA when they agree with the special privileges these unfunded mandates give to their public sector employees.  Not all unfunded mandates actually originate with legislators.

The two primary regulatory documents that include many of the unfunded mandates are the Public School Code of 1949 and Title 22 of the Pennsylvania Code.  The larger of the two documents is Title 22 of the Pennsylvania Code which comes out of the Department of Education.

Those regulations do need to be reigned in.  As long as the property tax to fund education exists, that is not likely to happen, because it doesn’t have to.  They will just continue to pass the cost of the mandates down to local citizens through the property tax.  Passing HB/SB 76 will force us to address these unfunded mandates which is something the PSEA doesn’t really want.  In a recent webinar from the PSBA they acknowledge the PSEA as their sister organization.

So do they want these unfunded mandates reigned in or is that just rhetoric that they use as an excuse while they continue to raise local taxes?

Take a look at these two chart from openpagov.com:

Now look at this chart from the IFO showing the rise of school property taxes.

Looking at the IFO chart from 2000 to 2012 we can see that the growth in spending correlates to the property tax growth.  It is the result of the reliance on school property taxes in funding education.

Now one would think that with all this additional spending as total school population declines we would actually produce better results in the classroom.  You’ve seen this in this blog before but we need to roll this out once again.

This, I’m sad to say, is the shocking reality.   All that additional spending has not translated into improved performance of our students in the actual classroom.

The real threat to the PSBA and PASBO is in limiting their ability to raise taxes at will while passing the blame on to everyone but themselves.  The real threat is an accountability to the taxpayers in expecting results that improves the performance of the student in the classroom which should be the priority of a quality education.

Yes, HB/SB 76 allows for other taxes to be implemented through a local income tax but those increase would be controlled by the constituents in that school district.  5 people on a school board would no longer have the privilege of raising taxes because they want to pay for some project the community doesn’t really want.  It will restore the control to the local citizenry.  It will not allow 5 members of the school board to control the locals….even to the point of taxing you out of your home.

The worst false claim of all is that HB/SB 76 does not eliminate the school property tax.  It’s an outright falsehood that, to anyone who has taken to time to actually read the bill, can easily refute.    Maintaining the status quo doesn’t eliminate the school tax, it only allows it to get worse.  Reduction schemes do not eliminate.  The temporary reduction is offset by new taxes that will remain in place as the school property taxes climbs back to it’s current levels.

How long did it take for your school property tax to exceed the Casino revenue relief?

While they tell us that passing HB/SB 76 is cause for panic; as they scream that the sky is falling; they don’t want you to actually look at what is happening to us all because there is a property tax.

We all know the end of the story of Chicken Little.

That is the ending that the PSBA is defending: their ability to, as Thomas Jefferson put it in our Declaration of Independence, “send hither swarms of Officers to harass our people and eat out their substance.”

 

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(1) http://thenotebook.org/articles/2015/04/22/how-much-does-pa-spend-on-public-schools-and-how-are-costs-shared