Note: This is part two of a series of articles intended to expose the misrepresentations that continually invade the discussion of school property tax elimination. Part 1 (The Retained Debt Myth) can be found here:
I touched on this in the last blog but I want to address this issue in more detail.
We like to think that we have local control when it comes to public education and when I first learned about HB/SB76 (back when it was still HB1776 and SB 1400) loss of local control was an issue for me. Rather than rely on talking points and rhetoric I decided to do my own studies. In doing that research I was soon to learn that local control is a myth, rhetoric used to distract us from the actual issue of the immoral nature of using our homes to pay for government.
The regulations, many of which are unfunded, that controls education originate at the state level and not all of it comes through the legislative body. That which does can be found in the Public School Code of 1949. The 1949 act that created the Public School Code has grown since 1949 but it’s still identified by the year it came into existence. This massive volume contains 817 pages of regulations over our local schools. Actually it includes summaries of laws which are cited in the document. Those citations are found repeatedly throughout the document and if those laws were printed out in their entirety it would make up a small law library.
Let’s look at one of those regulatory laws.
The Prevailing Wage Law, which was created in 1963, requires that all construction, repair, demolition or alteration projects that are paid for in whole (or in part) from public dollars, such as the case with public schools, must pay laborers who work on the project the “prevailing minimum wage” as determined by the secretary of Labor and Industry. This wage amount is typically based on union pay scales in cities such as Philadelphia and Pittsburgh, which are much higher than private sector wages in other parts of the state.
These wages are said to drive up the typical cost of school construction or renovation by an average of 17 percent (2001 study by the Journal of Education Finance).
Between 2000 and 2010 the Department of Education tells us that school districts spent $7 billion on school construction. At 17% average we are talking about $1.19 billion in additional education costs primarily paid for through local property taxes.
Perpetuating the notion that Prevailing wage elimination will alleviate the need for school property tax elimination just doesn’t add up. $1.19 billion sounds like a lot of money but that’s over 10 years. It translates into $119 million a year. Now contrast that to the $13 billion that is collected each year through the school property tax. I’m not saying that $119 million in savings is something to dismiss, I’m just saying that the elimination of the prevailing wage laws isn’t going to solve the bleeding we are seeing through the school property tax.
To make matters worse, individual costs can be much higher. Averages just don’t tell the whole story. During a press conference at the Capitol in support of legislation to exempt schools from Pennsylvania’s Prevailing Wage Act, the business administrator of the South Western School District in York County recalled an experience his district went through when roofing work was needed on four school buildings in the district. They initially approached a contractor for a bid that came in at $84,504; however, because the cost was over $25,000, they had the contractor go back and adjust the price to include prevailing wage rates. The new cost of the project – for the exact same scope of work – came in at $126,825, an increase of $42,321 or 50 percent.
While I commend attempting to update prevailing wage laws even preferring to see them repealed entirely we cannot miss the fact that this is but one of the unfunded mandates that the state enforces but doesn’t have to pay for. Our homes pay for it. It is difficult for me to imagine that if this funding came from the state requiring increasing state taxes to pay for prevailing wages if it would ever have been enacted. I believe the same to be true of forcing school districts to pay for the collection of dues from the teacher’s union, the pension, healthcare and special education mandates etc. How many times have our state legislators bragged about not increasing out tax burden and yet their own actions through the unfunded mandates that come down to us from the state do have a cost and that cost is reflected in the rising cost of property taxes in funding education.
There is no local control with an unfunded mandate. We don’t have an option. The cost is inflated and then our homes are used to pay for it.
During hearings of the implementation of the federal program called Common Core the secretary of the Department of Education claimed that the cost of implementing Common Core would not cost the state a single dime. In terms of the state budget they were right. The implementation of Common Core was going to be paid for through local property taxes just as the failed system of open classrooms was paid for through local school districts.
The Department of Education has their own regulatory controls over local education seen through Tittle 22 of Pennsylvania Code. I have serious issues with this to begin with since all legislative (regulatory) powers are supposed to reside in the General Assembly which is our legislative body. The Department of Education, however, is not part of the legislative Branch….it’s under the Executive Branch.
Title 22 of the Pennsylvania Code is over 1000 pages long and has to be downloaded in separate files from the state website (http://www.pacode.com/secure/data/022/022toc.html). Like the Public School Code of 1949 (except longer), this is page after page of regulatory controls over education.
The Department of Health and Human Services regulations can be found in Title 55 of the Pennsylvania Code. Portions of these regulations have direct impact on education.
Other Departments under the executive branch have their own codes all of which are regulated through the Administrative Code of 1929…another 305 pages.
This includes departments like the Tax Equalization Division (formerly the State Tax Equalization Board) which is responsible for determining the Common Level ratio applied to assessed values of homes. There is also the Department of Labor and Industry with their own regulations dealing with contracts and collective bargaining. When contract negotiations break down we must use the Pennsylvania Bureau of Mediation. That Bureau is empowered through Public Employee Relations Act (Act 192 from 1970) which was amended through Act 88 in 1992.
There’s more but I think you get my point. The deeper you dig the more you begin to realize how little control we actually do have at the local level. But again, it begs the question, how much of this control would actually exist if the state had to fund it all rather than kick the responsibility down to the local level.
Even Curriculum choices are controlled to some degrees at the State level. It’s not that there aren’t choices it’s just that they are false choices because they are limited by state controls through the Department of Education.
Part of Act 1 was sold to us as a means to control spending through voter referendum. Like most of these promises it hasn’t worked out. The three remaining exemptions are broad enough to cover most school districts when they want to exceed the Act 1 limits; broad enough that the request to exceed the Act 1 limit has been rubber stamped since its inception.
By the way, who sets the Act 1 Limit? The Department of Education
Who approves the request to exceed the limit? The Department of Education.
Who elects the members of the Department of Education? They aren’t elected. They are appointed.
The Department Of Education has 21 members. The Appointed Director has no official vote. 4 members are the appointed majority and minority from the Education Committees in the House and Senate. The remaining members are all appointed and most of them are PSEA members who are there to continue the unique protections afforded of the teacher’s union.
Why don’t we see the inherent problem with this?
Most school do have their own local codes for things like dress codes, attendance, discipline, etc., and this helps to perpetuate the notion of a modicum of local control but those codes must be in compliance with the state codes both legislative or departmental so who really is calling the shots.
Look, if you doubt what I’m saying go to your school board and complain about the cost of education. One of the first things you’ll hear about is the unfunded mandates and the fact that their hands are tied…then if you suggest school property tax elimination you’ll likely hear “what about the loss of local control?” but wait…..they just told us their hands were tied….which is it? It can’t be both.
The only control that SB 76 really removes is the ability of 5 members of any school board from raising your taxes without your consent. The other controls will still exist at the state level and that redirects school boards from raiding our homes to focus their energy on either lifting these regulations or providing the funding to pay for it. Understanding how difficult it is to increase taxes at the state level compared to the local property tax, I predict that the much needed reforms and the shrinking of government agencies to save money will begin. I also contend that this is the ONLY way to bring these much needed reforms into play. Until then the State legislators can just keep kicking the can of those issues further down the street so they can and roll them out during campaign season once again.
Don’t get me wrong, we have some good legislators who really want to bring about reforms but there simply aren’t enough of them to make it happen. Far too many prefer the promise to the principle.
Now, to be sure, there are those who think we should begin dismantling these state controls one at a time but thinking both practically and logistically it would take decades to do so. I am beginning to wonder if the goal isn’t simply to perpetuate the problem for as long as possible to create an apparent need for the organizations who want to fight this battle in that manner. That’s not looking out for our best interest. Shifting the legislator’s ability away from local taxation to pay for these controls and placing that accountability where it belongs (with those who create it) will, in my opinion, expedite the process.
In the meantime, by eliminating the local school property tax we remove the individual home from the process. Individuals no longer need to fear that their property taxes will exceed their ability to pay which will stop the bleeding of 10,000 people a year facing the possibility of eviction from their homes because of taxation. With 350,0o0 abandoned properties in the Commonwealth and with the continual exodus out of the state by people no longer willing to bear the tax burden one would think that legislators and our opposition would look at the unsustainability of the current system and join with us in eliminating this horrendous tax that has allowed for such state regulatory authority to grow creating the myriad of Departments, Agencies and Bureaus, all of which only increase our tax burden.
Let’s get those tax dollars out of these agencies and into the classroom so we can once again fund education instead of the Agencies and Administrative bodies and their unfunded demands.
Like many others I am not comfortable with centralizing anything in government. If our school districts were actually local school districts keeping everything related to it at the local level might make sense but that simply isn’t where we are. Our Commonwealth Constitution places the responsibility of public education solely in the General Assembly where there are to provide for a thorough and efficient system of public education.
With the power already centralized in public education at the state level, the funding for it should be there as well. Until it is I simply can not accept that we can streamline the process to make this system either thorough or efficient. We might see temporary shifting but it will be short-lived as long as the legislators and the myriad Departments, Agencies and Bureaucracies they created can keep kicking the responsibility for their actions down to the local level. Until they are made accountable for their spending and homes are freed from this burden little will permanently change.