SB 76: The Myth of the Shortfall

SB 76: The Myth of the Shortfall


The Art Of Misdirection

Opponents of HB/Sb 76 like to point to the fact that 10 years down the road we’ll be creating a shortfall in education funding.  The implication is that we’ll be cutting the education budget by billions of dollars.

The source for this information comes from the Independent Fiscal office.


This type of debate is sometimes called misdirection.

Under HB/SB 76 the replacement revenue distributed to schools is a dollar for dollar replacement of the revenue currently collected through the property tax.  Each school district will receive exactly what they are receiving now through the property tax.  That amount will be adjusted each year by the inflationary indexes currently in place which means that school districts will continue to get increases every year set to the rate of inflation.  There are no cuts in education budgets.  School Districts budget will still be able to increase with the rate of inflation.

In fact, school districts that have been frugal and fought against increasing property taxes in the past would have actually seen increases in funding under HB/SB 76 had this bill been passed when introduced.

Let’s look at this by extending the above chart 10 years out focusing on three factors.  Maintaining the current increases in property taxes, The Average Weekly Wage, and the regional Consumer Price Index.


On the chart the difference between the Average Weekly Wage and the property tax is about .60 in cumulative growth in 2012-13.  By 2012-13, that difference will be 1.2 or doubling the increase in property tax revenue compared to the Average Weekly Wage.  Will you be able to afford that kind of increase?

Comparing property taxes to the to the rate of inflation, the difference is slightly greater.

What happens when we move the rate of inflation growth up to the existing school property tax line?


School funding continues to increase but it does so at a much lower rate.  It also begins to close the gap between the Average Weekly wage and School funding through HB/SB 76.  In 2012 the gap is 0.60 and in 2022 that gap will be about 0.50.

Something that is not reflected in these charts is the decline in population due to out-migration.  We lost almost 8,000 people last year.   That translates into less people paying more towards the rising costs and disparities of the property tax.

Lets assume for a moment that this trend continues.  In ten years we’ll have lost about 80,000 people.   The Census Bureau tells us that the average household is 2.64 people.  A loss of 80,000 people translates into a loss of 30,303 households.  That’s 33,303 households not paying the school property taxes in 10 years that currently would be.  That simply means that with less people funding education through the current system the remaining households will have to pay a higher share of the property tax revenue as the total cost of the property tax continue to increase.

If we continue on the same course of action maintaining the status quo we find certain instability in the future for the majority of working families in the state.

When our opposition talks about the increase to the PIT/SUT on the working families of the Commonwealth they intentionally choose to ignore that current system and future it will bring to those same people.  They are often seeking to protect their own interest even if doing so means hurting the people they claim to be defending.

After all, that’s what’s been happening while those same naysayers (and others who have followed in their footsteps) have prevented School Property Tax from advancing in the past.

This process is a process of misdirection.  School Administrators and advocates for the PSEA come out of the woodwork and talk abut the impact on the poor and because they don’t want you to look at things like this:


The runaway cost of funding education is not reflected in population growth nor can it be justified with higher test score results.  Rather than irresponsibly increasing the cost of education, allowing for Ghost teachers that are paid as school teachers but doing the work of the Public sector unions;  Rather than protecting the unique provisions to these unions that aren’t actually translating into a better quality education for our children; they fight to keep increasing the financial burdens on their communities.

Many of our 3rd class cities are struggling.  The increasing school district taxes have hit the municipalities where we find cuts in services like road repairs, police protections and cuts to health and safety departments.  Home ownership declines to be replaced by rental properties where the rent just keeps rising.  This contributes to transient populations which becomes a contributing factor to rising costs in education.

While they talk about the negative impact of Eliminating School Property Tax through HB/SB 76 on renters, they are misdirecting us away from this:


A comparative study to the increase in rents correlates perfectly to the increase in property taxes.  This is just common sense.  When you increase the taxes on a rental property the owner of the property must increase the rent or they’ll lose the property.  To pretend that the existing system of property tax has no impact on renters is simply delusional.

If we don’t put an end to the status quo rent will continue to increase to the same rate as property taxes.  Eliminate the property tax and you stop that growth limiting it to the rate of inflation.  In other words, maintaining the status quo will have a hugely negative impact of the cost of rent in the future.  To the opposition, we are just supposed to ignore this.

Had we done this 20 years ago, imagine how much renters would have saved?  If we had done this 20 years ago how many renters would now be home owners?

After all, we are trying to open doors of opportunity through HB/SB 76.  The current system closes those doors and keeps that door securely locked.

When our opposition talks about centralized funding and the loss of local control they want you to ignore this:


These books represent some of the regulations and unfunded mandates that drive up the cost of local property taxes implemented at the state level.  Each of these books are full and printed double-sided.  It’s thousands of pages of control over our local school board’s much of it granting special and unique privileges in favor of the PSEA.

When our opposition talks about 17% increase in the sales tax they use the percentage as a distraction.  It means that if you buy a $1,000 big screen TV for your family room you currently pay $60.00 in Sales Tax.  Under SB76  you’ll pay  $70.00 and in exchange for that you get your school property taxes eliminated.

When our opposition talks about this being a tax break for the wealthy they will never tell you that the wealthy are making out considerably better when we look at percentage of income in relation to the school property tax under the current system.  We have wealthy districts where the percentage in income is less than 2% of of the average income going to the property tax and in poorer districts where it’s as high as 15%.  I have never once heard the opposition who is supposedly so concerned abut the plight of the poor ever once condemn the most regressive tax in the entire Commonwealth, the school property tax.

When they talk about the tax breaks to Walmart by eliminating their property tax in compliance to the Pennsylvania Constitution they don’t tell you that Walmart makes up a small part of the landscape when it comes to employees.  What they don’t talk about is the fact that businesses with under 20 employees still make up the largest majority of workers in the commonwealth.  Those businesses would also see their property taxes disappear allowing them more income to invest back into their business to become stronger competitors against the corporate chains.  That investment may include higher wages for their current employees.  That investment could mean hiring more staff to meet consumer needs.  That investment could mean lower competitive pricing. All of that is good for Pennsylvania.  Walmart is just the distraction to hide the benefits of HB/SB 76 to small mom and pop businesses across the Commonwealth.

When our opposition talks about the stability of the tax they never put that stability in context.  As the chart above indicates, it’s is stable in its increases.  It is stable for the tax collectors and the tax leviers because many people will do without healthcare and food before they lose their homes.  The stability for the tax leviers and collectors is predicated on the instability it causes for the working families who have to pay it.   So much so that more than 10,000 people a year face losing their homes because the tax has exceeded their ability to pay.

Another tool of misdirection is to completely ignore the intent and purpose of the bill.  HB/SB 76 is a bill to eliminate the School Property Tax by finding the replacement revenue necessary to return to each school district, dollar for dollar, what they currently receive.  We recognize that there are other problems.  The Basic Education Funding Formula is seriously flawed.  That needs to be fixed but that isn’t what this bill is about. The Public Sector Pension Plan is a debacle.  That isn’t what this bill addresses.  We need separate bills to deal with these other problems in responsible and equitable ways.

When opposing legislators do this it’s particularly troubling.  Using this bill to point out that it doesn’t address those problems when those legislators have not introduced bills to deal with those problems is disingenuous.  It may help them maintain the status quo but at what cost to the taxpayers of this state?

When our opposition says this bill needs to be vetted more they don’t tell you that this been has already been vetted more than any other bill.  It has gone through three IFO (Independent Fiscal Office) studies as well as other outside groups.  It’s all about misdirection.  When that misdirection comes and those misdirecting know the truth but intentionally keep the truth from the public, that misdirection is a form of dishonesty.

Much of our opposition comes from Administrators, CPA’s, those strongly connected to the PSEA and other educated professionals where I find it incredibly hard to believe they do not realize what it means to protect the status quo of school property taxation and the negative impact this has on homeowners, small business and our communities and yes, even the negative impact it has on the children in our schools.

So much of their opposition is easily exposed. In fact, since they went public with their opposition their talking points have been addressed and exposed.

In response, they never address the facts….they simply just keep repeating the same old tired and worn out excuses.

Most of our opposition is based on misdirection and misrepresentation and some of that is covered elsewhere in this blog.  I encourage those who are unfamiliar with this blog to spend some time here: Read the other postings.

I also encourage you to go to and get the facts behind SB/Hb 76, School Property Tax Elimination.


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