3 Delco pols oppose property tax elimination bill
‘Tax Independence Act’ called danger to education in region
NETHER PROVIDENCE >> Bipartisanship can be hard to come by these days, but three area lawmakers from both sides of the aisle are united in opposing a bill that would dramatically alter the way schools in the state are funded.
During a town hall-style meeting on Friday night at Strath Haven High School, state Sen. Tom McGarrigle, R-26, state Rep. Leanne Krueger-Braneky, D-161, and the chief of staff for state Sen. Tom Killion, R-9, were unequivocal in declaring Senate Bill 76 as a nonstarter as far as they are concerned.
McGarrigle said the bill, which has been dubbed the “Property Tax Independence Act” by its backers, would “destroy” education in Southeastern Pennsylvania.
“It (the current approach of relying primarily on property taxes) is a system that’s been in place for many years, and it’s a system that works,” he said near the outset of the gathering, which drew about 250 residents.
At a later point in the session, he said, “The last thing you want is Harrisburg telling Wallingford-Swarthmore it knows how to run this school district. Every district has unique characteristics.”
Krueger-Braneky said the legislation’s impacts would be “devastating” and would not entirely eliminate property taxes.
And Killion Chief of Staff Mike Stoll, who said the senator had prior commitments and therefore could not be on hand, said the proposal would cede control of school district decision-making to the state.
“To take all of that money and put it in the hands of Harrisburg would be a big mistake,” Stoll said.
SB 76 calls for replacing most school property taxes with increases in both the state personal income and sales taxes, though county, municipal and school taxes covering outstanding debts would remain. Specifically, the income tax would rise to 4.95 percent, or by 61 percent, while the sales tax would climb to 7 percent, or by 17 percent.
Another element of the proposal would require districts to pursue taxpayers’ approval for increases to pay for capital improvements, but not allow them to do so for additional costs involving ongoing operations.
Wallingford-Swarthmore School District officials have voiced significant concerns about the change in approach and urged parents and other residents to reach out to state legislators to urge them to vote against the plan. The meeting Friday night was another outreach effort to lawmakers.
Other organizations have also come out against the bill. For example, the Pennsylvania School Boards Association has stated the proposal is “being touted as a victory for homeowners and a better way of funding public education, but it is not a panacea for taxpayers or school districts. Instead, the elimination of the property tax merely serves to create additional, higher tax burdens for other taxpayers and destabilize funding for public education.”
The bill nearly passed the state Senate in 2015, with Lt. Gov. Mike Stack, a Democrat, breaking the tie to defeat it. However, the outcome of the November elections changed the makeup of the 50-member Senate, increasing the GOP advantage to 34 members and heightening speculation the legislation could now win passage.
On another school budget topic, the legislators were asked if they supported a basic education funding distribution formula developed by a state commission in 2014. The formula directs money to school districts based on several such factors as enrollment, the needs of the student population and a district’s wealth and ability to generate local revenues.
An estimated $4 billion in additional basic education funding – through tax increases, state spending cuts or a combination – would be needed to implement the formula’s objectives.
McGarrigle said that while he supports the formula, it does not, as currently structured, treat southeastern Pennsylvania fairly. He said the region gets back less than 20 percent of the tax dollars it sends to Harrisburg, while other parts of the state receive 50 to 80 percent.
What’s more, waste and inefficiencies by the state need greater attention, the Springfield resident said.
“One of the things one of my colleagues says is, ‘Pennsylvania does not have a taxing problem, it has a spending problem,’” he said.
Stoll said a “hold harmless” provision in the formula would lock in existing inequities even though area counties have experienced population growth and many other parts of the state have seen losses. Until that disconnect is addressed, Killion would have a hard time supporting the formula, he said.
Krueger-Braneky said the formula attempts to “take politics out of budget discussions,” something that has not occurred previously.
“The next step is to put more money into public education,” said Krueger-Braneky, who several times mentioned the need to impose “severance” taxes on Marcellus Shale natural gas drilling companies operating in the state. Gov. Tom Wolf, a Democrat, has repeatedly called for such taxes but has been unsuccessful in garnering the necessary support.
Another question for the lawmakers dealt with was could be done about the state’s soaring pensions obligations. School districts have experienced surging costs to keep up with those obligations in recent years.
McGarrigle said the best place to start is by requiring new hires to take part in a 401k-type plan while allowing current employees to remain in the existing system.
“Private industry did it 30 years ago,” he said. “It will not solve the problem, but it will stop the bleeding,” adding that Harrisburg has continued to “kick the can down the road” on the issue.
Stoll agreed, explaining that pension and benefit reforms are “incredibly important” amid some “pretty staggering statistics.”
Although Krueger-Braneky concurred that there is a problem with unfunded pension liabilities, she said she had not yet seen a proposal that will adequately fix the problem. The legislator said she is seeking a plan that will deal with the underfunding of pensions but not cost school districts more than they are already paying.
“I just haven’t seen it, folks,” she said.
With respect to another thorny issue, McGarrigle said he supports charter and private schools while Stoll said Killion has a similar view. Krueger-Braneky said she at present opposes a bill that would bolster such schools because the Fiscal Year 201718 budget-development process is still under way and the legislation would circumvent that process.