School funding should come with property tax cut
The topic of funding schools in Pennsylvania is enormously complex.
In response to the Pennsylvania Commonwealth Court ruling that school funding is unconstitutional, the Basic Education Funding Commission held a series of 11 public meetings, providing a platform for panels to testify on various issues outlined in the 786-page order. The complexity of the issue is evident in the multitude of topics covered, as well as multiple media articles.
Two findings prominently stand out. First, a significant number of school districts fall short of meeting student adequacy targets, highlighting a systemic challenge. Second, the overreliance on local property taxes is a prime driver of failing to meet adequacy targets due to the state’s disproportionate reliance on local wealth/property taxes.
This overreliance contributes to the significant variation in student performance and nation-leading funding disparities.
During testimony for the commission, many of the panels cited a study by “plaintiff expert Witness” Matthew Kelly, an assistant professor of education at Penn State When reviewing Kelly’s “Main Findings” in his report, the first two bullets cover underfunding and failing to meet adequacy targets. We assume he felt this was his most important finding. The third bullet deals with “local wealth / local property taxes” — likely, also at the top in terms of importance.
Kelly clearly connects the dots showing that property tax disparities, which vary wildly across the state, are a prime driver of students failing to meet adequacy targets. To fix any problem on a long-term basis, you need to fix the root cause.
During testimony, it became apparent that some panels selectively emphasized the need for more funding while downplaying or entirely avoiding discussions on property taxes. To be fair, a few members of some panels did express concern for the taxpayers but almost exclusively in terms of no additional burdens, not reduction or elimination.
It is debatable that more funding would solve adequacy issues. Pennsylvania already ranks about eighth in the nation with regard to dollars per student at approximately $22,000 for school year 2023-24, while the state contribution is currently ranked 46th in the nation, according to the Keystone Research Center. Pennsylvania spends roughly $4,000 more per student that the national average.
Using the current funding in a more solution-driven approach and addressing the high cost of unfunded mandates is a more prudent course of action. Unfunded mandates, such as pension costs, are directly reducing dollars for the students. Regrettably, neither of these points were part of the commission’s discussions.
It is worth noting that the majority report lists 113 schools that do not have an adequacy gap. This implies these schools are receiving more than ample funding.
One panel — introduced by Sen. David Argall, R-Schuylkill, as the most important panel of testimony — addressed the predominant court order cited issues head-on with a robust plan. Three members of the Property Tax Elimination Working Group, Robert Stillwell, former state Rep. Frank Ryan and Robert Kistler, testified.
We demonstrated how our plan would increase annual school funding significantly while eliminating the prime reason for school-funding disparities that led the Commonwealth Court to rule Pennsylvania’s method of funding schools unconstitutional.
Property taxes are mentioned in a cursory manner in the majority and minority reports despite the court order and Kelly’s highlighting the issue. Failing to address a prime driver of the dysfunction — local wealth/ property taxes — will result in a temporary solution further exasperating local funding disparities, while ignoring the spirit of the court order.
Many property owners struggle mightily to pay their annual school property tax bill. The majority report proposes increasing funding to schools annually by $5.4 billion over a period of seven years. The report indicates that nearly 95% of this funding will come from the state, the remainder from local wealth/property taxes.
The question everyone is asking is, what is the source of this money? The only sources capable of generating this level of income are sales and use and/or income taxes. If enacted, this could lead to historic tax increases.
In response to the recent budget proposal by Gov. Josh Shapiro, the PTEWG reaffirms our unwavering commitment to school property tax replacement. Fundamentally, we agree with the apprehensions voiced by several legislators across various media platforms regarding budget overreach. It is palpable that the additional and currently unfunded fiscal burden that would be placed on the taxpayers is a legitimate and pressing concern.
As we navigate these complexities, it is imperative that the solution addresses the needs of our educational system while mitigating the financial strain on the hardworking individuals who form the backbone of our communities.
The reality is many of the people who testified before the commission are school employees, who are accustomed to the current system and were hyperfocused on the narrated need for more dollars, often overlooking the pressing concerns raised by the court, the taxpayers, and Kelly regarding property taxes.
The author, Robert Kistler of Mahoning Township, Carbon County, is a member of the Property Tax Elimination Working Group, along with former state Rep. Frank Ryan of Lebanon County; Robert Stilwell of Gettysburg; former Montoursville Area School Director Ronald Snell of Lycoming County; Henry Rothrock of Fredon Township, New Jersey; Ryan Pertusio of Dauphin County; and Michael Fogarty of Chester County.