By G. Terry Madonna and Michael L. Young
These days, the word “crisis” has become a tedious cliché, much overused and abused by those for whom every problem becomes a looming catastrophe. But the unparalleled challenges now confronting the financing of Pennsylvania’s public education system do comprise a genuine crisis, one that if left unsolved threatens to transform Pennsylvania—educationally, economically, culturally, and even socially—into a permanent backwater.
Across the Commonwealth dedicated teachers are being furloughed, vital programs are being curtailed, entire schools are being shut down, and an entire generation of students may be losing their access to a quality education. That’s just the good news.
Worse is that the furloughs, the cutting, and the closings are all going to accelerate in the coming months and years, bringing further assaults upon Pennsylvania’s public education system. The consequent damage to the quality of education, the future of our children, and their ability to compete in the emergent global economy cannot be exaggerated.
And who, or what monster, shall we blame for this monstrous calamity? Are evil teachers unions behind this looming disaster, or perhaps corrupt politicians, or even grasping school boards? No. Neither these nor any of the “usual suspects” can take the fall for this one. Our financial crisis is not due to greedy teachers, incompetent administrators, angry taxpayers, manipulating political parties, or even super-PACs.
In fact, the villain behind our educational woes isn’t even a person or institution; it’s a tax that most of us are all too familiar with: the real estate property tax, better known as simply the “property tax.”
What about the simple property tax is so atrocious, so flawed, and so defective that we ascribe to it most of the contemporary problems of financing public education? That’s a good question, one to which entire libraries are devoted.
The (very) short answer produced by legions of public finance experts is that the property tax is grotesquely unsuited to modern times. It is unfair (i.e., regressive), expensive to administer, difficult to assess accurately, disconnected from the modern economy, and politically repugnant to most taxpayers. These defects and many more are the bitter fruits of the much-hated property tax. Of all America’s major taxes, including the income and sales taxes, the property tax is the worst by any measure you care to use.
But bad as the property tax is, its egregious faults are only part of the problem. Even worse is that we are using this most flawed of taxes to finance perhaps the most important function of government: education. We are trying to educate our children on the back of a creaky 19th-century antique that barely did the job then, faltered badly in the 20th century, and is now failing spectacularly as we move through the second decade of the 21st.
Must we watch helplessly as our proud tradition of public education withers away, the victim of inert political leadership and ossified public policies? Absolutely not!
Two things seem eminently sensible.
First, we should adopt expeditiously a tax system that finances 21st-century education with a 21st-century tax. One of the most promising concepts being discussed now is Representative Jim Cox’s (R-Berks) bill known as the “Property Tax Independence Act,” which would replace the school property tax by increasing the state’s personal income tax from 3.07 percent to 4 percent, and expanding and increasing the state’s sales and use tax from 6 percent to 7 percent.
Second, we should avoid throwing out the baby with the bath water and recognize that the property tax—for all its limitations—is best fitted to financing Pennsylvania local government. Originally, property tax revenues were used almost exclusively to finance local government functions like public safety and public health. Only over time was the property tax base hijacked to support more and more local education, so that now as much as 80 percent goes to the schools. We should stop using the property tax to finance schools and instead using it only to support non-school local government expenditures. This is where the property tax works best.
Neither of these steps requires overall increased taxes. Cox’s bill and others proposed over the years would not raise taxes but rather would shift tax burdens from the property tax to a tax more suited to modern times and the needs of public education. Nevertheless, any legislation that envisions tax changes, even tax shifting, will be controversial. Indeed, earlier efforts dating back three decades to bring tax reform to Pennsylvania were rife with dissension.
But let’s not kid ourselves. The choice is not between change and no change. Change, almost all of it bad, is happening across the state almost every day as Pennsylvania’s school districts adapt to the new realities imposed by relying on the property tax to finance education. The real choice is between having a choice about the future of state public education and having that choice imposed upon us by doing nothing.
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Politically Uncorrected™ is published twice monthly, and previous columns can be viewed at http://politics.fandm.edu. The opinions expressed in this article are solely those of the authors and do not necessarily reflect the opinions of any institution or organization with which they are affiliated.
Bob Norman
2:39 pm on Monday, June 4, 2012
I wonder how many residents of PA know just how much money sits in assets of groups like the Association of School Boards, etc. that should be directed at education, when, in fact, it pays people who live in a non profit world, get HUGE salaries and do little more than lobby (pay off state politicians). in essence, property tax rebates to selected state officials while non profit lobbyists, like Gurney, gets to play with $7 million through asset management while collecting salaries and benefits for his cronies. Pretty Good Work if you can get it, and you can get it if you "Care a little about education and a lot about your own bank account."
AidanJ
5:42 pm on Monday, June 4, 2012
System is broken. It's got to be fixed.
James Peter
7:38 pm on Monday, June 4, 2012
I agree. The assessment system is unfair & inaccurate.
Sham
8:33 pm on Monday, June 4, 2012
The only problem is the small families with big houses win and the big families in small houses lose. You will get a tax break if you own a big house and property, businesses will no longer have to pay. So who makes up the difference? The people who pay less with their smaller house. Also the people who have larger families and have more usage will pay more with the sales tax. I am for cheaper taxes but beware of sheep in a wolf's clothes.
P2YA
10:07 am on Tuesday, June 5, 2012
I'm taking a guess you may be someone who lives in a property with a relatively low (pre-1972) assessment. As with everything these days people refuse to consider the greater good, in this case fixing a broken system. They cannot look beyond how they are personally affected or benefitted. If you are for maintaining the status quo then basically you're saying it's fine for others to pay a greater share of education and other government expenses than you simply because you may live in an older home that is most likely under-assessed. Most people are aware Bucks County has refused to reassess properties in over 40 years. Paying for education is a necessity and taxes are required to do so. The form and level of taxation should be fair, even and unbiased. That's a pipe dream. Politicians for the most part strongly favor a system that promotes inequity and unfairness, because they're afraid if they take a principled stand they may lose a few votes from those that have been enjoying benefits from the current arrangement for at least two or three decades.
Concerned
9:58 am on Tuesday, June 5, 2012
Seems that we need to revisit how we educate overall and the structures (buildings!) in which we educate. How do we compare to charter schools, how many kids ride the busses (esp. in high school-maybe a minimal charge for those who ride), will the future mean some online classes, do we teach too much "to the test" vs. real learning, instead of a few kids in the Penn program - why not allow everyone so that we can have more "thinking" kids to better serve society later - somehow incorporate that philosophy into the regular day/week, do kids care about marble floors and wood ceilings (or is that simply an extension of the McMansion mentality - when the thought was there is money to spend) vs. something simple with a friendly landscaped entrance, a garden for kids to plant in /learn and windows - lots of them. Is there such a group who can think long-term, objectively and do more with less?? Perhaps a study of our kids could provide some real insight into what matters and what makes a difference. Perhaps some top high school students could be invited to create the ideal school situation along with alumni who have been in the world a while and who have attended top colleges (Harvard, Princeton, Swarthmore, Dartmouth, etc.) to help figure this out!
Michael Carcel
4:23 am on Wednesday, June 6, 2012
Education cannot be funded only on the backs of home owners especially since a lot of home owners do not use the service at all. Taxing the home owner has always been the easy and lazy way out for government. In the past, townships just evicted the home owner that could not pay and brought in another, what happens when there is no one who can afford to buy any more, or even wants to buy? Better start to look at and fix this unfair system now!
My2cents
9:08 am on Wednesday, June 6, 2012
The idea of Harrisburg deciding how much each school district gets is down right scary. It is too easy to envision the tax being lowered to "attract business" with our schools being gutted (sound familiar) or money disproportionately winding up in the black hole that is the Philadelphia Public schools system.
The system we have now is far from perfect, but at least the tax rate and the money are both locally controlled.
Anthony roccone
3:42 pm on Wednesday, June 6, 2012
Greediness and selfishness is the teachers. Economy is collapsing and they still have jobs and homeowners are pushed out of their homes because of the skyrocketing school taxes we can no longer afford to pay these taxes seniors only live on social security without free medical with deductions deducted from a monthly check don't even come close to pay their homes or food to live on something is wrong here the system is out of whack I believe retired on social security shouldn't pay for the school system where salaries and needless spending goes on and on no one knows. Yes everybody is fattening up not the seniors above 65 years stuck with absorbent high Medicaid bills. Can we strike????
Tim
2:11 pm on Friday, June 8, 2012
No you can't strike, but you can get one of those teachers to teach you how to write coherent sentences.
Anthony roccone
3:48 pm on Wednesday, June 6, 2012
Give it up. Let the kids enjoy the summer people are working for $7.00 an hour at 66 Stop complaining remember the traffic controllers at the airports needless to say the President stepped in maybe stricter actions should be bestowed upon you .
Anthony roccone
3:55 pm on Wednesday, June 6, 2012
Salaries I heard above 80.000 a year We can't afford these salaries we want to strike !!!! Were Seniors we paid our dues for our own children no you pay it's your tme to not old people dying of diseases they can't pay
Andrew Starr
12:52 pm on Friday, June 8, 2012
Property Tax Independence HB1776 would be so good not only for the home owners of this state but for the state itself. No tax should EVER have the power to leave you homeless and the epidemic of losing ones house for the inability to pay school property taxes continues to grow especially for those on a fixed income. While we are relatively lucky with regards to how much we pay here locally, in other parts of the state houses worth $200,000 are paying close to $11,000 a year in taxes with 84% in school property tax. Could it happen here? Absolutely! Pennsylvania actually provides property tax exemptions to certain businesses to entice them to set up shop here, proving no taxes brings in much needed jobs. One could only imagine the boom in business relocation or start up in PA if the entire state was tax free.
HB1176 is very fair and to learn more visit http://ptcc.us which has a wealth of information or watch this excellent video discussion which includes the bills architect David Baldinger. http://www.youtube.com/watch?v=Ko0eJl1BNg0
Pennsylvania is one of the few states that have the ability to remove school property taxes and that window is closing in. If this idea has merit please call your Representative and ask him to support HB1776
Andrew Starr
1:48 pm on Friday, June 8, 2012
I had a typo in my last comment. HB1776 is the correct bill number not HB1176. Sorry if there was any confusion....