Area school districts voice concerns about tax proposal
Representatives from Salisbury, Panther Valley, Parkland, Bethlehem and Nazareth Area school districts, along with circuit riders for the Pennsylvania Campaign for Fair Education Funding met Feb. 1 at the Salisbury Township Administration Building to talk about the impact of Senate Bill 76 on school districts.
The goal of Senate Bill 76, according to state Sen. David G. Argall, R-29th, is to eliminate all school property taxes across the commonwealth and replace those taxes with a combination of funding from personal income tax and sales and use tax.
“The school property tax has been a primary source of school funding since the 1830s,” Argall said. “The legislature cannot continue to ‘fix’ or ‘reform’ this archaic tax - that is why we are proposing a new education funding model that would promote economic growth and completely eliminate the school district property tax once and for all.”
Argall said the plan is to increase the sales and use tax by one percentage point and broaden the base of the state sales tax to include more services and products. Necessities and business-to-business transactions will continue to be exempt from the sales tax. The state’s personal income tax would increase from 3.07 to 4.95 percent.
Administrators said if this legislation passes, not all school property tax will be eliminated – district debt will still need to be covered by the homeowners.
The winners would be big businesses and corporations, landlords/commercial property owners, out-of-state property owners and many retired homeowners.
“We need fair, consistent and stable funding in all of our schools in Pennsylvania,” Salisbury Township School District Superintendent Dr. Randy Ziegenfuss said in his opening remarks.
“Our students, whether they are graduating in 2017 or our kindergarten students graduating in 2029 are entering a world which is volatile, uncertain and complex in a future that is changing exponentially.”
Ziegenfuss asked the following questions.
“How will we prepare our learners for a future where 47 percent of our current jobs will be at risk to artificial intelligence, robotics and other technology?
“How will we prepare our learners for a future where one-third of the skill sets required by the year 2030 will be new?
“How will we prepare our learners for a future where 65 percent of children entering primary school will have jobs that don’t yet exist?”
Ziegenfuss said districts need stable funding from the commonwealth to focus on the learners and remain agile enough to best meet the constantly changing future - the future our learners will inhabit and create.
Ziegenfuss also noted a changing demographic in Salisbury with an increase in ethnicity and poverty which becomes a challenge for the district to make sure those learners are ready for the future. The special education program has also grown as well as the mobility of students who move in or out throughout the school year.
“These are all challenges we face on a daily basis....and we need the stable financial backing to focus on the challenges and not worry about whether we can pay our bills.”
Four mandates, Pennsylvania State Employees Retirement System, charter school payments, transportation and special education costs consist of 36 percent of Salisbury’s budget. Although Salisbury only has four buildings, the district provides bus service to 47 schools. The state contribution to total revenue is 20.5 percent. Local taxpayers have assumed the money necessary to run the district.
“This bill will not provide us with that financial stability,” Ziegenfuss said.
Salisbury’s Business Administrator Robert Bruchak said the PSERS liability will be close to $1 million over the next five years for the district which will need to be funded by the taxpayers. Charter school payments in Salisbury are close to $800,000 plus transportation which is close to $1 million paid by the taxpayers.
“We are not receiving any help from the state for this school choice. School choice is expensive. More teachers, more buildings, more administrators, more transportation. It costs more money,” Bruchak said. Transportation costs were reimbursed by the state for $500,000 and the cost is $2.1 million. Special education costs are also skyrocketing and not reimbursed 100 percent by federal or state money.
Chief Financial Officer Stacy Gober, Bethlehem Area School District, discussed the largest challenges facing are the mandated costs of charter schools and pensions. Gober said since the 2007-2008 school year, the mandatory pension costs have increased by 384 percent, mandated tuition to charter schools has increased by 441 percent. The net increase for these two costs has gone from $9.9 million to $60.4 million, an increase of $50.5 million for two expenditures that are mandated beyond our control over the last 12 years.
“During that same period, basic education funding has increased $10 million. Where has the difference come from? That additional gap has been covered through the cost of reductions in our programs, deferred maintenance on various equipment purchases, school buses that needed to be updated or replaced to pass inspections, furloughs and the remainder has come from local community and our taxpayers,” Gober said. “We are running out of things to reduce.”
Superintendent Dennis Kergick, M.Ed., Panther Valley School District said his is one of the six school districts in the Commonwealth who sought equity through the lawsuit filed by The Public Interest Law Center.
Approximately 65 percent of his students are living in poverty which requires additional supports and services.
“Our district relies heavily on state funding. It is unfortunate but with SB 76, the improvements made in the funding formula will be reversed and fair funding will be disrupted,” Kergick said.
Kergick said there are three big drivers in his budget: “PSERS, an increase of $375,000 to $2,525,000, charter school expenses with an increase of $300,000 to $1,200,000 and special education services with an increase of $100,000 to $1,500,000.
SB 76 proposes that eliminating all property taxes will fix the problem; it simply causes some far bigger areas of concern,” Kergick said. “Most taxpayers will pay more in taxes overall, business, landlords and retired residents without large investment income will benefit the most, ....renters will pay more taxes and the hard working lower and middle class will pay more in taxes.”
Kergick said “It is time for legislators to deal with what our students and state need and find a fair way to raise the revenues instead of perpetuating myths that all it takes is controlling costs and ending all property taxes.”
John Vignone, business administrator at Parkland School District said, “There is no bigger investment in our country, then the investment in education.”
Vignone also thanked members of the press saying, “they are a pipeline to the community.”
Saying Parkland School District had all of the same concerns as the other districts, Vignone said, “If school property tax elimination goes through, all of the other matters are not going to be in the forefront. This elimination will change the landscape of public education as we know it today.”
Vignone said they need to educate the taxpayers and the legislators. “Do the math,” Vignone said. “This elimination bill creates total uncertainty.
“If I were sitting in a room with legislators, I would say, “Folks you may solve that property tax problem a little bit but in a year from now you may sitting here with 10 times more problems. Be very careful. Think this through, very slowly. Understand the unintended consequences of what this can do, not only to education but also the commonwealth.”
Almost all speakers were in agreement some sort of tax reform should be passed to help senior citizens and some offered suggestions other than SB 76.
School Director Linda Stubits, Nazareth Area School District, agreed how important it is to inform the community about the school districts’ concerns. In a recent community meeting, Stubits said residents were convinced parents of charter school students paid for the student to attend charter school, not the school district.
PA Circuit Rider Dr. Tom Seidenberger ended the news conference by saying, “It is imperative that the state increases or, at a minimum, maintains their level of support for public education.”