Property tax hikes point to the coming financial disaster in Pennsylvania schools

Jul 23 2019 | 07:10 AM

    Property tax bills have arrived in homeowners' mailboxes, and for many, this year's sticker shock has gone up despite an increase in state funding for schools and despite local school boards weighing program cuts. Some area districts avoided tax increases by depleting reserve funds. That squeeze — weighing students' needs against taxpayer resources — is about to get worse with a divide that threatens more than half the 500 school districts in Pennsylvania with financial crisis in five years.
    In the next five years, 60 percent or more of school districts in Pennsylvania will be in fiscal distress, according to a June 30 report by MediaNews Group staff writer Evan Brandt. His report detailed the findings of a study, “A Tale of Haves and Have-Nots," by the Temple University Center on Regional Politics. Study authors William Hartman and Timothy J. Shrom illustrate how unfunded mandated costs — retirement and charter school tuition in particular — soon will exceed the amount of state aid many districts receive.
    Districts are left with no choice but to raise local property taxes to balance their budgets. With state law capping such increases, it may still not be enough, and many will have to resort to cutting programs to balance their budgets, Brandt reported.
    The study authors wrote: “The 'Have-Nots' will have lower expenditures, fewer educational resources, lower levels of staffing, and limited other opportunities for students. (The) 'Haves' will have higher levels of expenditures, appropriate educational resources, including advanced technology, adequate levels and types of staff, and additional educational opportunities for their students."
    A sampling of 10 Berks, Chester, and Montgomery school districts analyzed by Brandt, using the report's calculations and Pennsylvania Department of Education data, show five districts weathering deficits of more than $12 million, while five amass combined surpluses of more than $23 million. It works out to a school funding gap of more than $35.7 million among just 10 districts.
    (In the Delaware Valley School District, the five-year projected shortfall in major expenditures is $1.61 million, or .45 percent. DV's major subsidy increases minus major mandate increases over that same period is minus $855,321, or minus 79 percent. See https://bit.ly/2K1ucrr.)
    The culprits are mandated costs that local school districts can't control. Those costs threaten to force even some wealthier districts into the have-not's column.
    The mandated costs of pensions, special education and charter school payments grew by $293 million in Montgomery County districts alone since 2010, according to Public Citizens for Children and Youth.
    Thus, the annual budget season dance in which local school boards debate cutting things not mandated by the state, such as athletics, art, music and foreign language instruction. When all else fails, that property tax bill climbs.
    Legislators refuse to raise taxes on the state level, and efforts to reform charter school reimbursements and pension plans fall short. Without drastic changes in mandates or substantially increased funding, the study authors said, their predictions will become reality. They said their study shocked Senate staffers, prompting talk of a task force to examine school funding.
    We strongly urge that examination, beginning with the recommendation to reduce mandates and increase the state share of funding. Charter school reform is near the top of that list. This fiscal crisis has been edging closer to reality through years of bad decisions in Harrisburg. It's time to stop the slide before hundreds of districts — and thousands of children and taxpayers — suffer the consequences.
    The Reading Eagle