Lehigh Valley school districts of all sizes are struggling with crushing mandates from Harrisburg and budget uncertainty that will only worsen if a property tax elimination bill is enacted.
Parkland School District Business Administrator John Vignone speaks during Wednesday’s press conference.Sara K. Satullo | For lehighvalleylive.com
That was the message from superintendents, business managers and school directors gathered at the Salisbury Township School District administration building Wednesday afternoon to discuss the financial realities they face as they craft their 2017-18 school budgets.
“We need fair, consistent and stable funding in all of our schools,” said Randy Ziegenfuss, superintendent of Salisbury.
Pennsylvania is facing a massive state budget deficit and state revenues are not coming in as expected. And for years Harrisburg has not been picking up its fair share of the skyrocketing costs of pensions, charter school and special education, officials said. That has forced local school districts to pass down the costs of those unfunded mandates onto local taxpayers, officials said.
Pair that with the proposed HB/SB-76, known as the Property Tax Independence Act, which would eliminate the school real estate tax in favor of a higher personal income tax and an expanded, higher sales tax, and districts don’t know what funding they can count on.
“This elimination bill creates total uncertainty,” said John Vignone, Parkland School District business administrator.
No school tax means Bethlehem businesses pocket $18.2M
The news conference was held on the heels of the Pennsylvania Association of School Administrators (PASA) and the Pennsylvania Association of School Business Officials (PASBO) Wednesday release of their annual financial survey of the state’s 500 school districts (361 participated).
Almost eight in 10 districts in the state raised taxes this year and 80 percent of them used savings to balance their budget, up from 74 percent the prior year.
Thirty-seven percent of districts reported cutting programs, although 13 percent were able to roll back planned academic reductions and another 13 percent reduced staff cuts thanks to a $200 million boost in state funding.
But the survey shows mandated expenses are consuming any new state dollars, said Jay Himes, executive director of PASBP.
“We continue to march backwards resulting in more staff cuts, higher property taxes and reduced educational opportunities,” Himes said. “Our only option to balancing school budgets is to increase property taxes, cut staff and spend down reserves.”
An ongoing funding crisis diverts districts’ attention from finding the best way to educate students for the jobs of tomorrow — jobs that many cannot even envision, Ziegenfuss said.
He detailed how Salisbury has seen its state funding drop by more than 10 percent, while its minority student population grew by more than one-third.
There has also been a major jump in transiency: 25 percent of students are not there a full school year. And the district is spending a fortune busing students to 47 private, parochial and charter schools, Zigenfuss said.
HB/SB-76 does not provide the needed stability, he said.
The proposal would allow school districts to still tax to pay down existing debt service. Districts’ funding would be based on current funding levels but would be doled out at the state level.
State Sen. Lisa Boscola, D-Northampton/Lehigh, is a co-sponsor of the proposal. She also wants to tap table games revenue to more than double the amount of casino cash available for statewide property tax relief. On Wednesday, she called for Gov. Tom Wolf to order a special legislative session on property tax reform.
Vignone and Bethlehem Area School District Chief Financial Officer Stacy M. Gober spoke in favor of giving senior citizens expanded property tax relief by increasing the property tax rebated.
“You don’t have to change it all,” Vignone said. “Change it a little bit.”
Use table games cash to lower tax bills, Pa. lawmaker says
Gober also pushed for reinstatement of some of the state charter school tuition reimbursement, which was cut in 2011-12. Since 2006, Bethlehem’s pension and charter school costs have grown from $9.9 million to $60.4 million annually.
The district has 1,900 students enrolled in charter and cyber schools, which is larger than 44 percent of Pennsylvania public schools, Gober said.
“We are funding a separate school district within the Bethlehem Area School District system,” she said.
Vignone warned of the many unintended consequences of HB/SB 76.
Nazareth Area School Director Linda Stubits said there are many questions surrounding the bill and the district needs answers. Nazareth provides a high-quality education while doing the right thing by its taxpayers and students, she said.
She would love to see property tax reform but fears there are more questions and answers with the new proposal.
If districts receive their current funding levels, what happens if Nazareth sees an influx of new families, who are attracted to the area by not having to pay property taxes, she wondered. Would there be a funding increase? Or what if school choice options expand under President Donald Trump’s administration?
Stubits pointed to the many big box retailers opening warehouses in the area. Their tax dollars would be lost under HB/SB-76. In Bethlehem, the top 20 taxpayers are businesses that pay $18.2 million in school taxes a year, Gober said.
Sara K. Satullo may be reached at ssatullo@lehighvalleylive.com. Follow her on Twitter @sarasatullo and Facebook. Find lehighvalleylive.com on Facebook.
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