The Commonwealth Foundation has long advocated for an education funding formula based on student enrollment and student need. This afternoon, the Basic Education Funding Commission released a report that aligns with those objectives.
The Pennsylvania Department of Education recently released new expenditure and revenue figures for the 2013-14 school year. This memo presents trends in school spending, revenue, pension contributions, district fund balances, and property tax increases.
Today, Commonwealth Foundation Vice President of Policy Analysis Nathan Benefield will testify before the Senate Environmental Resources Energy Committee and Senate Finance Committee on the impact of Gov. Wolf’s proposed natural gas severance tax.
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This is what desperation looks like.
Gov. Tom Wolf recently visited Downingtown Area School District and claimed the no-tax-increase budget he recently vetoed "includes only $8 million for education—that’s less than 3 cents, per child, per day."
Where to begin? To start, let’s clarify that the Republican budget spends more than $10.4 billion—that’s billion, with a B—in support of public schools. Gov. Wolf’s $8 million figure is misleading because it refers only to the increase over the previous fiscal year.
The $8 million figure also happens to be false. The budget Wolf vetoed includes $100 million in new Basic Education spending, $20 million in new Special Education spending, $30 million in new early education spending, $50 million in new higher education spending, and $573 million more for school pensions. Sure, these totals are less than Gov. Wolf requested in his March budget proposal—a spending and tax package that was voted down 0-193—but the Republican plan spends money the state can actually afford.
As for the "3 cents, per child, per day" remark? It’s a cute talking point from a governor who, as PennLive recently described him, acts "less like a chief executive and more like a perpetual candidate."
But it tell us nothing. If, for example, we applied the same math to the mythical "billion dollar education cut" often decried by the governor, it would amount to a reduction of 3 dollars, per child, per day. Keep in mind, too, that this "cut" is a complete fabrication.
Over the past week, we've learned the Wolf administration is fixated on tax increases, adept at parroting union talking points, and prone to dividing by large denominators. The time has come to retire from campaign mode and face reality.
At the end of last month, Gov. Wolf vetoed the Republicans’ budget, criticizing it for failing to meet his lofty goals of closing the structural deficit, increasing education funding through higher energy taxes, and providing property tax relief to homeowners. Those goals come with hefty price, primarily more taxes for Pennsylvanians at all income levels.
Here’s why: If we concede (we shouldn’t) the severance tax won’t hurt people in low and middle income households, it still won’t raise enough revenue to pay for the governor’s education proposals, let alone his plan to reduce property taxes or close the deficit. To raise enough revenue for all three priorities, he needs broad-based tax increases, which Republicans have ruled out.
Right now, there has not been any better ideas presented to us than increasing the personal income tax, increasing the sales tax, while providing the property tax relief that was not included in their budget
The governor has drawn a line in the sand: Either tax low and middle income families or Pennsylvania continues to operate without a budget. His position is puzzling considering he campaigned on protecting low and middle income people from tax hikes.
Not only is Gov. Wolf breaking one of his core campaign promises, but his position won’t fix what he sees as some of the state’s biggest problems:
The structural deficit: His own budget plan—and the gigantic tax increase accompanying it—won’t eliminate the structural deficit. According to the Wolf Administration’s own calculations, by 2016-2017, the state would face a $318 million deficit under his plan.
Severance tax/education funding: The governor wants to impose a severance tax on the natural gas industry. He’s too late. Pennsylvania already has a severance tax, but it’s described as an impact fee. And according to the Independent Fiscal Office, it’s the equivalent of an effective 4.7 percent tax rate on production. The revenue raised from the tax rate is just one of the many taxes the natural gas industry pays.
Yet the governor continues push for an even higher severance tax to "restore education funding cuts of the last four years." There are two problems with this narrative. One, education spending is at its highest level ever. Two, there is no link between higher levels of education spending and academic achievement.
Property tax relief: Providing property tax relief through tax shifting treats the symptom instead of the disease. Property taxes are on the rise because education spending is ballooning. If the state shifts the tax burden, but doesn’t control education spending, taxpayers will continue to take a hit, just in a different pocket.
Gov. Wolf can break the budget impasse and provide Pennsylvanians the “fresh start” he promised during the campaign, but he’ll need to abandon his fixation on the stale policies of the past.
There's a lot of misinformation being thrown around about the Pennsylvania state budget and education spending. While folk are entitled to their own opinions, they aren't entitled to their own facts.
The charts below illustrate some of the key trends and data points in Gov. Wolf's proposed budget and in state education spending.
Scroll down to advance the slideshow.
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