PSBA Property Tax Reform Blueprint

The PSBA unveiled its Blueprint for Comprehensive Local Tax Reform, which has some good ideas, some misguided notions, and some bad ideas.

The Good:
1. Create a state funding formula which creates a funding level per-student.

We support this notion, probably to a more radical extreme than the schools boards. Money should follow the child, not flow to districts based on politics. A formula such as Weighted Student Funding – where per-pupil funding (with higher levels for special needs and low-income students) follows the child to whichever public school they choose to attend – would meet such a formula.

2. Repeal Prevailing Wage laws

Prevailing wage laws drive up the cost of school construction by 10 to 20%. We support the PSBA’s effort to repeal prevailing wage laws for school construction (we would in fact, extend the repeal to all levels of government).

3. Relief from and repeal of costly, unfunded mandates.

We support giving local schools and parents greater control over the delivery of education. We think that the number of mandates should be reduced, but we also think more school districts should use apply for the Mandate Waiver Program than simply shift blame to the state for their own spending decisions.

The Misguided:
1. Give school districts greater authority to assess a variety of different taxes.

While tax competition between districts is a good idea – find the right mix and the least bad form of taxes – without school choice or voter referendum (see below), this gives too much power to school boards.

2. Increase state funding of public schools to 50%, but don’t replace local funding.

The PSBA argues that the state share of school spending has declined over time – but this is only because state spending, while escalating dramatically, has not grown nearly at the exorbitant rate of property taxes. The PSBA does not explain how this 50% ratio will be ensured – if school districts choose to increase spending, is the state required to match it?

The Bad:
1. Provide additional reimbursement rates for charter (and cyber charter) students & implement moratorium on new charters schools.

Charter schools get funding from districts for each child they enroll – equal to the per-pupil spending on instructional and educational services (excluding debt, construction, transportation, etc) of the district. In other words, the district keeps a portion of their per-pupil revenue (about 30%) for students they no longer educate. Additionally, the state reimburses district for charter school students (about 27% of the of cost). Thus districts keep about 50% of their per-pupil costs of children charter schools educate.

If local districts will retain power to authorize (see misguided #1 and #2) taxes for 50% of public schools, then public school students – charters and cyber schools are also public schools – deserve equal funding as district students. We need more competition in public education, not less, and this PSBA recommendation is simply calling for greater monopoly power.

2. No referendum on future tax increases

The PSBA opposes letting voters have any say over future tax increases (see Misguided #1). We think referendum on all tax increases are necessary, will work, and will force districts and the state to get serious about mandate reform (Good #3).

3. No School Choice

School Choice gives parents greater control over the education of their children, promotes health competition among schools, and saves taxpayers money. The Commonwealth Foundation unveiled a plan last year which would provide school choice to thousands of families and reduce property taxes by several times the amount of relief under Act 1, with shifting to another tax.