Testimony of Matthew J. Brouillette, President, Commonwealth Foundation
Thank you Chairman Rohrer and members of the House Subcommittee on Basic Education for the invitation to testify this afternoon on House Bills 1250 and 580. My name is Matthew Brouillette and I am president of the Commonwealth Foundation, a Harrisburg-based research and educational institute that focuses on Pennsylvania public policy issues with a particular emphasis on education policy. I also bring with me many years of practical experience on the frontlines in the classroom as a teacher at the middle school, high school, and university levels, and as a former public school board member.
Let me begin by stating that this committee is considering two very diametrically opposed bills that could have a significant impact on property taxpayers across this Commonwealth. As you are well aware, property tax increases by local school boards have far outpaced the rate of inflation for decades. Indeed, between 1980 and 2000, local property taxes for school purposes grew by nearly 240% while inflation grew at 85%.
The current property tax crisis in which many Pennsylvania homeowners find themselves is primarily due to the fact that school boards in this Commonwealth wield unilateral taxation power. The power of school boards to tax residents without their direct consent continues to drain extremely limited resources from working Pennsylvanians’ paychecks and senior citizens’ pensions and retirement funds. While the overwhelming majority of school boards across the nation are denied such unilateral power to tax, Pennsylvania school boards have historically increased property taxes at double and triple the rate of inflation.
Currently, before school districts contract for construction, contract to lease, or construct new school facilities at taxpayers’ expense, school boards are required by law to receive the “consent of the electors” through referendum or by holding a public hearing. It is no surprise that when given the option to conduct a public vote versus merely holding a public hearing, school boards overwhelmingly choose not to go to the ballot box. Indeed, it is highly unlikely that any of the 48 capital projects totaling nearly $1 billion during the 2002-03 school year (according to the Pennsylvania Department of Education) were done with direct electoral approval via referendum. Nevertheless, the local taxpayers will be paying for school district projects ranging in value from $5.2 million to nearly $85 million after having very little, if any, input into, and virtually no power to control the process.
Yet the sponsors of HB 580 want to further streamline the taxation power of school boards to take more money from taxpayers and property owners. Instead of increasing the involvement of taxpayers in the spending of their money, HB 580 would allow school boards to skirt altogether the public’s “interference” in their school facilities decisions by being able to get a waiver for holding even the public hearing.
HB 580 is most troubling given the fact that school boards in Pennsylvania already wield an inordinate amount of taxation power. While it is no surprise that the Pennsylvania School Boards Association is pushing for the complete circumvention of public input on multi-million dollar school construction projects, this special interest legislation would serve to only exacerbate the current school property tax problem in Pennsylvania. At least under current law, taxpayers can go to the public hearing and voice their concerns. While residents already lack the power to control these tax increases—a power enjoyed by citizens in nearly every other state in the country—HB 580 would permit school boards to completely deny citizens even their symbolic influence on multi-million dollar district decisions.
That is why I’m pleased to see this committee considering Rep. Matthew Wright’s HB 1250. While HB 580 would further restrict taxpayer input on multi-million dollar decisions, HB 1250 would provide much needed electoral control of such expenditures.
Instead of exacerbating the school property tax problem, as does HB 580, HB 1250 is part of the solution to our current tax crisis. Rather than allowing school boards to circumvent the very people who will be compelled to pay for new capital construction projects, Rep. Wright’s bill will require electoral approval of these multi-million dollar projects before the school board may proceed. It is clear that the people of Pennsylvania deserve more input—not less—in school tax increases, and HB 1250 provides such taxpayer protections.
Opponents of school tax referenda reject direct voter involvement in such decisions for various reasons. But let me address two of the most commonly made arguments.
First, opponents of electoral approval of tax increases argue that this power is a responsibility of elected officials, and allowing or seeking taxpayer consent is somehow a “passing of the buck” or “shifting of responsibility.” This is simply not the case—and is in fact exactly backwards. Allow me to explain.
It is true that school board members are elected as representatives of the people. This, however, hardly suggests that the electorate should never be consulted (except at re-election time) and that board members can act as tyrants in the interim. Indeed, a clear expression of the will of the people on such important fiscal matters as multi-million school construction projects and tax increases should be desired by our elected officials, not rebuffed or avoided.
Instead of passing the buck through referenda, school board members would be seeking electoral consent on plans developed, crafted, approved and presented to the public by board members. No school construction projects or tax increases are ever developed by the electorate. Rather, a referendum would merely seek input and approval from the people that will be compelled to pay the increased school costs for many years to come. Clearly, this would increase board member responsibility and accountability to the people whose interest they were elected to represent—not reduce it.
Another common argument against taxpayer referenda is that voters can say “no” to tax increases. This, of course, is true when you give people choices instead of compulsory directives. However, the notion that taxpayers will always vote against tax increases has not been borne out in states that require elector approval of school construction projects.
For example, during the 2002-03 school year in Michigan, voters were asked to approve 69 separate bond proposals for school capital projects totaling more than $1.3 billion. If the critics of referenda are correct about how taxpayers will respond when given the power to vote, then one would expect that Michigan voters soundly defeated these tax increase proposals. They, however, would be wrong.
The reality is that more than 60% of the proposals, totaling more than $423 million, passed with voter approval. (See Table 1 below.) But even the minority of school boards that fail to get voter approval of their proposed projects can come back to the voters with a revised plan. These repeated attempts are usually scaled-back versions that eventually meet voters’ willingness to pay for well-explained and necessary projects.
In Ohio, where voters must approve all local tax increases, voters have approved more than 62% of the tax increases put before them over the last five years.
The point, of course, is that voters in states where elected school board members must get electoral consent on school tax increases have demonstrated a willingness to voluntarily raise their own taxes for their local public schools. That is why the PSEA’s efforts to liken the referenda movement in Pennsylvania to California’s recall debacle and the PSBA’s offensive move with HB 580 are merely scare and stall tactics designed to prevent even minimal taxpayer control of out-of-control school spending.
While HB 1250 attempts to provide some limited taxpayer control, we all know it only begins to deal with the tip of the fiscal iceberg that is sinking many Pennsylvania families and seniors. Much more will have to be legislatively done to curb a public school system that straps Pennsylvania taxpayers with the 4th highest per-pupil expenditure in the nation (when adjusted for the cost of living) and some of the worst SAT scores in America.
Yet while more dollars have consistently failed to produce more scholars in our Commonwealth, the defenders of the educational status quo want to use HB 580 to help them further circumvent the taxpayers of this state by denying them any input on school expenditures. While HB 1250 is hardly the panacea for the current school property tax crisis, it is definitely part of the remedy—and could be improved even further with additional amendments and legislation.
Thank you again for the opportunity to address you this afternoon, and I look forward to answering your questions.