Tuesday, November 11, 2014

SB 76 and equal funding for schools

SB76, the bill to end property taxes in Pennsylvania, is a bad bill on a number of levels.  First of all, it will exempt huge corporations from paying any property tax.  Kovatch, a major contributor to Panther Valley School District, and Wal-Mart, a major contributor to the Lehighton Area School District, would pay no property tax.

Secondly, SB76 will raise the income tax.  In Pennsylvania, by Constitutional provision, taxes must be of equal percent.  Unlike the federal government, which has a graduated income tax, in Pennsylvania everyone pays the same percent.  If you make $2,000,000 a year, you pay the same percent as if you make $40,000 a year.  That is sometimes called a “flat tax,” but it actually regressive.  Who will have the harder time paying 3.07%--the millionaire or the $40,000-a-year guy?

Third, SB76 will raise the sales tax.  This is bad on three levels.  Sales taxes fluctuate wildly with economic swings, meaning deficits will be likely.  Secondly, the sales tax will apply to more items.  Finally, the sales tax is a regressive tax.  Poor people actually pay a higher proportion of their annual income in sales taxes than rich people pay.  If you don’t understand the reason for that, I’ll explain it in a later post.

Finally,and this is the big one, SB76 locks in the current spending in school districts.  Panther Valley, one of the poorer districts in the state, will remain a poor district.  Lower Merion, of course, will be funded at a high level.

But wait.  Six school districts are suing Pennsylvania.  The districts, which include Panther Valley, say the state has failed to meet its constitutional obligation to “...provide for the maintenance and support of a thorough and efficient system of equal education” for the state’s students.

An aside here:  In 1971 the California Supreme Court ruled in Serrano v. Priest that the state’s school funding law denied students in poor districts an equal education, and thereby violated the state’s equal protection clause.  A later case reaffirmed the decision and gave California six years to to equalize funding.

In 1973, in San Antonio School District v. Rodriguez, the U.S. Supreme Court ruled that unequal schools did not violate the 14th Amendment’s equal protection clause, saying that education was not a fundamental right.

That is why the Panther Valley case is using the Pennsylvania Constitution to challenge the funding formula.  Similar cases in the 1990s were dismissed because the Court had no basis on which to judge success or failure.  Now they do--the results from state-mandated testing are public, and in fact, were published in a recent issue of the Morning Call.  Panther Valley students compared poorly to the other school districts, but wouldn’t you expect that of a poor district?


For those legislators, such as Doyle Heffley and John Yudichak, who support SB76, heads up.  I believe the Court will rule that funding will have to be substantially equal.  That ought to pull the rug from the present method of school funding as well as SB76.  It’s about time.

3 comments:

  1. This is yet another example of the rich getting more than they need and the middle class and the poor paying for it. Just more wealth transfer. Greed does not serve the people!

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  2. Well said rj.
    The income tax is going up? Is this the same income tax increase that the Democrats where accused of supporting in the election?? This bill is totally designed to benefit the rich. The poor and middle class who support Republicans are convinced their taxes will go down by voting Republican. Most will be wrong but Walmart and Kovatch will be big winners. To keep the retired people from losing their homes is a noble goal but is the wrong way to do it.

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  3. There is only one way to fix property tax and that is total elimination. Here in PA every year approx. 10,000 homes go to Sheriff sale. Some home owners just walk away from there homes since they can no longer pay these ridiculous taxes. Besides there is no such thing as property tax relief, so lets stop kidding ourselves.
    In my case it takes 26% of my social security to just pay property taxes.
    If I payed an increase sales tax on every dollar that I spend I would never come close to what I pay in taxes. It could be 10% for that matter and stil be better for me.
    A person earning $100,000 a year an additional 1 % would only be another $1,000. I would gladly pay that if I were making $100,000 a year.
    The supreme court said back in 1841 (not certain of exact year) that property taxes were legal. Just recently the supreme court ruled that corporations are individuals and that makes them legally the same as you and me.
    The elimination would create a boom here in PA that it would hard to believe the growth that we would see. New homes, new companies, that would create many new jobs for builders, workers to name a few.
    We need corporations. Part of my working life was that of company vice-president at a small electronics company and I know how hard it was to keep that company solvent. There are many taxes that a company has to pay that the average lay person doesn't realize.
    Bottom line Property taxes must go and never to return.

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