School boards are using me to deliver lies
The Pennsylvania School Boards Association (PSBA) has declared war on the taxpayers of Pennsylvania. This extremely powerful lobbying organization is currently using any and all means to publicize their propaganda throughout the Commonwealth. It started with an edict from the PSBA "encouraging" school administrators across the Commonwealth to condemn the Property Tax Independence Act. Administrators, acting as PSBA agents, are spoon feeding school boards a "sample" resolution to adopt at public school board meetings. The public is being bombarded with story after story in the media publicizing the PSBA's biased and misleading points of view. Some schools, such as Great Valley School District, have produced videos. Other school districts are using children as propaganda couriers, sending home letters – like this one – from Eastern Lancaster County School District. Not only is this a highly questionable use of taxpayer funding, but these supposed "leaders" of our educational institutions are setting a terrible example for our children.
Many of the PSBA's myths are debunked below. Follow these three simple steps if you would like to learn more about the Property Tax Independence Act.
MYTH: Local tax dollars don't stay local.
FACT: Passage of HB-SB 76 will enable a dollar-for-dollar replacement of all property taxes eliminated in each district. There is no formula and no redistribution of wealth. Annual increases are based on an inflationary index and are distributed to the schools equally on a percentage basis. In the event of an economic downturn all schools are guaranteed at least level funding with no reductions. All revenue is placed in a segregated account - the Education Stabilization Fund - for transparency and to prevent meddling. Any adjustments between districts must be done through the Basic Education Subsidy, the portion of school funding that is done through the General Assembly.
MYTH: It doesn't eliminate school property taxes.
FACT: Yes, it does via one of the following scenario's: 1) School property taxes will immediately be eliminated in areas where school districts do not have any long term debt obligations; or 2) School property taxes will be reduced, on average, 85 to 90 percent in areas where school districts do have long-term debt obligations. In this case, school property taxes will be eliminated after all long term debt obligations are met. Plainly spoken, if your school district has been fiscally responsible with your (taxpayer) money and has no debt then school property taxes in your district will be eliminated immediately. If your school district has been spending your (taxpayer) money like a drunken sailor on shore leave then you'll pay approximately 85 to 90 percent less in school property taxes until all your school district's debt is paid.
MYTH: It doesn't eliminate other local property taxes.
FACT: This actually is correct, it does not eliminate other local property taxes. The Property Tax Independence Act was never "sold" as a vehicle to eliminate all property taxes. In fact, the bill stipulates that only school property taxes will be eliminated. Period.
MYTH: It eliminates local control and/or creates a state takeover of public schools.
FACT: The current idea of local control is actually the myth. It is proven to be a myth by the more than 3,000 pages of rules, regulations and mandates handed down from states to local school boards. Actually, passage of the Property Tax Independence Act would enable true transparency of school district budgets. In fact, local taxpayers will gain far more control within their school districts via a no-exception ballot referendum. Requests for additional revenue from school districts (via a local EIT or PIT only) must be approved by taxpayers. The only thing eliminated is the ability of school boards to just ignore taxpayers. Plainly spoken, if your school district wants a college like sports complex they will have to fully explain their needs to you, the taxpayer. Finally, taxpayers would have the final say in funding said college like sports complex.
MYTH: It shifts taxes from businesses to individuals.
FACT: First and foremost, businesses do not pay taxes. Individual customers pay taxes. Taxes, including school property taxes, affect the prices of products that consumers pay. It's often argued that big box stores (such as Walmart or Target) will reap a windfall from the elimination of school property taxes. This is a tactic that is meant to stir the "class warfare" pot. What's not mentioned is the fact that small firms make up over 98 percent of Pennsylvania's employers. The statement that small businesses are the backbone of the economy is, indeed, true. In fact, if you look at statistics from the Pennsylvania Small Business Development Centers you'll see that most of these businesses represent local small "mom and pop shops" that have to fight tooth and nail to compete with the big box shops. Big corporate entities (such as Walmart or Target) can afford expensive lawyers (along with local and state puppet legislators) to milk the current school property tax system. A perfect example is local taxing authorities picking winners via specialized tax privileges. The little "mom and pop shop" that already is at disadvantage becomes even more pronounced when a large business is given a specialized school property tax break. Essentially, passage of the Property Tax Independence Act would turn the entire state into a giant Keystone Opportunity Zone.
MYTH: Harrisburg will play political games with the revenue.
FACT: All revenue collected goes into an account totally separate from the General Fund called the Education Stabilization Fund. A budget stalemate, for example, will have absolutely no affect on this revenue because the account is separate and free from the bonds of political gamesmanship. The Education Stabilization Fund does exactly what the name implies – it enables school districts to budget more precisely based on a constant and stable flow of quarterly payments from a funding source unencumbered by the politics of Harrisburg.
MYTH: It would take $14 billion to fill the void of eliminating school property taxes.
FACT: This actually is not a myth! Just three years ago the total amount needed to eliminate school property taxes was $12.6 billion. At that time the income tax increase needed to eliminate school property taxes was just over 4 percent. Fast forward to the present and the income tax needs to be increased almost another full point – to 4.95 percent. Why? Because entities such as the Pennsylvania School Boards Association (PSBA) don't want to admit that the school administrators and boards they represent have a huge spending problem. Under the current system of school property taxation these increases will continue to mount, unabated, unless taxpayers gain a true voice in how their schools are spending taxpayer money.
MYTH: School property taxes are stable.
FACT: School property taxes are far from stable! The stability comes from a system of taxation that enslaves families. Every year families across Pennsylvania are forced to figure out how to pay for rising school property taxes. These families have seen very limited or, in fact, no increases in income, yet, school spending continues virtually unchecked with no consideration of taxpayers ability to pay. From year to year the master takes hold of this virtual whip and strikes the taxpayer with more lashes. Eventually, the taxpayer is broken leaving his or her family without a home. Up to 10,000 people lose homes annually in Pennsylvania because of the instability created by the school property tax. Stability through force is not stability. It's enslavement - pure and simple!
MYTH: It doesn't address the factors driving school costs.
FACT: It most certainly does address those costs with annual funding increases pegged to inflation. What it means is that many school boards are going to have to tighten their belts and stop building unneeded Taj Mahal schools, outrageous sports facilities and other frivolous expenditures. Further, the enactment of the Property Tax Independence Act will force Harrisburg to finally address the pension problem and unfunded mandates. The days of Harrisburg simply passing these expenses to local school boards so the schools can be blamed for increasing taxes will be over.
MYTH: It removes all "safety valves" to cover unpredictable costs.
FACT: This is a big myth! Additional school district expenditures can be financed at the local level with an earned income or personal income tax. Entities such as the Pennsylvania School Boards Association (PSBA) oppose this, however, because imposing these taxes requires approval through a local voter referendum. They do not want true local control of taxation where the taxpayers have a voice in spending and taxation. They want to continue to allow the school boards unrestricted power of taxation so they can continue to tax and spend as they please.
MYTH: School property tax elimination will exacerbate school funding inequities.
FACT: Passage of the Property Tax Independence Act will lock the current inequities between districts in place, establishing a baseline for future correction of these inequities. Allowing the current system to remain in place will truly exacerbate the inequities as wealthy districts continue to increase taxes and the amount they spend on each pupil while poor districts with a stagnant tax base remain mired in education poverty. Entities such as the Pennsylvania School Boards Association (PSBA) are too interested in maintaining the status quo to realize the gross inequities and damage to poorer districts that is caused by current system as the gap between districts widens. In reality, the onus of the inequity in education funding falls directly into the lap of the Pennsylvania General Assembly's inability to come up with a truly equitable basic education funding formula.
MYTH: Increasing income and sales taxes will hurt renters.
FACT: This is usually framed around the idea that supporters of maintaining school property taxes actually care about renters. According to the American Community Survey (ACS), in the last three years alone median rent has increased by 5.47 percent. The largest factor in the increase of rent is the property tax. If those trends continue, Pennsylvania's renters would see a 27.4% increase in rent over the next 15 years. They also fail to mention the fact that by shifting to a personal income and sales tax the burden of increasing rents due to rising school property taxes will no longer be there to drive up the cost of rent.
Click here to download the Property Tax Independence Act: Myth vs Fact information sheet.