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The election for all the school boards is front and center once again in the May election. The May 18 election is certainly generating a great deal of interest and anxiety for all the various interested parties.
In discussing the concerns with a friend of mine who is a retired teacher, he commented that our school property taxes, while a concern, are some of the lowest millage rates in the state. I noted that while that is true, the impact of rising taxes on those without any retirement plans and without savings who have been devastated financially by the pandemic is horrific.
This school board election is bringing to surface the fiscal woes facing our school districts as well as those who pay the property taxes. In summary, it is a collision of two wonderful groups of people each of whom are being impacted differently by such a complex problem as school funding.
The Independent Fiscal Office recently released a response to my request for updated data on the school property tax elimination proposals and provided this summary of where school property taxes are headed.
The forecast is not a good one to say the least. School property taxes are due to increase by almost $600 million per year for the next five years and property taxes locally can be expected to increase by approximately 2.5% per year for the foreseeable future because of it.
Last session, I announced a draft House Bill 13, the School Property Tax Elimination Act, in August 2019 to get rid of school property taxes. The bill called for a tax on non-Social Security retirement income and it excluded your own pension contributions from the tax. Seniors would have saved over $2 billion annually in school property taxes under my bill.
After traversing the state for a year, we found that the acceptance rate overall on the draft HB-13 was about 65%, with 15% undecided, and 20% vehemently opposed.
At the same time, I was working with the legislative and executive branches in a working group on property taxes. After three months of study no consensus had been reached. There are many competing plans, but none have consensus.
Because the difficulty in the working group in achieving consensus, I have decided to table House Bill 13 and after much reflection I decided this session to start a working group myself.
This time though the working group is made up of citizen property tax elimination groups, PSEA, PSBA, PASBO, Pa Chamber, AARP, senior residence facilities and many other groups that expressed apprehension about property taxes – either for it or against it.
Our working group is focused on the following principles:
- Keep any tax shifts local so that property taxes are replaced with local funding sources of taxation.
- Develop a program to ensure that funding for schools is stable.
- Do not disadvantage one demographic at the expense of another group.
- Be cognizant of the problems of the “fair” funding formula to our school.
- Develop a program that recognizes the growth of our community in school age population.
- Remove the potential loss of one’s home to taxes or unforeseen medical costs so that seniors are able to plan.
- Avoid temporary solutions in favor of a long-term solutions.
Our working group also agreed to a right of non-attribution so that ideas can flow freely without fear that our thinking outside the box limits creativity in developing a solution.
I have been pleased that ALL groups have approached the bargaining table in good faith and have offered some fairly creative ideas on how to approach the concerns.
Our next step is to ask the group if there are any issues that are not negotiable so that we can start to frame a solution.
In all candor, the property tax and school funding problem will NOT go away and, if we do not solve it soon, it will crater sectors of our Commonwealth.
This is a problem which can be solved. This is a problem which must be solved for the future of our community, our children, our schools, our seniors and our working families and individuals.
I welcome your ideas but, most importantly, I welcome your flexibility to listen to other ideas before responding.
My thought is if we can convince people that everyone has something to lose if we do not address our problems, we can then solve these problems.
Frank Ryan, CPA, Col USMCR (Ret) represents the 101st District in the PA House of Representatives. He is a retired Marine Reserve Colonel, a CPA and specializes in corporate restructuring. He serves as Vice Chair of the PSERS Pension Board and its Chair of the Audit/Compliance Committee. He can be reached at fryan@pahousegop.com.