Received this from http://www.pahouse.com in my email today - thought I’d share it with you all
January 27, 2006
Rep. H. William DeWeese, Democratic Leader
Rep. Mike Veon, Democratic Whip
A real chance to do something about property taxes
Homeowners in Pennsylvania have been waiting for property tax relief for a long time. As slot machine gaming gets closer, an important part of that relief is on the way. House Democrats led the way on slots and we are again at the center of the effort to increase the size of property tax cuts by finding additional sources of revenue.
This week, we announced our support for a compromise plan that we believe has the best chance of becoming law and providing the quickest tax relief. The compromise we are supporting would cut school property taxes by one-third to one-half for homeowners by combining three revenue sources to take the burden off older residents and help young working families get their piece of the American Dream by being able to afford to live in their first home.
Our plan would:
-direct the anticipated $1 billion in annual slot gaming money to every school district for property tax reductions (current law gives districts the option to refuse to take part);
-let voters in each school district decide in 2007 if they want a higher Earned Income Tax, with the proceeds used to further reduce homeowner property taxes in that district;
-add a half-penny increase in the current state sales tax - with no changes to the current exemptions on selected goods or services - immediately providing more than $700 million each year for additional tax relief.
Governor Ed Rendell has gone on record in support of this tax-cutting effort, and we know we can count on the same leadership he showed during the successful effort for slot machine gaming.
The bottom line is that property tax relief is long overdue, and this compromise plan has the components to get it done.
House Democrats leading the way
While the quest continues unabated for meaningful property tax relief, House Democrats are building a remarkable record on many of the other issues that matter most. Rep. Camille “Bud” George joined the governor this week to announce an expansion of the state’s heating assistance program. Rep. Michael McGeehan is fighting for justice for people convicted of crimes they did not commit. Reps. Stephen Stetler and John Myers are focusing attention on ways to reduce trafficking of illegal handguns. Rep. Dan Surra is pushing for safer working conditions for the state’s underground coal miners. Rep. Ted Harhai’s persistence resulted in great news for constituents waiting for a major sewer construction project. And Rep. Linda Bebko-Jones and other women legislators will provide valuable insight this Monday into the fight for a fairer minimum wage.
It does not fix the system completely. It shifts the burden from the home owner to the income earner and spender. It also relies on gambling revenue which at this time does not exist and may never exist at the levels they “anticipate”. Let’s face it, using gambling revenue for education was the only way they were able to sell slots so I am sure they over estimated revenues.
By expanding the sales tax, you shift some of the burden to the non-resident that shops in your area. That is one positive. But spending does need to be controlled or you will be back here again in a year complaining… Harrisburg never seems to get that (neither does the Fed or any other state).
In my opinion the problem of taxes goes way beyond the school crisis. Growth, generally, is out of control in York County and people’s attitudes and expectations are inconsistent with quick resolution of the problem. The southern tier of municipalities is a cheap haven for the Baltimore labor force. Population growth is double digit. There needs to be tighter management of sprawl in York County and, especially, in those municipalities in the Baltimore commutershed. Though I hear that Hopewell Township (where I live) has a very conservative view of growth, I am not convinced. The next big expansion of Stewartstown Station I am told will be on the plot to the south and west of Barrens Road and Plank Road. It is not just the schools that are strapped financially and unable to keep up with the pace of growth. So, too, are police, street maintenance crews, refuse collection, recreation facilities, and every other public service. In short, demand exceeds supply. The public sector cannot keep up. This puts more stress on individuals by increasing taxes, causing more congestion, fostering more crime, and making life less pleasant in many respects. The ultimate effect is a reduction in the quality of life.
In short, demand exceeds supply. The public sector cannot keep up.
Call me a simpleton, but doesn’t the great influx of people provide a lot more tax dollars by itself without having to raise taxes one dime? While it is true that our town’s infrastructure is struggling to keep up with the growth, it seems like a lot of the growing pains aren’t directly related to revenue, but space and planning issues. When people move in, property and income taxes are added to our state/county/school district.
As far as quality of life goes, I suppose that depends on what you’re looking for. I think maybe we are fighting the inevitable by trying to keep people from moving into S. York County. As far as the struggle with public services and congestion etc, the supply will probably catch up to the demand eventually, but it seems that small-town life in this area is becoming more and more a thing of the past. But hey, we’re not Bel-Air yet!
Residential tax payers consume roughly $1.25 for every dollar they contribute in taxes. I don’t recall the source of this but it was on here previously. Commercial consumes less than $1 per $1 and industrial and ag are the lowest. It has a lot to do with the costs associated with supporting a tax payer and their family… fire, EMS, police, water/sewer, roads, schools, local gov’t costs, etc. A business consumes less of these items then a single family home does. For example, a business does not need to make use of schools.
So adding more residents does increase the tax base, but it also increases the cost associated with them. It nevers catches up or moves ahead of the curve. That is why a good balance of commercial, industrial, agriculture and residential is required in order to survive without being a burden on any one group. If you ever want to experience this situation, try playing SimCity (EA Games) sometime. Many colleges are using this as a tool to teach students the importance of planning, balancing the tax burden, providing services, etc.
To give examples of how a residential household uses services more than a business..
A typical house will over a 5 year period…
- use the police for something..
- use the ambulance
- use zoning for shed/decks/additions
- zoning violations
- street plowing, sweeping (parking lots are privately owned, and maintained)
- send 1,2 or more kids to school for 18 years
- use the recreation facilities
A business however
- doesn’t send kids to school
- rarely will use the ambulance/police
- will use zoning only once when the building is being built but probably no more/less than house, but they also will pay allot more
for their permits
- have to pave their own lots, plowing etc..
- typically have higher access values for their buildings though they do pay the same tax rates
- doesn’t use the recreation facility
I am not sure that most of the differences sighted are causing the dysfunction in the School Funding.
- use the police for something..
Police action is based on criminal activity / civil action. Business property reports are prevelant. Road issues (Drunken driving, speeding, etc..) are not a homeowner vs. Business issue. This does not affect the school system of funding
- use the ambulance
The ambulance service in Stewartstown and surrounding area is not a government provided function (atleast not yet). We donate to the service and support as a community. This does not affect the school system of funding
- use zoning for shed/decks/additions
We pay for the service when requested. Business fees are higher. However, many areas do not require permits to add a deck to a home, adding a shed to the yard, and placing a fence up. This acutally helps the school system by documenting property improvments that cause proprty values to increase. This inturn causes school taxable values to increase.
- zoning violations -
Zoning is a Governing function, Violations are usally followed by a citation and a fee for failure to comply with zoning regulations. This is a civil issue. Business and Homeowners alike would be subject to fines for violations. This does not affect the school system of funding
- street plowing, sweeping (parking lots are privately owned, and maintained) -
Street plowing is based on a public roadway. Homeowners and Business both use the public roadways. My driveway (parking lot) is privately owned and maintained). This does not affect the school system of funding
- send 1,2 or more kids to school for 18 years -
Here is something that really is difference. Hence, the need for reform. Businesses benefit from an eductaed workforce. Right now I have three children utilizing public school system. I am “underpaying” for the use of the system right now. However, From the age of 18 to 27, I overpaided for the system. I had no children in the systemat that time period. At the age of 48 on, I will have no children in the public school system and will contiune to pay for the “common good”. The balance sheet will sum out over time. If I live long enough, I will overpay.
- use the recreation facilities -
Businesses utilize the recreational facilities (fund rasing at the fair grounds - pay a fee for booth). They also hold events at those locations. This does not affect the school system of funding
I agree with you that the school system is in drastic need of reform and the funding system for the school system is broken! I would rather see you on the school board than council! I will say Thankyou for being one Council Member that engages in on-line discussion of problems and solutions!
EMS, Fire and Police service are a function of local governments. The local municipalities are obligated to provide these services in some fashion, either by contracting with a service or providing their own service.
In the case of the Stewartstown area, Stewartstown Borough, Cross Roads Borough, Hopewell Township and East Hopewell Township are served by Eureka Volunteer Fire and Ambulance for fire service. Some money is provided to assist with this service but the majority does come from donations and fuind raisers. EMS service is also provided to parts of North Hopewell Township and funding comes from tax money, billing, fund raisers and donations.
The comment I made about how a resident uses more tax dollars than a business still stands true with schools. Businesses do not send students to school. Residential properties do. If you have a large number or residential properties as compared to commercial/industrial, you will have an inbalance. I forget what SESD said it cost per year per student, but it was somewhere between $6K and 9K. I know if I had kids, my house would not cover their costs and I have a house valued in the upper areas. I would only be covering about 1/3 of one child. Imagine if I have 2 or 3 or 4…
The fact is there are very few businesses in SESD. There is very little commercial or industrial development in Delta/Peach Bottom. There almost none in Fawn and Fawn Township (Rutters, a bank and a few small businesses). The Borough of Stewartstown has some good commercial but no industrial anymore. East Hopewell only has the golf course. Hopewell Township is carrying all of the school districts potential money.
Excelon (Peach Bottom Nuke Plant) has been screwing the school district for years. They won’t pay property tax on their fair value (they argue their fair value). Several of the industrial businesses in Hopewell are under a LERTA (tax abatement) which lasts for up to 10 years from the time they break ground. The good thing is that Home Depot, Ruby Tuesday, Cracker Barrel and the Hampton Inn were excluded from the LERTA so they are paying full fare. Only Oakworks, EPI and Baltimore Steel got the breaks. They pay an increasing amount each year.
Yes, the system is broken. Example: Renters pay property taxes via rent, but most of the time they pay a disproportionately lower amount then a home owner. Case in point… Main St Stewartstown… most of the apartment units near the square are valued around $120K. Assume for a moment that there are 4 apartments. That property only generates $2000 or $500 per family.
The person that owns a single family home valued at the same amount pays the full $2000 in property tax. Those of us that own a home are carrying a bigger burden then a multi unit renter would.
In a nutshell, we need more businesses paying their taxes. We need to get rid of deadbeat business problems (Excelon). We need the state to fund at the level they agreed to (50% not 39%). If you look at what Excelon owes us or the state owes us, you will find the short fall in funding this past year and then some. Even still, property tax is messed up which is why I support enlarging our tax base (by combining school districts) or moving to a sales tax based system statewide with funding based on need and growth issues.
I am sure nothing is perfect, but the only ones winning right now are Philly and Pittsburgh, both of which have declining enrollment in their schools but yet get the same level of funding they did years ago.
One more thing to consider - the study that was done regarding the amount of taxes paid/services used was based on municipal taxes - not school taxes. This is the property tax you pay to your local municipal government, which in effect pays for road maintenance, salaries, emergency services, etc.
Zoning should pay for itself, since you have to pay for the permit and any follow up inspections.
One study was done for Hopewell Twp and another for Shrewsbury Twp. Not sure if the Hopewell
study is available on line any longer, but the Shrewsbury study can be accessed through the Twps website http://www.shrewsburytownship.com.
I realize the study was for municipal taxes. I should have been more specific, but the parallels are the same if you look at it deeper. No matter what tax is charged (school vs. municipal), the resident almost always uses more than they give. It is even more of a problem with schools.
I just checked the SESD website. The cost per student this year is $10,520. If a house is assessed at $200,000, you are currently paying about $4,270 in property taxes to the school. Plus you also pay 1/2% in income tax. No where close to the cost of covering even one kid, let alone two or three.
Property tax will drive people to leave the area or they will be foreclosed on over time. The state is not doing anything meaningful to fix the problem. The burden needs to be moved from the home owner to the consumer and spread out across the state so that the have-nots (non-commercial/industrial schools) get a break. Schools like Suburban, Central and Red Lion enjoy a large commercial/industrial base. We all shop there too, so we end up supporting their schools. Wouldn’t it be nice if we got some of that back? We would under a county based system or a consumption tax option.
I think it is worth exploring. I am not saying it is the perfect answer but we have to find something soon or areas like ours will be in trouble. I also support curbing residential growth and curbing it hard.
$10,520 per student? Do you look at that number and think that’s normal? I really don’t know, just thinking about home schooling and some private schools, being nowhere near that number and getting a better result.
Is that inline with other districts, anybody know what the cost per student is in a county run system? You know, even if it is, seems to me like you need to focus on getting that reduced.
Alex, I understand the parallels between municipal taxes and school taxes, I just didn’t want others to think that those figures applied to school taxes
In 2002, SESD spent about $9,062 per student. The County average was $9,819 and the State average was $10,755 per student. This puts SESD below average on spending per student.
An interesting note on this… Student Proficiency… we were slightly below average County and Statewide, with the exception of graduation rates and Grade 11 testing. It seems from this, our elementary and middle schools are lacking, but things are picked up in high school (or dumbed down more).
Our staffing is about average with 16.4 students per teacher which is higher than the state average but in line with the county. Now students per total staff is interesting. We are at 9.9, state is 7.8 and county is 8.8. Could this be some fat to trim? Over staffed maybe? According to the site, we are way above average for library aids, guidance counselors and administrators.
All salaries are lower than state and county average. In some cases, substantially. When I reviewed spending distributions for 2002, there were a few things that jumped out at me. For the most part we were within a few tenths of a point for state and county averages except for:
Transportation, 9.1% SESD, 5.5% State, 4.8% County
Purchased Services, 26.1% SESD, 19.8% State, 19.1% County
Alternative Education, 1.3% SESD, 0.8% State, 0.5% County
It is hard to figure out the problems from these numbers. It seems that our students are not getting the best money can buy, but it is what our money can buy. In other words, we either need more money or we need to find ways to use the money more efficiently such as increasing teacher salaries (theory is getting better teachers), reduce transportation costs and purchased service costs. Alternative Education is a requirement based on special needs students so not much we can do there. We could reduce admin costs too… having two middle schools with mirrored admins in both is stupid. Why is it that we only needed one principal in the 90’s when we only had one building? Heck, when I went to school there, we had one principal between all three elementary schools. Why can’t we reduce expensive admin costs here some how?
So, if 2002 spending was $9,062 per student, we’re paying $181,240 to teach basic skills to a classroom of 20 kids! (And remember, that’s four years ago .) That’s insane, and I don’t care if the insanity is comparable to other counties, states, or whatever—it doesn’t make it right.
What would you think if you heard this: “I’m in debt to credit cards for $50k, but my neighbor’s in for $75k. Is he an idiot or what?” That’s what these comparisons sound like to me.
There are many problems in the government schools, but lack of financing is not one of them.
