Viewpoint ? Pennsylvania's school-funding crisis

by G. Terry Madonna

and Michael L. Young

These days, the word crisis has become a tedious clich?, much overused and abused by those for whom every problem becomes a looming catastrophe. But the unparalleled challenges now confronting the financing of Pennsylvania?s public-education system do constitute a genuine crisis, one that if left unsolved threatens to transform Pennsylvania ? educationally, economically, culturally, and even socially ? into a permanent backwater.

Across the commonwealth, dedicated teachers are being furloughed, vital programs are being curtailed, entire schools are being shut down and an entire generation of students may be losing their access to a quality education. That?s just the good news.

Worse is that the furloughs, the cutting and the closings are all going to accelerate in the coming months and years, bringing further assaults upon Pennsylvania?s public-education system. The consequent damage to the quality of education, the future of our children and their ability to compete in the emergent global economy cannot be exaggerated.

And whom, or what monster, shall we blame for this monstrous calamity? Are evil teachers unions behind this looming disaster? Or perhaps corrupt politicians, or even grasping school boards? No. None of these ?usual suspects? can take the fall for this one. Our financial crisis is not due to greedy teachers, incompetent administrators, angry taxpayers, manipulating political parties or even super PACs.

In fact, the villain behind our educational woes isn?t even a person or institution. It?s a tax that most of us are all too familiar with: the real estate property tax, better known as simply the property tax.

What about the simple property tax is so atrocious, so flawed and so defective that we ascribe to it most of the contemporary problems of financing public education? That?s a good question, one to which a lot of thought has been given.

The (very) short answer produced by legions of public-finance experts is that the property tax is grotesquely unsuited to modern times. It is unfair, expensive to administer, difficult to assess accurately, disconnected from the modern economy and politically repugnant to most taxpayers. Of all America?s major taxes, including the income and sales taxes, the property tax is the worst by any measure you care to use.

But bad as the property tax is, its egregious faults are only part of the problem. Even worse is that we are using this most flawed of taxes to finance perhaps the most important function of government: education. We are trying to educate our children on the back of a creaky 19th century antique that barely did the job then, faltered badly in the 20th century, and now is failing spectacularly as we move through the second decade of the 21st.

Must we watch helplessly as our proud tradition of public education withers away, the victim of inert political leadership and ossified public policies? Absolutely not!

Two things seem eminently sensible.

First, we should adopt expeditiously a tax system that finances 21st century education with a 21st century tax. One of the most promising concepts being discussed now is the Property Tax Independence Act, of which Rep. Jim Cox, a Spring Township Republican, is the primary sponsor. The bill would replace the school property tax by increasing the state?s personal income tax to 4 percent from 3.07 percent, and expanding and increasing the state?s sales and use tax to 7 percent from 6 percent.

Second, we should avoid throwing out the baby with the bath water and recognize that the property tax, for all its limitations, is best fitted to financing Pennsylvania local government. Originally, property-tax revenues were used almost exclusively to finance local-government functions such as public safety and public health. Only over time was the property tax base hijacked to support more and more local education, so that now as much as 80 percent goes to the schools. We should stop using the property tax to finance schools and instead use it only to support nonschool local-government expenditures. This is where the property tax works best.

Neither of these steps requires overall increased taxes. Cox?s bill and others proposed over the years would not raise taxes but rather would shift tax burdens from the property tax to a tax more suited to modern times and the needs of public education. Nevertheless, any legislation that envisions tax changes, even tax shifting, will be controversial. Indeed, earlier efforts dating back three decades to bring tax reform to Pennsylvania were rife with dissension.

But let?s not kid ourselves. The choice is not between change and no change. Change, almost all of it bad, is happening across the state almost every day as Pennsylvania?s school districts adapt to the new realities imposed by relying on the property tax to finance education. The real choice is between having a choice about the future of state public education and having that choice imposed upon us by doing nothing.

G. Terry Madonna is a professor of public affairs and director of the Center for Politics and Public Affairs at Franklin & Marshall College in Lancaster. Michael L. Young is a former professor of politics and public affairs at Penn State University and managing partner of Michael Young Strategic Research in Hummelstown, Dauphin County.

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