School Budget Woes in Pennsylvania

School Budget Woes in Pennsylvania

Joseph Tramontana is the CFO for OnPoint Education

Mr. Tramontana discusses budget woes in Pennsylvania

There are new school budget woes for Pennsylvania Schools this year. As this website has told you, revenue shortfalls cannot keep up with expenses. The troublesome areas are obvious. The state wants to provide relief property tax relief and the same level of education. These are two competing interests. So instead of directly confronting the problem, they plan on just shifting the tax burden. Under the new proposal, tax payers will receive an additional $700 in property tax relief by increasing the state tax on purchases. Renters will suffer the brunt of this proposal, because they get no relief from property taxes. The other interesting fact is that most of the revenue will be generated from southeastern Pennsylvania (about 50 percent). However, this region will not receive the same amount of proceeds in return (The Mercury Opinion 11-15-22).

The biggest change requires that any school tax increase will need to be approved by the voters; even the ones that are within the state imposed cap. The problem, with this change, is that most of the increases are mandated by contract or law. This includes salary increases, benefit increases, pension contributions and the requirement to fund charter schools. If school districts cannot rely on stable funding from the state education programs will need to be cut.

The Pennsylvania school board association said it best. “There are too many unfunded and underfunded state mandates and these types of referendum are really only shifting the tax burden instead of addressing it head on. Referendum treats the symptom of unpopular property taxes without treating the cause of the problem — an inadequate education funding system and too many unfunded and underfunded mandates, the Pennsylvania School Boards Association wrote in an analysis of the referendum proposal (The Mercury Opinion 11-15-22)”.

PSBA noted that not only are referendums an exercise in shifting blame for taxes, they also don’t work in the long run.

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