Pa. Targets School Aid Reform as a Priority

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Pennsylvania legislators are gathering in a special session this week, driven by a drumbeat of constituent voices demanding an overhaul of the state's property-tax and school funding systems.

Most observers agree that the need to forge a more equitable finance formula and cut the soaring local property taxes on which education relies has reached a critical mass in the Keystone State. But lawmakers are shouldering that complex and politically charged task at a time when only the rosiest of optimists would say they are likely to craft a solution: six weeks before an election.

Even so, observers say the special session may signal the greatest likelihood in years that state leaders truly are ready to confront the question of how Pennsylvania should pay for its schools.

Overhauling school funding, while cutting the property taxes that support it, would likely require higher state taxes. For that reason, those who gauge the political waters in the state capital, Harrisburg, laugh openly when asked if lawmakers are likely to commit to such a move before Nov. 5. On that day, voters will decide who sits in the governor's office, who occupies all the seats in the House of Representatives, and who holds half the seats in the Senate. Right now, Republicans control the governor's mansion and both legislative houses.

"We have a better chance of commandeering a Russian sub in the Baltic" than getting comprehensive education and property-tax reform before January, said House Minority Leader H. William DeWeese, a Democrat.

Still, insiders view the special session, scheduled to run Sept. 23 through Nov. 30, concurrently with the regular legislative session, as a crucial starting point for progress on the issue early next year, when Democrat Edward G. Rendell or Republican Mike Fisher will be governor. Both have pledged to call special sessions on the issue.

'Only Chance'

Donna Cooper, the campaign director for Good Schools Pennsylvania, a Philadelphia-based coalition that has been working for better school funding, sees a rare opportunity to tackle the thorny duo of property taxes and school finance.

A political realignment around those issues is bringing together education activists, traditionally conservative chambers of commerce, and a powerful lobby representing the elderly.

Lawmakers undertake such changes only rarely, Ms. Cooper said, which raises the stakes to get it right this time. "This is not only our best chance," she said. "It may be our only chance."

A flurry of proposals and legislative-committee reports is circulating as the special session gets under way. The Sept. 10 report of a select committee is getting particular attention. That report describes the school funding system as the product of "an ever-growing list of ad hoc fixes" that is driven more by changing budget priorities than by the actual cost of education.

"Pennsylvania has never figured out how to fund education. It's been utterly nuts," said Timothy Potts, the director of the Pennsylvania School Reform Network, a Harrisburg-based community group that pushes for school improvement.

The select committee recommends that the state develop a "foundation" budget, which details what an adequate education would cost and takes into account individual districts' special needs.

The state, whose share of education expenses has dropped over the years to a little more than a third as the share borne by local governments has risen, would provide half of each district's costs. The committee suggests that residential property taxes be cut in half, but its report does not address what revenue sources might patch the resulting budget hole.

It proposes setting up a committee to design the funding system.

The gap between the rich and poor of Pennsylvania's 501 districts is significant, leading some finance experts to call its system of funding one of the least equitable in the nation. An August report by the Education Trust, a Washington-based research and advocacy group, found just three states with greater disparities between rich and poor districts.

And the select committee's own report notes that one low-income Pennsylvania district spends $5,300 per pupil, while a particularly wealthy one gets $14,000.

In some quarters, the committee's report has been criticized as calling for too little to close such gaps. By capping local governments' ability to raise taxes, some observers argue, the proposal could perpetuate the disparities.

Pennsylvania legislators also are discussing a July report by the Legislative Budget and Finance Committee, which suggests consideration of several variations on Michigan's approach to tax reform. That state in 1994 adopted a funding-equalization system that shifted much of the burden for schools from local property taxes to state sales taxes, and raised the state's share of school funding.

Busy Time

While more than 70 proposals by lawmakers are circulating in Harrisburg, only a few address the link between property taxes and school funding, activists say.

The highest-profile of those, offered by Republican Rep. Nicholas A. Micozzie, proposes that the state shoulder nearly 64 percent of education costs, and that local property taxes be reduced by 30 percent.

To manage both steps, he proposes raising the state's personal-income-tax rate from 2.8 percent to 4.6 percent, an idea that even Mr. Micozzie acknowledges could be a tough sell politically.

To calculate appropriate school spending, Mr. Micozzie's bill uses the "successful schools" model, which tries to approximate in each district the amount spent in the state's highest-performing districts.

The select committee's proposal uses a blend of that method and the "professional judgment" model, which seeks to attach a cost to the critical elements of education and ensure that each district gets enough to cover those expenses.

With a variety of ideas circulating and unprecedented demand for change, the winter could well bring significant improvement in how the state finances K-12 education, longtime Pennsylvania political watchers say.

"There is more activity in Harrisburg and on the grassroots level than I've seen in 28 years," said Ronald R. Cowell, a former state legislator who now is president of the Education Policy and Leadership Center in Harrisburg. "Either governor is going to see a lot of interest in the legislature to deal with these issues."

Vol. 22, Issue 4, Pages 17, 19

Published in Print: September 25, 2002, as Pa. Targets School Aid Reform as a Priority
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