BCT Editorial – 6/23/05

This page was last updated on June 25, 2005.

Economic apartheid; Editorial; Beaver County Times; June 23, 2005.

Below is a detailed critique of the subject editorial.

“Property taxes are killing many poor school districts in Pennsylvania by making them uncompetitive.

“But instead of going after the cancer that is eating away at these districts - the property tax system - the power brokers in Harrisburg are squabbling over the color of the Band-Aid they want to apply to a dying patient.

“In the budget for next year, Gov. Ed Rendell has proposed handing out an additional $23 million in his so-called Foundation Supplement for districts that spend less than $8,500 per student.”

[RWC] By the time you get to the end of the editorial you’ll note it doesn’t indicate how much its example school districts spend per student. You’ll read why at the end.

“One problem with Rendell’s proposal is that the GOP controls the Legislature, and Republican power brokers in the House and Senate have their own separate plans when it comes to subsidies for next year.

“But what few, if any, are talking about is the reliance on property taxes as the main source of local revenue to fund public education, and the way in which this system distorts the real estate market in a way that punishes poor school districts, even academically competitive ones such as Big Beaver Falls Area.

“Let’s say two similarly priced homes are up for sale in the Beaver Area and Big Beaver Falls Area school districts, which have about the same enrollment.

“According to Standard & Poor’s SchoolMatters Web site (from which the information in this editorial was taken), school taxes on $100,000 of property in the Beaver Area School District are $1,638 while those on the Big Beaver Falls Area house are $2,884. Obviously, that puts the Big Beaver Falls house at a huge disadvantage.

“One reason taxes are so much higher is the disparity in the revenue that one mill of property tax generates. (Demographics are another; see the following editorial.) When Beaver Area hikes its tax by 1 mill, it pulls in approximately $181,000 in new revenue. When Beaver Falls does the same, it brings in about $115,000.

“Sure, Big Beaver Falls receives more in state subsidy than Beaver Area, but the subsidy, which is weighted, is offset because of the Beaver Area’s overall higher property value, which is approximately 2.4 times higher than that of Big Beaver Falls Area.

“As a result, Beaver Area can raise more revenue per mill because of its larger tax base. Meanwhile, Big Beaver Falls Area must impose a higher tax rate to generate sufficient local revenue, which drives up taxes on homes across the board.”

[RWC] You may think the Times advocates some local tax other than property to fund public schools. You would be wrong.

Why? Any local tax will have similar issues as the property tax. If we switch to an income-based tax, those who can afford to will move to communities with lower rates. That would mean the taxes on residents left behind would increase. It also means the value of a house in a high income tax rate community will drop, just as it would with high property taxes.

Ultimately, I believe the Times wants schools funded exclusively by the Commonwealth – or perhaps by the federal government – because that’s more in line with the paper’s socialist leanings.

Remember this the next time you read an editorial crying about loss of local control. Those are crocodile tears.

“This pattern is being repeated across the state, and the power brokers in Harrisburg don’t care. Instead, they are content to fiddle around to fix a tax system that is leading to the economic apartheid of public education in Pennsylvania.”

[RWC] As the author noted above, the editorial took some numbers from the S&P website. It carefully omitted some figures from S&P, however.

The author forgot to mention the “economic apartheid” actually resulted in Big Beaver Falls ($8,514/year) spending 17.2% more per student than Beaver ($7,265/year). This isn’t an isolated example.

Let’s look at the Aliquippa and Center Area school districts. “Poor” Aliquippa ($9,225/year) spent 25.2% more per student than Center ($7,367).

That’s some “economic apartheid.”

Now that you have some context, let’s look at the comment “One problem with Rendell’s proposal is that the GOP controls the Legislature, and Republican power brokers in the House and Senate have their own separate plans when it comes to subsidies for next year.” Not once does the author mention that Mr. Rendell’s proposal would not help “poor” districts like Aliquippa and Big Beaver Falls because they already spend more than $8,500/student-year. Instead, the author chooses to bash Republicans.