Where’s the Money?

Governor Corbett seems to be having trouble finding the money to pay for our children’s education. So we’ve put together this helpful list of potential state revenue sources to help him out. Because there is money that could help us restore the devastating budget cuts to our schools (now totaling $2.3 billion), but it’s just not going to our kids.

Possible State Revenue Sources

  • Close tax loopholes: the Delaware loophole costs our state $500 million in missed tax revenue every year and more than 20 other states have already closed it. The “89-11” real estate transfer scheme cost Pittsburgh schools alone millions of dollars before it was tightened last year. What other loopholes can be closed right now? [See “Corporate Grinches”]
  • Impose a severance tax on Marcellus shale: most states with major mineral resources like ours have a severance tax, not just a mere impact fee. This could yield $334 million per year. [Post-Gazette, 12-27-13]
  • Get rid of the new bonus depreciation rule: the Corbett administration adopted this federal tax incentive in 2011 and it quickly cost far more than the $200 million it was anticipated to drain from the public and now could cost up to $700 million. [See “We Have a Priority Problem”; PBPC, “Revenue Tracker” report, 3-9-12]
  • Keep the capital stock and franchise tax: Gov. Corbett wants to eliminate these by next year as a gift to corporations. But if lawmakers freeze the tax at 2012 levels, the state could raise around $390 million. [PBPC, “Budget Analysis,” 5-29-13]
  • Eliminate sales tax exemptions for millionaires: helicopters and gold bullion top the list of hard-to-swallow exemptions. [PBPC, “Kids or Tax Breaks,” 3-19-13]
  • Tax cigars, chewing tobacco, and loose tobacco: unlike other states, Pennsylvania does not tax these products. Doing so could generate $56 million per year. [Post-Gazette, 12-27-13]
  • Cap discount to businesses that remit state sales tax: a Post-Gazette analysis suggests that “big stores like Wal-mart, Target and other would be most affected” and would save the state $44 million. [Post-Gazette, 12-27-13]
  • Rescind the new Voter ID bill: it solves no actual problem in the state, has been declared unconstitutional by a Pennsylvania judge, will be expensive to legally defend, and will cost taxpayers an estimated $11 million to implement. [PBPC report, 5-10-11]
  • Fix the cyber-charter funding formula: Taxpayers and school districts could be saving $365 million per year – that’s $1million per day – if cyber charter schools received funding based on what they actually spent per student. [PA Auditor General, “Charter School Funding Special Report,” 6-20-12]
  • Shut down the EITC programs: they cost us $150 million per year by funneling corporate tax money that should have gone to the state for our budget needs into the hands of private schools instead, with zero accountability to the public. [See “EITC No Credit to PA”; Keystone Research Center, “No Accountability,” 4-7-11]
  • Reduce high-stakes-testing: The new School Performance Profile system, largely based on student test scores, cost us taxpayers $2.7 million to develop over the past three years and it will cost an estimated $838,000 every year to maintain. [Post-Gazette, 10-5-13] This does not include the five-year, $201.1 million contract Pennsylvania made with Data Recognition Corporation to administer high-stakes-tests to our students. [PennLive.com, 12-1-11]
  • Stop the charter-school “double dip”: due to an administrative loophole in the law, all charter schools are paid twice for the same pension costs – once by local school districts and again by the state: by 2016 this double dipping will cost taxpayers $510 million. [Reform PA Charter Schools]
  • Stop handing money to international giants. The new sweetheart deal with international giant Dutch Royal Shell will cost taxpayers $1.675 billion. That’s billion with a “b.” [Post-Gazette, 6-4-12]
  • Make choices to fund schools, not prisons. While the state has slashed funding for public schools in 2011 and 2012, it has not done so for prisons, and has actually increased the 2013 Department of Corrections budget by $75.2 million ($63 million of which is for correctional institutions). [PBPC, “Final Budget Analysis,” 7-9-13]

There you go. I think we just found hundreds of millions, if not billions, of dollars to adequately, equitably, and sustainably pay for public education. You’re welcome.

Budget Forecast

On Wednesday, Governor Corbett gave us a sneak peak at his proposed education budget for this year, which he will formally announce in a few weeks. Speaking of the millions of Pennsylvanians worried about further cuts to their public schools, he said, “I think they’re going to be happy” with the budget. But then he immediately tempered that with: “I think you know not everybody’s going to be pleased with the budget address, but I think a number of people are and will be at least satisfied.” [Republican Herald, 1-10-13]

I don’t know about you, but I won’t count myself satisfied until we see the nearly $1BILLION he slashed from our schools in 2011 restored. As we well know, that massive reduction was carried forward in the 2012 budget, locking in the largest cuts to public education in Pennsylvania history. And our children are reeling from the effects: they have lost almost 20,000 of their teachers in the past two years; watched as art, music, and library have been eliminated; suffered from cuts to tutoring programs, special education, transportation, and even Kindergarten. All of these draconian cuts have hurt our poorest students the most – in part because Gov. Corbett reneged on our legislature’s pledge to fix the state’s terribly broken funding formula. By taking us back to the old system, Corbett has literally locked in historic inequalities that have been damaging public education in Pennsylvania for decades. [For more on this, please see the posts under “Claim 3” on “The Facts” tab.]

We are eager to hear what the governor will announce on February 5th, but it is already clear that he plans to continue blaming everyone else for the deep wounds he has inflicted on public education. On Wednesday he again claimed, “We are fixing the fiscal mess that I inherited. A 4 billion-dollar deficit, spending out of control, spending beyond our means and we had to do that.” [Republican Herald, 1-10-13] Funny how Governor Corbett wants to talk about billions of dollars and out of control spending, when he himself wants to give Royal Dutch Shell Oil Co. $1.675 BILLION of our taxpayer dollars. He proposed handing the international corporate giant $67 million a year for twenty-five years starting in 2017, ensuring that our children and grandchildren will be paying this boondoggle for years to come. [See “Can Shell Educate Our Kids?”]

State budgets are about priorities. And Governor Corbett and his allies in the legislature have made it abundantly clear where their priorities lie: for instance, this past year they refused to halt the ongoing phase-out of the capital stock and franchise tax, costing us taxpayers another $275 million over two years. The Pennsylvania Budget and Policy Center explains that this “is part of a decade-long pattern that will see the commonwealth spending $2.4 billion on corporate tax breaks in the new budget. That amount has tripled over the last 10 years and does not count the hundreds of millions of dollars lost annually to corporate tax loopholes.” And it’s mostly giant corporations that benefit from these tax giveaways, without any obligation to actually create jobs. [PBPC 2012-2013 Budget Analysis]

And while Gov. Corbett was proposing to cut another $100 million from education last year, he managed to find that same amount – $100 million – for a “voucher in disguise” program: his EITC tax credit program is now giving away public money to private and religious schools. He also created a new $50 million program for students living in the attendance boundaries of “low-achieving schools,” as defined by the state using high-stake-test scores. [See “2-4-6-8, Who Do We Appreciate?”] And by refusing to fix the broken charter school funding formula, the Governor and our legislators force our public schools to overpay charter school operators an estimated one million dollars every day. [See “One Million Per Day”] So when Governor Corbett told a reporter, “I think we’re starting to turn the corner … we seem to have started to see the light at the end of the tunnel,” I have to wonder: what corner? what light?

The light that we saw shining Wednesday on the Governor as he made these comments actually came from retired teachers protesting his budget cuts. He was visiting the Pine Grove Area school district for a presentation on the role Pennsylvania played during the Civil War: ironically, this was the very district where Corbett himself taught high school for one year, leading him to claim credentials as an educator (remember the “lifetime achievement award” for education he got back in May?). That district out in Schuylkill County, has lost $1.1 million in education cuts these past two years. The retired teachers there held signs saying, “Put education first, restore funding now,” and “We are one for public education.” Jane Fennelly, who taught math and physics at the high school, summed it up, saying, “Public education is needed for a strong democracy.” [Republican Herald, 1-10-13]

I applaud these retired teachers for taking a public stand for public education. The budget forecast might be chilly, but Governor Corbett is right about one thing: there is light at the end of the tunnel. And it’s coming from the grassroots as parents, teachers, students, and community members demand adequate, equitable, and sustainable public funding for our public schools.

It’s Raining – Money

It’s still raining in Pennsylvania – campaign money, that it. As the elections have heated up, candidates pushing school privatization efforts such as vouchers have received a windfall from some well-organized and extremely wealthy out-of-state pockets. While we’re mopping up and rebuilding after Hurricane Sandy, we better take a look at what else has blown into our state, and the consequences we could be dealing with for years to come.

Remember Betsy DeVos and her American Federation for Children (AFC)? The former chair of the Michigan Republican Party and married to the heir of the Amway fortune, DeVos is the founder and board chair of the AFC, which works across the country to promote her “school choice” agenda. In the run-up to this spring’s primaries, the AFC funneled over $1million into Pennsylvania politics through the Students First PAC. (Last year AFC contributed $120,000 and in 2010 it paid $1.2 Million into Students First PAC.) [PA state campaign finance reports] In the past few weeks alone, the AFC has dumped another $400,000 into the superPAC. [Keystone State Education Coalition, 10-29-12]

A few years ago, Ohio fined DeVos’s group a record $5.2 million for illegally shifting money into that state to support “school choice” candidates. [Associated Press, April 5, 2008] Wisconsin also fined her group for political misconduct. Following these incidents, DeVos simple rebranded her organization as the current American Federation for Children. The AFC also accepts donations from the likes of Charles and David Koch, the ultra-wealthy and ultra-conservative brothers who are well known for their anti-union politics. [The Nation, May 2011; for more on the AFC, see It’s All About the Money, Money, Money”]

Joel Greenberg, who just made the list of Pennsylvania’s top political campaign donors, is on the board of the AFC. He and two of his financial investment partners, Arthur Dantchik and Jeff Yass, founded Students First PAC back in 2010 with $5.2 million they happened to have lying around. [Public Source, PA top political donors report] Now Students First PAC operates as the conduit for AFC campaign contributions. Since September 28th, the superPAC has spent $534,000 on Pennsylvania elections. Where is all that money going?

Far and away the top beneficiary these past few weeks has been Representative Jim Christiana, from right here in Southwest PA. The Republican from Beaver County received a deluge of $100,000 from Students First PAC – twice as much as any other single candidate. The superPAC gave a handful of candidates two donations, but Christiana received no less than five separate checks, totaling about a fifth of all their giving. Why?

It’s certainly not because Rep. Christiana faces any serious political challenge. His opponent hasn’t had a campaign event since August and has just 40 “likes” on his Facebook page. (Honestly, this is the best the Democratic Party could do in what should be an extremely important race? Even the word “Endorsements” is spelled wrong on his website.) [Elect Bob Williams site] So why shower Rep. Christiana with cash?

The answer is pretty obvious. Christiana has become the go-to guy for Governor Corbett’s school privatization legislation. Back in June, he introduced our shiny new Educational Improvement Tax Credit (EITC) program, a voucher-in-disguise that will divert $200 million in public money to private and religious schools. (See “2-4-6-8 Who Do We Appreciate?”) Christiana hails from Monaca in Beaver County, site of the proposed Dutch Royal Shell cracker plant, which Gov. Corbett intends to hand $1.675 BILLION to do business in Pennsylvania. (See “Can Shell Educate Our Kids?”) Just a few weeks before Christiana brought the EITC bill forward, he received a nice fat check for $25,000 from “Fighting Chance PA,” another new superPAC started by – you guessed it – Joel Greenberg, Arthur Dantchik and Jeff Yass, founders of the Students First PAC.

These guys have also taken notice of a more tightly contested race in our neck of the woods, funding Republican senate candidate Raja who is running against Democrat Matt Smith, currently a representative in the state house. [Keystone State Education Coalition, 10-29-12] Fortunately for public education advocates in the South Hills area, Rep. Smith offers the clear choice: he has met with Yinzercation parents and stands solidly behind adequate and equitable public funding for our public goods.

But we better be asking ourselves just what Philadelphia hedge fund operators are doing, dumping their spare cash in political races over here on the other side of the state. And we have to pay attention to the millions flooding into Pennsylvania from Betsy DeVos and her American Federation for Children. It’s still raining campaign money, and there will be a lot of storm damage if public-education advocates don’t get out to the polls next week – come hell or high water.

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Sunshine

Yesterday’s summer solstice gave Governor Corbett and Republican leaders the extra daytime they apparently needed to agree on a budget. Only they aren’t letting the details see the light of the sun. After the longest day of the year, Gov. Corbett announced Pennsylvania would have a $27.66 billion state budget saying, “We can put money back into some programs, we’re just not going to go into the details.” [Post-Gazette, 6-21-12] Why keep us in the dark?

The figure announced yesterday matches the one approved by the Senate, which included a $50 million cut to public education. While Governor Corbett originally proposed cutting $100 million back in February, we would obviously prefer to see the plan approved by the House a few weeks ago, which had no further cuts for K-12 schools still reeling from last year’s massive budget gutting. (See “Time’s Not Up, But Revenue Is.”)

Legislators feel they have a little more wiggle room in the budget with the state now anticipating $100 million more in June revenues than previously predicted. [Post-Gazette, 6-21-12] Yet they are poised to hand that – and far more – to Shell Oil Co. next week in a tax credit plan for a Beaver County petrochemical plant. That revenue-giveaway will cost us taxpayers $1.7 BILLION over 25 years. (See “Can Shell Educate Our Kids?”) While the final numbers may vary slightly, the big smiles on the faces of Allegheny County Executive Rich Fitzgerald and Gov. Corbett as they stood for press photos yesterday suggest that it’s a done deal. [Post-Gazette, 6-20-12]

So why keep us waiting for those budget details? Governor Corbett is trying to shove through some last minute legislation, and he’s got his eye squarely on vouchers. According to a “ranking Republican senator,” the Post-Gazette reports that “a policy discussed in negotiations [is] on its way forward.” That will most likely be Governor Corbett’s attempt to create a commission to study funding for charter and cyber charter schools (as well as special education).

Right now there are also several bills in play dealing with charter “reform.” Unfortunately, as Executive Director of Education Voters PA Susan Gobreski points out, this is “charter reform (without the reform).” Last week, Rep. Christiana, from here in Southwest Pennsylvania, proposed giving away $200 million to private schools by increasing the current EITC program, while creating a new Education Improvement Scholarship Credit (EISC) program. (See “We Have $200 Million?” for details.) This is HB 2468 and is scheduled to be voted on this coming Monday, June 25, 2012.

An alternative bill (HB 2364) sounds better: it would fund charter schools based on what they actually cost. Meanwhile, another local legislator, Rep. Jake Wheatley, a Democrat from Allegheny County, wants to introduce yet a different bill that will increase EITC funding and create a new Keystone Scholarship Tax Credit (KSTC) program. Various proposals also include a statewide “authorizer” that would “take away local authority and input.” [Education Voters legislative update, 6-20-12]

Christiana and Wheatley’s proposals are actually vouchers in disguise and should never see the light of day. But on the longest day of the year, Gov. Corbett declared, “I feel very confident that we’re going to have a very productive week next week.” [Post-Gazette, 6-20-12] Real charter reform would be a ray of sunshine, fixing the way charter schools are funded, increasing accountability, and maintaining local authority.

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Ed Voters PA is hosting a “virtual phone bank” today from 6:30pm to 7:30pm. You can volunteer to make calls to voters in key legislative districts and patch them through directly to their representative’s office. You can make the calls from the comfort of your own home and all you need is a phone and a computer. To help, please contact Ian Moran <ian@educationvoterspa.org> for details.

Economics 101

Governor Corbett might want to get out his old economics textbook for a refresher. There is no evidence that his current economic policy – slashing essential public services while giving away billions to corporations – ever works.

After feeling the heat on his announcement that he would give away $1.7 BILLION to Shell Oil Co., Gov. Corbett went on the offensive last week. (See “Can Shell Educate Our Kids?”) He sent three of his cabinet secretaries to Beaver County Community College to tout the jobs his proposed petrochemical refinery plant would create. It was an ironic setting, given the governor’s simultaneous proposal to slash 30% from higher education.

Yet there they were, touting that the Shell cracker plant might employ up to 400 people and could create up to 10,000 temporary construction jobs. The American Chemistry Council estimates that another 2,400 jobs might be created in a manufacturing industry that could grow up around the plant. (That’s because Shell will have no state tax liability and could spend the money to build up associated industries.) [Penn Live, 6-14-12] That’s a lot of “mights” and “coulds.”

Those watching Harrisburg report that the Shell tax credit deal will “likely” pass, though “Republicans want some kind of assurance that the money will guarantee that jobs come with it.” And they note, “It helps that organized labor groups from the Pittsburgh area are supportive.” [New Jersey Herald, 6-17-12]

But best-case scenario, we’re looking at a couple thousand permanent jobs. Meanwhile, Gov. Corbett’s austerity budget has already eliminated over 14,000 public K-12 education jobs with many more losses to come. And many of those were actually good union jobs.

It seems that Governor Corbett shares a playbook with former Massachusetts governor, Mitt Romney, who blasted President Obama recently: “He says we need more firemen, more policemen, more teachers.” Then he snorted, “It’s time for us to cut back on government and help the American people.” [Washington Post, 6-8-12]

Princeton economics professor Paul Krugman took this slash and burn theory to task in his New York Times op-ed column over the weekend, saying “Conservatives love to pretend that there are vast armies of government bureaucrats doing who knows what; in reality, a majority of government workers are employed providing either education (teachers) or public protection (police officers and firefighters).” Krugman asked, “So would getting rid of teachers, police officers and firefighters help the American people?” Here is how Krugman answered:

“We now have a lot of evidence bearing on that question. … Conservatives would have you believe that our disappointing economic performance has somehow been caused by excessive government spending, which crowds out private job creation. But the reality is that private-sector job growth has more or less matched the recoveries from the last two recessions; the big difference this time is an unprecedented fall in public employment, which is now about 1.4 million jobs less than it would be if it had grown as fast as it did under President George W. Bush. And, if we had those extra jobs, the unemployment rate would be much lower than it is — something like 7.3 percent instead of 8.2 percent. It sure looks as if cutting government when the economy is deeply depressed hurts rather than helps the American people.”

Professor Krugman went on to explain how Europe is teetering on the brink of economic catastrophe due to austerity measures. Yet it’s ironic that “While Republicans love to engage in Europe-bashing, they’re actually the ones who want us to emulate European-style austerity and experience a European-style depression.”

Maybe Governor Corbett and his cabinet secretaries could enroll in Economics 101 at Beaver County Community College, assuming they are still able to offer that course after this year’s state budget cuts.

In the Tank

Governor Corbett’s approval rating has tanked, in no small part because of what he is doing to education. A new poll out this week shows him at his lowest rating yet, with only 36% of voters happy with his performance. Meanwhile, over half of those surveyed disapproved of the way Gov. Corbett is handling the state budget. [Quinnipiac poll, 6-12-12]

No small wonder that Mr. Unpopular has garnered national attention for his appalling track record of decimating public education. Last week Alternet.org named Corbett to its list of ten worst governors, saying “His attacks on public education alone make him worthy of our Hall of Shame, but coupled with a massive tax break for Shell Oil–$1.7 billion in subsidies for the oil giant—his comments about taking responsibility for future generations ring awfully hollow.” [Alternet.org, 6-9-12]

Local mom and OnePittsburgh activist Debbie Srogi took Gov. Corbett to task for the same thing in an excellent OpEd piece in today’s Post-Gazette. And Pittsburgh’s City Paper skewered the Governor’s support for Big Oil at the expense of essential public services on its cover this week, playing on the now-famous Time magazine breastfeeding cover. The cartoon, which spread quickly through social media, shows Governor Corbett suckling corporate greed and asks, “Are You Gov Enough?”

[Source: Pittsburgh City Paper]

Even the New York Times wrote a scathing editorial about Corbett’s cuts to public education, pointing to Reading, PA as the poster-child for the consequences of defunding schools. That city, which is considered the nation’s poorest, just laid off 110 teachers and is making drastic cuts to educational programs. The editors criticized Gov. Corbett for failing to replace federal stimulus dollars in the education budget, which the state had committed itself to several years ago, and said, “Instead he further drained his public coffers by cutting business taxes by $250 million this year.” [New York Times, 6-13-12]

But my absolute favorite quote of the week came yesterday at a meeting in Pittsburgh of the Governor’s new Advisory Committee on Postsecondary Education. He set up that group of 31 university administrators, business leaders, and students back in February when he proposed slashing the higher education budget by an unbelievable thirty percent. In a move reminiscent of his attempts to privatize public K-12 education, Corbett and his allies have been trying to funnel state aid to college students (who could attend private universities) rather than fund public universities directly. Even though he leads a private institution, Carnegie Mellon University President Jared Cohon called that plan a “terrible idea” and said it “ignored the idea of education as a public good.” [Post-Gazette, 6-15-12]

Yes, indeed. Thank you President Cohon. Public education is a public good. And Governor Corbett’s approval rating may just stay in the tank until he realizes that.

No More Teachers, No More Books

Next week is going to be a sad one for Pittsburgh Public School students. Facing over $30 million in cuts from the state, and struggling to get its own per-pupil costs down, Pennsylvania’s second largest school district is laying off 285 teachers and other educators. (That’s one out of every eight teachers.) Next Wednesday will be their last day in the classroom with students.

While most kids are excited about summer vacation, this year students all across the state will be saying goodbye to thousands of beloved teachers. That comes on top of over 14,000 educators who lost their jobs in the commonwealth last year. [PASA & PASBO Sept. 2011 report] The old school-yard rhyme, “no more pencils, no more books, no more teacher’s dirty looks,” could be shortened to simply, “no more teachers, no more books.”

Last week, the Highlands School District up in the Tarentum and Brackenridge area in northern Allegheny County held a candlelight vigil to say goodbye to the educators who will be furloughed there. [Tribune Review, 6-2-12] Inspired by their actions, Pittsburgh Public school parents and students have decided to host a similar event: plan to join us on Wednesday June 13th from 6-7PM outside the Bellefield Ave. administration building in Oakland. We will light 285 candles to represent the teachers we are losing due to these devastating state budget cuts. Please visit our Facebook event page to RSVP and to help invite your networks to attend.

Republican leaders in the House have announced that they wish to get the budget in next week. So this will also be an important day to tell our legislators that our children need those 285 teachers to thrive and that they will be dearly missed. We can let Governor Corbett know that if he is serious about Pennsylvania jobs, he should be looking at ways to keep the thousands of schoolteachers employed in our communities where their services are urgently needed.

Instead, Gov. Corbett had his Lt. Gov. Jim Cawley out speaking to the press yesterday, defending his $1.6 BILLION tax dollar giveaway to Shell Oil Company as a “job-creation tool.” And the State Revenue Secretary Dan Meuser boasted that it would be “an excellent return on investment.” [Post-Gazette, 6-6-12] As we pointed out in “Can Shell Educate Our Kids?”, we are trading more than 14,000 teaching jobs right now, for the possibility of 10,000 jobs at some point in the future. It will cost Pennsylvania almost twice as much as the governor has already cut from public schools – and the real cost will be born by our children and grandchildren, whose education is at stake.

What kind of crazy calculators are they using in the governor’s office to determine “return on investment”? Pennsylvania taxpayers can see the bottom line and we know that education pays the very best dividends. Perhaps the glow from our candles next Wednesday will help our legislators see that, too.