Can They Fly Our Kids to School?

What on earth is going on with our state legislators? Yesterday the House Finance Committee voted, 18 to 6, to give away $14 million in our taxpayer money to exempt the super-wealthy from paying sales tax on the purchase of their private jets. House Bill 1100 will also keep corporate aircraft, jet parts, maintenance, and repair all tax free. Of course, you and I will still have to pay sales tax on our cars. [Pennsylvania Budget and Policy Center, “Kids or Tax Breaks”]

Seriously? Eighteen Pennsylvania state representatives voted for this bill when school districts across the state are still slashing programs, furloughing teachers, and closing entire buildings?

Our state senators are apparently eager to give away our money, too. By a unanimous vote last week, the Senate Finance Committee approved a bill creating a new loophole allowing business owners to pass along their assets to heirs without paying the usual inheritance tax. Senate Bill 303 does nothing to exempt the rest of us from paying that tax when we inherit a family house, but we will all be footing the bill for the estimated millions this tax giveaway will cost us every year.

And the House Commerce Committee is looking at a bill that will give away $15 million a year to wealthy investors. Yes, if you’re already rich, Pennsylvania is the place for you. House Bill 36 will reward investors with a net worth of $1 million or more (or who have an annual income over $200,000) if they put their money in start-up companies. And they can take the tax credit even if they don’t owe state taxes. [Pennsylvania Budget and Policy Center, “Kids or Tax Breaks”]

What’s $15 million here, $14 million there? To our legislators, apparently nothing. But to our children, this is real money that is being drained directly away from their schools. You can’t honestly claim that Pennsylvania is broke and make draconian cuts to public education, then turn around and offer plump tax breaks to millionaires. And you can’t honestly suggest that our kids get their school money from a one-time shot of booze-bucks while these new tax codes will continue to strip our public coffers of millions of dollars every single year.

Last week, seven public education allies sent a letter to Governor Corbett warning him of the many ways in which Pennsylvania’s school finance system is failing to meet the state’s own constitutional requirements. [See our previous discussion of this in “Simple”] The letter was signed by The Education Law Center of Pennsylvania; Education Voters Pennsylvania; Public Citizens for Children and Youth; Pennsylvania Budget and Policy Center; Public Interest Law Center of Philadelphia; Pennsylvania League of Urban Schools; and the Pennsylvania Association of Rural and Small Schools. All these organizations argue that state “underfunding is now so significant that the Commonwealth is failing to fulfill its constitutional obligation to maintain a ‘thorough and efficient system of public education.’”

The groups also point out that Pennsylvania is actually now providing less funding for public schools than it did back in 2008, a finding consistent with our own analysis. [See “The Numbers Game”] What’s more, the state’s share of school funding is once again on the decline: Pennsylvania now provides only 36% of the costs of public education, while the national average is 46%. [“The Unconstitutionality of Pennsylvania’s School Finance System,” March 2013]

If Pennsylvania is not meeting its own constitutional requirements to fund public education, we need to be asking why our legislators think they can give away more of our tax dollars to wealthy investors and private jet owners. Pittsburgh has already tried eliminating bus passes for students and having high school kids start at the insanely early hour of 7AM, all to save transportation money. [Post-Gazette, 5-19-12] Harrisburg has talked about getting rid of student transportation altogether. [Penn Live, 5-16-12] Can those private jet owners fly our kids to school?

The Fiction of Flexibility

When Governor Corbett proposed collapsing several educational budget items into the Basic Education Funding line, he championed it as a move towards “greater flexibility” for schools. But school districts here in Yinzer Nation are finding that flexibility is fiction: a nice story, but in the end, just that.

According to Corbett’s flexibility story, districts would no longer have to spend, say, their state allocations for salaries or transportation on those things; if they found a way to save money on teachers or school buses, under the proposed system, they could spend that money elsewhere. Flexibility sounds good. Who doesn’t like flexibility? School officials in West Mifflin, Sto-Rox, Penn Hills, McKeesport, and the North Hills all spoke with the Post-Gazette this week to explain the problem.

As the Post-Gazette reports today, “district officials said it’s nearly impossible for them to reduce salary and transportation costs as most salaries in the district are dictated by contractual agreements, and transportation costs continue to increase, in many cases, because more students are choosing to attend charter schools and their home districts are required to transport them to distances up to 10 miles.”

The West Mifflin school district has already made huge cuts to its transportation system, and can’t imagine where it’s supposed to find additional savings. A new charter school in Penn Hills has increased transportation costs for that school district and also nearly doubled its charter school tuition payments, from $4.2 to $8 million. Penn Hills, McKeesport, and Sto-Rox all stand to lose their funding for full-day Kindergarten programs with Corbett’s elimination of accountability block grants. “Flexibility” isn’t going to pay for any of these things: school districts can’t rob Peter to pay Paul because they’re both broke.

What’s worse, the Post-Gazette reports that business managers in these school districts “fear the reason Mr. Corbett lumped much of the school funding … is to eliminate the formulas previously used to fund items such as transportation and Social Security subsidies.” David Hall, director of finance for the North Hills School District, explained, “Right now, both the [Social Security] and transportation subsidy are formula driven and when they are increased, the state automatically increased their subsidy to match. By putting it into a block grant, I’m guessing there won’t be any increases in the future. It will no longer be formula based,” Mr. Hall said.

In other words, where school districts used to be able to count on formula-based increases for things like transportation costs, now they can expect no increases at all, even as costs continue to rise. This isn’t flexibility – it’s a fairytale.