Where’s the Money?

Restoring the state budget cuts ought to be our community’s top priority. Fortunately, Pennsylvania could do just that. There is money in the state budget, but it’s not going to public education for our children. Here’s our handy list of 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]
  • Prevent charter-schools from “double dipping”: 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]
  • Crack down on charter fraud: a new report found that a lack of accountability since the inception of Pennsylvania charter schools has led to over $30 million in fraud. That’s money stolen from our public schools. [Center for Popular Democracy report, 9-2014]
  • 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 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]

To support Pittsburgh schools at the local level we could:

  • Re-balance tax revenues split by the city and the school district. In 2003, the state required the school district to turn over a portion of its earned income tax revenue to the city, which was bankrupt at the time, resulting in a cumulative loss of $84 million to the Pittsburgh Public Schools. [Post-Gazette, 11-4-13]
  • Insist on PILOT payments from large non-profits. UPMC alone would be supporting Pittsburgh schools to the tune of $8.5 million a year if they did this. [“UPMC’s Fair Share“]
  • Hold corporations to their word. Rivers Casino is trying to wriggle out of paying $1million a year to Pittsburgh schools after promising to be a good neighbor when we gave them perks for setting up shop in our city. [“River Casino’s Fair Share“]

At the federal level we could:

  • End sequestration: federal cuts due to the artificial crisis of sequestration cost Pittsburgh Public Schools over $2 million in the 2013-14 year, which has already resulted in the loss of six entire early-childhood classrooms.[i] [Post-Gazette, 7-25-13]

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