This week has been busy with many people visiting my Senate office in Harrisburg and many emails received regarding Senate Bill 76 – The Property Tax Independence Act.
If SB76 is passed it would eliminate school taxes on all real estate.
To be clear – local county and municipal taxes would remain in place.
The elimination of school taxes would apply to all real estate in Pennsylvania – residential, commercial and industrial.
To completely eliminate school taxes on real estate in PA the legislature has to find between $12-14 Billion Dollars of revenue from other sources.
Other sources mean new taxes, increased taxes, and lifting exemptions on goods or services not currently taxed.
There is no free lunch – money is not falling out of the sky – so everyone has to have realistic expectations.
I have been a private sector business owner for over 35 years and I learned over 20 years ago this bit of wisdom from a business associate – “Begin with the end result in mind.”
So here is how we begin the task of eliminating school taxes on real estate – we have to identify the actual dollar amount that is needed to cover the school tax elimination – that is the easy part.
Here is the hard part of SB76 – we currently have 500 school districts in PA – each school district has a school board – to be clear there are 500 different school boards that are comprised of volunteer board members.
Each school district negotiates teacher contracts for wages and benefits without any input from the legislature.
Currently there are many school districts renewing teacher contracts with annual salary increases of anywhere from 2% to 3.5% increases – these increases are being given in a period when the CPI index is less than 1%.
The private sector business world is seeing dramatic health insurance increases – in the private sector it is customary for employees to pay for between 20% and 30% of their monthly health insurance costs.
In the Philadelphia School District teachers pay zero toward their health insurance – many teachers throughout PA pay a lower percentage toward their monthly health insurance costs than private sector workers.
We still have not fixed the pension crisis in PA.
Prevailing wage mandates are still required for construction and maintenance projects at school districts.
In my own school district in York this past summer the school district replaced roofs on several buildings – the school finance director requested two bids to replace the roofs, the first bid required using prevailing wage labor and the second bid did not require prevailing wage labor.
The prevailing wage labor price was $2.8 Million Dollars – the non-prevailing wage price was $2.2 Million Dollars a difference of $600,000 – Six Hundred Thousand Dollars – the district had no choice but to award the contract using mandated prevailing wage labor.
I call school districts the “Hungry Monster” that needs to be put on a diet – until we solve salary and health insurance increases – SB 76 will be a disaster – we MUST get school costs under control first.
Another very large issue with school boards is that I estimate that between 25% and 50% of volunteer school board members are married to a teacher, have a son or daughter who are teachers, the board member may be a teacher at another school or the board member may have been a former teacher – My point is that there is a large amount of conflict on school boards – these conflicts must be resolved and eliminated.
The conflict of interest on school boards is similar to the fox guarding the chicken coop.
So here is the dilemma that I face when voting on SB 76 – have spiraling costs been contained or eliminated – and where is replacement revenue coming from?
Here is another bit of wisdom I heard over 20 years – “Align your expectations with reality.”
In reality the SB 76 issue is front burner for everyone – it must be done correctly or three years from now what was a good intention will explode.
That leads me to my closing comment – “I am a person that will tell you what you need to hear – not want you want to hear.”
SB 76 must be done with great thought, planning and precision – My colleagues in the Senate are committed to getting this issue to the finish line.
I intend to vote for SB76 but it is important that it be done properly and not just jammed through.