School property taxes across much of the country have brought homeowners to their breaking point. We can and will not tolerate much in further tax increases. Here’s the situation in my school district of York Suburban, a typical middle to upper middle class suburban school district.
In spite of a 25% increase in taxes collected/student over the last 10 years, revenues continually fall behind planned expenditure. Expenditures continue to grow annually, driven by union negotiated teachers’ salary and benefit increases, increased pension costs and building project expenses. Since the year 2000, our property taxes have increased 43% in inflation adjusted dollars. The current tax level amounts to a 32.9% sales tax on a homeowner monthly mortgage principle and interest payment, assuming a mortgage payment based on 10% down, 5.5% interest rate, and a 30 year amortization. Projected ongoing deficits would require that “sales tax” to rise to 52.4% over the next 5 years!
School boards have 2 primary constituencies – the students and the tax payers. The teachers and staff, as the providers of student education, make up a secondary, albeit important constituency.
How are the York Suburban students faring? In 2009, 11th grade YS student scored 71% and 61% proficient or advanced achievement in reading and math respectively on standardized Pennsylvania student achievement testing. This gave YS a rank of 8/16 in the county, even though YS is considered one of the county’s top school districts. Examining the 10 year period 2000 to 2009, reading achievement at the 11th grade level remained steady at 71%, while math fell from 69 to 61%. Concurrently, spending/student increased from $11,413 in1999 to $14,325 in 2008.
Not infrequently for new initiatives we are told “we need to spend this money for the sake of our children”, yet as the YS experience and many other investigations have demonstrated, expenditure does not directly correlate with student achievement. Further, perceived school district “needs” must be tempered by fiscal realities.
Let’s consider the school board’s other constituency – the tax payers. Over the last 10 years, property taxes have increased 43%. During this time, private sector wages have been stagnant, while public sector employees have seen union negotiated annual increases. Nationally, since the summer of 2007, the private sector has lost 7.7 million net jobs, while state and local governments have lost 70,000. Personal wealth has fallen significantly over the course of the downturn and retirement savings accounts have lost value. Public pension funds too have lagged far short of that needed to fulfill promised benefits. Tax paying citizens saving for retirement in defined contribution plans must live by those results, but additionally are ultimately responsible for defined benefit public pension shortfalls as well.
The economic hardships hit retirees on fixed incomes particularly hard with their income producing assets generating paltry returns, and appreciable assets depreciating. More unjustly, those individuals and couples who worked and saved throughout their careers to “own” their home now find that very “ownership” threatened by ever increasing property taxes.
Though facing significant budgetary challenges, school boards further increasing property tax is not equitable, sustainable, reasonable, or acceptable. At the district level, this means resolving budget shortfalls with a combination of outsourcing, reorganizing, and cuts to programs and staff. Fiscal realities clearly require sacrifices, and the taxpayers have already done their part and more. Many citizens of our district would be willing to help the board find places to save money or to offer expertise in the operation of the district but will tolerate no further financial burden.
Finally, issues such as prevailing wage laws, inequitable disbursement of state monies, funding of local education by local taxes, and pension fund liabilities, all fall outside of the immediate influence of our school board, but the board should be networking with other school boards, as should citizens of the district with those of the other districts, to educate and influence legislators. Only blocking further property tax increases will force the school boards and state to look to and work for state level reform. Comprehensive state-level legislation including: elimination of property tax for funding of local education, true pension reform, rescinding prevailing wage laws, promoting school choice, and promoting consolidation of school districts can effectively and sustainably address the educational and fiscal crisis facing PA public education.