T/E School Board Holds Public Informational Meeting Tonight on Earned Income Tax (EIT)

As the T/E School District begins the budget development process for 2011-2012, a budget balancing strategy from last year was to determine the effect an earned income tax (EIT) would have on the school district and its residents. Tonight (7:30 – 9:00 PM, Conestoga High School auditorium) is an informational presentation from a representative from the  Pennsylvania Economy League. 

The School Board will not make a decision tonight; in regards to an EIT; the session is strictly informational.  Again, I applaud the efforts of the School Board in their willingness to disseminate the EIT information in a transparent, public manner. This public meeting tonight is a good first step — educating the School Board and the community on EIT so an informed decision can be made at a later date.

On the subject of the School Board, the following letter came across my desk today from the president-CEO of the nonprofit research and educational group, Commonwealth Foundation.  There are some harsh words for the teacher unions. With many of the local teacher contracts up for negotiations, it is going to be interesting to see how wide-spread the negativity towards teacher unions is and how it will affect the process.

Dear Commonwealth Foundation Friends:

Support for school choice is becoming more and more bipartisan, as both sides of the ideological aisle begin to realize that maybe—just maybe—the teachers unions have their own agenda, and that ensuring the best possible education for our kids may not be their first priority.

In last Monday’s update, I mentioned that I was scheduled to testify that Wednesday before a Senate Education Committee hearing on the future of school choice and opportunity scholarships. It was quite an experience: an all-day free-for-all that included a remarkable exchange between Senator Andrew Dinniman, the Democratic Chairman of the committee, and a Pennsylvania State Education Association (PSEA) representative, whom Sen. Dinniman sharply criticized for frustrating committee efforts to meet to discuss reform measures. Sen. Dinniman event went so as to wonder alond whether PSEA’s commitment to students is just “window dressing.”

We’ve known all along that teacher union bosses care first and foremost about one thing: preserving their own taxpayer-funded perks and cushy pensions, while at the same time making sure that they are never made to justify any of it. Meanwhile, the poorest and most vulnerable of our kids are being warehoused in failing schools, while these well-paid union reps stand at the schoolhouse door, blocking any reform that might make a real difference in the lives and futures of these kids. It’s outrageous.

We know that whoever wins next month’s gubernatorial campaign, our next governor will be sympathetic to the issue of choice in education. Though we may be getting a friendlier and more receptive set of ears in the Governor’s Mansion come January, this debate is by no means over. Any measures to reform our schools will be seen as a threat to the teachers unions and to the entrenched bureaucrats whose very careers and livelihoods depend on maintaining the status quo. We’re going to keep up the good fight. Together, we will work to ensure that every child in the Commonwealth has access to a safe, top-notch education, regardless of his or her family income, or the zip code in which he or she happens to live!

Fighting for Your Freedom,

Matthew J. Brouillette
President & CEO

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  1. A very informative meeting – I encourage everyone to check out the broadcast – details to be provided on the TESD web site.

    Many important specifics that I’m not going to spend a moment on here because what the meeting served to do for me was to highlight the ineptness of our current and want-to-be state legislators and supervisors.

    We’ve gone over the PSERS issue endlessly here. How about the Tredyffrin budget – hostage to the Kampf candidacy. The Township could be handed the opportunity to take up to, say, $4 million a year, courtesy of a 1% EIT sponsored by the school district (they could actually double that by enacting a 1.5% rate).

    But: do they need it? What’s the outlook for 2011 – just 2 months away? Did that budget workshop have any projections for 2011 or 2012? Is there a budget gap built in from contract increases/pensions? Is there the opportunity to offset that with program cuts? BAWG efficiencies? How many more service level reductions can the community stand? When will that traffic light at 202 and Swedesford be fixed?

    The School District is showing how public responsibilities should be carried out. The Township Supervisors are playing politics.

    [Reply]

  2. Ray, I share your sentiments that the prospect of a $6.9 million deficit for the 2011-12 school year is a huge problem that requires a coordinated response at the state and local level.

    Taxpayers have no good options. The SD did a terrific job of cutting costs last year. What is left to cut without negatively affecting the quality of education T/E is known for?

    Though some may criticize the last teachers’ contract as overly generous and contributing to the district’s ballooning pension obligations, the contract was in line with other area school districts’ and negotiated before economic disaster hstruck in the fall of 2008.

    I found it chilling that a number of members of the audience last night clapped and cheered at one resident’s question: “Can the teachers be de-unionized?” Obviously, some resent the fact that teachers enjoy a higher level of job and retirement security than many taxpayers in T/E. But cheering to take that away – especially when teachers work very hard to educate our kids and have faithfully paid into their pension plan – is disrespectful. Teachers should not be singled out as the cause of the financial woes of the state/ nation’s school districts.

    Some stark facts were presented last night:

    While T/E has maintained a modest annual $15k per student cost, the following factors need to be considered:

    – Tredyffrin and Easttown Townships are basically built out with no expected increase in real estate taxes going forward..

    – During the last two years, a significant number of homeowners and businesses have requested and received lower property assessments, reducing tax revenue to the school district..

    – The SB considers the fact that seniors are strapped, having received no S.S. COLA’s for the last two years, and lower investment income, so any property tax increase would be a burden to them.

    – Not to mention the number of residents who are out of work and for whom any tax increase could be unmanageable.

    – And under Act 1, the state has limited the allowable tax increase for school districts to 1.4% next year- hardly enough to cover T/E’s anticipated $6.9 million deficit..

    Other facts presented:

    -95% of municipalities in PA already collect an EIT

    – Total estimated compensation earned by T/E residents is $1.9 billion, so a 1% EIT could potentially collect $19 million (minus 1-2% for collection fees and the $2.8 million paid to Philadelphia under the Sterling Act.)

    – Net: $15,770,000 with a 1% EIT. (More if gaming revenue makes up for revenue lost to Philly’s wage tax)

    – If the townships decide to take half (.5%) – as they can by law and without a separate referendum – TESD would be able to collect $7,885,000.

    – Of the 11,426 wage earners in Tredyffrin and Easttown, 4,015 are already paying an EIT to some other municipality.

    – Of the remaining 60% of T/E resdients, some will not pay an EIT because they are retired and retirement income is not subject to an EIT. Those who are unemployed will not pay an EIT.

    – Though a PIT – personal income tax – is viewed by some to be a fairer and broader tax, it is not authorized under Act 511. Under Act 1 all PIT revenue would have to be used for property tax reduction. And that option was voted down by a large margin of T/E voters in 2007.

    Unlike Act 1, Act 511 allows school districts to levy the tax to increase revenue, with no requirement to reduce property taxes..

    Taxpayers must engage. The choices involve additional tax expense for most who do not already pay an EIT

    Pay higher property taxes – the 1.4% allowed by the state plus special expceptions applied for and granted though the state plus additional increases approved by voter referendum

    or

    Approve an EIT of somewhere between .5% and 1% to cover district expenses in excess of distrcit property tax revenues

    Monday’s School Board meeting will allow for resident comment before a vote is taken as to whether to place a referendum question on the May 2011 ballot.

    [Reply]

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