The fiscal year for Pennsylvania starts July 1 and for the first time in 8 years, a signed budget will meet the deadline. The Pennsylvania House Republicans passed the budget and all that awaits is Gov. Corbett’s signature.
In the last few days, there was a major battle over the projected revenue surplus. Expected to be close to $700 million, the Democrats wanted most of the money to go to the Department of Education to restore spending cuts to higher education and to school districts across the state. There was support from the Democrats that the revenue surplus should also help restore the funding cuts to human services. The Republicans argued that the $700 million should be held in reserve. The battle is over on this one – the revenue surplus will go to the ‘rainy day’ fund; although some might argue that we are living in the eye of the storm now.
Some are suggesting that this budget is not a ‘no-tax’ budget as has been touted but rather a ‘tax-shift’ budget. Using the ‘robbing Peter to pay Paul’ approach, the money is coming out of one pocket and going to another pocket. Theoretically, Corbett can claim that his budget does not include a tax increase to the taxpayer, the end result filters down locally. Pennsylvania taxpayers may not see an increase in state tax but due to the decrease in public education funding, school districts are forced to increase property taxes. Isn’t this shifting of the tax burden creating the same product? Whether it is at the state level of locally, the taxpayer will see an increase in taxes.
I received a copy of a ‘talking point’ statement circulated by the office of House minority leader Frank Demody (D). Among other things, it addressed the tax-shift notion of Corbett’s budget, claiming that, “. . . middle-class homeowners and seniors being forced to pick up the tab through higher local property tax hikes”. I uploaded the statement – click here for an interesting read.
Although the education cuts are not as severe as were contained in Corbett’s draft budget in March, significant cuts remain – approximately $860 million from public schools and funding to higher education remains scaled back. School districts will receive less funding than a year ago but certainly more than in the original March budget proposal.
Sen. Andy Dinniman, minority chair of the Senate Education Committee released the figures on the Chester County school districts. Collectively the 13 Chester County school districts will see state funding restored by $11+ million over the governor’s original budget. From Dinniman’s office, the followings list indicates the school district and the increase over Corbett’s proposal from March.
Avon Grove $ 280,716
Coatesville Area $1,987,156
Downingtown Area $ 949,310
Great Valley $ 750,487
Kennett Consolidated $ 405,560
Octara $ 120,294
Owen J. Roberts $ 785,118
Oxford Area $ 186,084
Spring-Ford Area $ 893,610
Phoenixville Area $ 825,756
Unionville-Chadds Ford $ 827,233
West Chester Area $1,757,349
The timing of this information comes after the deadline for school district budgets. The T/E school board passed the 2011-12 school budget with a 3.77% property tax increase for taxpayers just a few weeks ago. The school budget passed 7-2 with school board members Debbie Bookstaber and Rich Brake casting the opposing votes. At the time, Brake who serves as the board’s legislative liaison, offered that he believed that some state public education funding would be restored. Although Brake did not have a crystal ball, he was estimating the amount could be $900K to $1 million. At $1.3 million in restored funding, T/E school district exceeded Brake’s expectation and was only behind Coatesville and West Chester on the county list.
For the record, T/E school district currently has $29 million in the fund balance. The $1.3 million will be additional revenue for the 2011-12 school year. Based on the restoration of $1.3 million in state funding, presumably there is no mechanism for the school board to recalculate and lower the approved 3.77% property tax increase. I guess it is not possible for TESD to offer some form of a rebate back to the taxpayers.
We have learned that the state budget does not contain imposition of a fee or tax on Marcellus Shale gas drilling. Further discussion of imposing a natural gas extraction fee is off the table until at least the fall. Another topic that will take a break is the school voucher discussion. Although temporarily on hold, legislators will most likely take up that discussion after their two-month summer break. Transportation funding is also on hold until late summer or early fall.