Nirvana II: all students learning, going to college an

1
chool Finance Reform in Pennsylvania Out
of the Briar Patch in 03 ?Robert P.
StraussCarnegie-Mellon

• March 21, 2003South Pointe Hilton

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Introduction Disclosures

• Educated k-12 in Suburbs of Cleveland, Ohio, BA
  Michigan, Phd Wisconsin
• Parent of 3, refugee from Franklin Regional SD
  in Westmoreland County
• Self-confessed fiscal social worker and scholar
• Dangerous, in the words of Jerry Boyer, talk
  show host, Bobyou know what youre talking
  about

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Goals of Remarks

• Provide Context for Governors action yesterday
• Identify Pas local tax reform briar patch
• Provoke thought discussion about the Price for
  school finance reform
• Identify major ingredients of accountability and
  fiscal reforms for schools
• Speculate about what can be done locally that
  makes a difference and as Harrisburg completely
  implodes

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School Finance Nirvana and the Briar Patch of
Local Tax Reform

• Nirvana I equalizing state for k-12 50
• or better greater reliance on income
  tax than
• local real estate tax
• Nirvana II all students learning, going to
  college and taking great jobs in home town
• Nirvana III all parents and grandparents happy
• Nirvana IV all teachers better paid and come to
  work every day
• Real Estate Tax is Loved by All

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Context for New Food Fight in Capitol1991 vs.
2003 Pa. Budget Crisis

• Political wisdom is that to raise taxes,
  legislators need to be compensated for taking
  risk
• Compensation is bacon to bring home to voters
• In 1991, every 1 of new taxes to close deficit
  required additional 2 of spending/new taxes
• From 2.1 to 3.1 to 2.8 PIT is what happened
• Governor wont do that this time, wants to focus
  on his priorities cutting real estate, schools,
  development, will trade within

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The Local Tax Reform Briar Patch

• Briar Patch 1 state aid per pupil is declining
  in real and terms
• Briar Patch 2 Pa. learning results not
  terrific Philadelphia SD is imploding
• Briar Patch 3 Taxpayers hate the local real
  estate tax
• Briar Patch 4 Fixing assessments viewed as
• political suicide

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Briar Patch IssueThe Real Estate Tax Trap

• Explanation 1 increasingly residential decline
  of manufacturing
• Explanation 2 local budget pressures due to very
  aggressive collective bargaining have pushed
  school real estate tax growth rate up faster than
  growth in personal income
• Explanation 3 assessments highly uneven (

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Fixing the Real Estate Tax Promises Made and
Kept?

• Act 50 band aid to trick people into believing
  help was just around the corner
• Last year 60 local tax reform bills in General
  Assembly touted to be what voters needed
• 2002 Special Session called, ended, nothing
  accomplished, and nobody noticed
• March 27 promises may be hard to keep
• New problem of Teacher Retirement Fund-- 1
  billion of additional new real estate taxes by
  06-07

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More Briar Patch Issues Philadelphia, The City
of Brotherly Love

• Philadelphia Issues and SE Pa. Votes in Capitol
• 3.96 on commuters from suburbs, no credit
• back at place of residence
• 350 million commuter revenues at issue
• Suburbanites city politicians hang together to
• forestall action until this is fixed with
  statewide
• Philadelphia SD borrowed ¼ billion for
  operations, time bomb in Harrisburg in next few
  years
• 210,000 kids 2,000/kid increase420
  million/year

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More Briar Patch Issues Should Business
Property Tax be Cut?

• Pa. Uniformity Clause Problem all taxpayers in a
  jurisdiction have to be treated the same
• Moving to personal income tax at state and local
  level means business property taxes will go down
  a lot recrimination likely
• Pittsburgh, SD 40 is non-residential

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Another Briar Patch Issue Anemic State
Revenues Divided Government

• Deficit FY 2002-3 at least .6 billion
• Deficit FY 2003-4 at least 2.5 billion
• Getting to 50 at least 1.5 billion, ignores
• Philadelphia SD deficit, Pittsburghs
• emerging bankruptcy
• Getting Serious Foundation Grant another
• 5-7 billion, very unlikely

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When should we spend another 5-7 billion on
School Finances?

• Squishy economy not best time to raise taxes
• Public pessimism that more money wont change
  much except the cars in the teachers parking lot
• More money without changes first in
  accountability?
• Allowance before or after chores are done?

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Pennsylvanias DilemmaLocal control vs.
accountability?

• Local tax transparency vs. 3rd world view of
  taxpayers as suckers to be exploited
• Assessment reform and state oversight
• Fixing the grandma problem if real revolving
• fund at state level for reverse equity lien
• Meanings of Accountability
• Punishing kids because their teachers dont know
  the curriculum to make sure no child gets left
  behind?
• 03-04 Budget guts teacher testing, dont ask
  dont say?
• Hiring only the most academically talented
  teachers?

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Bobs Dream Accountability System I

• Labor Day testing of each kid, results back to
  kid, parents, teachers, and principals reports
  to Board by first board meeting
• June testing of each kid, results back to kid,
  parents, teachers, and principals reports to
  Board by first board meeting
• Oath of office for Board Members and
  Superintendent Agreeing to Allocate Resources
  only for enhancement of student learning
• Mandatory educational plan passed in June with
  budget that addresses issues identified during
  year

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Bobs Dream Accountability System II

• Monthly statistical and oral reports to Board on
  progress of educational plan in June budget
• Elimination of any conflict of interest on part
  of school employee or Board member by prohibiting
  direct and indirect conflicts
• Pay each director 12,000/year with state funds
• Parental choice of teachers in August of each
  year
• Considerably revamped Pa. Dept of Education
• Testing, Oversight

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Accountability Yourself Reform Ideas

• Get Washington Countys assessments fixed, Rank
  of 39, CD35 is bad, should be 15
• Local ordinances can raise ethical standards
• impose stronger oaths of office
• Local ordinance can fix superintendent-board
  relations, require educational plan/reports
  budget
• Local ordinance can create parental choice of
  teachers
• Local boards can not directly pay themselves
• Hiring can be on merit, not nepotism
• Testing is relatively cheap, can be done
  twice/year
• County wide collective bargaining?

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More own source money and no accountability
reform?

• Worst case scenario property taxes go up, no tax
  assessment reform
• Status quo in board-superintendent relations
• Status quo in hiring practices
• Status quo in haphazard state testing
• Status quo in escalating teacher costs
• Result? Continued out-migration of capital, young
  people from Pa.

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Our 21st Century Reality

• The battle to improve our standard of living
• will be won or lost in our
• school and college classrooms