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Wayne Independent - Honesdale, PA
  • An extremely taxing subject

  • For Rep. Mike Peifer, there are no easy answers when it comes to funding schools in Pennsylvania.
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  • — For Rep. Mike Peifer, there are no easy answers when it comes to funding schools in Pennsylvania.
    Peifer was the guest Saturday morning at a meeting of the Wayne County Taxpayers group which formed last year to focus on property taxes related to school funding. It was held at Joey C's Restaurant in Honesdale.
    "I want to listen to you," Peifer told the group.
    There is currently a move in the state to completely change the school funding system. One such proposal is eliminating property taxes.
    However, Peifer says that is a slippery slope.
    "There is no such thing as elimination," said Peifer. "There is no magic wand."
    Peifer said it would take $13 billion to eliminate property taxes for schools.
    But Peifer said it is not an elimination, rather, "It's really a shift."
    In order to shift that funding, Peifer said other taxes would have to be examined and likely raised.
    That includes income, sales and taxes on vehicles, as well as "sin taxes" on alcohol and tobacco.
    "We've got to be smart," said Peifer of moving forward.
    Under the current system, about $9.1 billion in revenue for schools is raised from residential property taxes and another $3.8 billion from commercial property taxes.
    Peifer said he has to weigh all of the options.
    For instance, he said that 53 percent of students in the Wallenpaupack Area School District are on free or reduced lunches.
    "As a legislator, I have to be very careful to take money off of property taxes and put it on people already in poverty," said Peifer.
    Page 2 of 5 - Under one plan, he said corporations would be given "100 percent forgiveness" on property taxes.
    "I don't think they should be given forgiven, they should pay their fair share," he said.
    Another issue he said must be considered is the fact a "large portion" of property in Wayne and Pike counties is owned by non-residents. He said it's about 50 percent in Wayne County.
    "Should we take it off the non-residents and put it on you?" he said.
    He also talked about the sales tax issue. Currently, the statewide sales tax is 6 percent. Peifer said in Philadelphia, state lawmakers have allowed the city to raise the sales tax rate to 7 percent.
    Peifer said other municipalities, including Harrisburg and Scranton, are hoping to be able to do the same.
    However, he pointed out there is a "huge concern" in the business community that raising sales taxes could harm business. In southeast Pennsylvania, he said there is major concern because Delaware has no sales tax.
    "As you can see, there are winners and losers," said Peifer.
    Another point outlined by Peifer is the fact Pennsylvania lost population according to the last census.
    In spite of that, he said a "hold harmless" law passed in 1991 about school funding remains in place.
    In that clause, it keeps school funding levels the same even if districts have gained or lost population.
    "School populations have grown and the funding has not grown with it," he said.
    (See related chart.)
    What it boils down to is districts which have lost students still receive the same amount of funding. In places where student population has spiked, those districts, too, receive the same amount of funding meaning more burden is put onto the local taxpayers.
    Page 3 of 5 - Both Western Wayne and Wayne Highlands have seen a spike in local taxation as a result of the funding formula.
    Another factor relating to property taxes is the amount of debt owed by school districts.
    He said in Mount Pocono, for instance, that district has $290 million in debt. East Stroudsburg's district has $270 million in debt.
    Both Wayne Highlands and Western Wayne districts "have significantly less" debt, said Peifer.
    "If we eliminate property taxes, I don't want to pay off someone else's debt," said Peifer.
    He said two bills which were floated in the last legislative session have been renamed and will be introduced this year. Those are House Bill 76 and Senate Bill 76.
    Peifer said the drafters of those bills have said they want local districts to pay off their own debts, something he said is positive.
    Peifer said said he thinks the state should pay a larger share to local districts. The state constitution calls for "adequate" funding of public education.
    In Wayne Highlands, for example, the local taxpayers are funding about 63 percent of the budget while the state and federal governments fund the rest.
    "I think it should be 50 percent," said Peifer.
    He also thinks the hold harmless clause should be changed and that reapportionment should be used based "on today's enrollment numbers. That money could help lower school taxes."
    But there is a major problem when it comes to changing the formula.
    "I can only get 88 votes," said Peifer, who added it takes 102 to get a majority in the House.
    The reason is there are more lawmakers in districts which are benefiting from the old formula and their taxpayers are not getting hit nearly as much.
    Page 4 of 5 - "There are more losers than winners," he said.
    Peifer said the idea of freezing property taxes for people 65 and older has also been discussed.
    "I'd like to freeze it for you at age 65," he said.
    However, Peifer said because of the state's aging population, in four to five years that would be a major hit on the state budget.
    "Where can we tweak this?" he said.
    The representative also discussed special education, a program he says is very expensive but necessary.
    "It's a moral obligation to help these students," said Peifer.
    He thinks it might be better if the state took the lead in dealing with the federal government when it comes to special education issues.
    Peifer said many lawsuits are filed by parents who don't feel districts are meeting the requirements of students who have Individual Education Plans (IEP) and that is costing local taxpayers a lot of money.
    One problem Peifer sees coming out of this session is the fact Gov. Tom Corbett has made transportation his top priority, not education.
    "I don't know if the governor sees this as a priority," said Peifer.
    Local resident Carol Santos said one of her main concerns is the fact there are more and more public sector employees and less from the private sector.
    She also feels the Wayne Highlands School Board members are out of touch with reality.
    "The school board members, I don't think they really know their district," said Santos. "They are an insult to me. They do what they do because they can."
    Page 5 of 5 - Others complained the board is now in the middle of contract negotiations yet the public is kept in the dark about what is being offered to the teacher's union.
    One resident said it is "time" for the teachers to pay a portion of their insurance benefits. Surrounding districts have made that move. Under the current contract, all insurance benefits to teachers in Wayne Highlands are paid 100 percent by the taxpayers.
    Peifer said he appreciated the input of the citizens and promised to continue to work for the taxpayers in his role as a state representative.

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