The following is the last of a two-part interview with Dan Albright and Steve Everhart, two teachers in the Tyrone Area School District, regarding Act 72, the property tax reduction legislation that Pennsylvania school boards must opt into by May 30 in order to receive gaming revenue generated by Pennsylvania casinos.
Gaming revenues will off-set modest property tax reductions in districts that opt in, but districts must first raise local income taxes as one provision of the act. Another key provision of Act 72 limits school districts’ authority to generate needed revenues by making future tax increases a matter of voter referendum. Thus far, only 10 of Pennsylvania’s 501 school districts have opted in to the legislation.
Here, local teachers try to explain why so many school districts and teachers are reluctant to opt in.
Tonight at 7 p.m. in the LGI room, the Tyrone Area School Board will hold a public meeting to air residents’ concerns over the legislation.
What do parents need to know about Act 72?
Albright: That they have a voice. Let it be heard, for their kids’ sake, even though it may seem futile. Research conducted by Henry Lesieur and others indicates that kids are three times more likely than adults to become problem gamblers. Our schools may be the only institutions left in our society outside of our churches charged with the task of guiding our youth. And our youth are sharper than we think in their ability to smell out and react to hypocrisy. Tell your school board how you feel about this act. I’m sure they’d appreciate it. Many of them do not like this law either. Your words may encourage them.
If Act 72 is such a bad law, then why has our board like so many others refrained from opting out of it at this point?
Everhart: Hey, board members across the state are cautious. That’s to be commended. Add to this the fact that Act 72 is a very confusing law that’s difficult to understand. But many board members across the state may rationalize giving in to gambling money because they believe that this law will be a boon to their district’s elderly. Ethical issues aside, remember who will be hit the hardest with net tax increases. Renters will take the largest hit since they will see zero tax reduction but will bear the brunt of new income tax increases—which may seem modest at the start but may balloon dramatically down the road.
Increasing numbers of our elderly in Pennsylvania are renters, not property owners, and so will receive no benefit at all from this law. Instead they’ll see a modest but mandatory income tax increase. Remember that most board members want to do what’s best for taxpayers—that’s a major part of their mission. Act 72 gives taxpayers a certain amount of control over future tax increases. What many boards may be forced to do, however, is to raise taxes in advance of budget submissions—as they can do without voter approval–up to the rate of inflation. They are forced to submit budgets so early under Act 72 that they have to build reasonable safety nets. Tyrone’s board does not have to think and act like this now. Act 72 strips them of some of their ability to forecast upcoming spikes in insurance premiums, fuel price increases, special ed costs, and unfunded mandates.
They have to react like any family would react to financial uncertainty—either they’d seek extra income (raise taxes modestly on a regular basis) or cut expenses to be safe (programs and staff, most likely). This especially concerns teachers since we know from both experience and from independent rating sources like Standard &Poors that our board runs an incredibly tight ship already and that there is not much waste in our district to cut.
Do you trust Pennsylvania school boards to do the right thing?
Albright: Trust? Remember that the future of our community lies primarily in how we take care of our kids, how we treat them and how we train them. Hopefully, we elected our school board members because we trusted them to do that. But Rendell believes that local school boards can’t be trusted. That may be an issue in districts with out-of-control spending issues. Many Pennsylvania districts spend double what we spend per student in Tyrone. If Rendell’s mistrust is justified here, then why do Tyrone residents enjoy among the lowest local property tax burdens in the state? And why doesn’t Rendell place increases in state income taxes on referendum? Your school board hasn’t raised taxes once in the last six years. You’ll recall that Rendell made a major income tax increase one of his first acts as governor. Maybe this is the direction he should be pursuing now instead—raising income tax to reduce property tax. The state income tax, unlike the local property tax, does not penalize those who have worked hard to own property. It doesn’t penalize the elderly on fixed incomes. But as it stands, the back-end referendum string attached to Act 72 takes control of school revenue from the hands of your elected school board.
But what happens if the public denies its elected board the right to raise taxes when necessary?
Everhart: In many other states where local taxes are now tied to voter approval, programs, staff, and services are cut, pure and simple. In Tyrone, by contrast, without tax increases for six years, our board has not only ensured our kids’ top-of-the-state academic results but also beautiful buildings and facilities, expanded arts and music programs, solid sports programs. Under Act 72, without adequate funding via referendum, programs not directly related to the academic mission of the schools could be slashed. Costs associated with running our vocational programs, for example, like the spiraling costs for health insurance, which in some districts have gone up 25 percent in one year, may back school boards into corners where they have no choice but to cut deeply enough to make ends meet. Because they have a proven track record of doing a lot with very little, our board deserves our trust. We trusted them enough to vote for them. And although Rendell claims that Act 72 is not about the trust we place in our school boards, this is a trust that Act 72 takes away.
What final thoughts can each of you offer those who have not made up their minds about Act 72?
Albright: Just think for yourself. Group-think is what makes laws like this possible. Politicians collectively compromise their values to create monsters like this, and school boards are tempted to bow to them. We urge residents to attend the public presentation on Act 72. And we urge them to look and listen carefully. If they’re motivated primarily by money, listen to how little money this law will save you–or cost you.
Everhart: But, hey, if they’re motivated primarily by values, they should look with sympathy at the folks at their local convenience stores who exercise their right to spend thousands of dollars annually on lottery tickets, far more than they will save via Act 72, but most of them losing money in return. Such losses will multiply under casino gambling. Listen also to how many financially un-savvy souls across the state will have to lose billions of dollars at Pennsylvania casinos before they see even one dollar of property tax relief. Rest assured. We will be bailing many of these folks out of bankruptcy further down the road. These are the people whose lives are most likely to be affected by gambling– not those who can most afford it, those who are so well-heeled that they can absorb the risk and know how to manage money. It’ll be those who can least afford it that will lose—the elderly, the young and foolish, those already in financial distress. But most importantly, look at the fiscally responsible folks who already serve as your board members. We trust them to do what’s best for our kids. Hands down, no one does that job better.
