State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Squabble over business tax as school problems loom larger

Written by Mary Wilson, Capitol Bureau Chief | Jun 17, 2013 8:57 PM

Photo by G.R. Wilson

Three big issues have dominated the state budget debate, but with less than two weeks before June 30, one lawmaker is suggesting poor schools are getting short shrift.

"Pensions, transportation, liquor - they're being resolved as we speak," said Sen. Anthony Williams (D-Philadelphia). "Education has not been resolved, and it can actually affect whether we get a budget or not."

Philadelphia school district has announced plans to lay off nearly 3,800 people, and four people have announced a hunger strike to protest the pink slips and closings of 23 schools. Allentown's school district will lay off nearly 100 teachers this week.

Williams said other financially distressed districts will join Philadelphia and Allentown soon if the state doesn't provide more funding. He said Monday that state lawmakers are too busy trying to find consensus on policy issues Gov. Corbett has staked out as his top priorities.

"Where's the money? I don't know. We don't know. We haven't figured that out," said Williams. "I cannot imagine we're able to leave Harrisburg without figuring out what those school districts - how they'll be able to perform and get through their school years."

Philadelphia is asking the state for an additional $120 million dollars. Some observe that in this year's budget, the district will be lucky to get any increase at all. Sen. Jake Corman, who chairs the Sen. Appropriations Committee, said leaders are "probably looking at tens of millions" for the cash-strapped school district.

Corman said there are options for raising state revenues, like allowing a business tax that was scheduled to disappear by the beginning of next year to live on a little longer. He said he couldn't see how freezing the phase-out of the Capital Stock and Franchise Tax, currently at 0.89 mills, would hurt business.

"We haven't discussed it with anybody yet. I would consider it, but that's just me," said Corman.

"I don't think businesses will look at it and say, 'Oh, we can't come to Pennsylvania. Oh, we're leaving Pennsylvania.' I mean, it's such a low rate now, it's fairly insignificant to them," said Corman. "Is that phase-out more important than education dollars?"

The words weren't out of his mouth more than a few hours before the House Republican Majority Leader Mike Turzai called an impromptu press conference to preempt nascent efforts to keep the tax.

"We have already implemented that policy. It's an existing law," said Turzai. "It has created expectations with respect to employers and we want the existing law to stay the same. To be honest with you, changes to the Capital Stock and Franchise Tax phase-out would be, for me, a non-starter."

This post has been edited to reflect the CSFT rate for 2013. The 1.89 mills rate was for 2012.


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Comments: 5

  • Carol Brian Junkologist img 2013-06-18 15:37

    Mike Crossey, president of the PSEA (Pennsylvania State Education Association), in asking that school districts be relieved of restrictions they now face on local real estate taxes in order to make up for the loss of state funding and for the Legislature to enact a "rational funding formula" for education sounds to me like he's demanding HB/SB76 ..

    Read more:

  • Carol Brian Junkologist img 2013-06-18 15:38

    Next campaign slogan: - "Drink Heavily, Smoke lots of Cigarettes and gamble daily to support school funding"; "It's For The Children". lol (laughing out loud)

  • Carol Brian Junkologist img 2013-06-18 15:40

    David Baldinger - School Property Tax elimination HB/SB 76 Legislation
    Pa HB/SB76 abolishes the school board's authority to levy property taxes. Under HB/SB76, the school board will get an annual 100% dollar for dollar budgetary expense replacement "Check" from the state, instead of the current 20-25% of Public School Funding from the state and the remaining 75-80% from property owners [and renters via a portion of rent]. Decades ago, the state legislature granted the school board the authority to act as the IRS does and hold a gun to property owners' heads. .... When "You" don't pay, you are threatened with destitute homelessness. You are faced with either diverting some of your food, insurance, heating, medicine, and other money to cover the increasingly debilitating school property tax [or an increasingly inflated rent] or you can throw in the towel, walk away from the home you may have fought so hard to secure for you, your children, and future generations. ..... In recent years, more than 75 taxpayer advocacy groups have emerged across Pennsylvania to fight this fight for those who are not aware of the imminent danger inaction threatens us all with. ...... The battle to preserve the quality of life, all Pennsylvanians have fought and died for since the 1700's, is amassing support as dozens become hundreds and hundreds become thousands ...... Last year, for instance, several hundred members of Pennsylvania Coalition of Taxpayer Associations (the PTCC - Pennsylvania Taxpayers Cyber Coalition, on facebook) rallied at the state capitol, touring the building, interviewing legislators, and speaking on the record in support of then HB1776. ..... Since the September 2012 "Fil-a-Bus" tour, the PTCC has grown from about 650 to over 1700 members, co-sponsors of HB/SB76 have been helping us lean on their peers to get more legislators signed on as co-sponsors, and, everyday, more taxpayers are being educated by us, as we ask you to Spread The HB/SB76 Word !!

  • Sharon Pollard img 2013-06-18 15:42

    HB/SB76, school tax elimination is the biggest issue with PA residents. We are over burdened and struggling to pay these taxes. Schools should be funded through people not property. Property ownership is almost out of reach for any couples. The mortgage is affordable the added taxes to escrow per month is not. Business would expand into PA. bringing a livable wage which in turn benefits the community. School tax on property owners as we have now is a cash cow for school boards and special interest. Knowing we will pay the price to keep our homes. I am tired of paying for my property only to have it held in the school funding grasp. We are a crisis away from a sheriff's sale.

  • Edward Szczepkowski img 2013-06-18 18:27

    The property owners already are on a hunger strike we can't afford steaks anymore

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