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Tinkering with the tax plan

April 10, 2003

Members of the Pennsylvania Senate this week began work on Gov. Ed Rendell's plan to increase education funding and lower property taxes. Let's hope this signals the legislature's willingness to give the plan serious consideration.

In a nutshell, the plan would increase the amount of state aid to local school districts by increasing the state's income tax from 2.8 percent to 3.75 percent. That would allow property taxes to be cut by an average of 30 percent for each school district.

Senators who reviewed the plan this week focused on tightening it so that in the future, local school boards couldn't raise property taxes without a voter referendum. The administration agrees with the idea of holding down that tax, but a spokesman said that right now Rendell doesn't favor any one method of curbing future increases.

Other senators questioned whether the funding formula proposed is too closely tied to enrollment, which they feel would harm small rural districts that may not grow more than 2 percent each year.

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A third group sought help with school construction costs, which the governor has suggested could be augmented by refinancing existing debt, while Education Secretary Vicki Phillips suggested that some districts might combine two classes in a single large classroom.

That last idea is a non-starter, or should be after all the research on the benefits of smaller class sizes. Construction costs are also a concern, but that issue shouldn't get tangled up in the tax plan, which deals with operating funds.

As for referendums, we invite Pennsylvania lawmakers to look at how that works in West Virginia, where referendums on school issues are common. While referendums do force educators to justify every dollar they seek, they also make it difficult to plan ahead.

A statewide percentage cap on property-tax increases would do the same job and let future legislatures decide if and when additional increases are needed.

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