End budget stalemate now

October 07, 2003

In his inaugural speech in January, Pennsylvania Gov. Ed Rendell, a Democrat, let the state legislature's Republican majority off the hook for tapping the state's Rainy Day Fund and using other acounting tricks to balance the state's budget and avoid an election-year tax increase.

It was an olive branch he hoped would lead to an end to the partisan sniping that has so far blocked an effort to decrease school systems' reliance on property taxes for their funding. It hasn't happened yet, and unless someone bends, local property taxes may actually go up.

Why? Because as reported by the Associated Press, the stalemate over tax policy has kept the state from disbursing part of the $4 billion in state aid to local school districts.

Without that aid, some school districts have been forced to borrow money. Peter Jackson, who covers the legislature for the Associated Press, reports that $130 million has been borrowed so far and that local property taxes may have to go up to pay interest on those loans.

Rendell has said that he won't release the money unless lawmakers okay some of his educational initiatives. They include: all-day kindergarten statewide, smaller class sizes for kindergarten through third grade and preschool programs for the state's poorest districts.

Without some progress on those measures, Rendell said he will veto any attempt to provide stoppgap funding to the schools.

In the meantime, Republicans continue to oppose any increase in taxes, even though the key to Rendell's plan is not a tax increase, but a proposal to reduce property taxes and increase income taxes by a similar amount.

Such a trade would help Pennsylvania residents on fixed incomes stay in their homes. But from the start we predicted that lawmakers would be wary of any measure that future opponents could use to claim they voted to raise taxes.

Left to their own devices, it seems clear that neither side will yield, so it's up to those affected - the taxpayers - to begin applying pressure to settle this issue before local school districts rack up more debt.

Perhaps Rendell will have to settle for half a loaf - getting smaller class sizes but delaying the all-day kindergarten proposal. Maybe lawmakers will have to begin seriously considering changes in the tax system. But the stalemate must end, before it begins to hurt the people everyone in Harrisburg was elected to represent.

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