BCCT editorial.
More money for the schools ... or is there?
Posted: Sunday, July 1, 2012 6:00 am | Updated: 6:34 pm, Fri Jun 29, 2012.
Republicans in the state House were quite pleased last week after crafting a 2012-13 state budget, particularly with the increases they claim the budget provides for local school districts.
Figures released by the House Appropriations Committee show school subsidy increases in Bucks County of anywhere from 4 percent for the Bristol Borough School District to almost 18 percent for New-Hope Solebury. Double-digit boosts were the rule in almost every district in Bucks but a few.
“We did pretty well, didn’t we?” asked state Rep. Scott Petri, R-178, vice chairman of Appropriations. “While I have not talked to my area superintendents, I already know they’re going to be pretty pleased with how it affects their schools.”
Well, maybe not.
It’s true there’s more total money going to the schools. But according to Democrats, that’s because the Corbett budget combines money for transportation, Social Security and pension costs with basic education funding (BEF) and accountability block grants (ABG). Those latter two categories represent money that actually reaches the classroom; they were separate line items in former Gov. Ed Rendell’s budgets.
When you present the budget numbers the old way, the Dems claim BEF and ABG are the same as last year. State Rep. Steve Santarsiero, D-31, says funding for basic education “remains flat” and “is treading water from last year. We have not made up for the massive cuts from the previous year. ... Ask any Bucks County superintendent, and they’ll tell you this money is not getting to the classroom.”
A spreadsheet prepared by the House Democratic Appropriations Committee would seem to bear out what Santarsiero is saying. All the extra money for education that Republicans are crowing about is for retirement and transportation. Only a handful of districts statewide will receive additional classroom education funding.
The overall Republican budget has come under heavy fire for what it doesn’t do for social services. Funding decreases in those areas have been described as catastrophic. If we’re to believe what the Democrats are saying, education won’t make out much better. Coming on the heels of severe cuts in school funding in the previous budget, a spending plan that provides no additional money for actual education means schools will continue to play catch-up.
We understand responsible budgeting is always difficult, it’s especially difficult now and priorities have to be established. Doing more with less has become standard operating procedure among all the agencies that count on the state for support.
But it’s disingenuous for Republicans to claim their budget provides more for education when it appears they’re really just playing a game with the numbers.
We hope there’s more to it than that.
The bottom line is, school districts in our part of the state are already hurt by a flawed funding formula. A budget that provides no additional funding for the classroom — if indeed that is the case — adds insult to the injury of last year’s budget cuts.
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Gov. Corbett signs $27.7 billion Pa. budget
Updated at 07:54 AM today
HARRISBURG - July 1, 2012 -- After days of long meetings and last-minute bills flying, Gov. Tom Corbett signed a $27.7 billion no-new-taxes budget just before midnight Saturday that was the centerpiece of several long-term victories for his legislative agenda.
There were defeats for the governor too, though his fellow Republicans who control the Legislature tried to squeeze out as many victories for Corbett as they could in the waning moments of the fiscal year. Minority Democrats staunchly opposed elements of the budget as well.
Corbett won approval from the Legislature for two different tax credits: one designed to seal the deal for the construction of a massive new petrochemical refinery and another designed to advance his agenda to open up taxpayer-financed alternatives to public schools.
He also cemented an overhaul of how public school teachers' classroom performance will be evaluated, and he eased his former chief of staff and longtime friend, Bill Ward, into his dream job of being a judge.
Still, Corbett failed in a last-ditch attempt to win support for provisions to smooth the road to opening up more privately run, taxpayer-funded charter schools.
Signing the budget before midnight let Corbett keep his pledge for the second year in a row to sign an on-time budget.
"Hopefully we're developing a habit," he said after a signing ceremony in the Capitol Rotunda.
The budget plan for the 2012-13 fiscal year that began Sunday authorizes a spending increase of about 1.5 percent, largely for debt, pensions and health care for the poor, as well as to help fill a shortfall in the almost-finished fiscal year.
Meanwhile, it is projected to accumulate around $350 million to $400 million into reserves while cutting businesses' taxes by hundreds of millions of dollars and slashing hundreds of millions of dollars from services for the poor, homeless, troubled and disabled.
Aid for public schools and universities will remain flat - a handful of public schools nearing financial collapse will see a little extra money - after absorbing more than $1 billion in cuts in the current fiscal year.
It was those cuts in aid and the memory of deep education cuts in the past 12 months that most rankled Democrats at a time when Corbett pushed for tax breaks for a subsidiary of Netherlands-based oil and gas giant Royal Dutch Shell PLC.
Rep. Rick Mirabito, D-Lycoming, suggested that Shell's CEO, Peter Voser, and his company should sacrifice in the same way that Corbett has asked people in Pennsylvania to do by cutting aid for the poor, social services and schools.
"You should do what all of us are doing in Pennsylvania. You should learn to live with less," Mirabito said. "Learn to live on $15.2 million a year without getting any tax breaks from us in Pennsylvania."
A proposed $50 million tax credit approved Saturday night is designed to help low-income students transfer out of the state's worst schools - a condition that was an integral part of a conventional school voucher proposal that stalled in the Legislature despite Corbett's support.
The credit is being incorporated in the existing Educational Improvement Tax Credit program, whose 2012-13 appropriation also would be increased to $100 million from this year's $75 million.
That 11-year-old program rewards businesses that contribute money, property or services to nonprofit groups that provide scholarships to students from low- and middle-income families who transfer to private schools or public schools outside their home districts.
Much of Saturday was devoted to trying to iron out disagreements between the House and Senate over charter schools.
In the end, the chambers traded competing education bills without the key provisions Corbett sought: putting the decision to create a charter school in the hands of an appointed state board, rather than locally elected school boards, and stripping the ability of parents and teachers to prevent the conversion of a public school building into a charter school.
Both bills stalled, possibly until fall, despite having some similar provisions.
Supporters of each bill said they were designed to strengthen state oversight of charter schools, overhaul the way the state distributes special education aid and seek recommendations to address longstanding public school board complaints over the amount of taxpayer money charter schools receive.
Professor: Pa. Shell Tax Credit Is 'Soviet Thinking'
06/27/12 Kevin Begos,
PITTSBURGH (AP) — Gov. Tom Corbett and union leaders want lawmakers to approve a $1.7 billion tax credit to lure a new petrochemical plant to western Pennsylvania, but some tax experts say that would run counter to sensible tax practices and would be unfair to other businesses.
The first-term Republican governor, who ran as a pro-business conservative, proposes Pennsylvania's largest-ever financial incentive — a tax credit of $66 million per year for 25 years. In return, Shell Chemicals has tentatively committed to build a multibillion-dollar petrochemical refinery about 30 miles northwest of Pittsburgh.
Union leaders from the United Steelworkers and the AFL-CIO have endorsed the plan, as well as some Democratic politicians.
But David Brunori, a professor of public policy at George Washington University and author of "State Tax Policy: a Political Perspective," described the idea as "Soviet thinking."
Brunori said numerous studies show that the best tax systems have low rates, are broadly based, and treat all businesses equally. "What the governor's doing is opposite of that," he said. "There's absolutely nothing good about what the governor is proposing."
One leading advocate of free markets also said the plan doesn't add up.
"It's unfair to the companies that don't get the breaks," said Chris Edwards, editor of DownsizingGovernment.org and director of tax policy studies at the Cato Institute. "I think it makes a really bad tax policy."
Edwards said politicians around the country seem to have "a weakness for giving narrow tax benefits to their favorite industry." He said it would be better to lower tax rates for all businesses in Pennsylvania.
Both Brunori and Edwards note that Shell has argued that the tax credits would help justify the company's investment risk given the chances that much of the Marcellus Shale gas could be shipped to other regions, for use by other companies. The company says that without a large, steady supply of gas, it can't justify the huge investment to build the plant.
But Edwards said businesses are supposed to take risks.
"It does seem bizarre that they want the government to cover their private business risk," he said.
Houston-based Shell plans to tap into the enormous new supply of natural gas coming out of the Marcellus Shale, a gas-rich rock formation thousands of feet under Pennsylvania, New York, Ohio and West Virginia. The so-called ethane cracker would convert natural gas liquids to ethylene, which chemical manufacturers can then use to produce chemicals that go into plastics, tires, antifreeze and other products.
West Virginia and Ohio also have offered Shell large tax credits, and Brunori said fear may be what really motivates politicians in such cases.
"Nobody wants to be blamed for losing a big company," he said.
Shell's announcement last year of its plans for the refinery seemed to signal the return of major industry to the northeast United States for the first time in decades. The plant could create up to 10,000 construction jobs, 500 permanent jobs, and inspire many other companies to locate to the region.
But some companies now want to ship the gas down to existing or new plants on the Gulf Coast, some want to ship it to Canada, while others want to export it overseas. Energy industry analysts agree that the Marcellus is generating plenty of competition and even market turmoil.
"We are likely to see grand plans by many firms. Some will fail. Some will succeed. Some investments will be abandoned. Others will produce high rates of return for their investors," said Jay Apt, director of the Carnegie Mellon Electricity Industry Center in Pittsburgh.
Shell's plans could be slowed or derailed by competitors or even national politics, added Fadel Gheit, an oil and gas analyst with Oppenheimer & Co. in New York City. A political decision, for example, could allow the export of natural gas liquids, he said.
The market price for the gas in Europe or Japan is double or triple the price in the U.S. Even factoring in the difficulty and cost of transportation, some companies still want to export the bounty.
Plenty of money for corporate welfare.
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