After months of debate and deliberation, property tax reform comes to a head in the next few weeks. I and other legislators have to evaluate the various proposals, weigh the good versus bad in each and decide how we plan to vote. The issue of what property tax reductions go to whom and how they are paid for is extremely complicated. However, I want to focus on one aspect of this debate which is troubling me, and that is the so-called back-end referendum.
The theory behind the back-end referendum (“BER”) is as follows: If the state uses gambling money and/or some other source of revenue to reduce property taxes, what is the stop the local school boards from raising property taxes right back to where they were thus obviating any relief? The back-end referendum will force the school boards to get the voter approval if they ever want to raise taxes property taxes greater than the rate of inflation. This sounds reasonable on its face, but under scrutiny, some problems become apparent.
First, I have never been a fan of government by referendum. In states where referendum is available, people often, for example, vote to cut taxes and mandate higher spending at the same time. The population can vote its mutually exclusive preferences. They don’t have to square the circle like a legislature or a school board does. This usually leads to an untenable fiscal mess in short order (i.e. California) Also, a referendum does not allow for the single greatest instrument of progress in our body politic: namely compromise. If an 8% tax increase goes on the ballot, people may think it is too high, while they think 4% is reasonable, they can’t express that on the ballot. The vote is all or nothing – there is no compromise possible.
Another huge objection I have to BER is the issue of mandates. So much of what school districts spend is mandated by either the state or federal government or contract. Examples of costly mandates include the federal requirements for special-needs students (“Individuals with Disabilities Education Act”) and the “No Child Left Behind Act.” Suppose the district needs to raise taxes to comply with a mandate and the referendum looses? The school district still must comply. It seems unrealistic to compel a school district to do something while denying them the resources to do it.
Also, BER turns each year’s budget into a political campaign. I know something about political campaigns. They take a great deal of time, money and energy. A referendum is an election that can only be won by doing the things required of all campaigns such as phone banks, yard signs, door-to-door canvassing, fundraising, etc. BER turns each of our school board members, school administrators and teachers into campaign operatives who must spend time away from the classroom politicking.
Finally, a referendum tied to inflation is simply unfair. That is because the things that school districts must pay for usually increase at a rate much higher than general inflation. Last year inflation was about 2%, but the cost of special education, health care and transportation all increased by double-digits. This is a recipe for dramatic, forced cuts in real dollars every year. Teachers will have to be fired, after-school programs, music, sports and tutoring will all have to be cut. In a few short years it is very possible that Lower Merion’s education system will be unrecognizable.
Of all Pennsylvania’s school districts, Lower Merion probably fares the worst under a mandatory BER regime. Under most proposals we get comparatively very little in actual tax relief, and we put in serious jeopardy our status as one of the state’s best and most respected public school systems. This is why I cannot support any bill which contains a BER unless there are significant exceptions for things like mandates, population growth, health care costs, contractual obligations, etc. Our public school system is simply too important to our community, to our reputation, to our property values, and most of all, to our children.