The School Tax Vise: Taxes Soar, But Districts Still Struggle

Philly.com reports of the growing tax burden within suburban districts. According to their analysis, school taxes in Montgomery, Bucks, Chester and Delaware Counties increased more than 40 percent in the last decade, in some cases double and triple the rate of inflation. On average, the increases have added about $1,200 to homeowners’ tax bills. In the Octorara School District, bills have risen almost $1,700.

Inquirer Staff Writers, Jessica Parks and Chris Palmer, focus on the problem common to all districts, personnel costs, which include average annual teacher salaries, generous medical benefits plans, and the Public School Employees Retirement System‘s defined benefit pension.

At Octorara, we know that a very large percentage of the budget also goes to debt, paying for over building. The 2003 Feasibility Report, used to justify spending, speculated 500 new students in 10 years. The enrollment for 2012-13 was actually only 2,508, the lowest enrollment in more than 10 years. In fact, enrollment has been in decline for a good number of years now. There were 75 fewer students in 2012-13 than 2011-12, with continued declines expected by the PA Department of Education into the next decade.

The report also highlights the struggle many homeowners are going through to pay their taxes, and how taxes threaten to put many on the street. It reminded me of the first time I went to speak before the Octorara Area School Board of Directors, armed with facts and figures about taxes, income, home values, and other demographic information showing Octorara’s high tax rate was causing real harm. The initial response was to dismiss there was a problem.

The preliminary budget presentation for the 2014-15 school year is less than 5 short months away. It will only be through making your voice heard to the board that real change will occur. Octorara’s mission statement is, “A partnership among school, community, and family.” The role of government officials is to listen to all opinions, especially the ones they would rather not.

Pennsylvanian’s Governor Corbett supports pension reform, and changing the Public School Employees Retirement System from a defined benefit to a defined contribution. While this will save Octorara some money, it will not relieve the burden of higher than average salaries and unnecessary debt.

The only way for the Octorara Area School District to fix the tax problem is a top to bottom reorganization of the district, which includes building consolidation and concessions from teachers. If I have my timing correct, contract negotiations with the teacher’s union should begin sometime this Fall. Don’t expect it to be announced like other districts. Octorara likes to keep things on the Down-Low. Parents, citizen, and taxpayers will need to be preemptive and proactive in order to get a contract that is fair to homeowners.

3 thoughts on “The School Tax Vise: Taxes Soar, But Districts Still Struggle

  1. There needs to be a better system in place to fund the schools. No one should lose their home because they can’t pay their tax bill. We need to move towards a sales tax so that everyone has skin in the game when it comes to funding our children’s education. But even with doing that, we need to force the school boards to be more fiscally responsible and to remove the whole pension program.

    • I’m not yet 100% convinced that a sales tax is the best option. It is too much redistribution of wealth in my opinion, and it would further diminish local control and oversight. Of course, it would stop school boards from just raising taxes whenever, and spending would need to be more thoughtful.

  2. I don’t think you are the type of person to do so, Mr. Alexander, but you could be forgiven for taking some satisfaction in the way that this Sunday’s Philadelphia Inquirer (and through it, to the philly.com website) chose to place as the lead story on its front page the disturbing news that throughout the five-county Philadelphia metropolitan area school district taxes are becoming, indeed already are, a monstrous problem which is challenging the financial ability of an increasing number of taxpayers to pay the freight, and which is already driving an increasing number of people, especially older folks, out of their homes because on their fixed incomes they simply cannot afford the school district taxes imposed upon them. I urge, implore, everyone to read the article. And if you do, take note of the fact that the article singles out the Octorara Area School District as the school district in Chester County where taxes have risen the most over the past ten years, despite a declining student enrollment. Indeed, over the past ten years the school tax rate for residents within the Octorara Area School District has risen 68%, resulting in an average tax increase of almost $1,700. Now, how many local residents have seen their incomes increase 68% in the past ten years? Damn few, I’ll wager. In fact, according to almost all economic metrics, the real incomes of most middle-class families have actually declined in the past ten years, in fact have been declining for 20 years or more. What’s wrong with this picture? Well, I submit that one need look no further than the recent bankruptcy filing of the City of Detroit. To be sure, there are many villains and culprits in the sad saga of Detroit’s decline, but not least among them are public sector unions which kept demanding more and more while delivering less and less, and in the face of a dwindling tax base…aided and abetted by a complacent citizenry, and by government too corrupt and lily-livered to even think about taking the punch bowl away from the party. And if you read the article linked in Mr. Alexander’s post — and again I urge you to do so — also take note of where the authors’ pin the lion’s share of the blame for the outrageous increases in school district taxes: squarely on the absurdly, ridiculously high pay and benefit packages for teachers. How would you like to come right out of college and move right into a job with a beginning salary of nearly $50,000, with three months off and a lot of extended holidays each year, with a benefit package to beat the band, and with representation by a union that effectively makes it almost impossible for you to be fired, no matter how miserable of an educator you might be? Talk about sweetheart deals! You and me and most of the rest of us should be so lucky. But no, we poor working-class schlubs, or Social Security-dependent oldsters, are expected just to pay our tax bills for an educational establishment that seems increasingly greedy on a gross scale, and which, more to the point, seems to be unproductive, incompetent, etc., etc. Maybe I’m missing something, but from most of what I read today’s students are not what we were 30, 40, 50 years ago. So it seems the pattern is that we pay more and get less. And within the Octorara Area School District, we pay a great deal more and get even a great deal less vis a vis the declining student enrollment. Only in the minds of government employees and those who acquiesce to their incessant demands for more, more, more, can such anti-logic sit easy.

    Now, Mr. Alexander, while we have met and chatted just once, I know you mostly through your words on this blog, what you have posted to other blogs, and what you have said in school board meetings. In all cases I have found you to be knowledgeable, informed, prepared, and cool and calm as you went about presenting your case, offering your message, even in the face of sometimes outrageous slanders. As I said at the outset, I would not expect you to take a victory lap over the fact that just this Sunday the region’s premiere journalistic outlet headlined a story which pretty much underscored what you have been saying for months, that the board of directors of the Octorara Area School District, and by extension school districts all across the region and all across the country, have completely and utterly lost touch with reality. No need for you to blow your own horn; I just did it for you, and well deserved.

    I’m not easily won over. And if I ever see you compromising your simple and basic principles — that the poor and quasi-poor people of this neck of the woods can no longer afford Cadillac educations for each and every student in the OASD — then trust me to call you on it.

    Respectfully,
    C. Vail

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