– State Reps. Tim Hennessey (R-North Coventry) and Tom Quigley (R-Royersford) jointly introduced legislation to help school districts facing sudden and overwhelming losses of property tax revenue, as well as to achieve tax fairness in a more timely fashion.
“It has been two years since the adoption of the Fair Funding Formula for basic education funding. Although this was a step in the right direction, more needs to be done to provide true fairness,” Quigley said.
Mensch added, “School districts like Pottstown show that the state needs to have a greater urgency in achieving full implementation of the new school funding formula. But until the state gets there, bills like we are introducing are essential for the financial success of struggling school districts.”
The bipartisan 2014-15 Basic Education Funding Commission (BEFC) reviewed the distribution of the more than $5.5 billion in state basic education funding and recommended a new distribution formula for all following years to address funding disparities between districts.
While the Fair Funding Formula works to distribute money fairly and predictably among Pennsylvania’s 500 school districts, many school districts are being shortchanged because of the Hold Harmless provision, which requires that all districts receive at least as much money as they did the year before – regardless of students moving out of the district or any other changes. The BEFC identified 180 school districts that are currently underfunded.
The bill would incorporate BEFC’s recommendations and, beginning in the 2018-19 fiscal year, allocate 75 percent of all new basic education funding proportionately to the underfunded school districts. The remaining 25 percent of the new basic education funding would be distributed to all 500 school districts though the student-weighted Basic Education Formula. No school’s funding would be reduced below the 2014-15 base year level.
The second bill would address school districts’ loss of property tax revenues when a for-profit hospital sells its institution to a non-profit.
Locally, six Community Health Systems hospitals were sold to Tower Health, resulting in an annual property tax loss of $970,000 for Pottstown School District.
“The Pottstown School District is already hugely disadvantaged by the delay in fully implementing the Fair Funding Formula, to the tune of $13 million each year. The additional loss of nearly $1 million is crippling,” Hennessey said.
To cover the loss sustained each year by these school districts, the bill would create a stand-alone account within the General Fund. Money for the account would come from the current tax revenues, which would be transferred to the account and would be in addition to the new money distributed by the Fair Funding Formula. A school district would no longer receive the ongoing subsidy if and when the building is returned to a tax-paying status.
“While our school districts do not have a say in the property transfers and significant loss of tax revenue, we can help protect them from the adverse consequences,” Quigley added.
Representative Tom Quigley
146th Legislative District
Pennsylvania House of Representatives
Media Contact: Alison Evans