EPLC Education Notebook

Friday, December 16, 2005

Special Session on Property Tax Relief

With Governor Rendell keeping the pressure on legislative leaders to have the House and Senate send to him property tax relief legislation before the end of the year, this past week has seen some significant activity in both chambers. The Senate approved a bi-partisan proposal, Senate Bill 30, on Thursday. The House had a very rare session on Tuesday as the "Committee of the Whole" that informally considered more than a dozen different proposals and informally indicated majority support for three of the proposals. These House discussions and the "test" votes were largely about concepts and are supposed to lead to re-drafted legislative proposals that apparently are intended to represent the "best" or at least the "most popular" ideas that will be brought forward for more formal consideration by the full House.

But the Senate and House seemed to be headed in different directions as this week comes to an end. The Senate-passed legislation is primarily about giving local voters in school districts the opportunity to approve a partial shift from property taxes to higher earned income taxes. With its provisions for voter approval required for proposed school district tax hikes exceeding an inflation index, and the distribution of "slots" funds to all districts, the Senate Bill 30 looks much like the Act 72 of 2004. The bill does not call for any increase in state taxes. In contrast, the ideas in the House that seem to have the greatest support would provide for a more substantial reduction in school property taxes funded by an increase in the state income tax and the state sales tax. But it is one thing for House members to vote in favor of a concept, and quite another matter for members to vote for an actual increase in state taxes.

Neither House nor Senate was scheduled to be in session next week, but now both chambers are recessed until the "call of the chair." It is still possible that an agreement will be reached between House and Senate this coming week. Stay tuned.

Meanwhile, House and Senate committees also continued to consider a great variety of Special Session bills, some of which might become a part of any final legislative agreement on this very complicated issue of property tax relief. Read below for a more detailed description of events this past week.



• The Senate passed legislation on Thursday ( Special Session Senate Bill 30) that would reduce school property taxes for homeowners and expand property tax and rent rebates for low-income senior citizens. The Senate's plan would ask voters to decide if they want to increase their local earned income tax in order to reduce school property taxes. A referendum on the tax switch would be held during the 2006 primary election. The legislation includes a back-end referendum requirement on future school tax increases that exceed an inflationary index. SB 30 also expands the state's Property Tax and Rent Rebate program by $131 million - a change that will provide tax relief to 281,000 additional low-income senior citizens. Senate Bill 30 was sent to the House and passed by House Rules Committee on Thursday before both chambers recessed.



• On Thursday, the House rejected the Governor's plan for property tax relief ( Special Session House Bill 1) that mandated school district participation in the Homeowner Tax Relief Act (Act 72 of 2004). The House voted the proposal down 182-12.



• The House met as a rare Committee of the Whole this week to unofficially consider proposals for school property tax relief. Of the more than 20 plans presented by legislators, three gained a nod of approval in the non-binding votes taken by the House. The chamber looked favorably on a proposal by Representatives Mario Scavello and Kerry Benninghoff that would provide homestead property tax relief by expanding the base of goods subject to state sales tax ( this would not include food, clothing, prescription drugs, non-prescription drugs, home heating fuels, health care services or college tuition). Deeper tax relief would be provided through gaming revenues when funds from gaming become available. The proposal allows school districts to provide additional property tax reduction through an increase in the local personal income tax. Future property tax increases would be subject to voter approval. Also garnering support was legislation from Rep. Dave Reed that provides property tax relief through an increase in the state sales tax (from 6% to 7%) and state personal income tax (from 3.07% to 4%) and infusion of state gaming revenues. Reed's plan would drive dollars for tax relief to school districts on a per-student basis. He estimates that his proposal would raise between $4.68 and $5.16 billion for property tax relief, depending on the level of revenue realized from gaming. Reed's plan gives school districts the option of reducing property taxes by an additional 25% through a local earned income tax. It also includes a back-end referendum on future school tax increases that exceed the rate of inflation. Finally, a proposal to allow for quarterly payment of property taxes, put forth by Rep. Mario Civera, also earned consent from the Committee of the Whole. The House will consider the concepts embodied in these bills as it continues its formal debate on property tax relief.



• The House Special Session Finance Committee moved forward the following legislation this week (all bills have been placed on the House Tabled Bills Calendar):
  
  Special Session House Bill 3: Expands the special property tax exemption for certain disabled veterans currently provided for in the state constitution. The bill extends the exemption to the unmarried surviving spouses of services members who are killed in combat. Additionally, the bill amends the section of the state constitution exempting certain disabled veterans from property taxes. Currently, disabled veterans qualify for a property tax exemption "if, as a result of military service, they are blind, paraplegic or double or quadruple amputees or have a service-connected disability declared by the U.S. Veterans Administration or its successor to be a total or 100% permanent disability, and if the State Veterans' Commission determines" they are in need of the exemption. HB 3 deletes the words "total or 100%" from the constitutional provision.
  
  Special Session House Bill 29: Gives municipalities flexibility in determining eligibility for tax deferrals.
  
  Special Session House Bill 35: Requires school districts to provide for the collection of school property taxes in four quarterly installments. A quarterly payment option must be in place by January 31, 2007. The bill was amended to delete language that would have provided state funds to pay the property tax increases (up to $500 annually) for certain homeowners in poverty.
  
  Special Session House Bill 68: Creates a partial property tax exemption for homeowners who qualify for the Senior Citizens Rebate and Assistance Act.



• The House Appropriations Committee moved forward a package of legislation introduced by the Local Tax Policy Caucus that would shift responsibility for special education to the state, create separate local revenue streams to support educational instructional expenses and to support all other education costs, and reduce school property taxes through a local personal income tax. For a detailed description of the legislative package (Special Session House Bills 14, 15, 16 and 17) see the December 9 edition of the EPLC Education Notebook at www.eplc.org/notebook/December9,2005.html. The legislation awaits further consideration by the full House.



• The Senate Committee on Legislation voted Wednesday to approve Special Session House Bill 39, which prohibits school districts from levying property taxes after December 31, 2007 and requires school district revenue from the realty transfer tax to be collected in a state-level Education Operating Fund beginning January 1, 2008. The bill was part of a tax relief package offered by the House Commonwealth Caucus; HB 39 was the only piece of the six-bill package to gain House approval. HB 39 has been re-referred to the Senate Appropriations Committee.


Links to legislation introduced in the Special Session are available on the EPLC web site at www.eplc.org/clearinghouse_k12finance.html#legislation.


Pennsylvania Education Policy Activity

Senate Actions (Regular Session)


• The Senate Education Committee unanimously approved the nomination of Dr. Gerald Zahorchak as Secretary of Education. His nomination now moves to the full Senate for consideration. Zahorchak began service with the Pennsylvania Department of Education as Deputy Secretary for Elementary and Secondary Education at the beginning of the Rendell administration and has since twice served as Acting Secretary. His resume includes experience at every level of education, most recently serving as superintendent of the Greater Johnstown School District, and previously as a teacher, principal and school board member, as well as service as a member of the Johnstown City Council and Deputy Mayor of Johnstown.



• The Senate passed the following legislation this week:
  
  House Bill 894: Exempts retired teachers who return to school service from state-mandated professional development requirements if they work no more than 180 school days. Retirees who return to teaching for more than 180 days would be required to fulfill the state's continuing education requirements. HB 894 also requires the Department of Education (PDE) to provide access to its free, online professional development courses to all educators, not just those currently employed by a school entity. Finally, the bill requires PDE to maintain all retirees' teaching certificates in active status. HB 894 now goes back to the House for concurrence in amendments made by the Senate.



• On Tuesday, the Senate Finance Committee took the following actions:
  
  Senate Bill 292 and House Bill 1427: SB 292 and HB 1427 streamline the local earned income tax collection system. The Committee amended SB 292 and HB 1427 to align the language in each bill, however, both bills were held in Committee as amended and not moved forward. Finance Committee Chair Jane Earll said the Committee will entertain a proposal to establish a countywide EIT collection system in January, but wants to keep SB 292 and HB 1427 on the table as vehicles to at least clean up the current EIT collection system if efforts to create a countywide collection system are not successful. The Pennsylvania Department of Community and Economic Development previously released a report that recommended streamlining the EIT collection system. For more information on DCED's recommendations, contact the Department at (toll-free) 866-466-3972.
  
  Senate Bill 592: Allows the Pennsylvania School Employees' Retirement System (PSERS) to keep confidential some investment information during the time the investment is being negotiated. The bill was amended to delete a similar requirement for the State Employees' Retirement System which, according to Finance Committee Chair Jane Earll, will be considered next year. SB 592 has been re-referred to the Senate Appropriations Committee.
  
  House Bill 459: Allows property subject to delinquent tax claims to be donated in order to alleviate tax liens against the property. Under HB 459, a school district is authorized to receive donated property through a designated agent, such as a county redevelopment authority. This anti-blight legislation, designed to return abandoned and delinquent properties to productive use, does not apply to Philadelphia or Pittsburgh. HB 459 has been re-referred to the Senate Appropriations Committee. Legislation establishing similar anti-blight provisions that would apply to these cities (Senate Bill 640) was previously passed by the Senate and subsequently by the House Appropriations Committee.



House Actions (Regular Session)


• The House passed the following legislation this week:
  
  House Bill 1085: Makes any student who is a Pennsylvania resident and has been accepted into an approved higher education institution eligible for state grants from the Pennsylvania Higher Education Assistance Agency (PHEAA). The bill addresses problems experienced by homeschooled students and some Pennsylvania resident who are graduates of foreign high schools who do not meet current eligibility requirements of holding a secondary school diploma or graduating from an approved high school. HB 1085 awaits referral to a Senate Committee.
  
  Senate Bill 358: Extends the period of eligibility for higher education student assistance grants for Pennsylvania National Guard members who serve active duty in a combat zone. SB 358 now heads to the Governor for his signature or veto.
  
  House Bill 2296: Exempts military personnel licensed by the Departments of Education, State, Labor and Industry, Insurance, and Banking from continuing education requirements during wartime or preparation for national defense during a national emergency and allows such individuals to renew licenses upon military discharge as if all continuing education requirements have been fulfilled. HB 2296 was amended to extend tuition credit to the unmarried surviving spouses of military personnel killed while in federal or state active duty. Spouses would be entitled to a 50 percent tuition credit at state-owned colleges and universities or approved trade schools for up to eight semesters or four years. HB 2296 awaits referral to a Senate Committee.
  
  House Bill 1618: Requires school districts to develop policies that allow special education students to participate in graduation ceremonies with their classmates even if their individualized education program (IEP) prescribes continuing education beyond four years of high school. Policies would allow special education students who have satisfactorily completed an IEP and have attended four years of high school to receive a certificate of attendance at a graduation ceremony with their age peers. Receipt of a certificate of attendance would not preclude a special education student from receiving a high school diploma at a later date. HB 1618 awaits referral to a Senate Committee.
  
  House Bill 1617: Requires that teachers complete child abuse education training at least once every five years. Training would be approved by the Department of Public Welfare in consultation with the Department of Education. HB 1617 also requires school districts to disseminate training materials at the beginning of each school year to individuals required to report suspected abuse under state law, which such individuals much acknowledge that they have read and understood. HB 1617 was amended to create an addition path through which school districts can qualify for construction reimbursement funds for environmentally friendly buildings. School buildings that receive "two, three or four globes under the Green Building Initiative's Green Globes Green Building Rating System" will qualify for the supplemental state construction reimbursement that is currently available to buildings that meet certain standards under the U.S. Green Building Council's Leadership in Environmental Design rating system. HB 1617 awaits referral to a Senate Committee.



• The House Education Committee held off taking action on proposed changes to state regulations governing Academic Standards and Assessment (Chapter 4) and Certification of Professional Personnel (Chapter 49) at its Wednesday meeting. The Committee did not take action on Chapter 49 because it lacked the quorum required for a vote when the regulations were being discussed. The Committee asked staff to work with the State Board of Education to clarify questions about the rationale behind some regulatory changes proposed by the Board to Chapter 4. One proposed change updates the regulations to align with a State Board policy that requires students to demonstrate proficiency either on the PSSA or on a local assessment as a high school graduation requirement. Board representatives said there is a "misalignment" between the PSSA and some local assessments, creating a need for additional regulation of local assessments. Committee members questioned how the discrepancy between the assessments was determined. Proposed changes to Chapter 4 also edit a provision that would require all students be proficient in a foreign language if world language standards are adopted by the Department. The Board is proposing the change because of concerns about the lack of available world language teachers and costs associated with mandating the requirement. The regulations maintain the current requirement that school districts make at least two languages available to students. The deadline for Committee consideration of Chapter 4 is January 6.



• On Monday, the House Judiciary Committee moved forward a number of bills related to child abuse. Included in the package is legislation ( House Bill 2291) which adds requirements for reporting suspected cases of child abuse to the state's Crimes Code. Currently, under the Child Protective Services Law, certain individuals - including teachers, school administrators, day care workers and nurses - are required to report suspected abuse by parents or guardians to the state Department of Public Welfare. HB 2291 requires individuals who supervise, care for, or provide guidance or training to children in a professional or volunteer capacity to report suspected serious violent or sexual crimes against children to law enforcement within 72 hours. HB 2291 has been placed on the House Tabled Bills Calendar.


All legislation from the Pennsylvania General Assembly, including bills cited in this Notebook, can be found at www.legis.state.pa.us/cfdocs/legis/home/session.cfm.


Research and Reports


• School districts used more than $2 out of every $3 in accountability block grant funding to support early childhood education programs in 2004-05, according to a year-end report on the $200 million program. 38 districts invested in pre-kindergarten (for 3,000 children); 304 districts invested in full-day kindergarten (for 51,246 students); and 103 districts reduced class sizes in grades K-3 (for 19,240 students). Additionally, 89 districts used block grant dollars to provide tutoring for 20,295 students, 98 districts invested in professional development for teachers, and 109 districts hired math and reading teacher coaches. School districts also used the funds to support programs focused on underachieving student sub-groups (112 districts), social and health service programs (57 districts), science and applied knowledge programs (87 districts), and other research-based school improvement strategies (36 districts).
  
  The year-end report examines the impact accountability block grant investments are having on student achievement. In the North Clarion County School District, after one year in pre-kindergarten, 40% of children requiring specialized speech and language intervention made enough progress to eliminate the need for specialized services in kindergarten. In the Pittsburgh School District, 92% of students improved language comprehension skills, 93% improved fine motor skills, and 89% improved basic academics after one year of Pre-K. Additionally, after one year of full-day kindergarten, special education placements dropped by 60% in the Cocalico School District and no children were placed in special education in the Pottsville School District. Reduced class sizes led to increased reading proficiency in both the Boyertown and Penn Argyl School Districts, decreased special education placements in the Freedom Area and Ridgway Area School Districts, and improved ties with parents and families in the Catasauqua Area and Sayre Area School Districts. The report highlights similar positive impacts of block grant-supported tutoring, teacher quality investments, and other programs. Learn more about the positive strides being made with block grant dollars at www.pde.state.pa.us/svcs_students/cwp/view.asp?a=175&Q=111226.



• The National Center for Education Statistics recently released the following report:
  
  Student Achievement in Private Schools: NAEP 2000-2005 Results available at http://nces.ed.gov/nationsreportcard/studies/privateschools/



Other


• Next week...The Pennsylvania House and Senate are in recess and may return to session next week at the "call of the chair." For information on other upcoming events, see www.eplc.org/calendar.html.

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