EPLC Education Notebook

Thursday, December 22, 2005

Happy Holidays to All!

    The Pennsylvania House and Senate have recessed for the Holidays and will return to Session on Tuesday, January 3. In the meantime, the two chambers have approved very different versions of property tax relief legislation. Meetings this past week with leaders of the four caucuses and Governor Rendell did not resolve the significant differences. It is likely that additional discussions will occur during the period of legislative recess until January 3. See below for additional details.

    Special Session on Property Tax Relief

  • The House rejected a property tax relief bill approved by the Senate a week ago when it returned to session on Tuesday and instead passed its own plan to reduce school property taxes. The House plan - amended into Senate Bill 854 - reflects a proposal from Representatives Mario Scavello and Kerry Benninghoff that would increase the state personal income tax by 0.22 percent, expand the base of goods and services subject to the state sales tax, and use expected gaming revenue in order to cut school property taxes by up to 50 percent. The increased state PIT is estimated to raise $580 million; expanding the sales tax base (which would not tax food and clothing) is estimated to raise $1.8 billion - $19.7 million of which would be used to offset the city wage tax levied on non-residents who work in Philadelphia. Like the Senate's proposal, the House plan includes a back-end referendum on future school budgets that exceed an inflation index and also expands the state program that provides property tax and rent rebates for low-income senior citizens. The House would pay for expanding eligibility for and increasing the rebate amount available through the Property Tax/Rent Rebate program by using $150 million in gaming revenues.

    Under the House plan, state dollars for property tax relief would begin flowing to school districts during the 2006-07 fiscal year, with funds distributed "based on the number of students in a school district (average daily membership) and local tax effort (equalized mills)". State funds would be used to reduce local property taxes dollar-for-dollar. School districts could reduce property taxes further by increasing local income taxes, if approved by voters. Districts would have the option of converting a currently-levied earned income tax (EIT) into a personal income tax (PIT) - subject to voter approval - however the PIT may not increase revenue beyond what is currently generated by the local EIT. Districts that do not currently levy an EIT could enact a PIT at a rate that would generate about the same amount of funds as a 1 percent EIT. The House plan now heads to the Senate for consideration. The Senate Committee on Legislation is slated to hold a public hearing on the House plan on January 4. Previously, Senate leaders said they would not vote on a plan that raises state taxes. Gov. Rendell has said he will not sign a bill that includes an increase in the state's personal income tax.

    The property tax relief plan adopted last week by the Senate ( Senate Bill 30) asks voters to decide if they want to increase local earned income taxes in exchange for property tax reduction. An amended version of the Senate plan received only 50 positive votes from House members this week. Before it voted down the Senate proposal, the House removed the requirement for a front-end referendum on local tax increases to be held in conjunction with the May 2006 primary election. The House also amended the back-end referendum required on future school budgets with slightly different referendum exemptions, specifically in the way that exceptions for health care, pension and other costs would be calculated.

  • 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

  • The House Rules Committee approved a version of House Bill 894 as it was amended by the Senate. HB 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 heads back to the full House for concurrence in Senate amendments.

  • The House Education Committee passed an amended version of House Bill 1421, which requires all public and private colleges and universities to develop sexual violence awareness programs. All new students would be required to participate in the program. HB 1421 has been placed on the House Tabled Bills Calendar.

  • Higher than anticipated state revenue collections are being offset by the rising costs of health care, gas and utilities, according to the mid-year briefing delivered by Budget Secretary Michael Masch. The Commonwealth collected $8.81 billion in General Fund revenues during the first five months of the fiscal year - $92 million more than originally forecast. However, $62.5 million came from two one-time corporate settlements for back taxes. Masch estimates year-end revenue will exceed estimates by $145 million, but that will be offset by a $20 million transfer from the Gross Receipts Tax to the Low-Income Home Energy Assistance Program and $214.6 million in anticipated supplemental appropriations needed for long-term care for the elderly, grants to support children in low-income families, mortgage assistance for low-income homeowners, and increased death benefits for families of PA National Guard members, firefighters and law enforcement officers.

  • 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.

    Federal Education Policy Activity

  • The U.S. Department of Education has released proposed regulations for assessing students with disabilities, giving greater flexibility for the student assessment requirements under the No Child Left Behind Act. The proposed regulations follow the Department's previous announcement that it would allow flexibility for assessing three percent of students with disabilities - one percent with the most severe cognitive disabilities are permitted to take alternate assessments, while an additional two percent can be assessed using modified state standards. The proposed federal rulemaking is available for public comment at www.ed.gov/legislation/FedRegister/proprule/2005-4/121505a.html. Comments must be received by February 28, 2006.

  • Research and Reports

    Achievement Gap

  • A new study by Standard and Poor's analyzes states' performance on the 2003 and 2005 National Assessment of Education Progress (NAEP) by accounting for demographic differences between states to "establish a zone of statistically expected performance." S&P found that, after taking into account student poverty, most states perform as statistically expected on the NAEP exams given in math and reading to fourth and eighth-graders. Pennsylvania performed as statistically expected on all four exams. S&P also identifies states that consistently outperformed or underperformed on the NAEP over time. Learn more in "Leveling the Playing Field 2005: Identifying the Outperforming and Underperforming States on the NAEP in Demographic Context" at www.schoolmatters.com/pdf/naep_comparative_state_performance_2005_schoolmatters.pdf?GXHC_GX_jst=90c739791a0f6165&GXHC_JSESSIONID=-2604214561518236621&.

  • Links to additional research and reports related to Achievement Gap issues are available on EPLC's Education Policy Information Clearinghouse at www.eplc.org/clearinghouse_achievementgap.html.

    K-12 Education Funding

  • In a recent publication, Standard and Poor's evaluates an education funding proposal being promoted by Washington D.C.-based First Class Education that would require school districts to spend at least 65 cents of every dollar on classroom instruction. The analysis concludes that "there is no minimum instructional spending allocation that necessarily produces higher student achievement." Moreover, given the wide range of academic achievement among districts with different spending levels, "the specific ways that school districts use their instructional dollars may have as much, if not more, of an impact on student achievement as the percentage of dollars spent in the classroom," says S&P. Researchers reviewed data for nine states that are currently considering the 65 percent proposal and "found no significant positive correlation between the percentage of funds that districts spend on instruction, and the percentage of students who score proficient or higher" on state assessments. S&P says its "findings do not suggest that money doesn't matter." The report says focusing resources on the classroom "is a laudable goal, but the percentage allocated to instruction may need to vary from one district to another for legitimate reasons." Additionally, "while the data do not support mandating a minimum instructional spending threshold applied uniformly", S&P says there is value in measuring instructional allocations to evaluate a district's return on resources and whether "spending is aligned with its academic goals." "The Issues and Implications of the '65 Percent Solution'" includes questions policymakers should ask if considering a minimum instructional spending requirement for their state. Read the report at www.schoolmatters.com/pdf/65_paper_schoolmatters.pdf?GXHC_GX_jst=90c739791a0f6165&GXHC_JSESSIONID=7116765066140749443&.

  • Links to additional research and reports related to K-12 Education Funding are available on EPLC's Education Policy Information Clearinghouse at www.eplc.org/clearinghouse_k12finance.html.

    Teacher Quality and Supply

  • A new issue paper from the Education Commission of the States and The Teaching Commission discusses policy considerations for developing a performance-based or merit pay system for teacher compensation. The paper reviews research on attempts to reform compensation systems at the state level and provides information on school district and school-level programs. Read more in "Diversifying Teacher Compensation" at www.ecs.org/clearinghouse/65/83/6583.pdf.

  • Links to additional research and reports related to Teacher Quality and Supply issues are available on EPLC's Education Policy Information Clearinghouse at www.eplc.org/clearinghouse_teacherqs.html.

    School Reform

  • A new report from the American Institutes for Research's Comprehensive School Reform Quality Center rates the quality and effectiveness of 22 commonly-used elementary school reform models. The review includes popular programs such as Success for All, Accelerated Schools, Direct Instruction and Core Knowledge. Fifteen of the models rated "limited to moderately strong" in positively impacting student achievement. Access the "CSRQ Center Report on Elementary School CSR Models" at www.air.org/news/documents/ES%20CSRQ%20Report%20-%20Full.pdf.

  • Other

  • Senate Hearing...The Senate Committee on Legislation is slated to hold a public hearing on the House-approved plan for property tax relief in Harrisburg on January 4 at 10:00 a.m. For more information about the Senate Committee on Legislation, contact the office of Sen. Noah Wenger at (717) 738-1600.

  • For information on 2006 upcoming events, see www.eplc.org/calendar.html.

  • Publication of the EPLC Education Notebook will resume following the holidays on Friday, January 6.

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