EPLC Education Notebook

Friday, October 21, 2005

    Pennsylvania Education Policy Activity

    Special Session on Property Taxes

  • The Special Session House Finance Committee held its initial organizational meeting on Wednesday. Committee Chairs Dennis Leh (R) and David Levdansky (D) distributed a list of Committee and Subcommittee members. Five subcommittees will work in an advisory capacity to review legislation introduced in the Special Session and referred to the Finance Committee. The subcommittees are organized around: Sales Tax Initiatives, Local Control Initiatives, Income Tax Initiatives, Alternative Revenue Sources, and Property Tax Reduction. For a list of Committee members, contact the office of Rep. Leh at (717) 787-6417.

  • On Wednesday, the Senate Committee on Legislation held a public hearing on three proposals deigned to tweak the state's property tax relief program - Governor Rendell's proposal and two bills introduced in the Special Session on Property Taxes by Senator Robert Jubelirer ( Senate Bill 20) and Senator Robert Mellow ( Senate Bill 11). The Governor has proposed mandating that all school districts participate in The Homeowner Tax Relief Act (Act 72 of 2004), the property tax reduction law that uses state gaming funds to provide local school property tax relief and makes certain school tax increases subject to voter referendum. Senator Jubelirer disagrees with the Governor's approach to mandating school district participation. His legislation would give voters the opportunity to decide whether their school district should participate in the state's property tax relief program. Senator Mellow's legislation contains elements of both the Governor and Jubelirer's proposals. Under his bill, school districts initially would be mandated to participate in Act 72, but districts would later have an opportunity to opt-out of participating when they know how much money is available for tax relief. Additionally, in districts that later choose to opt out, voters would have an opportunity to override that decision and continue to have their district participate in the state's property tax relief program.

    Only 111 of the state's 501 school districts chose to participate in Act 72 by the May 30, 2005 opt-in deadline, prompting the Governor to call for a Special Session of the legislature to consider further options for property tax relief.

    Summaries of the Governor's property tax relief proposal, Senator Jubelirer's proposal (Senate Bill 20), and Senator Mellow's proposal (Senate Bill 11) as distributed at the Senate Committee on Legislation's October 19 meeting are available at the end of this Notebook.

    The Senate Committee on Legislation was formed specifically for the Special Session. For more information about the Committee's activities and information about testimony provided at Wednesday's hearing, contact the office of Legislation Committee Chair Noah Wenger at (717) 787-4420.

  • House Actions

  • The House Local Government Subcommittee on Boroughs recommended that the full Committee take up a legislative package that addresses awarding non-bid contracts after it reviewed the legislation on Wednesday. House Bills 1854 through 1872 make changes to numerous state codes. House Bill 1866 would amend the Pennsylvania School Code to increase the dollar amount above which school districts would be required to undergo full advertising and bidding of contracts from $10,000 to $25,000 and to increase the amount requiring telephone price quotes from $4,000 to $10,000. The dollar amounts requiring full bidding or telephone price quotes would be adjusted in the future based on changes in the Consumer Price Index for All Urban Consumers (CPI) determined annually by the Department of Labor and Industry. Additionally, House Bill 1860 would amend the Public School Building Authority Act to increase the dollar amount requiring full advertising and bidding of contracts to $10,000, up from $4,000, also subject to future adjustment by the CPI. For more information, contact the office of Subcommittee Chair Mark McNaughton at (717) 787-1230.

  • On Tuesday, the House Finance Committee passed legislation that seeks to streamline the local earned income tax collection system. House Bill 1427 has been placed on the House Tabled Bills Calendar. For details on the reforms made by HB 1427, contact the office of bill sponsor Rep. Gordon Denlinger at (717) 787-3531.

  • The House Appropriations Committee moved forward House Bill 349, which directs Penn State University to develop a teacher certification exam for vocational-technical teachers that can be used as an alternative to the PRAXIS exam currently required for certification and to develop an alternative method of approving teacher certification for individuals who cannot pass the alternative test. HB 349 also authorizes the Department of Education to award conditional teaching certificates to graduates of state-approved teacher education programs who have passed the subject content exams required for certification but have not passed all non-subject matter tests. Conditional certificate holders would be authorized to teach for two years, during which time the individual would be evaluated by the school district and issued a permanent teaching certificate upon satisfactory evaluation. Conditional certificates may be issued to an individual only one time. HB 349 now awaits consideration by the full House.

  • The House Local Government Committee has approved legislation that would require school police officers to undergo training provided by the Municipal Police Officers' Education and Training Program. Current school police officers would have two years to complete the training; new hires would be required to complete the training as a condition of employment. House Bill 1561 also provides for school district reimbursement for training tuition and other related costs, as well as 60 percent of the officer's salary while completing the training.

  • Senate Actions

  • The Senate adopted legislation that requires school districts to allow homeschooled students to participate in extracurricular activities in the student's district of residence. Senate Bill 361 was initially passed by the Senate on June 22 and amended and passed by the House on July 4. The Senate preserved a House-added amendment that establishes participation criteria for homeschoolers (home education students must meet eligibility requirements equivalent to students who attend the district's schools), but the upper chamber deleted an unrelated House-added amendment regarding enrollment of truant students in charter schools. SB 361 will now go back to the House for concurrence on the Senate changes.

  • On Tuesday, the Senate Finance Committee unanimously approved two pieces of legislation that would limit state spending to the rate of inflation. Senate Bill 884 would set spending parameters in the state constitution through a constitutional amendment. Senate Bill 4 would restrict state spending through statute. The legislation contains a provision through which the legislature could override the spending limitation either to respond to an emergency or by a supermajority vote. Both Republicans and Democrats on the Committee expressed support for the legislation. Committee Chair Jane Earll said historically she would have opposed the idea because setting annual spending levels is the responsibility of the General Assembly, but legislators have not been able to control themselves and Earll feels a measure is needed to reign in unrestrained spending. Senator John Wozniak encouraged his Democratic colleagues to vote in favor of the legislation. Wozniak said just as the General Assembly has placed spending limits on school boards, it should be willing to place similar limitations on itself. Both bills now go to the Senate Appropriations Committee for further consideration.

  • At its Tuesday meeting, the Senate Finance Committee also held over legislation that could impact the expansion of services currently provided by some intermediate units and other government entities. Senate Bill 930 seeks to protect businesses from government competition. Under the bill, private businesses could take a cause of action against a government entity for expanding competitive services; current government services would be grandfathered and not subject to legal action. Committee members expressed concern that the bill reaches beyond the publicly-funded ski resorts and golf clubs referred to by bill sponsor Senator Pat Browne and also could affect things like Philadelphia's WIFI Internet project, computer services provided by the Central Susquehanna Intermediate Unit, or publicly-funded universities renting expanded conference space. Committee members generally agreed that the concept of restricting government competition has merit, but more information is needed to improve the legislation. The Finance Committee plans to schedule public hearings on the issue.

  • The Senate Rules and Executive Nominations Committee moved forward legislation that requires all prospective public and private school employees, except those who have no direct contact with children, to undergo federal criminal background checks. Currently, only individuals who have lived in Pennsylvania for less than two years must undergo federal background checks. The requirement would take effect on April 1, 2006. In the interim, House Bill 1291 includes a provision that would allow individuals to be employed on a provisional basis for a limited period of time while the criminal checks are being conducted. HB 1291 has been re-referred to the Senate Education Committee. The Senate Education Committee previously passed HB 1291 on July 6.

  • On Tuesday, the Senate Local Government Committee voted down House Bill 102. The bill requires applicants seeking residential development permits to provide school districts with information about the proposed development. School districts would have 30 days after receipt of the information to submit written comments on the development plan to the local body considering the developer's application. HB 102 was passed by the House on July 2.

  • The House Veterans Affairs and Emergency Preparedness Committee adopted legislation that extends the period of eligibility for higher education student assistance grants for Pennsylvania National Guard members who serve active duty in a combat zone. Senate Bill 358 has been placed on the House Tabled Bills Calendar.

  • On Monday, the Senate Agriculture and Rural Affairs Committee held a public hearing on the Farmers First Agenda, including expansion of the Farms to Schools initiative. The initiative "combines local food, classroom instruction, and parent involvement to make a strong impact on the attitudes and behaviors of children towards their food," according to state Agriculture Secretary Dennis Wolff. Children are provided with healthy snacks from Pennsylvania farmers, classroom lessons on nutritious foods, and seasonal trips to local farms. Wolff said expansion of the initiative being piloted in Philadelphia kindergarten classrooms would complement other programs aimed at helping children make nutritious choices, as well as provide a boon for the state's agriculture industry by encouraging healthy eating habits at an early age and providing information about Pennsylvania-grown foods to parents. For more information about testimony delivered at the hearing, contact the office of Committee Chair Mike Waugh at (717) 787-3817.

  • 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


  • National and state-by-state results from the 2005 National Assessment of Education Progress (NAEP) are now available online. Results of the math and reading exams given to fourth and eighth graders were mixed. Nationally, fourth graders scored higher in both math and reading; eighth graders showed improvement in math, however eighth grade reading scores declined. National results also showed a narrowing of the achievement gap between white, black and Hispanic students. Pennsylvania students scored above the national average in reading and math across both grade levels tested. Scores for subgroups of Pennsylvania students varied, with the Commonwealth's Hispanic eighth graders scoring above the national average in math and black eight graders scoring below the national average in math. Access the results at www.nationsreportcard.gov.

    2005 NAEP Results: Pennsylvania vs. National Average (Average Scores)

        National Average Pennsylvania
    4th grade reading 217 223
    4th grade math 237 241
    8th grade reading 260 267
    8th grade math 278 281

    2005 NAEP Results for Pennsylvania's Student Subgroups (Average Scores)

        White Black Hispanic Students Eligible for
    School Lunch
    Students Not Eligible
    for School Lunch
    4th grade reading 229 200 203 205 233
    4th grade math 247 219 220 225 250
    8th grade reading 273 239 246 247 276
    8th grade math 287 250 267 262 289

  • For more information related to NAEP, see EPLC's Education Policy Information Clearinghouse on the Achievement Gap and on Assessment and Accountability.

    Edison Schools

  • Student achievement gains in schools run by the for-profit company Edison Schools "match or exceed gains in schools with similar student populations" over time, according to an analysis conducted by the RAND Corporation. Edison was awarded a contract to operate public schools in the Philadelphia School District following the state takeover of the district in 2001. The company also operates two charter schools in York and in Pittsburgh and has operated schools in the Chester-Upland School District. RAND found that achievement gains under the Edison model were not immediate, but "results relative to comparison schools improve in years four and five [of implementation of the Edison model]." However, researchers caution that Edison's success is not consistent across all schools it manages and that each school needs to evaluate its own success. The study also found the largest student achievement gains in schools with principals who are strong instructional leaders and a rich curriculum that includes music and other subjects not tested annually by states. The RAND study was commissioned by Edison in 2000 and is the most comprehensive analysis of the more than 140 schools Edison has operated since 1995. For information about "Inspiration, Perspiration, and Time: Operations and Achievement in Edison Schools", click here to access the Research Brief and click here to access the full report.

  • For more information related to the Philadelphia School District, including a recent analysis of for-profit management companies working in the district (including Edison) conducted by Research for Action, see EPLC's Education Policy Information Clearinghouse on Urban Education at www.eplc.org/clearinghouse_urbaned.html.


  • Register Now! The Education Policy and Leadership Center will host an Education Finance Symposium on November 14-15 at the Wyndham Harrisburg-Hershey. Participants will learn about finance reform efforts in other states, as well as reform proposals currently in the works in Pennsylvania. Registration materials and hotel information are available now at www.eplc.org/financesymposium.html.

  • Dr. Clive Belfield, Professor of Economics, Queens College, City University of New York, and Teachers College, Columbia University, will present new research on "The Cost Savings to Special Education from Pre-Schooling in Pennsylvania" at a forum sponsored by the PA Department of Education on Monday, October 31. Registration will begin at 12:30 p.m. and the program will run from 1:00 p.m. to 3:00 p.m., featuring remarks from Dr. Belfield and reactions to the study from a panel of educators and advocates. Dr. Belfield will address potential special education cost savings for investments in both universal pre-K and targeted pre-K programs. The study was commissioned by the Pennsylvania BUILD Initiative. The Initiative is designed to help states build a coordinated system of programs, policies and services that respond to the needs of families, carefully use public and private resources, and effectively prepare young children for a successful future. For more information or to R.S.V.P., contact Catherine Carretti at ccarretti@state.pa.us or via fax at (717) 783-8230 by October 24.

  • Next week...The Senate Education Committee meets Tuesday (October 25) in Harrisburg to consider Senate Bills 414 and 676. The House Special Session Finance Committee Subcommittee on Local Control Initiatives meets Wednesday in Harrisburg to review assigned bills and discuss future meeting dates. The House Labor Relations Committee meets Wednesday in Harrisburg to consider House Bill 194. The Pennsylvania Association of Elementary and Secondary School Principals holds its annual conference on October 23-25 in King of Prussia. The Pennsylvania School Boards Association and the Pennsylvania Association of School Administrators hold their annual School Leadership Conference on October 25-28 in Hershey. The National School Boards Association holds its annual Technology Conference on October 26-28 in Denver. The Pennsylvania Association of School Business Officials holds its Transportation Conference on October 27-28 in State College. The Pennsylvania State System of Higher Education Board of Governors meets Friday in Harrisburg. For information on these and other upcoming events, see www.eplc.org/calendar.html.

The next section provides a summary of three Special Session proposals discussed by the Senate Committee on Legislation on October 17.

Senate Committee on Legislation

Summary of Special Session Proposals Distributed at October 17, 2005 Public Hearing

Summary of Governor's Proposal

  • Imposes the Homeowner Tax Relief Act (HTRA) on all school districts in Pennsylvania. This means:

    • All school districts will receive funds from Act 71 to reduce property taxes, except Philadelphia, which is still required to reduce its resident and non-resident wage tax.

    • All school districts, except Philadelphia, are regulated by the "back-end referendum" provisions of Act 72.
  • Removes the requirement that school districts must impose a 0.1% earned income and net profits tax (EIT) in order to receive state funds for property tax reduction. Any district which has already opted in to the HTRA is no longer required to collect it, although it is unclear whether a school district is still permitted to levy, assess and collect this tax.

  • School districts may still reduce property taxes through an increase in the EIT or a local personal income tax through referendum. However, the required "front-end referendums" are removed and the decision to conduct all future "tax shifts" is left to the discretion of the school board.

  • Eliminates the requirement that a minimum amount of homestead and farmstead property tax relief be offered in a school district.

  • Removes the provision allowing a school district to ask the district's voters if they want to get out of the HTRA after 4 full years of participation (through referendum).

Summary of Senate Bill 20 (Sen. Robert Jubelirer)

  • Requires a November, 2005, public referendum in each school district that has not opted in to the Homeowner Tax Relief Act (Act 72 of 2004).

  • The referendum question would ask voters to decide if the backend referendum components of Act 72 should apply to the school district, beginning in Spring, 2006.

    • The backend referendum components of Act 72 require that school districts limit any increases in their tax rates to a rate of inflation calculated annually.

    • If a school district proposes to increase tax rates beyond the rate of inflation, the school district would be required to place a referendum question on the ballot at the primary election asking for voter approval of the tax rate increase.

    • The backend referendum components of Act 72 include the exceptions set forth in Act 72.

  • Creates a second opportunity to opt in to the state gaming funds component of Act 72.

    • This legislation would also allow a school district that has not opted in to Act 72 to have additional opportunities to access state property tax reduction funds derived from gaming revenues and to consider increasing income taxes to decrease property taxes.

    • In the first year that sufficient gaming revenues are available for the Commonwealth to distribute property tax reduction funds to school districts, school boards or voters would have the opportunity to vote to opt in to Act 72.

    • Within thirty days after school districts are notified that they will receive state property tax reduction funds school districts that have not opted in to Act 72 prior to May 30, 2005 may vote to participate in Act 72 by resolution.

  • In school districts where school boards do not opt in to Act 72 after this second opportunity, a referendum question will appear at the next municipal or general election asking voters whether the school district should opt in to Act 72.

Summary of Senate Bill 11 (Sen. Robert Mellow)

  • Imposes the Homeowner Tax Relief Act (HTRA) on all school districts in Pennsylvania. This means:

    • All school districts will receive funds from Act 71 to reduce property taxes, except Philadelphia, which is still required to reduce its resident and non-resident wage tax.

    • All school districts that will receive state funds for property tax relief are regulated by the "back-end referendum" provisions on Act 72.

  • Permits a board of school directors to opt out of the HTRA the year in which a distribution of state funds is made. Philadelphia is not permitted to opt out.

  • Should a school district opt out of the HTRA, two referendum questions would be submitted to the electors of the school district:

    • One question would ask voters whether they want to have their school district continue to operate under the back end referendum.

    • The second question would ask voters if they want to receive state funds to reduce property taxes in their school district.

  • Voters can either approve or disapprove either question. The question(s) that are approved become applicable to the school district.

  • Regardless of which referendum question(s) are approved, a school district, with the approval of the voters, may still reduce property taxes through an increase in the school district's earned income and net profits tax (EIT) or a local personal income tax. The required 2007 front end referendum is removed and the decision to conduct all future "tax shifts" through public referendums is left to the discretion of the school board.

  • Eliminates the requirement that a school district levy, assess and collect a 0.1% EIT in order to receive state funds.

    • Additional state funds from gaming will be distributed to any school district that opted in to the HTRA by the original deadline of May 30, 2005, thereby holding these school districts harmless.

  • Eliminates the requirement that a minimum amount of homestead and farmstead property tax relief be offered in a school district.

  • Sets forth that all state funds for property tax relief - whatever the number of schools participating - will be distributed to participating school districts.

  • Reduces the amount of funding dedicated to the Property Tax Relief Reserve Fund from $400 million to $150 million.

  • Minimum and maximum state fund allocations are now set forth from a $1 billion figure instead of $750 million. The effect of this is that the minimum amount of relief guaranteed will remain at 10%.

  • Moves poverty exemption for the EIT from $10,000 to $12,000.

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