‘Crushing’ school taxes
If Gwenevere Washington and her husband lived in the Marple-Newtown School District in the western suburbs, whose property tax rate is the lowest in their county, the school tax bill that arrived in their mailbox midsummer would have totaled about $1,700, even less with the state discount given to senior citizens.
But the Washingtons own a home in Yeadon, a borough less than 10 miles away, down Darby Creek. It is one of six communities that make up the William Penn School District in Delaware County.
The tax bill that arrived in July hit like a hammer. It was $4,000 for the year, less a $400 discount.
Add to that borough and county taxes, and their total tax tab tipped well beyond $5,000 a year, on a property that might sell for $150,000.
“We’re talking about downsizing. It costs too much, with these high taxes,” Washington said. “When you retire, you get less money, and all of our money goes to taxes.”
Despite tax bills a neighbor calls “crushing,” her school district is struggling for funds.
Its spending level, at $14,831 per student in 2012-13, is still among the lowest in Southeastern Pennsylvania. The largely African American William Penn district comes out just a few hundred dollars ahead of Philadelphia, which ranks fifth from the bottom in per-pupil spending among 61 districts in the five-county region.
When it comes to funding schools, all of Pennsylvania’s 500 districts rely primarily on the property tax, and the tax burden on homeowners varies widely from district to district, even in the same county.
In the Philadelphia region, some of the state’s most struggling districts are a short trip down the road from easy affluence.
An example: In Radnor, a Delaware County district with prime residential real estate, a corporate sector and bustling business strip, local sources contributed about $19,400 per student enrolled in its schools in 2012-13, the most recent year available, according to state data. All told, local property owners funded 88 percent of the $82 million budget. And there is so much property wealth that they raise that money with a tax rate that’s less than half of what the Washingtons pay.
Neighboring Marple-Newtown schools aren’t far behind. They, too, keep their tax rate low yet bring in more than $17,000 per student from local revenues.
But head south a few exits via the Blue Route to the impoverished Chester-Upland School District, also in Delaware County, and local tax efforts raised just $2,900 per student in 2012-13, according to the state. That meant that local taxpayers funded just 18 percent of the district’s $113 million budget, leaving schools almost entirely dependent on state aid.
Enrollment: 3,385 students
Budget: $69 million
Millage rate: 12.5
Enrollment: 3,685 students
Budget: $82 million
Millage rate: 13.8
Enrollment: 7,005 students
Budget: $113 million
Millage rate: 19.6
Enrollment: 5,605 students
Budget: $82 million
Millage rate: 30.9
Enrollment: 202,100 students
Budget: $2.968 billion
Millage rate: 20.2
Cries for relief from burdensome property taxes have been raised in some communities for at least two decades. There have been individual protests: The Forks Township, Pa., man who paid his school tax last year with 7,143 dollar bills became a YouTube sensation. And the Pennsylvania Coalition of Taxpayer Associations counts 84 taxpayer advocacy groups across the state.
The coalition in recent days has lobbied hard for legislation, pending but unlikely to win passage, that would abolish school property taxes and fund public education instead with increases in the personal and sales tax. Another bill, known as the Optional Property Tax Elimination Act, would give school districts the option to reduce or phase out property tax and instead use a combination of earned income, business privilege, and mercantile taxes.
Others like gubernatorial candidate Tom Wolf argue that the state can boost aid to districts and thereby relieve pressure on local property taxes by closing corporate tax loopholes and raising taxes on fracking.
Across all Pennsylvania districts, the burden on local taxpayers has increased in recent years as the state share of education funding has declined, with Pennsylvania ranking fifth from the bottom among states in how much it contributed in 2011, according to a U.S. Census report. That year, the state’s contribution to school spending was 34 percent. The national average state contribution was 45 percent, by comparison.
Hard-pressed homeowners say tax relief is long overdue.
Yeadon resident Edward “Scotty” Scott paused from trimming the edges of his lawn on Duncan Avenue to call for more state funding.
Taxes “are extremely high,” said Scott, who moved from the city to the quiet residential street three years ago, not fully realizing how big a tax bill awaited him. “You move across the city line, you really get hit,” he said.
“If the governor would give the schools what they need, then it would reduce the taxes on homeowners,” he said. “As it is, it’s just crushing.”
Gerald “Bruce” Mundy, co-owner of Mundy Machinery Shop in Collingdale, in the Southeast Delco School District in Delaware County, also supports tax reform.
“Why are we still taxing people who have no income?” Mundy asked. “The real estate tax is levied whether you have an income or not. Here, we are struggling with our business. If you don’t have an income, you can’t pay any tax.”
Mundy, a longtime critic of Pennsylvania’s property tax system, said he favors “a simple, straightforward income tax” with one pot of money paying for the public schools and “each kid gets the same share.” But he sees no serious initiative to reform school funding in Harrisburg. “That’s what Harrisburg does – kick the can down the road,” he said.
Yet few complaints get aired at Southeast Delco school board meetings, according to Mundy’s nephew, Eric Mundy, in his first term on the board. “We don’t hear much from the public at all. There’s very little participation,” he said.
The relative quiet may reflect the district’s conservative approach. A recent teachers’ contract called for a two-year salary freeze. And the district “has stopped hiring” to replace workers who resign or retire, with the result that class sizes have increased.
“We’ve seen what’s happened to Chester-Upland. We’re anxious not to have that happen,” Eric Mundy said. That district has been declared to be in severe economic distress and a receiver appointed to oversee spending.
“We just don’t have the tax base that other districts do,” he said. “Businesses have moved out of the area, and we’ve been hit hard. We are struggling.”
Southeast Delco, William Penn, and Chester-Upland are among the districts that make up the eastern end of Delaware County, up against the Philadelphia city line and running southwest along the Delaware River. The northern and western reaches of the county are far more affluent.
“It’s a world of difference between here and Radnor, even though we are only 10 miles away,” said Mundy, making reference to the comparative tax bases. State funding for Southeast Delco will make up about 40 percent of this year’s $67 million budget.
Philadelphia depends on state aid for about half of the District’s budget.
The most recent state data reveal that districts in the Philadelphia suburbs made up 18 of the top 20 districts in terms of local support for schools, showing the overall strength of the economies and housing market in Bucks, Chester, Delaware and Montgomery counties.
Back in Yeadon, the taxing situation has given rise to a community group calling itself CRY – Coalition for the Residents of Yeadon. At a recent rally, the focus was on the damaging effect of high taxes on local property values. The borough has lost population in recent years, and there are numerous properties for sale, with a fair number of them in foreclosure.
The real estate market in Yeadon is flat, even falling, despite the amenities of the town – solid stone homes, tree-lined streets, a town center, and proximity to the city and SEPTA lines.
But the Washingtons think this may be the time to downsize and move to a warmer, less expensive climate.
“Little bit by little bit,” Gwenevere Washington said, “school taxes are driving people like us out of the community.”