EDITORIAL: Beware some tax plans
State Senate Republicans really hope Pennsylvanians buy their voodoo economic theory posing as a solution to funding public education.
This past week, a gaggle of Senate Republicans brought their roadshow to Penn State York and pitched their so-called tax relief effort that would strip local property taxes from school districts and, allegedly, replace it with a boosted sales tax. Some iterations of the idea — and there are several floating around Harrisburg — would create a new tax on retirement income, too.
It would be a dollar-for-dollar replacement in funding for education, they say. It would provide relief to taxpayers, particularly senior citizens, from burdensome property taxes, they pledge.
It's what they don't say, however, that's the crux of the matter: The entire plan would fail when a recession hits and sales tax plunge. And it would all happen with local districts having considerably less control over spending decisions.
This proposed state power grab has been tried before and it's an absolute failure. In 2006, Idaho robbed its school districts of taxing authority and, instead, promised to fill the gap at the state level through a sales tax increase. Less than two years later, the economy crashed, consumers stopped spending and sales tax dried up.
Now that state is ranks dead-last in per-pupil spending, says the U.S. Census Bureau.
Do Republican lawmakers honestly expect their constituents to believe that Pennsylvania's miserly Legislature would plug the gap when the system ultimately goes bust? In fact, amid plunging state revenues, it's more likely that panicked lawmakers renege on their pledge and raid the funds dedicated for education to pay for other state programs, such as a spiraling state pension.
Proponents aim to foist a race to the bottom upon Pennsylvanians. It's a time bomb that could be proposed only by those who reject the premise that public education constitutes a society-wide public good. That's especially true since they continued preaching while Wall Street was showing symptoms of an economy on the brink.
Nothing is at is seems here. Sales tax is the most regressive form of tax, hammering the poor and elderly harder than any other. Some proposals say the math only works by hitting retirement taxes, too, which would doubly damage the very senior citizens proponents claim they want to help. And the entire scheme would crash the minute the U.S. economy falters, which appears significantly more likely in recent days.
Make no mistake, funding schools through property taxes is a deeply flawed approach. By its very nature, districts are segregated into haves and have-nots based on property values. But, by any reasonable measure, the one Senate Republicans are slinging is exponentially worse in that it would bring a new level of instability that would fundamentally break public education throughout the state.
No, this entire plot would rob local school boards of the power of the purse. In so doing, it would strip local taxpayers — who elect school board members — of oversight and, instead, place it almost entirely in the hands of far-flung state officials. And, ultimately, it would falter, leaving a gaping hole in funding for public education that would take years, maybe decades, to close.