Winners & Losers

  • Losers

    • Students – state-imposed revenue caps coupled with unfunded or under-funded state mandates could necessitate a reduction in the services and programs offered such as music programs, athletics, and non-core academic offerings. This is due to the fact that school districts will no longer have local control of revenue sources to account for community priorities and values and instead will receive a cost of living increase each year regardless of how much it costs to operate a school system at the level a local community deems important.

     

    • School Districts with Growing Enrollments it is unknown how the cost of living increase will be adjusted, if at all, for school districts experiencing growing enrollments. Locking in a year one allocation coupled with a single cost of living increase across the state will generate inequities in funding with costs per student in school districts wildly differing. In essence, depending on the district, the state will consider some students as more valuable than others. Growing districts will have to adjust services and programs to the flat increase established by the state regardless of how many students the district is serving. Thus lowering the the cost per pupil for education.

     

    • Homeowners – will lose federal income tax deduction for real estate taxes, thus having more of their dollars directed toward Washington DC in the form of higher federal income taxes.

     

    • Homeowners – depending on school debt service, homeowners will continue to pay a property tax in addition to increases in sales and personal income taxes.

     

    • Renters – will pay more in sales and personal income tax without any offset or reduction in taxes.

     

    • Consumers – will spend on at the store as they will be taxed on common items such as food and clothing presently excluded.

     

    • Consumers  will see a large portion of their locally spent dollars in the form of the increased sales tax diverted away from their community to districts across the Commonwealth, mainly affluent communities that were heavily dependent on property taxes.

     

    • Small business owners – will see an increase in their personal income tax liability and at the same time may experience a decline in sales due to the increase in sales tax.

     

    • Local Communities – locally-elected school boards will lose control over providing the resources need to support the school system in a manner championed by the local community.

     

    Winners

    • Homeowners - reduction in their property taxes and ultimate elimination once school district debt is paid off.

     

    • School Districts with Heavy Dependence on Property Tax Revenue - more affluent communities will receive the largest allocations from the increased sales and personal income tax revenue to supplant their property tax collections. This would shift the responsibility for funding school districts away from local communities to Harrisburg and your tax dollars (increased sales and property tax) would be redistributed to communities all across the Commonwealth. Independent analysis suggests that the following six counties will receive the largest allocation of dollars: Allegheny County, Bucks County, Chester County, Delaware County, and Philadelphia County.

     

    • School Districts With Shrinking Enrollments - will see the same cost of living increase as growing school districts. A such, locking in a year one allocation coupled with a single cost of living increase across the state will generate inequities in funding with costs per student in school districts wildly differing. In essence, depending on the district, the state will consider some students as more valuable than others, especially in the case of declining enrollments.

     

    • Federal Government - It is estimated that the loss in the federal income tax deduction for real estate taxes will net the federal government approximately $600 million.