Harrisburg – Oct, 20, 2015 – State Senate Democrats today called on the Pennsylvania state treasurer to “stop payment” on a scheduled disbursement of property tax revenue headed to charter schools. They have sent a letter to state Treasurer Tim Reese formally asking for the withholding of the money.
“Charter schools are seeking gaming tax relief funds based on one legal interpretation, while public schools and many public officials have a different view of the law,” state Sen. Democratic Leader Jay Costa (D-Allegheny) said today. “The treasurer should not release one dime until there is legal clarity and outstanding issues have been resolved.”
Charter schools contend that they are due disbursement from funds generated from gaming revenues. Typically, when a state budget is adopted, charter school funding is deducted from basic education subsidies.
Due to the budget impasse the normal funding stream is not available. The charters say that the law stipulates that since those funds are not available, the funds are then deducted from other state payments. The state is expected to make a $45 million payout to charter schools on Oct. 22, with 312 school districts diverting funds to charter schools.
“All of our schools, including traditional public schools and charters, need to be appropriately funded by the commonwealth,” Senate Democratic Appropriations Chair Vincent J. Hughes (D-Philadelphia/Montgomery) said. “However, we cannot provide special assistance to charter schools while many other school districts are suffering.
“I urge the state treasurer to hold off making payments to charter schools until the budget impasse has been resolved and all schools have funding in place.”
Sen. Jim Brewster (D-Allegheny/Westmoreland) called for the suspension of the payment to charter schools late last week. Brewster said “public schools are facing incredible difficulties because of the lack of a state budget.
“Now, the funding they are getting outside of the basic subsidy is being hijacked and that is wrong.”
Brewster pointed to the situation involving two of his school districts in the Monongahela Valley as examples of inequity. He said that while McKeesport is due $1.2 million in reimbursements, they will only receive $41,000 after charter school funds are deducted. He said that Clairton will have to send its entire $230,000 reimbursement to charters and receive nothing.
“Since so many of our schools are hurting due to the budget impasse, we need to answer important legal questions regarding these funds before they are distributed later,” Sen. Andy Dinniman (D-Chester), Democratic chair of the Senate Education Committee, said. “The bottom line is that both public and charter schools are in need of these supplemental gaming funds – funds that do not go through the normal budget process.”
In the letter to the treasurer, Senate Democrats said they do not believe that gaming fund reimbursements constitute “state payments” and that the state law dealing with disbursement of funds never contemplated a budget impasse.
They say that the statute involving the generation of faming funds and property tax relief define the use of funds disbursed from the property tax relief fund. Senate Democrats say that there is no discretion to shift funds earmarked for tax relief to pay operational costs at charter schools.
“Pennsylvania Race Horse Development and Gaming Act and the Taxpayer Relief Act must be read together in order to establish the General Assembly’s intent for the use of the money in the Property Tax Relief Fund,” the letter says.
Costa said that under the Fiscal Code the state treasurer has the authority to withhold payments from the state treasury.
“No payment can be made without the state treasurer’s warrant and approval,” Costa said. “This is a clear case when the law is murky and public schools are being treated inequitably by laws that did not anticipate a long budget impasse.”
Brewster, who met with the secretary of education and budget secretary yesterday about the issue, said he is very concerned about the short-term financial health of school districts if the funds are diverted.
“Many school districts across the state will bear the burden if these funds are released and they are not compensated,” Brewster said. “Given the outstanding legal issues, the responsible course of action is to stop payment until the conflicting interpretations of the law are reconciled.”
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Harrisburg – Sept. 18, 2015 – Senate Democratic Leader Jay Costa (D-Allegheny) today condemned the proposed four-month $11.22 billion Republican stopgap budget as a “political ploy” designed to thwart negotiations on a comprehensive budget agreement.
“The Senate Republican stopgap budget plan is a political ploy that drags down efforts to construct a long-term, comprehensive budget agreement that includes real dollars for education, human services, deficit reduction and property tax cuts,” Costa said. “Stopgap budgets are only used when you are not up to the task of negotiating a full budget.
“We keep wasting time on budget tricks and veto-override maneuvers instead of bargaining sessions that would ultimately result in a comprehensive spending plan.”
The stopgap budget passed the Senate today on a partisan, party-line vote and now heads to the state House of Representatives for consideration. Gov. Tom Wolf has promised to veto it.
The Republican stopgap is a slimmed down version of the Republican budget that was vetoed by the governor June 30.
Costa said the Republican plan does not include a reasonable Marcellus Shale extraction tax or property tax relief, which are supported by a strong majority of Pennsylvanians and remain among Senate Democratic priorities.
“The plan is essentially one-third of what was before the Senate earlier this year,” Costa said. “That was a bad budget that was balanced on tricks and faulty revenues that would keep Pennsylvania treading water.
Costa said that negotiators can do better but are hobbled by Republican intransigence. He said that the governor has offered significant compromises on two issues that Republicans say must meet their demands – pensions and liquor privatization – before any consideration of the General Fund budget will be considered.
“It is incredibly frustrating to negotiate when Republicans apparently see no value in agreeing to a long-term plan that includes real investments in education, human services, job creation, property tax relief and a shale extraction tax while addressing the $1.3 billion deficit,” Costa said. “The Republican tactics and budget ploys raise real questions about whether they are interested in any comprehensive agreement.”
Pennsylvania does not have an approved General Fund spending plan. The budget was supposed to be approved by June 30.
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Budget lacks vision, fails schools, denies tax relief, adds to deficit woes
Harrisburg – June 30, 2015 – State Senate Democratic Leader Jay Costa (D-Allegheny) today said that the $30.1 billion Republican budget approved by the Senate today “doesn’t add up and doesn’t make any sense.”
“It is hard to conceive a spending plan that could be so deficient in so many areas,” Costa said. “It is out-of-balance, fails to make meaningful investments in schools, denies property tax relief, does not include a responsible Marcellus Shale extraction tax and ignores a structural deficit of $1.3 billion.
“In addition, the plan is built on gimmicks, sleight-of-hand accounting and phantom revenues.”
The budget bill (House Bill 1192) passed the Senate today on a party-line vote.
The Republican budget is $1.1 billion out-of-balance and would grow the deficit to $3 billion by Fiscal 2016-17, Costa said. The plan lacks meaningful investments in education, job creation or social safety net programs and does nothing to lower property taxes.
Costa said that under the Republican plan, the new net investment in basic education would be $8 million. Special education and early childhood education would only receive a fractional increase and higher education is apportioned so little that tuition increases would be assured.
He said the Republicans plan fails to deliver substantial property tax relief or a reasonable shale tax to fund education let alone address the $1.3 billion structural hole in state finances.
“The losers far outweigh the winners in the Republican budget,” Costa said. “No relief for property taxpayers, no help for students in basic and higher education, no new dollars to aid job creation and no increase in the minimum wage.”
Costa said he was shocked that the spending plan was so out of touch and that the Republicans refused to negotiate with legislative Democrats or Gov. Tom Wolf. He said he expected that the budget would get a cool reception from the governor and lawmakers would soon be scrambling to negotiate a real spending plan.
“The governor has offered a responsible budget proposal that addresses key initiatives including a shale tax, new, real investments in education and relief from a structural deficit,” Costa said. “We need to put this budget exercise aside and address real problems with real solutions.”
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$1,990 rebate to taxpayers; property taxes eliminated for nearly 2/3 of property owners
Harrisburg – June 24, 2015 – A new property tax plan that would eliminate school property taxes for 2 million homeowners, reduce property taxes by $1,990 for another 1.2 million homesteads and provide a $500 rent rebate for more than 800,000 Pennsylvanians was unveiled today by Senate Democrats.
Under the PA Home Rebate plan, property taxpayers would be eligible for a 100 percent rebate of their school property tax bills up to $1,990 while renters would receive rebates of $500 provided their income is less than $50,000. The rebates would be available annually.
“The plan is simple, straightforward and substantial,” Sen. Jay Costa (D-Allegheny), the Senate Democratic leader said today. “It eliminates school property taxes for 2 million homesteads, makes deep cuts for more than a million more and helps renters.
“Seniors, working men and women and virtually all taxpayers and renters benefit from this approach.”
Costa said the plan drives out more than $4.4 billion in tax and rent relief by shifting the tax burden from a heavy reliance on the property tax to a mix of the Personal Income Tax, Sales and Use Tax and tobacco taxes.
“The plan provides significant tax and rent relief that Pennsylvanians have wanted,” Sen. Vincent J. Hughes, (D-Philadelphia) the Senate Democratic Appropriations chair said. “The $1,990 in relief is based on the average property tax bill in Pennsylvania.
“This is a fresh approach and a departure from the plans on the table because it is not based on a distribution formula and it provides uniformity in relief.”
Gov. Tom Wolf offered a property tax plan as a part of his budget address in March. The House of Representatives advanced their own plan (HB 504) which passed the House earlier this year. Each of those efforts include a complex formula to redistribute revenues.
The Independent Fiscal Office studied the Senate Democratic plan and reported its findings in March. In a letter to Costa and Hughes, the IFO indicated that the average property tax bill In Pennsylvania was $1,990 and the median was $1,608.
“This plan takes an important first step in shifting more funding responsibility for schools to the state and away from the local property taxpayer,” Sen. Lisa Boscola (D-Northampton) said. “While I still support complete elimination of school property taxes, plans like this provide relief to those struggling to pay ever-increasing property taxes.
“Many of us have sought total property tax elimination as our goal, but until that plan can get the necessary votes this is an excellent step forward.”
“For many seniors this is an exceptional approach because it would provide dramatic school property tax relief combined with relief from county or municipal taxes,” Hughes said.
Costa and Hughes said the Senate Democratic Caucus plan includes protections against sharply escalating school district taxes to further protect taxpayers from spikes in local taxes.
Because the plan provides a 100 percent rebate up to $1,990, taxpayers will be inoculated from future school district property tax increases until their tax bill reaches that threshold. In addition, current Act 1 spending caps, which require voter approval of spending above an inflation index, would remain in place. The amount that school districts could keep in reserve would be capped at four percent.
Finally, once Act 120 pension increases plateau and the school funding gap created by Gov. Tom Corbett’s drastic cuts in school funding is filled, school districts will not have to repeatedly raise local taxes to cover costs, they said.
Other elements of the plan include making the relief available as soon as possible via a Short Term Investment Program loan from the state Treasury. Taxpayers would be able to receive the rebate of up to $1,990 by check once they submit documentation that they paid their taxes. The process would be similar to the one that is used to process the rebates for senior citizens under the Property Tax Rent Rebate program, the Democrats said.
Hughes said the plan allows Philadelphia to fashion its own tax relief scheme because it uses a significantly different tax menu to fund its schools.
He said the plan allows flexibility for Philadelphia to lower a combination of taxes. The city currently uses a combination of a high wage tax, cigarette tax revenues, local sales tax and property taxes while most other school districts balance their books using local property tax revenues.
The proposed tax mix that generates the $4.4 billion to pay for the rebates uses a .78 increase in the Personal Income Tax, a 0.6 increase in the Sales and Use Tax and new levies on cigarettes and other tobacco products.
Costa and Hughes both noted that the levies in the Senate Democratic plan are similar to or lower than both the tax menu presented in HB 504 and the Governor’s proposal.
The senators said that they are open to discussing the proper mix of revenues to fund significant property tax relief for all Pennsylvanians.
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Harrisburg, June 18, 2015 − Senate Democratic Leader Jay Costa (D-Allegheny), Sens. Andy Dinniman (D-Chester) and Rob Teplitz (D-Dauphin/Perry) who serve as members of the Basic Education Funding Commission (BEFC) today hailed the new proposed statewide education funding formula as a responsible, predicable and equitable approach that would improve education for all students.
The formula, which the commission is recommending to be used to distribute basic education funding from the state to local school districts, was unveiled and unanimously adopted at a commission meeting this morning in Harrisburg. The proposal still has to be approved by the General Assembly.
The senators said the plan would address the wide inequity in education resources that hold back students from the poorest districts.
The formula contains five factors that reflect the actual costs of educating children in various economic circumstances: poverty, poverty concentration, English language learners, charter school enrollment, and district size. Local tax effort and tax capacity are also included, as is a determination of relative wealth of a district based on median income.
Pennsylvania is only one of three states that have no funding formula for public schools and has the distinction of having the most inequitable spending for poor students in the country.
The commission did exemplary work in crafting a new funding formula that is meaningful and substantive, Costa said. The commission was able to cut through politics, regional bias and complex issues to produce a funding structure that, if fully funded, will help students, parents, teachers, administrators and taxpayers.
Dinniman said he is pleased with the new funding formula but its success is totally dependent on the General Assembly providing sufficient dollars to ensure that all students have an equal opportunity to be educated to the top of the curriculum.
The goal is to improve performance statewide and eliminate funding disparities that plague student development by removing funding impediments so state funding is equitably distributed, said Dinniman, who serves as the Senate Democratic Education Chair, said. For too long, Pennsylvania school children and taxpayers have had to overcome funding challenges which were created in Harrisburg.
The new funding formula will rectify the imbalance and equitably spread funding.
Teplitz, who is a member of the Senate Education and Appropriations committees, praised the commissions process of developing a fair formula that was crafted in a bipartisan, open, and inclusive way. Its equally important to ensure that basic education is also properly funded, he said.
The formula that was developed by the commission on a bipartisan basis addresses funding equity, but we also must ensure that our schools are also adequately funded. If we want all kids to have access to a quality public education, we must not only divide up the pie more fairly, but also increase the size of the pie itself, said Teplitz. Being a member of this commission was a tremendous experience and I look forward to continuing to fight for our children.
Recognizing the need to develop a predictable, fair, and equitable education funding formula, the General Assembly passed Act 51 in 2014 that created the commission. BEFC has 15 members, including 12 legislative appointees and 3 cabinet officials. Costa, Teplitz and Dinniman are the current Democratic appointees. Sen. Matt Smith (D-Allegheny) served as a member of the committee until his announced departure from the Senate.
The senators said the formula represents a fair and equitable way to disburse education dollars for funding public education. The poorest 25 percent of districts will be getting an average of four times more from the formula than the richest 25 percent of districts.
Costa said because the formula was developed on a bipartisan basis with input from the administration, he was hopeful that the formula would be supported by increased education funding in the upcoming state budget.
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Contact: Stacey Witalec
Telephone: 717 877-2997
Email: switalec@pasenate.com
Harrisburg – June 16, 2015—Senate Democratic Leader Jay Costa (D-Allegheny) today issued the following statement applauding the Senate’s passage of legislation renewing and improving the statewide 911 emergency communications system. The measure, House Bill 911, passed the Senate unanimously.
“More than 25 years ago, the General Assembly made a commitment to develop a statewide emergency communications system. This legislation renews our desire to fund and improve a system that is responsible with connecting emergency responders to residents and communities in time of need.
“Over the course of the past two years, members from both the Senate and House worked with community leaders, emergency responders, the telecommunications industry and interested stakeholders to develop significant, substantive and meaningful improvements to the emergency communications law.
“Bringing a wide range of organizations together to help craft legislation of this magnitude was challenging but I couldn’t be more pleased with the final work product. This is an important step forward that will make differences in the lives of citizens throughout Pennsylvania.”
The current Act, providing for Pennsylvania’s emergency communication system was set to expire on June 30, 2015.
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