Governor Ed Rendell today unveiled a new taxing system to fund public education. It looks like everyone in PA will be affected.

The governor talks about eliminating our property taxes. What he means by that is that he wants to reduce our property taxes by 15%-30%. I don’t mean any comments here as a slam to Rendell–politics is all about positioning and spin, and Rendell could be targeting taxes a step at a time. Regardless, property taxes would go down 15%-30%, not all the way as the rhetoric suggests.

To make up for this property tax cut, the personal income tax in PA will go up an additional .065%. Rendell also wants to raise the income tax another .3% (why the .065% and the .3% are split out, I’m not sure. It seems that the .3% may be a short term temporary increase). The total PA income tax would now be 3.75%, relatively low as state personal income taxes go.

From what I can tell, the personal income tax will make up the loss from property tax reduction plus some. We (as a state) will all be paying a bit more in total taxes, depending on your income vs. your property value.

To provide even more funding, the governor wants to increase some so-called “sin taxes.” He’ll tax slot machines at racetracks and increase taxes on malt beverages (luckily, my fondness for Yuengling Porter tapered off a few years ago–y’know, it is an internationally rated five star beer). He also wants to increase fines on reckless drivers (who can argue with that?).

What does this mean for schools in the end? For one thing, the state share of local school budgets would go up, and the local share would go down. Local districts would have less control over their budgeting. Secondly, it seems that the richer districts would get less funding and the poorer districts would get more funding. Hopefully your district wouldn’t become one of the losers in this scenario.

More importantly, no single school district has any indication of what their individual state $$ allotment will be. This is very bad. School districts at this time have no way to guess what their budgets might be for July 1, 2003. I repeat: this is a very hairy situation. These school budgets must be in final form in April or May at the latest for public review and second (final) votes in June. So the PA government has four to six weeks or so to settle this and get new aid ratio numbers out to the districts. Otherwise, this turns into a colossal mess.

The next few weeks will be very interesting.