Pennsylvania School Scores in Limbo

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Proving once again that incompetence reigns throughout Pennsylvania’s public education apparatus, the Department of Education still does not have the reports on 2013-2014 test results ready for release. These tests were taken at least six months ago. They were due to be released in September, then October first and now they are being delayed again and no one is sure for how long.

The excuse is the Department needs to wait for schools to look over the results before official release.  But the real problems are never mentioned; political influences and thorough going incompetence in the Department.

Still, the even bigger problem is not in the delay of the scores, it is the terrible results for many schools that will be revealed. While educationists, liberal politicians and uninformed citizens clamor for more education spending, they never want to consider that the current level of spending ought to be adequate to educate youngsters.  It is the same old song, more money, more money followed by excuses as to why the test scores are so pathetic.

A recent survey by the Milton Friedman Foundation found that 49 percent of the public thinks school spending is $8,000 or less per pupil, with 20 percent believing it is less than $4,000.  The real answer in Pennsylvania in 2012-2013 was $14,600, with many far higher than that. Little wonder the education lobby is so successful in condemning anyone who questions the cries for more dollars for education. They have successfully propagandized the public long enough to create the false narrative about education spending.

Greenfields Get Subsidies, Too

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During the Governor’s visit to Pittsburgh yesterday to present $10 million in economic development funding to a site in Hazelwood, a local development official made the “priming the pump” argument of why the public needs to fund site development and noted “It’s too easy for developers to go into the suburbs and greenfield sites and build there instead”—implying that if there is no public money for older sites eager developers have the pick of the litter in non-urban sites and will do so on their own dime.

That would be true if the region was not littered with examples of state money, tax increment financing arrangements, and even neighborhood improvement district deals to make greenfield developments happen.

Think Pittsburgh Mills, Victory Center, the Mall at Robinson, Mt. Nebo Pointe as projects that involved a TIF.  That goes without mentioning proposals that stalled in Mt. Lebanon and in the Allegheny Valley. Who knows how many more came about with the involvement of one of the components of the alphabet soup of programs offered at the state and local level.

If it is easy, why does the state and local governments offer to pony up dollars or make incentives available?  And when does the public investment in non-developable areas reach its apex?

Calculating Local Police Costs

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A new report from the state’s Legislative Budget and Finance Committee on municipal police service in Pennsylvania explores several interesting topics, including some which have been discussed in southwestern Pennsylvania and written about by the Allegheny Institute.

Under existing law, Philadelphia, Pittsburgh, and Scranton (cities of the first class, second class, and second class A respectively) are required to provide police service while other municipal classes (third class cities, boroughs, townships) are authorized but not required to do so, according to the report.  There are opportunities for contracting out to neighboring communities, participating in a regional police department, or having the state provide coverage are all options.  With 2,500 municipalities in the state, the arrangements work out as follows:

  • State police provide all police service to 1,279 municipalities and part-time service to 420 municipalities
  • 986 municipalities have their own police force and 136 of these contract out their services to other municipalities
  • Twelve municipalities have a police force with over 100 full-time officers
  • There are 35 regional police departments in the state, with the oldest in Allegheny County (Northern Regional in the North Hills) and two are in Washington County

The report points out many of the hurdles to consolidation departments (cost, control, pensions, etc.) and offers several case studies of recent consolidations.

A Novel Approach for a Distressed District

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York City School District is under Act 141 status, which is essentially the public education version of Act 47 municipal financial distress.  It even has a recovery officer and a recovery plan.  That plan found that of 7,658 school age students in the District, 5,130 (67%) attended one of the District’s schools, and 2,450 (32%) attended a charter or cyber charter school (the remainder attended an alternative school).  The plan noted “a growing share of the total student enrollment is moving away from the District schools to charter schools” and survey data seems to indicate that parents are very satisfied with the results of the charters.

The recovery officer is proposing to turn over three of the District’s schools to charter management while leaving the remaining five in the hands of the District.  Student progress and parent satisfaction would be measured and, after four years “…whichever model was working better would be pursued”.  A third party would monitor the progress.

Of course, members of the teachers’ union are not happy with the proposal, even as they can see with their eyes the movement of children to charters.  One of the complaints is that the company that could manage the schools might “pump its own money into schools”—here is a guess that many of York’s teachers are strongly in support of more funding via new taxes.

Rangers in County and City

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We know, you hear “ranger” and think of a baseball team or a fellow chasing a bear in a tie.  But the County’s proposal to place rangers in County parks and redeploy County police to other, as of now unspecified, parts of the County, made it into the County’s 2015 budget proposal.

The County would hire four full-timers to get the program off of the ground.  Seasonal rangers could come in the spring but the thrust is to expand the program to the nine County parks.  The park ranger division of the Department of Parks budget would be $400,000 total, with $276,000 attributed to personnel cost (personnel and fringe benefits).  That averages out to $69,000 per full-timer if the personnel costs don’t include anything for the seasonal workers.  The County placed the cost of a County police officer at about $100,000 per year.  The Police portion of the 2015 budget for Parks Police Division shows a full-time headcount of 50, the same as 2014.

The County, while it has garnered some attention on this proposal, is not alone in embracing the idea of park rangers.  The City has actually budgeted for one full-time park ranger in their section of the Parks and Recreation budget for 2015.  According to the Parks Department, the ranger will be based at Schenley Park.  Pittsburgh police aren’t based at City parks the way County police are, so it is not that the City’s ranger is helping to redeploy an officer somewhere else.

School Choice in Rural Settings

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A newspaper article over the weekend contained an interactive look at the growth in charter schools in Pennsylvania.  A map included in the data showed that 52% of the state’s charters are located in Philadelphia, and pointed out that “charter school enrollment in Pennsylvania, as nationally, is overwhelmingly urban”.

Outside of Centre County there is very little presence of charters in the northern tier of Pennsylvania.  Of course, students in areas without brick and mortar charters can access cyber charter options.

Another article from last week looks at the presence of charter laws in states that have over 40% of their population living in rural areas as defined by the Census.  Only three of those states have charter school laws currently.

Mayor Wants Fair Funding

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The Mayor of Pittsburgh appeared at an event calling for “…a fair, sustainable and predictable method for funding public schools that recognizes the shared responsibility we all have — and the shared benefits we all receive — when every Pennsylvania child gets that opportunity.”

Now the Mayor of Pittsburgh does not have any formal control over Pittsburgh’s schools, but he has convened a commission and asked for participation in a Federal program thus far prior to the event.

So what is fair?  In 2012-13’s fiscal year, the combined revenues from local, state and Federal sources for Pittsburgh Public Schools was $595.5 million, with 48% coming from local revenue, 41% coming from state revenue, and 11% from Federal revenue.  Does the Mayor think City schools aren’t getting enough from the state?  Ten years ago (2003-04) the state’s share in Pittsburgh was 35%, so as a percentage of the total Pittsburgh is getting more state money now.

Does the Mayor want the state to fund 50% of public school education?  Doing so in Pittsburgh, based on 2012-13 totals, would require $53 million more from the state to bring the total to $297 million.  To arrive at the same funding per-pupil in order to keep the 50% level would require cuts of $53 million from Federal and local sources.

Doing so in a district that generates much more from local sources like North Allegheny (2012-13 total revenue of $128 million was split $102 million local (80%), $24 million state (19%), and $1.8 million Federal (1%)) might be welcomed, but to get that district to 50% from the state would mean sending $10 million more ($64 million) than would come from the state to that district than Pittsburgh.  Would that be seen as fair?

Or how about if a district had to cap expenditures in relation to its state designed market value/personal income ratio?  At 0.4134 Pittsburgh’s spending of $20,594 stands higher than districts with ratios nearby to Pittsburgh’s.  Statewide only two districts in other counties are at the same aid ratio yet spending more than $20,000 per-pupil.

PAT’s Budget Looks a Bit Different

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The Port Authority’s 2014-15 fiscal year budget shows that operating assistance—money from the state and County governments that combine with passenger revenue and government operating grants—will be up $20 million over FY13-14.  That is the result of the passage of Act 89, the transportation bill, by the state.

When we wrote about the passage of Act 89 earlier this year we asked a few questions that dealt with additional state aid the Governor promised in return for contractual savings, the County’s match responsibilities, and the inclusion of RAD dollars.

Here is what the Authority’s operating assistance portion of the balance sheet looked like in the past two fiscal years and the current one (values in millions):

2012-13

2013-14

2014-15

State

$155

$162.8

$212

Additional State

$30

$30

—-

County

$29.1

$29.1

$28.8

RAD

$3

$3

$3

Total

$217.7

$225

$244.3

The $30 million amount that came as additional state aid is now gone—that’s likely due to what PENNDOT stated when we wrote our Brief that the passage of Act 89 satisfied the Governor’s promise.  Money is coming as operating and capital dollars, but the dollars can be shifted with PENNDOT’s approval.  But in the operating assistance section state money is up $20 million over what the Authority received in FY13-14.

The County’s match comes from taxes on alcohol and car rentals and those taxes have been bringing in well above the amount needed for the 15% match.  In FY14-15 the $28.8 million from the County, along with $3 million from RAD, provides $31.8 million, or 15% of the $212 million from the state.  The RAD board expressed in 2013 when originally asked to make transit an asset that the Authority “…continue to find alternative, reliable, transit funding sources”.

RAD Returns to City Budget

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Lost in a recent newspaper series focused on the twentieth anniversary of the Regional Asset District and the submission of the 2015 budget from the City of Pittsburgh to the oversight board is that the City is budgeting almost $8 million more in revenue from the piece of the 1 percent RAD sales tax it receives.

How is this happening?  Has there been a monumental jump in taxable sales and use in the City? That’s not the case: the 1 percent RAD tax is divided between the pool of regional assets (50% of the tax proceeds), the County (25% of the tax proceeds), and the municipalities in the County, including the City (25% of the tax proceeds).  No news of significant jumps in revenue has been reported by the RAD board, nor the County, nor the other municipalities.

Is the City subjecting other activity to the tax?  No, it does not determine the subjects of the tax and cannot alter it, so that can’t be it.

What has happened is that a two decade long agreement between the City, the Urban Redevelopment Authority, and the state to intercept a portion of the City’s RAD tax proceeds to fund development is coming to an end and the money has showed up in the 2015 budget, which shows the City’s RAD tax proceeds increasing from a budgeted $12.6 million in 2014 to $20.1 million next year, but with no explanation.

The Regional Asset District is a special purpose form of government that was accompanied by the creation of a 1 percent add on sales tax, split into three pools—the assets, the County, and the municipalities.

The law directed the use of the proceeds that was to go to the County and local governments in several ways:  the County and the City of Pittsburgh had to eliminate taxes they levied on personal property; the City had to cut its amusement tax rate in half (from 10 to 5%); municipalities other than the City and the County had to use “at least two thirds” for local tax reduction, specifically real estate taxes.  The County and the City had to create real estate tax relief programs, including senior citizen tax relief programs.

Not long after the creation of the Regional Asset District, the City and the Urban Redevelopment Authority signed a cooperation agreement that allowed a portion of the City’s sales tax proceeds to be intercepted by the state Treasurer and directed to a trustee account (the trustee was Mellon Bank) for the purpose of funding or servicing debt related to an Authority Development Fund that came to be known as the Pittsburgh Development Fund.  While a 2004 Legislative and Budget Finance Committee audit pointed out a number of projects that the Fund was involved with, it will forever be remembered as one of the key pieces that funded the long-gone Lazarus department store.  It was, as the audit pointed out, “…the largest single approved PDF project amount” and upon it hinged a major development strategy.

That’s the past—so, what to do with the money?  One City Councilman made a proposal in May of last year to fund tax relief for homeowners whose values went up significantly after the reassessment—which would be permitted as the language is in the RAD law and in the Pennsylvania Constitution for counties of the first and second class.  Ironically, money that was stipulated in the law for tax relief but diverted for two decades for economic development returns the same year as a half mill real estate tax is proposed.

August Wilson Center Off- Kilter Rhetoric

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The never ending saga of what to do about the financially insolvent center has produced another great quote. According to the niece of Mr. Wilson, the judges need to be reminded that they are elected and must represent the interests of the people. In other words, they must rule against the developer and Dollar Bank.

It would appear that the niece has forgotten what judges are elected to do. They are honor and oath bound to rule on the law and the facts of the case, not on whether one side can fill a court room with advocates for the “people’s” interest.

Ironically, the people’s interest is part of the larger scheme of our tripartite government and is represented in and by the judiciary. Maintaining the rule of law for all is in the long term greatest interest of the people. That is why the system is designed the way it is. The judges must look at the facts in the case, the contract agreements and their stipulations. Then the judges must rule on the facts as the law requires. To base their decisions any other way is a paving stone on the road to the perdition of anarchy.