Could Referendum Open Door to Fair Funding?

So I think I get it.

The referendum question on the ballot next Tuesday is property tax reform in little pieces.

Unable to agree on a complete package that would replace the revenue from property taxes with something that didn't look like they might be raising state taxes, the members of the nation's second-largest, second-most expensive legislature punted.

But that's not necessarily all bad.

The Constitutional restriction against just offering relief to homeowners and farmers was a real-life legal hurdle and made the whole thing more difficult to pull off.

There were some dubious and, as always,
angry people at yesterday's forum.

If approved, it would only cost $7 billion to replace property taxes lost from taxing homes and farms.

That might be more doable on a statewide basis.

Also, it would allow school districts (and boroughs, townships and counties) to still have the stability of property tax revenues on commercial properties.

Now granted, the open-ended nature of what happens next if this is approved is certainly worrisome, given that it would be in the hands of people who can't pass an annual budget on time.

And you can't really blame Pottstown Schools Superintendent Stephen Rodriguez for calling it "smoke and mirrors," when the very real problem of school funding and opportunity by zip code  remains largely unaddressed.

And he's right to say so.

The potential for shenanigans on this thing in Harrisburg, with this open-ended authority, is certainly very real.

After all, the General Assembly has a history of dumping problems downhill to avoid looking like they're raising taxes -- particularly education funding problems.

State Rep. David Maloney, left, is the prime sponsor of the legislation

which brings this referendum to a voting booth near you Nov. 7.

I mean the idea that Pottstown could replace its lost property tax revenue with a sales tax is laughable, and Marlene Armato was right to call them on it.

But consider this.

The legislature enacted the fair-funding formula then cheaped out on implementing it in full because "it would be too much change too fast."

But what if the money coming from Harrisburg to replace the lost property tax revenue were to be distributed through the fair funding formula?

I mean, they're changing the whole system anyway. Isn't it the perfect opportunity to implement the formula in full?

I recognize, it's unlikely.

I mean after all this is Pennsylvania. We're not exactly a "can do" state.

And there are probably 100 obstacles I haven't thought of that would prevent it,

But still, it is a tantalizing thought and wouldn't it be easier to lobby for since its a major change being implemented already?

It's food for thought if this passes.

In the meantime, if you want to get confused, try following the Tweets from yesterday's forum which was supposed to explain it all..

On Excellent Teachers and Zero-Tax Budgets

Inadequate photo by Evan Brandt

From left, Pottstown School Board President Judyth Zahora, high school social studies teacher Maureen Rieger, Franklin Elementary teacher Jane Hospador and Superintendent Jeff Sparagana.

As much as this is the season of spring concerts, graduations and field days, it is also the time of the school year when excellence in teaching is recognized.

Some of that recognition occurred at Thursday night's school board meeting.

The first teacher to be honored was Jane Hospador, who teaches at Franklin Elementary School and was a finalist for the Montgomery County-wide Voices of Inspiration Award.

Here is a short video with Superintendent Jeff Sparagana reading why Hospador was recognized.




After Hospador, it was Pottstown High School social studies teacher Maureen Reiger's turn.

She was recognized by the Philadelphia Chapter of the Sons of the American Revolution as one of the teachers the organization recognizes each year "as an extraordinary educator."

It is presented to "a teacher whose instruction on the era from 1750 to 1800 demonstrates education efforts in the classroom that exceed and excel above the current, accepted curriculum requirements.

Rieger will not compete at the state and possibly national levels.

Here is a short video of the ceremony in her honor Thursday.



Of course that wasn't the only newsworthy thing that happened Thursday night.

There was also the small matter of a $57 million proposed budget that was adopted unanimously and will not raise taxes in the coming year.

But we both know that will get splashed all over the front page of The Mercury, so I thought it would be nice to lead off with the teachers since, to be honest, that will likely not make the paper.

And that's why The Digital Notebook's motto is "All the News That Doesn't Fit Into Print."

Speaking of non-print news, here are the Tweets from Thursday night's meeting.

(Be sure to scroll your way through to the bottom to see lots of photos from the district's first Elementary Math Olympiad, held at Rupert Elementary, as well as photos of students helping to establish a new community garden at Charlotte and Walnut streets.)

Your Chance to Talk Property Taxes, Education Funding

South Hall of Montgomery County Community College's 

West Campus

The House Democratic Policy Committee will hold a public hearing to discuss property taxes and “education funding cuts” at 2 p.m. Monday, Sept. 9 at the Montgomery County Community College’s West Campus South Hall on College Drive.

“The committee will hear from stakeholders — including school board members, superintendents, education advocates and the AARP — who will discuss education funding cuts and their impact on property taxes,” according to information posted on the Facebook page of state Rep. Mark Painter, D-146th Dist.

“Since 2010-11, the average classroom in Pennsylvania public schools has lost $11,575 in annual funding, and the poorest school districts have lost more than $20,000,” Painter posted.

“I remain disappointed that the overall state budget failed to adequately or fully fund public

Mark Painter

education as a whole. While the state legislature completed the budget process in early July, sadly, it did not restore the $1 billion in education funding cuts that Gov. Tom Corbett has delivered and retained in his last two budget cycles,” Painter said in his post.

“Children and their families are adversely affected when school districts are underfunded. This lack of funding, which has been a hallmark of the state budgets under Gov. Corbett, causes many school districts to make hard choices. I don’t support teacher lay-offs or cuts in vital programs such as music and art while property taxes continue to rise,” Painter wrote. “This double-edged sword of diminishing educational programs and rising taxes is unsustainable.”

The Borough's Burden, Part 5

What Should We Do About It?

Welcome back again.

Thanks for sticking with us for the whole thing.

This is the BIG pay-off!

Well, in all actuality what we have here are a series of fairly sedate suggestions from the Delaware Valley Regional Planning Study, "The Mismatch Between Housing and Jobs," 

This is the study we have been sharing in the two previous posts (Click here for Monday's post, here for Tuesday's post) and it ends with a series of suggestions for ALL levels of government that should be taken seriously.

I have a few suggestions to add, but we'll leave those to the end. And again, those comments of suggestions highlighted in bold are my own emphasis or suggestions.

Without further ado, here are the suggestions as outlined in the study:

The Federal Government should:

• Review their program rules and guidelines to ensure that they support community planning and revitalization efforts. For example, Section 8 landlords that become tax delinquent should no longer be eligible for a federal subsidy until their taxes are made current.
•  Link available discretionary funding (including transportation and infrastructure funding) to each community’s efforts to address their share of the region’s affordable housing needs.

(This is very important and would help Pottstown deal with the low-income housing burden it is carrying for the region.)

The Pennsylvania Legislature should:

• Require counties and municipalities to address a fair share of their region’s housing need as a part of a comprehensive plan and, working through the Department of Community and Economic Development (DCED), should assume primary responsibility for establishing the goals, policies and standards for defining regional housing needs throughout the Commonwealth.
• Target discretionary state funding (including funds available through the respective Departments of Community Affairs/Economic Development, Environmental Protection, and Transportation) to areas where the existing housing stock is currently affordable, to improve the ability of these communities to attract prospective homebuyers.
•  Implement or expand property tax relief programs that provide assistance to elderly and low-income homeowners struggling to meet the increasing property tax burden, such as property tax postponement or deferral, tax assistance, property tax caps, assessed value caps, homestead exemptions, or property tax credits. (This would be very helpful in Pottstown).
• Support programs that provide energy assistance to low and moderate income households, both for heating in the winter and cooling in the hotter summer months.
• Require public utilities to dedicate funds for weatherization assistance, to help low and moderate income homeowners interested in weatherizing their homes and thereby reduce energy costs.
• Research, review, and implement revisions to the current property tax structure, particularly the way in which public services (especially education) are funded, to allow housing location decisions to be based on sound planning principles rather than financial considerations. 
• Research and review successful alternatives used in other regions or states to provide and maintain affordable housing and achieve an appropriate regional jobs housing balance and determine which programs or program components could be successfully implemented within Pennsylvania.

County Planning, Housing, and Community Development Agencies should:

• County housing authorities that manage housing vouchers should proactively enforce property maintenance requirements (including annual inspections) and review their program rules and guidelines to ensure that they support community planning and revitalization efforts.

Municipalities should: 

• Recognize their responsibility to provide for the housing needs of both current and prospective residents. 
• Provide opportunities for an appropriate variety of housing types in residential zones, including increased densities in single-family zones and single story or “garden-style” townhouses.
• Allow non-traditional affordable housing alternatives in appropriate locations, such as accessory dwelling units and elder cottages. 
• Provide for inclusionary zoning in appropriate locations, where developers are offered density bonuses in exchange for providing affordable units.
• Expand available assistance for homeowners and landlords for rehabilitation of the home’s major systems (plumbing, heating, and electrical systems as well as the roof) and for other improvements (including improvements necessary to make the home accessible and aesthetic improvements such as siding or painting). (This is some of what is happening with Pottstown's Homeowner Initiative.)
• Adopt or revise and aggressively enforce a local property maintenance code, including both homeowners and landlords (including private owners as well as Section 8 landlords and public housing authorities).
• Pursue all legal means of requiring landlords to maintain their rental properties.
• Pursue all means available to legally acquire abandoned properties and properties that landlords have refused to maintain.

Given the means by which most local services are funded (especially education), concentrating low and moderate income families in certain municipalities (specifically, cities, boroughs, and older suburbs) places an unfair financial burden on these communities as they struggle to provide necessary services to disadvantaged residents.

Concentrations of low income housing units may also act as a deterrent to market-rate residential developers and non-residential redevelopment efforts.

Requiring that all of the region’s municipalities provide a fair share of affordable housing, however, will likely increase sprawl and result in disadvantaged residents living in areas where access to services and employment is limited.  

(Being politically impossible, it is also never going to happen. Instead, as I posted on Feb. 10, it's more realistic to ask the county and perhaps the state to provide additional funding to the borough to help support that burden Pottstown is carrying for the entire region.)

In that respect, targeting housing development (including affordable housing) to areas with existing services and access to jobs makes logical sense. The regional analysis of impediments and regional housing planning process must address and balance these valid but often competing regional objectives.

And now for a few of my thoughts on the issue:

The other, best answer, to all of this "cycle of disinvestment" is jobs.

Many, many, years ago, when The Mercury published my "Do or Die Time" series on Pottstown's plight, we looked at all these things -- education, codes, crime -- and while helpful, I have come to realize it was missing a crucial element.

That realization came from a reader who pointed out that we had not addressed the issue of jobs.

And the more we look at this, the more evident it becomes that good jobs, that pay a living wage, solve so many of these problems without any other need for programs, or ordinances or incentives.

After all, the name of the study is the "mis-match" between housing and jobs, which means the jobs ain't here but the low-income housing is.

More middle class wealth, means more support for local business, means more people who can pay their taxes, means more people who can buy homes here, who can be invested in this community and its schools and it means less crime.

Jobs and local investment means less low-income housing not because we've forced it out with some ordinance, but because the market has made Pottstown more attractive and the value of our homes has gone up.

In other words, having recognized the problems that concentrations of poverty bring, Pottstown should succeed not because we've forced the poor out, but because we've lifted them up and helped make them part of a healthier middle class community.

Jobs can do so much of that work and are probably ultimately more within our power to affect than convincing the state and county to pay us to house and educate their poor.

Recognizing the importance of jobs, watching borough council wrestle Monday night with the very real dilemma of taking a chance on a company, an unknown, versus losing tax revenue, a known, shows the difficulty of the choices we face.

So how to we attract jobs to Pottstown?

Giving tax breaks to a business has always been a risky affair and we are right to be cautious.

But consider the alternative.

Letting that deal collapse will very likely be the trigger that forces 84 Lumber into challenging its assessment.

If I owned that property, it's what I would do.

Then we will lose almost the same amount of revenue we lose through the Keystone Opportunity Zone deal council approved Monday, but have nothing to show for it but an empty building on a dead-end street.

It's good, I think, that we hashed out these issues in public, so the public knows the challenges with which the borough (and school district) must contend and the difficulties of the choice our leaders face.

If, as a result, council feels it should have more information before agreeing to another such deal on any of the few Keystone Opportunity Zone parcels that remain, then the time to work out those requirements is now, not three months into the process.

Let's remember there are other KOZ parcels in Pottstown that did work -- those on the former Mrs. Smith's Pies site on the north side of South Street, which are still working and still employing people in Pottstown.

Not only did the KOZ tool KEEP an EXISTING  business, and its jobs, here in town, but they worked out payment in lieu of tax arrangements with some similarities to those undertaken for Heritage Coach Co.

So let's mark this discussion as a point of progress on a difficult road toward attracting more jobs to Pottstown.

We need to recognize that almost anything that results in more jobs in this community is ultimately a plus, because of how many areas of life a living wage touches.

We should ask ourselves, why should we ask a business to take a chance on Pottstown if we are not willing to take a chance on them?

Will the workers at Heritage Coach and its tenants live in Pottstown? Maybe.

Should we require them to live in Pottstown? Probably not.

I put it to you that it be better to make Pottstown a place they WANT to live.

* * *

For those of you just finding this, here are links to the previous four posts:

1. Saturday, March 9
2. Sunday, March 10,
3. Monday, March 11
4. Tuesday, March 12

Toroney: Report Paved the Way to No Tax Hike

Borough Council President Stephen Toroney credited a 2009 consultant report on the borough’s finances for starting Pottstown down the road to what he considers a landmark achievement, that was made official Monday with the adoption of a $38.5 million that does not raise borough taxes for the first time in recent memory.

Councilman Mark Gibson, who, as a paid driver for the Empire Fire Company could be said to benefit financially by voting for the budget, which makes contributions to the fire companies, abstained from the vote.

But the budget, officially balanced at $38,530,729, otherwise received unanimous support from the remainder of council.

Also adopted with Gibson’s abstention, was the tax rate ordinance.

It is broken down as follows:
• General fund — 6.71500 mills;
• Debt fund — .55000 mills;
• Library fund — .19700 mills;
• Street light fund — .33700 mills;
• Parks and Recreation fund — .90600 mills;
• Fire house maintenance fund — 1.50700 mills;

Council President Stephen Toroney

This leaves the 2013 total real estate millage in the borough at 10.212 mills, the same as 2012.

For the average residential property in the borough — which is assessed at around $75,000 — that works out to an annual bill of $765.90.

Toroney thanked Finance Director Janice Lee for her hard work.
“It’s an early Christmas present for the citizens and taxpayers of our town,” he said.

“We’ve been working toward this since 2010,” said Councilman Dan
Weand, who chairs council’s finance and administration committee.

“It took many years to dig ourselves out of the hole we were in,” Toroney said, which prompted Borough Manager Mark Flanders to remark, “we’re not out of it yet.”

Lee declined to take all the credit. “It’s just evidence of everybody working together,” she said. “It was a team effort.”

“I think the start was the EIP report,” Toroney said in reference to a report paid for partly through the state’s Early Intervention Program for municipalities in financial trouble.

The 141-page report was written by an Ohio consulting firm named Management Partners and contained the startling prediction that unless Pottstown radically changed the way its borough and authority government is run, that borough property taxes would jump by 75 percent; water rates by 25 percent and sewer rates by 19 percent in the next five years.

In addition to there being no tax hike in 2013, there will also be no increase in water and sewer rates.

The report highlighted a number of looming problems, not the least of which has been the steady drop in Pottstown’s total assessed property values.

The report contained 122 recommendations designed to save $370,000 a year and was cited as the primary reason for borough lay-offs that occurred subsequently.

Among the other recommendations was a suggestion to merge the public works department and the borough authority.

While that has not happened exactly, Flanders told council that in 2013 he intends to consolidate the maintenance of the water and sewer treatment plants into a single department “and make a stand-alone maintenance department called ‘Utility Maintenance’ that will do work on both plants on a work-order basis.”

He said that department will be overseen by Brent Wagner, the utilities coordinator.

“If we hadn’t had the EIP report, we wouldn’t have had a plan and we wouldn’t be here,” Toroney said.

“The EIP report gave us that blueprint.”