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Dealing with Political Realities
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It doesn’t matter if we like it or not, political realities exist. There is a system in place that must be dealt with realistically when facing important issues and advancing legislation. We can be upset about some of those political realities and we can complain, but until they change, we have to understand that working within these political realities; developing strategies that consider these realities is essential if legislation is to move forward.
We all know the property tax is unfair. We know it is egregious and regressive. We know that the basis which will establish the millage rates, the costly home assessments, continually fail to do what they are supposed to do: make property taxation fair. We know that a minimum of 10,000 people a year face the risk of losing their homes because they can’t keep up with the demands of property taxation. We know that, in order to sustain the revenue demands of property taxation, increasing the tax burden on property owners becomes absolutely necessary.
When it comes to education funding, that tax burden on property owners comes to almost $14 billion dollars annually. Looking at statewide increase we can estimate that if nothing changes it will add a burden of about 3.5% annually. That means It grows by an estimated $500 million dollars a year If that trend continues we will be at approximately $20 billion within the next 10 years. At that point in time,, if we are still seeing a 3.5% increase, the additional increases would move from $500 million to $700 million in needed replacement revenue. In 15 years, it will grow by 875 million and in 20 years it will be an additional tax burden of $1 billion dollars a year. That’s all if nothing changes. Yet we know, as pension, healthcare and special education costs continue to grow exponentially, the likelihood of exceeding the 3.5% is a strong possibility.
We also know that the population growth in Pennsylvania is declining. In 2010, we lost a Congressional district because of population declines. In 2016 alone, approximately 45,600 more Americans moved out of Pennsylvania to another part of the country than moved in — the largest domestic outflow of any state other than New Jersey, California, Illinois, and New York according to USAToday (Source: link).
All of these are actual realities, but they differ from political realities.
Political realities are internal factors that operate within the system of government that can become obstacles to facing the hard facts about the substantive truth of any situation. Political realities become paradigms that are often based on perceptions, not physical realities. In we want to change paradigms we have start by exposing the flaws and weaknesses of those paradigms.
To change a political paradigm requires a paradigm shift. It requires moving from one accepted form to another. This is never going to be an easy task. Society, in general, is reluctant to radical paradigm changes. In the political realm, it’s even worse. The is what is behind eliminating the school property tax. It is a paradigm shift.
Any plan to eliminate school property taxes must deal with political realities. The first of these realities is the simple fact that this is a radical change in how we fund education. In spite of the evident negative effects of property taxation in the funding of education, clinging to the status quo is a political reality. Operating in a realm of political reality for those who want to cling to the status quo allows them to look only at the immediate, not the long term, measured against how such a radical change would impact special interest funding and re-election abilities. Those two factors, are what steers political realities.
The majority of the most powerful campaign funding special interests oppose eliminating the school property tax. They have refused to look at long term impacts on the overall economy of the state to focus only on the short-term self-serving benefits.
Case and point: With a shrinking base but a growing revenue demand, we can predict with some certainty the eventual collapse of the current system of property taxation in the funding of education. At this point in time, the educational complex (those campaign-funding self-serving lobbying interests of the educational complex) look at the property tax as a stable source for the collection of revenue. They know the ease of increasing property taxes over other forms of taxation and remain reliant on that ease by calling it stability. That’s a political reality but it is not based on substantive truth.
Their argument of stability is self-focused because it ignores the instability it causes in the overall economy of the state. In short, the stability of property taxation for the tax collectors is predicated upon the instability is causes for those who have to pay the tax. They refuse to accept the damage this tax has done to focus only on the benefits of the ease of raising property taxes and they then identify this as stability.
The challenge then becomes to expose the flaws of such a political reality and to accomplish that, the substantive debate must be framed around the unsustainability of the future of taxation. The stability argument allows those within the education complex to only see the stability for the moment. As costs increase and the burden grows; as it creates more and more instability for the people who must pay the tax; the less stable this tax will be for those who collect the tax. This creates a very uncertain future for our schools and teachers. If we cannot sustain the growth of the property tax burden, then we cannot sustain our schools and the teachers and children within those schools.
The reason for this is simple. In order to sustain the revenue demands in education through property taxation, the burden of property tax must increase. This results in endless increases in the property tax. Those increases impact the overall economy of the state, especially where wage growth in the private sector is not keeping up with increase of the property tax burden. As the property tax burden increases, the individual’s disposable income decreases. That means less overall revenue to put back into the economy of the Commonwealth. This impacts everything from support of local business to charitable giving.
In the last fifteen years, income and sales/use tax has remained unchanged and each year it generates addition revenue due to natural growth. Revenue from the Personal Income Tax grew by an average of 3.4% annually since 2004. It did so with no tax increases. The revenue from the Sales/Use tax grew by an average of 2.5% annually since 2004. It did so with no increases in the sales/Use Tax rate. The revenue generated from property taxation grew by 3.5%. That revenue growth required tax increases. (Source: Independent Fiscal office link)
If we had replaced the property tax in 2004 with a blended income and Sales/Use Tax, we could have generated additional revenue for our schools without seeing a single increase. The estimated additional revenue to our schools would have translated into approximately $5 billion dollars. In order to generate that same additional revenue to our schools through a property tax, we needed to increase the property tax burden statewide.
To my way of thinking, generating $5 billion dollars for our schools without a tax increase while avoiding adding $5 billion to the tax burden of working families is the very definition of stability.
By not adding $5 billion to the tax burden, we would have allowed for that $5 billion dollars to go back into the Pennsylvania economy through the additional disposable income granted to Pennsylvania property owners. This is just simple Common Sense but unfortunately, this kind of sense doesn’t seem to be to common in Pennsylvania anymore.
Again, this is the actual reality, but the political reality is that, the actual facts are ignored in order to appease the self-serving interests of the campaign funding lobbyists who cling to this stability argument created by refusing to accept the instability it is causing for many of those who have to pay the tax which damages the overall economy of the state.
Without the substantive debate, we aren’t going to change the status quo. If you are operating solely the realm of childish rants and the politics of personal destruction to make you points, you aren’t making any points. In fact, you are most likely hurting the cause.
As frustrated as we are with an overall lack of political will to change the status quo, the political reality is that, as citizen activists, we do not have the financial resources, time or manpower to change the political landscape in the replacement of enough incumbents opposed to elimination with candidates who support it. That doesn’t mean we shouldn’t try, it just means accepting another political reality.
OpenSecrets explains that public sector teacher’s unions have steadily amped up their political involvement: From 2004 to 2016, their donations grew from $4.3 million to more than $32 million -- an all-time high.
Two organizations account for practically all of the contributions made by teacher’s unions: The National Education Association (about $20 million in 2016) and the American Federation of Teachers (almost $12 million). Both groups -- which compete for members, but also collaborate with each other through the NEA-AFT Partnership -- are consistently among the organizations that contribute the most money to candidates and political groups. (Source: link)
That’s a political reality. $32 million dollars is going to generate substantive influence on elections. It doesn’t matter if we like this or not, until the process changes we have to deal with this political reality.
In order to change this, attacking individual teachers is not the solution. They want better pay and benefits, but then again, who doesn’t. The problem here is how we are funding this. In spite of the Teacher’s Unions opposition to school property tax elimination, the fact remains, the path we are on is unsustainable. Things need to change or the system will collapse under its own weight. The message must be made very clear as we advance this issue.
We do understand that education has to be funded. We understand that teachers are a valuable resource to our communities and the future of our children and if we want to preserve that, then we have to have a system that can sustain growth without unnecessarily increasing the tax burden on working families. The property tax unnecessarily increases that burden because it is reliant on tax increases to meet the revenue demand where it can be replaced by a blended income and sales/use tax that generates additional income without resorting to tax increases. The property tax is going to fail the future of our schools, teachers and children the way it has already failed thousands of working families and seniors in this commonwealth.
The opponents to school property tax elimination argue that plans to do so lock in inequities as though the argument they are making is that they are opposed to such inequities. The ironic nature of this debate is that the property tax has created the inequities and if we don’t lock them in at some point in time, those inequities will only grow further. The inequity in funding argument used to stop school property tax elimination is then another misdirection creating a political reality devoid of factual substance. Yes, there is inequity in school funding. The driving factor behind those inequities is the school property tax. If we do not change how we fund education, those inequities are going to become even greater inequities.
By locking in the current inequities we have a stable target to deal with inequities in education funding so that we can deal with that funding through the Basic Education Funding Formula in an accurate and predictable source. As long as the property tax remains, we can not do so because the property tax is a moving target that changes dramatically with each passing year. It becomes difficult to develop a formula that can be adapted to meet the changes that take place statewide in revenue through the property tax and it makes keeping track of the whole process far more difficult than it needs to be.
On one hand, by eliminating the property tax and generating the replacement revenue through an income and sales-use tax, we create a stable target so the problem can be more easily corrected. By maintaining the property tax, we create an unstable target that makes it far more difficult to deal with. Remember, we have 500 school districts and there is no consistency in tax increases within those school district each year. To complicate matters, those inconsistencies become even greater on a year by year basis. No one can really predict what the increases will be from school district to school district year by year. That inconsistency exists because of the reliance on school property taxation.
While we can predict an annual statewide increase of 3.5% across the board in the increase of the school property tax burden, we can not predict on a school district by school district basis, what those increases will be. Some school district get by one year without increasing tax burdens while other school districts exceed the 3.5% and the next year the same thing will happen again but it happens at different rates and with different school. Since there’s no predictability, the claim that school property taxes are stable becomes exposed for the myth that it is.
It is simply ridiculous to claim that you are concerned with school funding inequities when you are supporting the very institution of the property tax that not only created the inequities but will cause even greater inequities in the future.
The only way to truly deal with these inequities is to first centralize the funding that comes from the property tax and then direct that replacement funding back out to the schools where future growth is limited to inflationary growth statewide since inflation varies from county to county and municipality by municipality that creates predictable additional funding to the schools so that Basic education funding formula can then be adjusted using this predictability factor.
There are other factors at play here and in the future we’ll address some of those factors but we all need to understand something. Eliminating the school property tax is a monumental task because it involves changing how we fund education. No matter what plan we generate, those who cling to the status quo will look for excuses to oppose any such plan even if that means misrepresenting the facts.
We have to start with understanding that bitching and moaning isn’t enough. Nor is just wanting to see elimination happen enough. As John Kennedy said “Efforts and Courage are not enough without a purpose and direction.”
Part of the strategy in moving such an effort forward requires a willingness to accept the political realities and then working within the political system itself to change the paradigms that shape the political realities. That is going to require an education effort that reaches out to educate the public as well as reaches into the political process to change those paradigms from within.
The strategy needs to be addressing the opposition talking rhetoric with substantive debate and that is going to mean we have to engage those who oppose is and that we must do so firmly and passionately while avoiding the more blunt tactics of childish name-calling and the practice of the politics of personal destruction. If we want to turn those who are neutral or on the fence on this issue then we have to understand what issues are important to them as individuals and reach out to them demonstrating how that issue is negatively impacted by property taxation. The last thing we want to do is become so abrasive that we push the person who is one the fence of it and on to the other side.
Unfortunately, there have been some within this movement who have done that. They used personal attacks and name-calling, even of those who support our efforts to eliminate, to the point where they become resistant to work with us or even so much as have dialogue with us. These patterns are self-destructive to the overall goal.
We all get frustrated and we all get angry but we have to learn to demonstrate some form of self-restraint where we don’t allow our personal egos to get in the way of what we are trying to accomplish. We need to understand that this is going to require the effort of many individuals and we need to encourage that involvement, not fear that the actions of one individual or group might deflect from the attention we may want for ourselves. This becomes another area where ego gets in the way.
If we are to succeed we need to prove ourselves to be reliable conduits in disseminating data. We must provide substantive responses to criticisms that clearly refutes the criticism. If you make the claim that someone is misrepresenting the facts, if the debate is to be substantive you must prove why their claim is a misrepresentation. Calling them names isn’t proof. The only evidence you are providing is that you have a personal difference with that individual and all you have is childish rhetoric, not facts, in demonstrating why you believe that person is wrong. That is not conducive to creating the type of paradigm shift necessary for something so monumental as changing how we fund education.
It may please the some in the base but it also alienates others. It also alienates some of the base so in the long run, while you might be applauded by some for such childish antics, you are doing more damage than good.
The final political reality we need to understand is that sometimes, compromise becomes necessary so long as the compromise does not hurt the overall long-term goals. For me, I want to see the elimination of property taxation at every level of government. While I push for school property taxation I see that as an incremental step in the long-term goal. We need to understand that if we have to change something that still delivers elimination then me must be willing to at least consider that change. We must be willing to have that conversation, study its impact on the overall goal and then consider how to move that conversation forward.
We must accept that no one person has all the answers, but we can try to work together to attempt to achieve the same goal. The goal here is the elimination of property taxes starting with the school property tax. How we get there is important so let’s have the conversation. If we want to change the paradigms of the political realities, we are going to have to have those conversations with those who disagree with us. We are also going to have to take that conversation out to the public arena.
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