Rendell vetoes education bill over charter-school tax break

Posted: October 23, 2010

Gov. Rendell on Friday vetoed a comprehensive education bill that he said gave an unfair tax break to charter-school landlords - a move that blindsided and outraged some legislators and advocates of the measure.

The provision would have exempted nonprofit foundations that rent property to charter schools, and let them apply the tax break retroactively.

But the governor's veto took down with it a wider law that included about 20 other initiatives - among them, ones to combat student violence, make textbooks more affordable, and improve financial literacy.

"I support many of the initiatives included in this legislation, so withholding my signature is not easy," Rendell said Friday. "But this bill does not meet the threshold of constitutionality or basic fairness."

Every senator and 180 of 203 House members voted for the bill. Criticism of the veto came from members of both parties.

Rumors of a veto had been swirling, but Rep. James Roebuck (D., Phila.), chairman of the House Education Committee, was livid that Rendell didn't call him before or after the move.

"I'm more than appalled - I'm offended. I'm deeply offended by his arrogance," said Roebuck, who had written initiatives in the package to improve data on dropout rates and help teachers pay their certification fees. "This is a governor I was for when no one else was for him."

Charter schools are typically exempt from property taxes, although some districts have sought to tax them in recent years. The provision in question would have extended the exemption to their property owners, if the owners were nonprofits.

Rendell said it might spur for-profit landlords to convert to nonprofit foundations in order to exploit the tax break - and thus, in the end, prevent school districts from collecting needed revenue.

He also questioned whether such foundations would be "purely public charities" as required for an exemption under state law. And he said it would give them a break that churches, senior centers, and other nonprofits don't get. "It would give a small handful of nonprofits special access to tax breaks and encourage others to create new nonprofit corporate entities in order to game the system," he said.

The office of Sen. Majority Leader Dominic Pileggi (R., Delaware), who sponsored the charter-school provision, said it would affect just three schools: the Collegium and Avon Grove Charter Schools in Chester County and the School Lane Charter School in Bucks County.

"This governor has never been a friend to public charter schools, so his animosity toward them is not a surprise," said Erik Arneson, spokesman for Pileggi.

Guy Ciarrocchi, who heads the Pennsylvania Coalition of Public Charter Schools, said the language was "a technicality" to resolve what had become a costly legal issue. He said Avon Grove spent hundreds of thousands of dollars fending off tax bills from its local school district, township, and county.

"We really thought this was a clarification to stop the silliness of just pursuing this," Ciarrocchi said.

Rendell's office released 11 letters from municipalities, school districts, and officials who supported the veto, including Mayor Nutter. Philadelphia is home to 74 charter schools, including some that pay rent to nonprofit corporations and foundations.

A letter from the Philadelphia School District's deputy superintendent, Leroy Nunery, said the city and district faced "a significant potential revenue loss" under the law. His letter did not elaborate, and neither he nor a district spokesman was available to comment.

Frank Galicki, president-elect of a statewide school superintendents association, wrote in a similar letter that his own Western Pennsylvania district would "lose thousands of dollars by allowing this tax-free exemption."

In an interview, Galicki said that there were no affected charter schools in his district and that he was referring to potential future losses.

Like all the letters, Galicki's was written in the last two days - and it pointed out some of the positive initiatives proposed by the wider law. He said a Harrisburg lobbyist for the superintendents association asked him to write it.

"He gave me some talking points, but I massaged the talking points in the letter," Galicki said.

The veto disappointed others for different reasons.

Gary Cuccia had lobbied for nearly three years for schools to develop programs about dating violence among teens - since his daughter Demi was murdered by an ex-boyfriend in 2007. Earlier this month, the House declared Oct. 6 Demi Brae Cuccia Day.

The bill that would have mandated prevention programs was folded into the wider education bill. Cuccia, of Monroeville, said he had heard last week that a veto might be looming. So the news wasn't a shock.

Still, he said, "it's very disappointing."


Contact staff writer John P. Martin at 610-313-8120 or jmartin@phillynews.com.

Inquirer staff writer Amy Worden contributed to this article.

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