DN Editorial: Funding for dummies

Posted: July 11, 2014

IT'S TEMPTING to slam the state Legislature for failing to accomplish one simple task - pass a $2-per-pack cigarette tax in Philadelphia to help fund the schools.

But, in our estimation, the Legislature has failed to accomplish not one but five simple tasks, any one of which would have helped the city's schools open on time, with more than bare-bones staffing. And that turns a single glitchy bill into a sweeping and utter failure of leadership.

Because of last-minute tinkering with the cigarette-tax bill, the law that was on its way to Gov. Corbett's desk must now go back to the House, where success is iffy. (The House says that it will come back in August to deal with the bill.)

The cigarette tax itself - which had been projected to bring in $45 million in its first year - represents a desperate move on the part of the city, which came up with the tax in the absence of any productive ideas in Harrisburg. The whopping tax will have a few good outcomes - reduced health risks from smoking, for one - but will add especially high financial burdens to people who can least afford it. The city is one of the "smokingest" big cities in the country, and many of those that would be hit by the higher tax are low income. We'll put aside the lectures on "if you can't afford to smoke, you shouldn't smoke anyway," especially considering some of the other options for raising money or making the schools whole:

1. A gas severance tax. Pennsylvania is the only state that does not tax the extraction of gas. As a point of comparison, West Virginia reaps $100 million a year in extraction taxes, and that will double next year because of increased output. A 5 percent tax would generate $700 million in the first year. Allow companies to inject water and chemicals into the earth, extract highly valuable resources and don't take a percentage of that value? How dumb can you get?

2. Gambling revenues . Despite recent downturns, the state's gaming industry remains second only to Nevada in overall revenues. The proceeds from the gaming juggernaut get sliced up a few different ways; one of them sends a pile of money to the state's horse-race industry. So far, that industry has seen about $1.5 billion in revenues, since 2006. The state itself takes in 34 percent of the gross gaming revenues - $4.4 billion since 2006.

Seven years ago, this $6 billion didn't even exist. With this infusion of significant new money, remind us again why it's so hard to pass a damn budget in Harrisburg? And why can't a tiny slice of the wages of gambling signal that we place importance on education?

3. Medicaid expansion. Gov. Corbett has joined other Republican governors in refusing a federal expansion of Medicaid - which means that he refused $552 million this year alone, according to some estimates. The feds would reimburse the state 100 percent of the costs for the first three years, and 95 percent thereafter.

4. Charter reimbursements. Although not a source of revenue for the state, reimbursements of some of the district's charter costs once were a key source of revenue for the schools but eliminated in 2011 by Corbett. In the first year, that meant a hit of $100 million. And as the number of charter schools rise, so do the costs to the district's budget: $700 million last year.

The point is, there are sensible options that would stop the starvation of public education. Refusing one of them may be understandable. Refusing all of them speaks to a crabbed and limited vision for the state's future.

comments powered by Disqus
|
|
|
|
|