School Budget Squeeze Driving Property Tax Hikes

By Jenny Groff, PFB Summer Intern

Charles Porter knows firsthand the impact rising property taxes are having on farms. As a farmer
and Southern Columbia School Board member, Porter is in a position that allows him to discuss the
causes of property tax increases and see the impact of those increases on the farming community.
Porter, a Pennsylvania Farm Bureau (PFB) member, said pension costs are the primary reason for the
nearly 73 percent increase in property tax rates in his school district over the last 10 years. Porter stated
that his district is required to make payments equal to more than 30 percent of the cost of employees
salaries into the Public School Employees Retirement System (PSERS).
Porters district is not alone. Many school districts across the state face rising property taxes as a
result of pension expenses, special education expenses, and charter school costs. School board
members who are also farmers, like Porter, are often left with a difficult balancing act, as they
understand both their districts budgetary needs and the impact tax increases will have on farmers.
Another school district feeling the squeeze of pension-driven property tax hikes is Mountain
View School District in Susquehanna County, which saw a more than 24 percent increase in property
taxes over the last 10 years. Christine Plonski Sezer, PFB member and Mountain View School Board
member, stated her school districts payments into PSERS also equate to around 30 percent of salary
costs.
School board members say defined benefit pensions, where a retiree is guaranteed a set
payment, force school districts like their own to make up the difference when the state pension fund
falls short. PSERS costs are predicted to rise steadily in the coming years to a state average of more than
36 percent of employee salaries by 2022.
School districts are going broke, Plonski Sezer said.
And she added, increasing property taxes to cover pension costs has made it difficult for retirees
and seniors with fixed incomes to pay their taxes.
Echoing that sentiment, Lolly Lesher, a PFB member and Hamburg Area School Board member,
recalled a story from a school board member who, as a bank branch manager, witnessed seniors
draining their savings accounts each year to pay their property taxes. If property taxes arent soon
controlled, Lesher fears seniors may be forced from their homes over their tax bills.
Its stressful. They have a limited income and as taxes increase, it becomes harder for them to
make all the ends meet, Lesher said.
Leshers Berks County school district has increased property taxes 21 percent over the last 10
years, which she attributes not only to pension costs, but also to the expenses associated with special
education and charter schools.
According to Lesher, the best service for (special education programs) is not always the
cheapest. Its another part of our community that we need to take care of and we need to invest in
them and help them as much as we can so they can develop and become as productive citizens as
possible. We look at it as an investment and a way to enhance our community long term.
The costs to educate a student who receives special education services can soar to more than
twice what it costs to educate the average non-special education student. The current state system for
determining the amount of special education funding a district receives is based on a state average,
rather than district-specific data. This leaves districts with larger numbers of students enrolled in special
education programs struggling to find the funds to educate those students.
According to Plonski Sezer, Mountain View School District has larger number of students
receiving special education services, straining the school districts finances beyond the impact of pension
costs.
 We typically receive a hefty state allocation to help with funding programs, but this year that
funding was severely cut back, and while no programs were cut this year, Im not optimistic that will be
the case next year if our state funding remains low, Plonski Sezer said.
James Hallowell, a PFB member who serves on the Palisades School Board, stressed his concerns
over the lack of state funding for mandated programs, which leaves school districts like his struggling to
find money to pay for them. His Bucks County district has seen a more than 22 percent increase in
property taxes over the last 10 years, in part due to needing money to cover state mandated programs
which the government is failing to fully fund.
A growing shift towards charter schooling has also contributed to property taxes hikes. School
districts are responsible for paying for students that transfers to such programs. Mountain View School
District, for example, paid $13,176 per non-special education student for the 2016-2017 school year and
$34,862 per student enrolled in special education programs.
Any increases in pension costs for school district employees are also applied to charter
employees, which results in the districts having to pay even more to the charter schools.
Michael Diehl, a PFB member and more than 30-year veteran of the Turkeyfoot Valley Area
School Board, said solutions to these problems will not be easy to find. His Somerset County district has
faced a near 50 percent increase in property taxes over the last 10 years, mostly due to failures in the
PSERS system. Thats where he thinks reform should begin.
The PSERS situation has to be gotten under control. It is being ignored and is a huge problem
everywhere in the state, Diehl said.
Diehl believes the states pension problems are taking away much-needed funds from programs,
staff, and services.
A recently enacted law seeks to address pension costs in the future by shifting new state and
school employees to retirement plans that are less risky for taxpayers. While PFB sees that as a step in
the right direction, further reform is needed. The new law does not address the current pension deficit,
which whats causing school districts costs to skyrocket and forcing tax hikes.