July 07, 2008

08-09 PA State Budget

The Pennsylvania State Budget for July 1st, 2008 through June 30th, 2009 was passed on July 4th, 2008. A few days late as usual. However, all of the other State funded organizations needed to have their budgets adopted before July 1st. This includes school districts. The Rendell Administration is putting a nice spin on it as usual.

One of the quotes is “No increase in taxes”.

No increase in taxes? Sounds great, but wait. I just read in the paper last week that my school taxes will indeed increase by 3.1 mills or about 4%. So I guess there are tax increases. What’s the problem? I’ll tell you.

The Penns Manor Area School District (like all school districts) needed to have their budget adopted before July 1st. School districts around the area were led to believe they were getting an increase of only 1.5%, instead of around the 3% they normally get. Therefore, to cover the shortfall many school districts raised their tax rate.

Now, since the state budget was passed, the school districts find out they are getting 3% instead of the projected 1.5%. So the schools raised their taxes AND are getting more money from the state. Here is how the numbers work out for Penns Manor.

One mill of taxes at Penns Manor generates about $24,411, so an increase of 3.1 mills should generate about $75,674. Penns Manor was expecting about a $103,000 increase in their state basic education funding. Instead they will get an increase of about $206,000 from the state, plus another $75,674 they raised in taxes! That is a difference of about $27,300. Therefore, based upon this data, it is technically possibly that Penns Manor could have actually LOWERED school taxes this year by 1 mill instead of raising it 3.1 mills!

But that won’t happen. We need another way to finance things in PA. Property taxes are not the answer. Ed Rendell does not have the answer. We cannot increase spending each year without increasing taxes and/or borrowing money. Increasing taxes hurt the current economy while increasing borrowing hurts the future economy. Neither is a viable option.

The state (along with the federal and local governments) needs to decrease spending and focus on growing the economy. Heavily taxed economies cannot grow.

Get with the program Ed! But what does he care, he will be out of office soon enough, leaving Pennsylvania a big giant mess. Somehow, though, he will walk away with a nice spin on his administration.

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