Turning the Suburbs Blue

The suburbs surrounding Philadelphia have long been regarded as a Republican stronghold. Moderate Republicanism, perhaps best personified by Sen. Arlen Specter, has ruled the day. This has begun to change as the Pennsylvania GOP has moved farther and farther to the right. Democrats have a good shot at winning the majority on the Montgomery County Board of Commissioners as more suburbanites turn away from the Republican Party.

I grew up in Montgomery County and I'm happy to see that Democrats have such a good change to win the majority. We have two great candidates: Joe Hoeffel and Ruth Damsker. You have probably heard of Joe Hoeffel. He was a congressman for six years and ran against Arlen Specter in 2004. You may not be as familiar with Ruth Damsker. From her campaign site:

For the last 7 years, Ruth Damsker has stood up for working families on the Montgomery County Board of Commissioners. She has committed herself to providing better services, maintaining a clean environment, and working for a fair tax system.

Democrats have a great shot at taking the majority, mostly because Republicans are busy fighting amongst themselves:

District Attorney Bruce Castor, running for a seat on the commission, jabbed his running mate, incumbent Commissioner Jim Matthews, for accepting the financial support of Bob Asher, a member of the Republican National Committee who was convicted in a 1986 bribery-related case and who served eight months in prison.

With Republicans in disary, we have a real shot at this seat. Check out Damsker and Hoeffel's website by clicking here.

More Democrats coming to power is good news for Philadelphia. Republicans in Harrisburg have been unwilling to work with Philly's state legislators to provide adequate funding for SEPTA, public education, and a variety of other worthy programs. The only way to change this dynamic is to send more Democrats to Harrisburg and Montgomery County will be ground zero for the 2008 elections. If Democrats can win control of the County Commissioners, they have a good shot at beating some Republicans state legislators in 2008.

I'd like to be as optimistic as you but the suburbs are . .

sometimes quite scary.

As a mom, I often bring the kids out to soccer, gymnastics, art classes, the park, the swimming pool, etc. I agree with you that a good number of Montgomery County residents I've struck up conversations with are pretty easy-going. I wouldn't be surprised that the majority of them are deeply offended by the Republican National Party and the influence of the extreme religious right. But saying that they are appalled at the extremes doesn't mean they're going to the polls to establish equitable funding for schools and the like. It could mean that they seek really moderate bland Dems (read Bob Casey Jr.) who don't go off the religious right deep end but don't exactly take strong stands for justice either.

For example, re: education. A lot of people I speak with very much believe they earned their way out of crummy inner city public schools and into the best schools that money can and should buy. But they often remain unsympathetic to teacher union issues (Radnor teacher negotiations last year) or school buildings (Lower Merion HS beef) or freak out about any connection to Mumia (booting Angus Love from borough govt.) or don't think about plopping their school bus deport in the middle of Philly. So there's still tremendous privilege issues that play out in policy and actions.

The question for me is that when we talk about the shift away from extreme Republican domination what will moderate Dems do and accomplish?

Montco School Districts and Turning Montco Blue

I agree that it would be great to see the Montco Commissioners go blue with Hoeffel and Damsker winning and hopefully Castor losing (with Matthews getting the minority party slot). In terms of voter registration and demographic diversity Montco is changing, and the balance of Democratic vs. GOP registrations might tip sometime this decade to the Democratic side. I would argue that for many Montco suburbanites the two key issues they care about are real estate tax reform and education. As a large part of the suburban population does not have a direct connection to education (i.e. no children in public schools), they tend to focus even more on real estate tax reform. I would also suggest that in the matter of real estate taxes and real estate tax reform they place the blame in two areas: their school boards and Harrisburg (without really knowing or caring who is to blame in Harrisburg).

As someone who has been heavily involved in school district activities in a school district in Montgomery County and has spoken with advocates in other Montgomery County school districts, let me state the following:

  • Parents and taxpayers are upset due to a lack of communication and a lack of transparency from school districts.
  • Parents and taxpayers are upset by the fact that local real estate tax increases from Montco school districts generally exceed the rate of inflation and are routinely higher than the County increases (which have actually been generally flat) and local municipal government increases, which tend to be around the rate of inflation. This coupled with the fact that school districts tend to make up the bulk of the local real estate tax bills in Montco are key issues. (Keep in mind that Philadelphia has not increased real estate tax rates in years, while they routinely increase every year in the suburbs.)
  • Parents are upset about the focus and time spent on the PSSA (standardized) tests as required under the federal No Child Left Behind Act (e.g. "teaching to the test").
  • Residents are upset that due to the ability and practice of candidates to cross file for the primary elections, and the lack of competitiveness in some school districts elections due to one party or the other having a dominant voter registration position, that there is a lack of competition in elections in these districts.
  • Residents are upset that PA ACT 1 (2006), which promised real estate tax relief did not provide any relief as there are exceptions that allow school districts to raise taxes beyond the PA index (increase) rate each year, and that the amount of PA revenue from the casinos has not reached the amount needed to start the flow of the negligible payments for property tax relief.
  • In terms of school buildings, many of the suburban school buildings that were built post WWII during the period of mass suburbanization have reached the end of their 50 year life span. Many of these schools have not had adequate reinvestment over the years and there have not been adequate plans for their replacement. This coupled with the high cost of construction (especially in the Philadelphia region compared to the rest of PA), a cumbersome PA Department of Education school building planning and approval process, and a lack of available ground in many districts has made building schools very difficult. Finally the fact that school districts do not routinely build schools means that in many cases they do not have the expertise, structure, personnel or skill set needed to adequately oversee and implement a school building process.
  • In terms of school buses, nearly no one wants a school bus parking lot in their neighborhood and the amount of available and properly zoned ground needed to park dozens of buses is limited in many suburbs. While not defending the Lower Merion idea of parking buses in the Hunting Park area of Philadelphia, based on constituent objections and a lack of available and affordable land in Lower Merion, I certainly understand their position.

I haven't really lived in

I haven't really lived in Montgomery County for almost five years, so I am not nearly as close to the ground as the posters above. I don't have an easy answer to the problem of privilege in the suburbs. Many suburbanites don't seem to care about Philly's problems. Still, Democratic control of the Pa. House of Reps has directly led to more progressive public policy in Harrisburg. I want to see that control strengthened and taking the commisioner seats is a step in the right direction.

One more thing: it is not only suburbanites who are indifferent to problems facing Philadelphia's working families. It's important to remember that there are a lot of people who live in the city that don't care about public schools, SEPTA, or any other measurable public good. In some neighborhoods, people live their lives and ignore the fact that we're in the middle of a murder epidemic.

I will not deny that there are problems of privilege and power that factor into Philly's troubled relationship with the 'burbs, but those tensions are present within our own borders. Let's drop the us vs. them attitude towards the suburbs. There are good people everywhere and we can build a better tomorrow by working together.

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Clarification on taxes

ELP said:

(Keep in mind that Philadelphia has not increased real estate tax rates in years, while they routinely increase every year in the suburbs.)

While it may be true that suburban real estate taxes increase steadily, the percentage of tax paid by suburban residents is not nearly as proportionate for the $21,000 per pupil Lower Merion spends, for example, than what Philly residents pay for our $11,000 per pupil. An excellent summary of the messed up nature of the funding system can be found in the Summer 2007 Public School Notebook (http://www.thenotebook.org/editions/2007/summer/howschools.htm).

Authors Mike Churchill and Justin DiBerardinis point out the difference in funding between Reading and Tredyffrin-Easttown school districts. Reading taxes at 29 mills (for property tax) and is able to only raise $2,245 per pupil for its schools.

"By contrast, suburban Chester County’s nearby Tredyffrin-Easttown School District is able to raise $12,680 per pupil locally with a tax rate of only 14.5 mills – generating almost six times as much money per pupil as Reading from taxes set at half the rate." Even with state dollars the difference between the schools is $6500 per pupil.

This is not to be unsympathetic to the rising property tax burden in the burbs (hopefully it should be an incentive to seek a different funding formula, even though so far it's only resulted in property tax relief), but it's an important clarification.

Further Clarification on Real Estate Taxes

Mansei, I agree with you. Actually, things are worse than you stated from the Summer 2007 Public School Notebook report on the discrepancy between the Reading and the the Tredyffrin-Easttown school districts. The common level ratio for Berks County (Reading) for 2006 was 68.1 and for Chester County (Tredyffrin-Easttown) for 2006 it was 51.8 The common level ratio represents the assessed value to market value. In other words, when you are comparing mills across counties you are not comparing apples to apples unless you account for the the common level ratios. However, since the common level ratio is higher for Berks Co. and lower for Chester Co., the discrepancy is even greater than it would first appear. Two other significant factors that are often overlooked are Market Value Ratios and Personal Income Ratios. While I do not have time to pull the numbers, it is highly likely that the Market Value Ratio and the Personal Income Ratio for the Reading School District are far less than those of the Tredyffrin-Easttown School District (likely exponentially so). In simple terms the market value ratios and the personal income ratio discrepancies between the Reading and the Tredyffrin-Easttown school districts are almost certainly far greater than the figures used in the Summer 2007 Public School Notebook report would suggest.

I would suggest that for the 123 PA school districts that received PA Department of Eduction exceptions beyond the Act 1 Index rate for tax increases for 2007-2008 there was no real property tax relief. Believe me, real property tax relief cannot come soon enough as far as I am concerned.

Is it taxes vs. schools ?

I guess I don't quite understand your position on school funding. If the reliance on property tax for school funding results in these terrible discrepancies between Philadelphia and Lower Merion or Reading vs. Tredyffrin-Easttown then how can you just talk about property tax relief? Or can you clarify how property tax relief should address the school funding discrepancy?

Property Tax Clarification

My comments will focus on the suburbs, though in many cases they could apply to Philadelphia I suppose. However, Philadelphia is different due to its different tax structure for its unique range and type of taxes.

Let me start be restating my belief that PA Act 1 was not real property tax reform in that there are 10 exception areas that lets school districts apply to the Department of Education for higher real estate taxes; it is dependent upon the state building up a big pot of gambling funds; and once the funds reach the point where they can be used for "property tax reform" the amount allocated per household in terms of relief in many cases will be less than the amount that occurs every year as the increased amount in school district taxes. For the 2007-2008 year the Dept. of Education gave nearly every school district that asked for an exception were granted an exception in the amount at or very close to the amount they requested on top of a 3.4 percent Index increased real estate tax rate allowed as of right under Act 1. In the Cheltenham School District, for example, school district real estates taxes increased nearly 8.5 percent this year.

Ideally I would like to see no property taxes, or at least a much lower reliance on property tax. There are two issues, one the impact of property taxes at a local and an individual property owner level, and the second being the wide disparity between different school districts of effective property tax rates and ability to raise funding for schools and students.

I would like to see income taxes increased; the uniformity clause changed so there can be different tax rates; and sales tax applied to all purchased goods and services. The major issues with property taxes are:

  • It often times has no direct connection to a person's ability to pay.
  • It is more of a hidden tax as it is paid as part of a mortgage in many cases.
  • It unfairly impacts areas that have significant land/building value owned by non-profits, which are exempt from real estate taxes.
  • It is unfair to many senior citizens due to changes in assessments for tax purposes and the fact that real estate taxes tend to far outpace inflation, which is magnified due to compounding over years and decades.
  • It is unfair as Mansei pointed out due to the disparity in property values from school district to school district and accordingly the amount of taxes that can be raised or the effective tax rates needed from school district to school district.
  • If all or nearly all of the funding from schools came from PA (through non property taxes), our elected officials might have a better sense to impose less non-funded costly mandates like the requirement for school districts to bus students to private schools located within 10 miles of the border of the student's school district.

I believe that ideally the state should pay for all education costs, with a provision that if a local jurisdiction wants to pass additional taxes for added programs they could do so within a state defined limit for certain programs. This would allow the Lower Merions of the world, which has the potential funding base based on market value and personal income ratios, to tap into their good fortune to a limited degree if that is what they wanted to do.

Still confused about your tax stand

So the Pennsylvania Dept. of Ed says schools in the Commonwealth spend approximately $15 billion for the state 1.8 million public school students. Over $8 billion or nearly 60% on average is raised locally. And you're suggesting that property tax be eliminated and the state use income tax and sales tax to make up this amount?

PA gets slammed for providing less than a third of the education budget for schools. This past year Rendell invested an additional $2.4 billion (a huge sum according to the Dept. of Ed) and the advance in proportion of spending was something like 2%, it moved from 32% to 34%. I am just baffled how you would realistically expect to see the state go from 34% to 100%. It's not that I am not against a spending revolution, but not sure if you're more concerned about property tax relief than striking a balance between over reliance on property tax and equitable and adequate school funding.

Simple Statements on Schools and Taxes

I believe that the PA school funding mechanism is unfair locally, and is unfair in terms of the unequal funding it leads to among different school districts. I also believe that real estate taxes are a bad form of taxation. While it may not be achievable, I want more equitable funding and a better funding source and method. I am suggesting that a combination of higher state income taxes and/or higher sales taxes be used to ideally replace in full property taxes for school funding.

Not quite so simple

Mike Churchill at Public Interest Law Center of Philadelphia corrects my earlier statement that in fact the Dept. of Ed relies on $9.6 billion in property taxes. As he puts it “it ain't in the political cards that the legislature would ever raise that amount of new money.”

While you can complain that property taxes aren’t based on ability to pay, there are a couple of factors that make it an important source:
? in terms of revenue, it doesn’t fluctuate as sharply as income tax and therefore is more, and necessarily, stable;
? property taxes cover both business, commercial and industrial. Eliminating property tax lets businesses off the hook.

It’s neither sensible, fair nor realistic to eliminate property tax. However, I agree that the percentage of school revenues from local property tax needs to be reduced. According to the Close the Gap coalition which is working on state funding, the problem here is greater than just shifting funding from a local property tax base to a statewide sales or income tax. We have to address the fact that some districts in the Commonwealth are spending up to 2-1/2 times the poorest. Churchill says that local tax relief must come with, not be separate from state spending at levels to assure all schools have the basic necessities.

The state’s costing out study (due this November) shows that the state will need to invest an additional $3 billion in order to begin achieving this goal statewide. In order to move forward the costing out study will need the support of suburban and rural legislators. To me, that's a litmus test for Mr. Waxman's hopes on the blueness of Montco and other suburban areas.

Property taxes are also tied

Property taxes are also tied to real wealth. Even if your income hasn't increased, if the value of your home has gone up -- especially when it's gone up sharply, as it has in most of the Philadelphia area in the past few years -- it makes sense that your taxes reflect that. And in the aggregate, the value of the property one owns actually is a pretty good indicator of one's overall wealth, income, and ability to pay.

Mansei makes a great point about business, commercial, and industrial property taxes above, but on the residential side as well, ownership of property gives you access to a wide range of city services that are tied to that property -- including access to public schools. People who work, shop, vacation, and do business in Philadelphia pay taxes to support the wider range of city services (transit, maintenance, etc.) that they take advantage of while they're in the city. But unless they live in the city, and thus directly or indirectly pay property taxes, they don't/can't take advantage of schools.

I would actually like to see the city of Philadelphia raise a greater portion of its revenue from property taxes, for all of the salutary reasons that Mansei lists above. Philadelphia's property tax collections are actually down year-over-year in inflation-adjusted dollars, and have been since 1991. Meanwhile, sales tax, wage tax and BPT collections are all up, despite decreases in the tax rate in the latter two.

--Tim

Wealth and Property Taxes

I have to offer a different opinion about the belief in a nexus between home value and one's ability to pay real estate taxes or one's income. A home (where one is the owner-occupant) is a fixed asset that does not generate income, and can only be converted into income by selling it or taking out a loan against it. It is not a liquid asset. One can be house rich but income poor, such as for many seniors who purchased a house decades ago and have seen it appreciate in value significantly, while at the same time homeowners in many suburbs have seen their real estate taxes increase significantly as well, with their income not keeping pace with real estate taxes as income tends to decrease when one retires. In addition Pennsylvania suburban real estate taxes tend to outpace inflation and in many cases increase greater than the rate of increases in household income for working families, who also have trouble paying real estate taxes even when they own a home that has increased in value.

My assumption (which I should have stated before) is that business taxes would increase in some way if real estate taxes were abolished or significantly decreased. (This is a strong case for changing the uniformity clause; to allow for commercial and industrial properties to be taxed at a higher rate than owner-occupied residential properties.)

I have argued before on this site that Philadelphia real estate taxes are too low and are kept low largely by not having increases in rates for years at a time and also by not doing a reassessment. This actually puts Philadelphia at an advantage to the suburbs, while it limits potential revenue to the City and School District, and allows the City to keep other taxes, such as the BPT higher.

I agree broadly with your analysis

and despite being nothing close to an economist, I've become convinced that the property tax structure needs to be revamped so that--at the least--increases for lower-income and elderly people can be delayed until sale AND that property tax as dominant source of funding for public schools has a strong causal link not just to funding inequality between rich/white and poor/minority areas (obvious) but to continued entrenched residential segregation.

It has got to change and while those revolutionary shifts on the state level are tough to bring about, I hold out hope that the situation (the huge huge inquality in education for rich suburban versus poor urban kids) is bad enough that change can be forced through the federal government's funding leverage over the states.

Great resource

Questions of taxation and revenue are extremely important and also pretty complicated. If you want to learn more about these issues, I would recommend checking out a group called Citizens for Tax Justice, based in Washington DC. Their website is: www.ctj.org. I would also check out their sister organization that works on state issues, the Institute on Taxation and Economic Policy: http://www.itepnet.org/. I spent a summer working as an intern for them and I learned a lot about how to shift tax burdens so that they become more equitable. There are answers to these problems, we just have to find them.

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I'd rather focus on the issue of moderate Dems

You're right to not do an us vs. them. I just meant to say that I wouldn't necessarily equate a turn away from the extreme Republicans the suburbs have elected in the past as a necessary embrace of strong progressive Dems. There's no doubt that the Republican party is on the wane in many areas, but the rise of moderate Dems has not engendered confidence in a clear agenda for change and justice either. The question is whether and how potential Dem candidates can maintain an elective base among a still largely conservative electorate and move forward a progressive agenda?

51-49 works best for the citizen

Mr. Waxman's intial comments regarding turing Montgomery County Blue should be read in a larger context. I would agree that suburban enclaves with years of Republican control need challegnes from capable individuals and the residents should have choices that can be elected from more than one party. However turning an area "blue" should hardly be seen as automatically remedial. Philadelhia has been "turned blue" for 50 years and what do we have? - - the worst possible example of entrenched and corrupt power in the country with probably the highest violence and murder rate.

Now, I blame the Philadelphia Republican party just as much for they gave up their obligation as a minority party to constantly challenge the status quo years ago in the city, something suburban Democrats have not done. It is constant challenge, informed and capable alternatives to political machines, that serve the public interest. In most local elections, the labels mean far less than the ability and committment. One party machines with a stranglehold in either direction do not serve the public interest. Let each election be decided by 51-49% and you will have the best govenment.

Jim Foster
Indepenent Candidate
8th Council District
Philadelphia

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