Legislation introduced in House, Senate to help school districts in financial crisis

While school districts in throughout the state are facing overwhelming losses of property tax revenue, state Reps. Tim Hennessey (R-North Coventry) and Tom Quigley (R-Royersford) introduced legislation Monday to help financially distressed school districts and promote the achievement of tax fairness in a more timely manner.

The bipartisan 2014-15 Basic Education Funding Commission (BEFC) reviewed the distribution of more than $5.5 billion in state basic education funding. It also recommended a new yearly distribution formula, known as the Fair Funding Formula, to address funding disparities between districts.

“It has been two years since the adoption of the Fair Funding Formula for basic education funding. Although this was a step in the right direction, more needs to be done to provide true fairness,” Quigley said.

Acknowledging that the Fair Funding Formula works to distribute money fairly and predictably among the commonwealth’s 500 school districts, it is also noted that several of those districts are being shortchanged due to the Hold Harmless provision. This provision requires that all districts receive at least as much money as they did the year before, regardless of the student population shifts or any other district changes.

The BEFC identified 180 school districts that are currently underfunded.

The legislation introduced would maintain the recommendations made in the BEFC, while, beginning in the 2018-2019 fiscal year, allocate 75 percent of all new basic education funds proportionately to the underfunded districts. The remaining 25 percent would be distributed to all 500 school districts using the student-weighted Basic Education Formula.

The second bill would address the loss of property tax revenues that school districts when a for-profit hospital sells its institution to a non-profit, which is what recently happened to the Pottstown School District (PSD). Six Community Health Systems hospitals were sold to Tower Health, resulting in an annual property tax loss of $970, 000 for PSD.

Sen. Bob Mensch (R-District 24) introduced similar legislation in the state Senate.

“School districts like Pottstown show that the state needs to have a greater urgency in achieving full implementation of the new school funding formula,” Mensch said. “But until the state gets there, bills like we are introducing are essential for the financial success of struggling school districts.”