By Brad Bumsted and Tony LaRussa
TRIBUNE-REVIEW

HARRISBURG — Gov. Ed Rendell's assertion that school property taxes would go up if the Legislature doesn't approve an income-tax increase is based on "faulty assumptions" that overlook substantial boosts for school districts — even in the Senate's bare-bones budget, Senate Majority Leader Dominic Pileggi said Wednesday.

With state and federal stimulus money, school districts would receive an average 10 percent increase under the Senate bill, the Delaware County Republican told the Tribune-Review.

Under Senate Bill 850, which Rendell heavily has criticized, Quaker Valley School District, for example, would get a 25 percent increase; Fox Chapel Area School District, 22 percent; and Pittsburgh Public Schools, 13 percent. No district would get less than 3 percent, according to figures from the Senate Appropriations Committee.

Rendell and Senate Democratic leaders said Monday that local property taxes would go up if lawmakers don't approve the governor's proposed 16 percent boost in the state-income tax to help close a $3.2 billion deficit and forcing the state to make severe cuts.

"The first false notion is that we're cutting education spending. That's just false," Pileggi said in an interview.

The increases under the Senate's budget — the only one passed by a legislative chamber so far — in most cases are "double digits," he said.

"Even if it was less (money), the assumption is that their only option is to raise taxes, rather than cut spending," Pileggi said.

"In a period where the nation and Pennsylvania suffer from the recession, it would be irresponsible for school boards to take the position that they don't have to reduce spending," he said.

The Senate's proposed budget was voted down in the House Appropriations Committee two weeks ago, but it remains the basis of the Senate Republican Caucus' negotiating position with Rendell that sizable spending cuts are needed. The Senate budget would cut $1.7 billion from Rendell's proposed $28.9 billion budget.

A state spending plan must be in place by midnight next Tuesday.

"I think he (Pileggi) should have that conversation with school boards across the Commonwealth, who tell us they will be forced to raise property taxes if current funding levels remain in place," said Rendell's spokesman Chuck Ardo.

"I don't know that we've had feedback either way on that," said David Salter, spokesman for the Pennsylvania School Boards Association.

Robert Strauss, an economics professor at Carnegie Mellon University, said regardless of what happens with the state-income tax, "real estate taxes for education are going up with certainty, because of problems with the teachers' pension plan."

"We've got pension problems to the tune of hundreds of millions of dollars," Strauss said, noting that will result in higher real estate taxes "unless the stock market goes to 14,000."

School property taxes have increased statewide by an average of 5 percent since 1996-97, according to Senate research.

In the Hampton Township School District, board member David A. Gurwin took issue with Pileggi's contention that districts should make do with less. He said the senator's statement doesn't address realities that many school districts face.

"We raised our tax rate by 0.36 mills this year, after we told the administration to go back and find areas where we could reduce spending," Gurwin said. "But the reality is, school districts are not immune to what's going on in the economy, and many of the costs we face are out of our budgetary control."

Hampton would get an 8 percent increase in state and federal money under Senate Bill 850.

In the McKeesport Area School District, where the board is expected to approve a budget that calls for a 1-mill reduction in taxes, board member Dave Donato agrees with Pileggi that there is fat in school budgets.

"Boards have to be more aggressive in finding areas to save money," he said. "When enrollment is shrinking, like it is in many districts, you have to consolidate instead of keeping buildings open all over the place that aren't being utilized.

"In 1995 we had 5,200 students. Now we have 3,800," he said. "But, we have 15 more administrators and a total of 62 more employees. Now, you tell me there isn't something wrong with that picture?"

McKeesport would get a 9 percent increase under the Senate-passed bill.