As you may or may not be aware, the East Penn School district is selling the former Lower Macungie Elementary School property that is at the corner of Krocks and Lower Macungie Road. The vote was 8-0 in favor of the sale at the August 10th, 2015 board meeting. You can read the Agreement of Sale for yourself if interested (look for Exhibit #16). Incidentally, the board also discussed a policy for allowing service horses inside district buildings at that same meeting-- see what you are missing by not attending?!
Last night I received an email from a fellow community member asking about the reasons for the sale and expressing concerns about the sale price. I am posting my (slightly edited) response here, as it might be of interest to others:
I can't speak for the board as a whole, but I will tell you briefly why I voted for the sale. My first choice would have been to preserve Lower Macungie Elementary for possible re-opening as a school if it were needed down the road. Unfortunately, however, the school building is no longer usable by the district because the cost of making wheelchair access and other required code improvements to the building are cost prohibitive. There is no reasonable way to bring it up to code without incurring huge capital expenses that are unwarranted by the size and current condition of the building. Indeed, even maintaining the building right now is expensive-- the rent from the current tenant barely covers the district's maintenance costs. And, of course, keeping the property without using it to educate our students means the property is not on the tax rolls, putting that much more pressure on existing taxpayers in the community.
Another possibility, of course, would have been to keep the property for possibly building a brand new school in the future. Unfortunately, that particular piece of land is not big enough to accommodate a modern school-- again, because of changes in the legal requirements the district has to meet for new construction.
Why sell now is another reasonable question. As you may know, the district is going through a period of enormous financial strain. I would like to keep taxes as low as possible without having to cut programs like music, arts, and athletics, as they have done in places like Allentown. And I don't want to cut teachers-- we already have class sizes in many schools that are far too high. Because this is a piece of property that the district is not using, and cannot reasonably expect to use for a school in the future, it doesn't strike me as fiscally responsible to hold on to it while at the same time asking taxpayers to continue to foot higher bills to meet the current financial strain.
In terms of the price, I disagree with those that have suggested the sale price is too low. The district commissioned multiple assessments of the property's value and had a professional valuation conducted. As a final check on this work, a court must certify that the district received fair market value for the property before the deal is finalized. I used all of this data in making my judgment that the $840,000 price was a good deal for the district.
I don't know if this explanation will convince everyone that the sale was the right thing to do, but I hope that it at least makes it clear what reasons I had for voting for the sale. I take my responsibility as a steward of district resources extremely seriously. District resources are, after all, ultimately the community's resources. My vote in favor of the sale was not made lightly and came after a great deal of study of different options. My daughter attended kindergarten at Lower Macungie Elementary, and I will miss the school that has been standing in that spot for over 60 years. But in the end, I had to consider all possibilities, and in this case I believe the sale was the best option for our district and our community.
Discussion of the school district budget threatens to generate far more heat than light each year. Here are five key points that will help you stay informed and avoid some common misconceptions about school finances.
#1: There will be budget cuts, but no program cuts.
This is a tough budget for our schools. Spending on books and supplies is being cut more than 13%. School principals must cut building budgets by 10%, impacting things from the purchase of sheet music to the replacement of microscopes. The district copying budget has been cut by 24%, the purchase of professional services by 20%, and more. The budget does nothing to solve the growing class size issues in the district or provide significant updates to aging computer technology in the classrooms. The good news, however, is that-- unlike many PA districts-- East Penn is NOT cutting any programs this year.
#2: The biggest cost increases are outside of local control.
The district's required contributions to retirement programs are rising a whopping 18% next year. Payments to charter schools are rising 12%. These two items alone require $1.95 million in new net spending. Our school board is not allowed to adjust these costs; they are mandated by the politicians in Harrisburg. Many other cost increases are due to unfunded mandates by state and federal authorities too. If there is one thing I've learned from my two years on the board, it is that the local school boards are used as patsies by state lawmakers. They pass lots of new requirements for the schools each year, but leave local school boards holding the bag to pay for them all.
#3: There will be a 3.3% tax increase next year.
As already noted, the district faces some huge cost increases that are required by lawmakers in Harrisburg. The 3.3% increase translates into an additional $101 in taxes for the owner of a $200,000 home. Even with this additional revenue, a structural deficit remains in the budget, meaning the district will spend more money than it takes in. This deficit will be financed by dipping into reserve funds normally set aside each year for emergencies and unanticipated expenses. I put together the chart to show where the 3.3% tax increase fits in the context of the budget cuts and budget increases for the 2015-2016 school year.
#4: School board member are not paid.
School board members are unpaid volunteers who represent the community in governing the East Penn School district. The district budget represents many months of hard work and negotiation for the good of students, taxpayers and everyone else who lives in the district. People who criticize the budget as board members 'voting themselves pay raises' don't know what they are talking about.
#5: My opinion: I will hold my nose and support this budget.
There is lots not to like about this budget. At the same time, it is a responsible, compromise budget. It spreads the pain around: students will continue in crowded classrooms, teachers will have to do more with less, administrators have smaller budgets and will be without the SRO they had hoped to hire, and taxpayers will face a modest tax increase. The budget makes tough cuts, but does so to preserve the core strengths in the district. There will be no teacher layoffs, and the schools preserve important programs like art, music, athletics, and foreign languages. Over many hours of discussion with the administration about the budget, and studying a tall stack of budget documents myself, I also believe 3.3% is the lowest fiscally responsible tax increase possible right now.
As you might imagine, the $141 million budget for a district that employs hundreds of people and educates thousands of students is a complicated one. Things are made even more complex by the hundreds of laws and regulations the district, and its budget, are subject to in PA. Detailed budget documents are available here. I would also welcome questions, conversation and/or criticism about the budget.
Some related posts that might interest you:
The school board passed a final budget for the 2014-2015 academic year last week, by a vote of 8-1. You can get a copy for yourself here. There are five key points everyone should know about the budget, with the best news listed last:
#1 The budget includes a 3.34% tax increase
There is no way to sugarcoat this point, and it is a major disappointment. The average household will have to pay $113 more in taxes next year. I definitely don’t want to pay this, and I don’t know anyone who does. Like so many things in our community, the cost of educating children continues to rise. For example, fuel prices alone are up more 7.3% over last year - and the district buys a lot of fuel for its buses. Unfortunately, Harrisburg has increasingly shifted the burden of these costs to local taxpayers over the years, and this year is no different.
#2 This is a lean, austere budget
Even with this tax increase, the budget was cut in many areas. Two administrative positions were eliminated. Most of the administration office budgets have been cut by 5 percent. The district will also be losing 4.5 teacher positions. And principals face another year of zero increase in their individual school budgets despite increasing costs. Overall, the final budget passed by the board contains $2.1 million in spending cuts from the preliminary budget made public several months ago. The local tax increase, while sizeable, was nonetheless 34% lower than the state had authorized.
#3 Two of the biggest budget busters are outside of local control: pension costs and charter school payments.
The district will pay at least $1.5 million* more in retirement benefits next year, primarily due to the state underfunding its pension system for over a decade. Charter school costs will rise $220,000, to $3.8 million. This is at least $2.3 million** more to charter schools than it would cost the district to educate those students itself. Without these costs, not only could the $2.7 million tax increase be eliminated, but the district could actually look at possible tax cuts next year. Yet both of these costs are mandated by flawed state laws; local school boards are not permitted to change them.
#4 The district still doesn’t know how much state funding it will receive next year.
The politicians in Harrisburg require the district to pass a final budget before they require themselves to decide how much the state will contribute to public education. This is like asking your children how much they plan to spend each week without telling them how much their allowances will be. The district administration has tried to be conservative in its estimates of state funding in this budget, but several school board members believe even these conservative estimates may be optimistic.
#5 No educational programs are being cut
Despite the difficult sacrifices this budget requires, it does not cut any of the instructional programs East Penn currently offers its students. This at a time when over half of the state’s school districts expect they will have to cut academic programs next year. In the last three years, more than 700 such programs have been axed statewide; East Penn has lost none. Our community’s continued support for excellence in public education will serve all residents well and pay rich dividends in home values, jobs, and quality of life both next year and in years to come.
Notes: *The total increase in retirement benefits next year will be approximately $3.1 million, but the district receives about half of its pension contributions back from the state. **The superintendent believes all charter school students could be re-absorbed into the district for a cost of only $500,000 out of the total $3.8 million in charter school payments. Even tripling his estimate leaves a $2.3 million surplus.
I received a very flashy advertisement in the mail today from Commonwealth Connections Academy, a cyber charter school that enrolls more students in our district than any other. It promises a lot: engaged learning, talented teachers, an award-winning curriculum, and more. And it promises-- 3 different times on the single flyer-- to deliver all of this “tuition-free.”
Follow the Money
But here’s the rub: Commonwealth Connections Academy doesn’t actually provide the educational services they advertise. Instead, they outsource education to Pearson, a London-based multinational corporation that made more than $1.4 billion in profits last year. And by “tuition-free,” they mean that the money they pay Pearson comes from local taxpayers-- a total of more than $63 million in 2011-2012. Based on enrollment figures and state-mandated charter school reimbursement payments, I estimate East Penn School District taxpayers alone will be on the hook for hundreds of thousands of dollars for Commonwealth Connections Academy this year.
How is this possible? Political connections help. Their seven member school board includes Jerry Birmelin, a political consultant and former PA representative in Harrisburg, and Kevin Shivers, a Harrisburg lobbyist with experience in the PA governor’s office. Their board president, David Taylor, is executive director of a corporate lobbying group with experience on former U.S. Senator Rick Santorum’s staff. In terms of transparency, they provide much less information and public access to their operations than most public school districts. They have not posted meeting agendas to their website in almost a year; they provide no meeting minutes or information on their budget at all; and of the ten "public meetings” they have scheduled for the 2013-2014 school year, six are in reality only telephone calls.
Poor Educational Outcomes
The result? The Commonwealth Connections Academy touts high levels of parent satisfaction. But their school performance profile tells a different story. Last year they scored an abysmal 54.6, putting them in the lowest category of performance established by the state (by contrast, Emmaus High School’s score was 92.5). So taxpayers lose and students lose. The state performance scores are certainly not the only way to measure educational quality, but this huge disparity is hard to ignore. It seems the real achievement of Commonwealth Connections Academy is limited mostly to funneling public money to private corporate interests.
We Need Meaningful Charter School Reform
I’m picking on this particular school only because I received such slick marketing materials from them. Many other cyber charters are similar. The money that goes to schools like Commonwealth Connections Academy comes directly out of our pockets in the form of higher taxes. And every dollar the district is required to send to such poor-performing cyber schools is a dollar taken out of the well-performing classrooms in our district. Why are we rewarding failure by punishing success?
I say all this even as I continue to believe that a diverse school ecosystem is good for kids and our community. Having different models of education provide a natural laboratory for new ideas and innovation. Different kinds of schools can offer both parents and students a wider range of opportunities to find an educational approach that fits their values and learning style. But the current charter school law in Pennsylvania is being exploited by political insiders for financial gain. This was not-- I hope-- the original intent of the law. And such exploitation harms not only traditional public schools, but also those brick-and-mortar charter schools that seek the best possible outcomes for students and taxpayers, rather than corporate shareholders.
How can we best keep taxes as low as possible while maintaining excellent schools in our district? A key part of any balanced, responsible answer to this question is the need for better regional planning and smart growth policies in our boroughs and townships. Uncontrolled growth creates more costs to taxpayers than the additional tax revenue it generates. The school district is hit particularly hard, as they must expand programs, hire new teachers, and in some cases build new schools to accommodate the families that move in to unchecked housing developments.
Ron Beitler recently made this point in a blog post discussing how preserving green space helps keep local property taxes low. Economic impact studies consistently show that building new housing subdivisions cost local taxpayers between $1.04 and $1.67 for every new $1 in revenue they generate (depending on the type of housing, its location, etc.). The private developers who build wherever and whenever they can do not bear these costs, taxpayers do...forever.
Fiscal responsibility means paying attention to facts about what policies lead to higher taxes. Reigning in uncontrolled tract home development is one of the many things our community can do to stop rising school costs.
(For more information about the economic benefits of smart growth, see the recent "Building Better Budgets" report that summarizes the findings of 17 different studies nationwide.)
photo credit: woodleywonderworks via photopin cc
A poll of Pennsylvania voters completed just last week shows strong support for public education in our state-- including support for restoring adequate funding to the schools. More than three quarters of voters (77%) are concerned about school funding cuts, and public school funding is the #1 most important issue voters want our public officials to address-- more important than even healthcare, taxes, and crime (see graph below).
This is especially heartening news in our own community, where efforts to defund the schools-- without any sense of what is being cut, or even if such cuts are legal-- continue to dominate media coverage of our school district.
I believe we need school board members who can balance fiscal responsibility with our community's need for excellent public schools. And I think we need members who have the educational qualifications and professional experience with complex budgets to make intelligent, meaningful contributions to the funding discussions in the future.
The survey I cite here was conducted by the national polling firm Lake Research Partners. Complete results of the survey are available here.
photo credit: Leo Reynolds via photopin cc
Education Voters of Pennsylvania has organized a statewide action day to support public education TODAY. We need more pro-education citizens in our district to make their voices heard, and you can do so by devoting just a couple of minutes right now to making two phone calls:
Phone Call 1: Call our State Senators Patrick Browne (717-787-1349) or Bob Mensch (717-787-3110). Browne represents Lower Macungie Township and Alburtis. Mensch represents Emmaus, Macungie and Upper Milford Township. Ask them to:
Phone Call 2: Call Governor Corbett (717-787-2500) and tell him the state education budget cuts over the last several years are wrong for local taxpayers. Let him know that you believe public education should be a top priority in Pennsylvania, and that you want him to restore the funding to public schools that our districts need and our children deserve.
These two calls can be done in minutes. And you can multiply your impact by asking just 1 or 2 friends, neighbors, or family members to call too!
The East Penn School district budget is of great concern to those of us taxpayers who fund it. But in the heat of debates over the proper levels and sources of funding, it is easy to lose sight of some of the fiscal discipline that the current East Penn administration and school board have provided this community in recent years.
As the graph below shows, our school district tax rate is among the lowest in the county. Only Southern Lehigh and Parkland enjoy lower school taxes:
If you look at how much money is spent per child in the district, East Penn has one of the lowest per pupil expenditures in Lehigh County too. And we are below the overall state average in this measure:
What about administrative costs? We are also below the state average on this measure. According to the Pennsylvania School Boards Association, East Penn employed only one administrator ("manager") per 211 students, compared to the state average of 163 students per administrator.
Tax increases? There will not be any school tax increase this year for East Penn taxpayers. Moreover, in the decade between 2001 and 2011, the overall increase in taxes was only 1% higher than the level of inflation (a compound annual rate of 3.4% compared to 2.4%).
None of this information should leave us sitting on our laurels. There are certainly many ways we can make the district more efficient and cut unnecessary costs. But I believe the discussion of how to do so will be most productive if we start with a clear-eyed understanding of the fiscal record of the district in the recent past.
It is also possible to cut too much; we should take a practical, rather than ideological, approach to taxes. Our schools deserve the support they need to continue to improve the quality of education. The crisis in the Allentown school system is a sober reminder of what can happen when public education lacks adequate funding.
photo credit: horslips5 via photopin cc
When is a sinkhole a firm plot of land?
When Governor Corbett shares his view of the education-funding landscape.
Corbett tells us his current state budget proposal delivers, "a record amount of state funding into basic education" (a healthy landscape). The reality, however, is that Corbett’s budget creates a $250 million sinkhole in education spending.
Why such different pictures? Governor Corbett wants us to look at only the “basic education” line in his budget, which indeed shows record high spending (see table below). Now, look at all those $0s beneath that basic education line--therein lies the sinkhole.
Unfortunately, the basic education dollars do not support many of the costs needed to maintain excellent schools. Things like busing. And school buildings. And improvement to science education. When you look at the bottom line, Corbett’s proposed education budget represents more than $250 million in cuts to public education compared with five years ago.
What’s worse, many of the things the state has stopped paying for are required by law, which means local school districts must fund them. The proposed state budget thus effectively transfers many of the costs of education away from state taxes onto local property taxes. As I've written about before, this is is unfair to local taxpayers—particularly seniors and others on fixed incomes who in some cases are taxed out of their lifelong homes.
But it doesn’t have to be this way.
There are alternative sources of state revenue that Governor Corbett flatly refuses to pursue. For example, Pennsylvania is the only major oil- and gas-producing state that does not tax the resources private corporations extract from oil and natural gas wells (known as a severance tax). If the state implemented even the modest severance tax adopted in Texas-- a decidedly pro-business state in which big energy companies also have much influence-- individual Pennsylvania taxpayers could receive $246 million in tax relief.
Not surprisingly, most Pennsylvania citizens support this kind of tax reform. But until such reform is a reality, our education funding will remain hamstrung by ideological arguments in Harrisburg that pretend sinkholes are firm plots of land.
And as local taxpayers, you and I will be on the hook to fill the real hole they leave behind.
Many economists have conducted studies on the role of public schools in driving a community's economic prosperity. The data show that the quality of our schools help make us more economically competitive: excellent schools spur local entrepreneurship and attract state, regional, and national businesses; they lead to higher wages in the community, which in turn support existing business enterprises; and they encourage our brightest and most motivated young men and women to return to the area after college, contributing to social stability and tax base growth. And this list doesn't even include their positive impact on our property values, which I've written about elsewhere.
In short, schools are one of the best possible economic investments our community can make. Public education provides economic benefits to everyone in the community, not just students.
Want more specific facts and figures? An easy to understand summary of this research is available in a report by Jonathan Weiss of George Washington University, "Public Schools and Economic Development: What the Research Shows."
Dr. Gerald Gordon covers some of the same ground in the short video below. Dr. Gordon is the CEO of the Economic Development Authority in Fairfax County VA, and author of 12 books and dozens of articles on economic development and management.