State Senate overrides veto of school-code bill

HARRISBURG - The state Senate on Wednesday voted to override Gov. Rendell's veto of a school-code bill that he contended gave unfair tax breaks to certain charter-school landlords.

In doing so, the Senate joined the House in overriding Rendell for the first time in the almost eight years he has been governor. Rendell's second and last term ends in January.

Rendell last month had vetoed the bill, which includes numerous education initiatives, because of a single provision to exempt from property taxes nonprofit foundations that rent their properties to charter schools.

In his veto message, Rendell said he believes it is unconstitutional to give the tax break to such nonprofit foundations because some, in his view, do not fit the definition of a purely public charity under a 1997 state law.

He also was concerned that for-profit landlords would take advantage of the law by converting to a nonprofit status in order to take advantage of the tax break.

Rendell's veto infuriated many legislators, who believed the governor was ignoring a long list of good initiatives contained in the bill for a single item that he considered bad.

The House had voted to override the bill on Monday. Both the House and Senate votes required a two-thirds majority.

On Tuesday, before the Senate override, Rendell reiterated his concerns with the bill and said that if the Senate returned for a vote, it would be breaking its promise not to take action on official legislative business in a lame-duck session.

"They will be breaking the promise they made to Pennsylvania's taxpayers," Rendell said.

But if senators did return for an override vote, Rendell added, they should also make good on another promise they made to taxpayers: reach an agreement on taxing the extraction of natural gas from the Marcellus Shale.

On the floor of the Senate Wednesday, Senate Majority Leader Dominic Pileggi (R., Delaware) said he did not believe the Senate was reneging on its promise.

He argued that the Senate has already voted on the school-code bill, and would simply be reaffirming that vote. There was no vote on the Marcellus Shale tax.

"A vote to override the governor's veto is different in substance than a vote on new legislation," said Pileggi. " . . . I believe the citizens of Pennsylvania understand the difference."

With the Senate's action Wednesday, the education bill will now become law.

Other provisions in the school-code bill include one to require instruction in public schools aimed at preventing dating violence; and another that would require the state Education Department's Office of Safe Schools to direct all schools to submit school-violence reports by July 31 each year.

As for the charter school provision, it appears that a relatively small group of charters would benefit immediately from the legislation.

This school year, there are 135 charter schools in Pennsylvania; 12 of them are so-called cyber-charters that educate children in their homes using computers to provide instruction.

In 2008-09, the last year for which figures were available, 72 charter schools rented or leased some or all of their school buildings from for-profit or nonprofit concerns.

Of those, at least 18 charters, 15 of them in the Philadelphia area, were renting from nonprofits that could be eligible for the tax break.

Most of those nonprofits are not currently paying taxes on the properties they are renting to charters.

But starting in late 2007, the Chester County tax assessment office notified several charter school nonprofits and a cyber-charter nonprofit that school buildings that they owned or rented were taxable.

A series of appeals followed, with Commonwealth Court ruling in favor of the county in two cases. The School Lane Charter School in Bucks County was also taxed.