Inquirer Editorial: Trickle-down tax hikes

The illusion of Gov. Corbett's no-new-tax pledge is becoming clearer, given the state's budget crisis.

If Corbett closes a $4 billion shortfall only by cutting programs, he will have kept his campaign promise. But the result will be to put greater pressure on school boards and local governments to raise property taxes.

More than 35 percent of the state's general-fund budget pays for public schools, pre-K through 12th grade. Another 7 percent of the budget funds higher education.

Corbett won't unveil his budget plans until March. But as the largest slice of the state's $28 billion budget pie, education is an obvious target for his ax.

From the perspective of student achievement, the hefty increases in education spending under former Gov. Edward G. Rendell brought results.

From a tax perspective, however, citizens and public officials should begin this year's painful budget process on the same page. Cuts in state aid to school districts would almost certainly lead to higher property taxes and/or larger class sizes.

Relying more heavily on property taxes to pay for schools is exactly the wrong path for education in Pennsylvania. It's a familiar legacy of inequality that Harrisburg has been trying slowly to correct.

The property tax is an ineffective, regressive method of paying for schools. It punishes older towns with stagnant tax bases, as well as seniors on fixed incomes. It rises with little relation to a taxpayer's ability to pay.

The Costing-Out Study of 2007, commissioned by the legislature, highlighted inequities. Wealthier municipalities can collect more money and fund better schools, while poor communities tend to produce underperforming schools.

The report found that Lower Merion was spending $17,184 per student, while Reading spent $7,458 per student. The average annual funding needed per student in Pennsylvania was $12,057.

Furthermore, school districts are limited by law as to how much they can raise property taxes next year. Unless they gain voter approval to exceed that level, the squeeze could result in cuts to staff and academic programs.

The study also pointed out the state wasn't paying its fair share of overall education costs. In spite of recent gains, the state needs to do more.

Corbett and the Republican-controlled legislature face no easy options this year. Raising the income or sales taxes in this weak economy would be counterproductive to job growth.

There are other targeted tax increases that should be approved, such as on natural-gas production and smokeless tobacco. But those items would cover only a small fraction of the total budget shortfall, even if Corbett were inclined to approve them. (He's not.)

As this debate moves forward, officials should at least be frank about the impact of their decisions.

Just as in New Jersey, holding the line on taxes in the state capital will hurt at the local level.