House of Representatives

Commonwealth of Pennsylvania

Memo
To: Capitol Correspondents, News Reporters, Editors and News Directors
From: Stephen Miskin, Press Secretary to the Republican Leader
717-705-1852
Date: July 24, 2009
Re: Democrat Tax Increase for Education?

Governor Rendell and his House Democrat allies have been using education
to justify their call for a Personal Income Tax (PIT) hike, yet as you will see,
only HALF of the $1.3 billion that would be generated by the tax would
actually go to support schools and children.

The Republican budget proposal (contained in SB 850, Senate-amended HB

1416 and the Civera amendment) would increase funding for every school
district across the state WITHOUT increasing taxes. Specifically, the statewide
average funding increase would be 11 percent. Funding is provided with a
mix of state dollars and federal stimulus funds.

Attached is a spreadsheet put together by House Republican Appropriations

Committee staff showing the difference between the governor’s funding level
and the Republican funding level; the difference is $581, 226,298.

Increasing the PIT at the level proposed by Governor Rendell will generate
$1,270,489,139 in state revenue. When the difference between the
governor’s and Republican education funding is subtracted, the "leftover" PIT
revenues are $689,262,841.

For example, under the governor’s plan, the Cumberland Valley School
District would receive $684,521 in additional monies. However, to receive
that money, the taxpayers in Cumberland Valley would have to pay a total
increase of $7,663,827 in their state income tax – or $6,979,306 more in
state income taxes than the $684,521 they get back for their school district.
(Full disclosure, I live in the Cumberland Valley School District)

In the attached spreadsheet, the last column represents the difference

between what the taxpayers shell out in PIT and what they get back in
education funding for their respective school district. These taxpayer funds
from working Pennsylvanians could be going to other school districts OR any
of the unidentified programs Governor Rendell wants to fund. Philadelphia
SD for example is getting more than twice what it pays in – more than $100
million more.

Additionally, I am attaching a document with the actual language of the

American Recovery and Reinvestment Act (ARRA) .

It is important to understand there are some limitations to the use of the

federal funds and that they expire in two years. But it also important to know
what the ARRA Act states:

The Governor shall first use ARRA funds:

• to restore State support for elementary and secondary education
to the fiscal year 2008 level; and
• to restore State support for postsecondary education to the fiscal
year 2008 level.

Something the Rendell Administration is trying to keep from you, the U.S.
Department of Education (USDOE) two weeks ago issued guidance increasing
the flexibility on the use of the Title I and IDEA funds.

USDOE Guidance States ...“Among other things, the Education Stabilization

funds may be used for activities such as: paying the salaries of
administrators, teachers, and support staff; purchasing textbooks, computers,
and other equipment; supporting programs designed to address the
educational needs of children at risk of academic failure, limited English
proficient students, children with disabilities, and gifted students; and
meeting the general expenses of the LEA”...

In the PA Department’s guidance to school district in March includes the

following statement:

PDE GUIDANCE TO SCHOOL DISTRICTS - March 2009:

“If a school district receives an increase higher than inflation, at least

80% of the additional amount must be used to EXPAND
programs and services to students from a menu of specific proven
academic programs.”

Governor Rendell is telling school districts to use funds that go away in two
years to expand programs and services.

Mind-boggling.

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