Rich Wilkins and Bernie O’Hare have some posts up about the Allentown School District and its perennial financial misfortunes.
The issue is that Pennsylvania funds only about 32% of education costs with state tax dollars, and the rest comes from local, mostly property tax dollars. And then when you go down to the local level, everything is super segregated.
You have 501 school districts for 67 counties, which is nuts, but even that distorts the picture because most of those counties are fairly empty. So in the developed areas there are even more school districts than you’re probably thinking.
Bernie O’Hare thinks we should quarter the Allentown School District’s territory and give its parts to the surrounding suburban school districts. That’s not a bad idea, and I am on the record as a huge fan of disincorporation strategies. Basically just dissolve the city government or school district and let the county taxpayers or the Intermediate Units and suburban school district taxpayers pay for the central city services.
Rich rightly rejects Bernie’s characterization of this as primarily a pension issue, but also rejects the disincorporation strategy in favor of countywide districts. In a separate post, he responds to criticisms that bigger school districts don’t automatically do a better job of educating students, and points out that this is about using money more wisely by reducing duplication of administration, purchasing, and so on. Some places are starting to share equipment and purchasing and you can get some good deals on the margins.
I used to think the money-saving angle was a persuasive argument – it may still be persuasive as a political argument, and I don’t want to dissuade anyone from using it anyway – but people should know there are two main pitfalls it runs into in practice. One is that you don’t necessarily see reduced tax bills when this happens – some places find that with greater capacity to deliver services…they want more services and end up keeping taxes the same or even raising them to pay for service upgrades. No problem there, but if you’re a county politician running on a tax cut from consolidating police departments, and then it turns out your Council wants a new Drug Enforcement Unit more than a tax cut, you might end up looking stupid come election time.
The other pitfall is that sometimes, in order to reduce public sector unions’ political opposition to consolidations, officials promise no redundancy layoffs, so there’s no real savings.
The really ironclad progressive argument for local government and school district consolidations is to get the money.
The exurban areas and townships have more wealthy people and housing wealth than the cities. Drawing your school district lines around the 67 counties puts those people in the same tax base as poor urban kids, and they’d have to pay money to the same district. Voila! Progressive taxation.
This problem is well-known to municipal finance wonks in PA and it hasn’t gotten solved because of entrenched power dynamics, but there’s a good reason for the townships to get on board with consolidating tax bases now at the County level – the migration back toward central cities is going to leave them high and dry, without the tax base to pay for the crazy amounts of expensive unfunded suburban infrastructure they’ve built over the past few decades.
They need to throw their lot in with the cities now if they want to hang onto any hope of getting a bailout later when the infrastructure maintenance bills start coming due. As I am obviously a fan of central cities, you might wonder why I’d want to stick cities with the suburban infrastructure cost timebomb, and the answer is that I want the greater service delivery capacity that comes with larger local governments, including binding regional planning authority at the county level, and I also want the political opportunity for more local-level redistribution of wealth.