Editorial: Taxpayers and the school funding house of cards

Burrell School District is losing out on $403,000 in tax money because of one large property owner’s appeal.

Arconic has negotiated a lower assessment for its property in Upper Burrell because it just isn’t worth what it once was. School district legal counsel Anthony Giglio of Andrews & Price in Forest Hills said the company wanted a 74% drop in taxes for the parcel because the value had fallen from $50 million to $13 million when it was appraised.

The parties came to a settlement at $20 million — still a 60% drop in worth that has a corresponding impact on what the company pays in taxes to Upper Burrell — which loses about $39,000 in the deal — and the school district.

So why does this matter? Because it could be any school district, any major property owner and every taxpayer. No, not just could be. This is the problem for the whole state.

Arconic did nothing wrong in this scenario. No one should be paying 60% more tax on a piece of property than its valuation demands. Think about your house. Would you be willing to keep paying your current tax bill if you found out your house was worth only a quarter of what it used to be? Of course not. You would do what Arconic did — go to the taxing authorities and ask for it to be adjusted.

But every school district is potentially held hostage by this process. A business goes under. A major property burns down. It doesn’t even have to be that violent. A significant tax-generating property could be acquired by a nontaxable entity. There are far too many ways for the revenue that keeps a school district running to disappear in a completely legal, non-nefarious puff of smoke.

When that happens, the schools’ needs don’t shrink correspondingly. The kids still need to be taught. The teachers still need to be paid. The building still needs heat and electricity and water.

So the district can be in the position of having to make up that money elsewhere. Not just this year, but every year going forward, because a tax valuation is a perpetual motion machine districts use to make their budgets and plans. So that 2.5 mills Burrell School District just lost is not just $403,000. It is $4 million over 10 years, and so on and so on and so on.

Pennsylvania’s school funding system that balances the responsibility for education on the backs of homeowners and other property owners is a house of cards that at any moment has the ability to pull an ace out of a key position and bring down an entire district.

Taxpayers have been asking for relief for decades and gotten nothing but sympathetic shrugs and empty promises. Nothing has really changed. Nothing likely ever will. But it should.