Monday, January 16, 2017

Presenting the 2017-2018 Fake Budget

At one time, Janice Klein referred to the preliminary budget as "the fake budget." Jan Klein, whose title changed from Finance Director to Director of Business explained that the purpose of the preliminary budget is to be able to apply for exceptions to the Index limitation on real estate tax rates. I would like to present Jan Klein's 2017-2018 Fake Budget.

The Post-Gazette reports that according to the "preliminary" budget, our taxes should increase by 0.83 mills to 24.76 mills. Mt. Lebanon begins work on school budget

Lebo Citizen readers might want to do a search for "fake budget" on this blog. Read about how Mt. Lebanon resident Bill Matthews demonstrates to the Department of Education how the District annually submits a fake preliminary budget. Bill and I have attended District budget meetings, where we were both treated rudely. The audios of those meetings are still available on For obvious reasons, those meetings have been discontinued.

For those of you who are new to this process, this is usually when the school board directors like to speak in terms of lattes or pizzas. Just cut back on buying lattes, we were instructed. From 2012, we were told about a $30 million fundraising campaign. Spin Class 101 We are still in the quiet phase of the now $6 million Century of Excellence Campaign. I would love to know how much is in that account. Maybe it will show up in the fake Final Budget.


Richard Gideon said...

Ah, yes, the annual "keep Lebo education exclusive" game. Our "public" school district is more like a private coeducational institution - without the educational benefits - run by the Mafia. There is no pressure on the MLSD to control spending, or to direct spending toward education. But Lebo isn't the only district in the Commonwealth to operate in such a fashion, and the blame for this can be laid at Pennsylvania's funding system, which turns local school boards into alt. governments (an entity with the power to tax and enforce collections is, by default, a government). It isn't that way in other states.

In Connecticut the local school board's job is to oversee education (what a novel idea!); but tax rates are established by the towns in which the districts operate. From a relative of mine in Wallingford, "The school budget is part of the overall City budget. The Superintendent of schools submits the school budget for review. Our City Manager submits the city budget to the City Council for review after his adjustments from all department budgets and it is then voted on as are property tax rate adjustments and increases." Get it? Another set of eyes acts as a balance to school spending. (Disclosure: There is a move in Connecticut to give school districts the authority to set and collect taxes. A bill to do so has been introduced into the Connecticut General Assembly and has support from the usual suspects. It is creating a firestorm across the state.) But even with Connecticut's current system 56.6% of public school funding comes from local sources. Here are the top five states* with the most local burden for school taxes: Illinois (55.7%), Pennsylvania (56.3%), Connecticut (56.6%), Nebraska (59.2%), and New Hampshire (60.4%). For contrast, here are the top five states* with the least local burden for school taxes: Hawaii (2%), Vermont (4.5%), Arkansas (11.9%), and New Mexico (17.5%). In states were the local burden is relatively low most of the funding comes from the state. In all states the federal contribution is low, because the federal government does not fund education directly. Louisiana gets the most from the feds at 15.8%. Connecticut gets the least, at 4%.

In many states where the majority of school district funding comes from the state the source of that revenue is an income tax. In Utah, for example, "All
revenue from...a tax on income shall be used to support the systems of public education and higher education....
**" This money is used to fund the state's basic educational requirements for all districts; however, local school districts may raise revenues to fund programs that go beyond these minimums. In 2014 37.5% of school funding across Utah came from local sources (which in some locations in Utah came from the County). In Hawai'i, no property tax funds are levied for the support of education. The funds for the operation of public schools are determined by the legislature on a biannual budget basis and are actually disbursed by the Governor. The major taxing sources are the General Excise Tax, which raises 51% of the revenues, Personal Income Tax, 31%, Corporate Income Tax, 4%, Accommodation Tax, 2%, and approximately 12% is raised from a variety of special taxes such as the inheritance tax, a tax on banks and corporations, liquor, various license fees, and other use taxes.***

The point of all of this is that the archaic property tax is certainly not the only way to fund public schools, and our state might want to start studying other states to see if there are other systems that might work here. It would be a great day in Pennsylvania when our elected officials started to put a kid's education over an administrator's salary, a fancy building, or the wishes of a sports plutocracy.
*source:, 2014 figures
**Utah Constitution, Art. XIII, Sec. 5(5)
***John A. Thompson, Professor Emeritus, University of Hawaii at Manoa

Richard Gideon said...

In addition to my comments above, you might be interested to know that for the year 2014 (the most recent year available on, the total public school debt ("Debt outstanding at end of fiscal year") in the United States was $416.2 billion! The state with the most public school debt is Texas, at $70.8 billion, followed by California ($56.0 billion), New York ($31.1 billion), and coming in at number four is Pennsylvania ($24.9 billion). Surprisingly, there were two places that had NO debt outstanding: the District of Columbia, and Hawai'i.

Jason Margolis said...

RG, totally agree that we need to end property tax funding of schools. Among other factors, it is one of the major reasons there are such disparities between public schools... A very segregated (in just about every way), have-have not system.

E. T. Gillen said...

Thanks for the informative comments, Anonymous, but I am no longer accepting comments that are not signed with your real first and last name.

Richard Gideon said...

I know our school district/board will absolutely hate this post (partly because they won't be able to throw "anonymous" darts at it!), but given Lebo's expensive and discriminatory public school system here is some food for thought concerning school choice and the funding thereof:
"In the past year, the United States continued strong progress toward more educational freedom. Legislative victories in 2015 and 2016 heralded six additional new school choice programs, raising the total to 59 programs across 28 U.S. states and the District of Columbia.1 These programs are characterized by vouchers (which allow qualified students to use their public school funds toward a private school education), tax-credit scholarships (whereby individual or corporate tax donations fund non-profit scholarship granting organizations, known as SGOs, that issue scholarships to students), and education savings accounts (which allow qualified students to use their public school funds toward a wide variety of educational purposes such as tuition, textbooks, software and tutoring). Such progress toward school choice reflects a growing approach in public education toward school funding that reflects the needs of individual students and follows them to the schools of their choice." -- from Annual Privatization Report 2016, Education, from the REASON FOUNDATION.
1. “Fast Facts on School Choice,” Friedman Foundation for Educational Choice, 2015,