Bigger school districts, lower taxes?

From the Inquirer.

Bigger school districts, lower taxes? Economy of scale is a wonderful thing, but it eventually plateaus and the large bureaucracy comes into existence to be undone by the nimbleness of a smaller entity. And then the cycle begins again.

The big lesson to take from this: The Emperor speaks! (see below)

Bigger school districts, lower taxes?
By Anthony R. Wood and Dan Hardy Posted on Sun, Mar. 22, 2009

Eighty percent of the state's school districts would disappear, small districts would become parts of bigger ones, and hundreds of administrative jobs would evaporate.

In one of the more ambitious initiatives of his six years in office, Gov. Rendell has called for a major reorganization of Pennsylvania's school bureaucracy, in part to tame wildly unpopular property taxes.

But based on the early response - and the long, tormented history of school district mergers - the road to school consolidation in Pennsylvania is likely to be a torturous one that could take years to navigate.

The Rendell administration holds that enlarging districts would lead to better schools and to lower - and fairer - taxes by reducing administrative costs and spreading property wealth.

School officials in financially struggling Pottstown and Morrisville like the idea. And nationally, the trend has been toward ever-larger school districts. In the 1939-40 school year, the nation had 117,108 districts. Today, it has fewer than 15,000.

But the merger idea isn't a big hit everywhere. Home rule is an issue in Lower Merion and Jenkintown, both well-off, high-achieving districts that fear losing fiscal and educational independence.

"There is no research that suggests that we would become a better school district by becoming part of a bigger school district," said Douglas Young, spokesman for the Lower Merion district.

And the state's property-tax system looms as a huge factor in any merger plan. That system is riddled with inequities fueled in large measure by disparities in real estate wealth among districts. Those disparities have widened in the four decades since the last major round of mergers.

Consolidation, theoretically, would ease some of those disparities.

Ironically, however, the very flaws in the system loom as major impediments to changing it.

While the majority of property owners might see tax decreases, some likely would have to pay more, regardless of any cost savings.

"There would be winners and losers," said State Sen. Jeffrey E. Piccola, the Dauphin County Republican who chairs the Education Committee.

The Democrats haven't been holding pep rallies, either. "No one is saying this is the best thing since peanut butter and jelly, let's go do it," said State Sen. Andrew E. Dinniman (D., Chester), minority chair of the committee. "At this point, it's going nowhere."

Merger movements are under way in several states looking to whack administrative costs. A modest version is on the table in New Jersey, where school districts actually outnumber municipalities.

The Rendell plan calls for reducing the number of districts from 501 to fewer than 100.

He would appoint a special legislative commission to look into consolidation, so it is impossible to say yet how a reorganization might look.

In testimony before the Senate, however, state Education Secretary Gerald L. Zahorchak said the administration had looked at states with county-level districts.

That's the system in Maryland, so The Inquirer looked at how the tax universe might change if Pennsylvania suddenly decided to establish countywide districts.

And, by the way, that was the recommendation of a special Pennsylvania legislative committee back in 1937.

The analysis found that property owners in 51 of the 64 districts in the four suburban counties would see tax decreases; 13 of the wealthier districts would get increases. In an all-Montgomery County district, for example, Cheltenham would see a 47 percent decrease; Upper Merion, a 48 percent increase.

Countywide districts could well make economic sense, said Steven Wray, executive director of the Philadelphia Economy League of Greater Philadelphia.

"It might spread development more evenly throughout a county," by lessening competition for high-tax business properties, he said. "It would also mean that if Upper Merion added a big box [mega-store] or a mall, it would benefit all the districts in the county."

Pennsylvania's school system once was far more balkanized.

In 1937, it had five times the districts it has today, and 34 of them had no schools, including tiny Millbourne, Delaware County. The town did have a board, however, that collected taxes and sent two kindergartners to East Lansdowne via cab every school day.

Finally, by 1967, after controversy, rebellion, lawsuits, and numerous compromises, the number of Pennsylvania districts was reduced to about 750.

Since the last round of mergers, however, economic fortunes have changed radically, and the gaps between the rich and poor have widened.

Janis Risch, head of Good Schools Pennsylvania, a reform group, argues that since schools are so dependent on the property tax, the disparities have driven well-off homeowners from poorer towns.

"For several decades, we've had a public policy that did a really good job of concentrating poverty and fostering divisiveness in communities," she said.

"To talk about consolidation without addressing that reality is missing a giant elephant in the room."

Piccola agreed that those wealth disparities were the biggest obstacle to consolidation. "You are not going to get any widespread mergers until you eliminate the property tax," he said.

Bill Hellmann, school board president in the Morrisville district, which has fewer than 1,000 students and struggles with high taxes and deteriorating facilities, said he didn't foresee widespread mergers "happening voluntarily."

However, he said, he believed mergers were inevitable because many districts no longer could afford pensions and teachers' salaries. "That will drive mergers," he said. "I don't know if it is going to happen now, but it has to happen."

John Armato, spokesman for the Pottstown School District, isn't so sure. "There are 501 school districts in Pennsylvania for a reason," he said. "Everyone wants to protect their piece of the world. There are real turf issues."