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Pennsylvania educators don’t bank on governor’s proposal to increase school funding | TribLIVE.com
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Pennsylvania educators don’t bank on governor’s proposal to increase school funding

Alaina Raftis
| Sunday, March 8, 2015 10:40 p.m
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Lillian DeDomenic | For Trib Total Media
Edward Reiss, 45, of Plum said it makes “no difference” to him whether the state tries to get revenue through additional income and sales taxes — or how it handles school property taxes. “They’re going to get their money either way,” Reiss said.
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Lillian DeDomenic | For Trib Total Media
Michele Andrae, 53 of Monroeville says she is concerned about how her daughter would afford college textbooks if Gov. Tom Wolf succeeds in taxing them as part of his budget plan.
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Lillian DeDomenic | For Trib Total Media
Consumers would pay more tax on tobacco products under Gov. Tom Wolf’s proposed increase in sales tax.

Gov. Tom Wolf’s plan to pump $1 billion into education sounds good to school officials, but they don’t count on it materializing this year in light of a brewing battle between Wolf and the GOP-led legislature and questions about budget projections.

“As everyone knows, this is a wish list from the governor. We hope it comes to fruition, but we can’t count on it. We’ll look at what we got the year before (from the state) for our budget,” Greensburg Salem school board President Ronald Mellinger said. “We’re guarded but optimistic. It does make it harder to predict, given all what’s being proposed. I would hope it goes through, but there’s a lot of moving parts.”

Wolf’s budget proposes a 5 percent tax on the value of natural gas at the wellhead, plus 4.7 cents per thousand cubic feet of gas extracted, to take effect in 2016. It projects that would produce $155.7 million in a shortened 2016 fiscal year for the general fund and $765.3 million in fiscal year 2016-17, the first full year of the tax, then subsequent yearly increases to $819 million, $869 million and $948 million.

That does not include $225 million the state expects to collect annually for a separate fund to replace existing impact fees on natural gas drillers.

Marcellus Shale Coalition President David Spigelmyer said those projections are wildly off-base, given a glut and resulting low price of natural gas in Pennsylvania.

“It’s not even close,” said Spigelmyer, who estimated the tax would bring in about $300 million. “Their estimates, in reality, will be far less than half of their projections.”

Wolf spokesman Jeffrey Sheridan said the projections are based on information from the Department of Environmental Protection, which showed that natural gas production hit an all-time high in Pennsylvania in 2014.

For 2016, Wolf’s administration projected a price of $3.25 per thousand cubic feet of gas, based on the Henry Hub pipeline market price in Louisiana but adjusted for Pennsylvania prices, Sheridan said.

“The (budget projection) is representative of where we believe the price will be,” Sheridan said. “The severance tax is going to bring in real revenue. We’re projecting a billion dollars, but even if it’s $600 million, that’s more than the impact fee.”

According to the Public Utility Commission, the fee generated $225.8 million in 2013, the most recent year for which data are available.

According to the U.S. Energy Information Center, the Henry Hub price was $3.26 per thousand cubic feet last week. Prices in different parts of Pennsylvania varied between $1.30 and $3.05 per unit, representing a price spike attributed to the recent cold snap, Spigelmyer said.

Proposed education funding increases would vary by district. South Side Area School District in Beaver County, for example, would get a 2.6 percent funding boost under Wolf’s plan, the third-lowest in the state, while Woodland Hills in Allegheny County would get a 15.6 percent increase, the largest in the state.

Despite Wolf’s funding proposal, several school districts have filed with the Department of Education for permission to raise taxes this year beyond the state-approved rate. Among them is Quaker Valley.

“That (request) is mainly to put ourselves in position in case we need that. That doesn’t mean we will (raise taxes),” said John Sheline, Quaker Valley’s director of finance and operations. The district would receive a 5.8 percent funding increase under Wolf’s plan.

“This particular budget would be the most from the state we’ve gotten,” Sheline said. “For now, we’ll budget (based on) last year because we can’t put $120,000 extra in the budget of additional revenue if we’re not going to get anywhere close to that. Usually by June you get some kind of idea (from the state about) what’s feasible and what isn’t.”

In addition to the shale gas tax, Wolf’s budget would increase the personal income tax from 3.07 percent to 3.7 percent and the state sales tax from 6 percent to 6.6 percent to cut property taxes. The budget would broaden the sales tax to include dozens of exempt items, including parts of higher education.

Raising and expanding the sales tax would bring in $1.55 billion annually, Wolf said.

“I don’t believe they will (lower property taxes). Unless they take away the school districts’ taxing authority, it won’t work,” said Ben Bolinger, 29, of McCandless.

“It’s early in the process, and we understand the governor is trying to balance the budget, but we would appreciate no additional costs on our students,” University of Pittsburgh spokesman Ken Service said.

Bobby Kerlik is a Trib Total Media staff writer. Reach him at 412-320-7886 or bkerlik@tribweb.com.

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