The news media always like a bare-knuckles fight, making public policy debate appear more ideological and polarized than it actually is. Disagreeing with conservatives for sport, however, isn't one of Keystone Research Center's values. More constructive is to assess the recent Commonwealth Caucus proposal -- funding schools via a broader state sales tax -- against values that really matter.

		Stephen Herzenberg is the executive director of the Keystone Research Center (www.keystoneresearch.org), a Pennsylvania-based think tank.

When it comes to school taxes and funding, three values stand out.

Community well-being is one. Burdensome tax rates in struggling older communities can accelerate population loss and community decline, as Pittsburgh and other cities know only too well.

Tax fairness is a second. There is a need to raise school revenues without overburdening those with less ability to pay.

Educational equity is a third value. School funding should be sufficient to provide a quality education for all. At present, Pennsylvania gets a D- from Education Week on funding equity, the third worst grade in the nation.

How does the Commonwealth Caucus school funding proposal stack up against these values?

With respect to community well-being, the proposal represents a major step forward. Funding education through state rather than local taxes would eliminate the need for less affluent districts to have high tax rates to adequately fund schools.

With respect to tax fairness, however, the Commonwealth Caucus proposal is flawed because of its exclusive reliance on sales taxes.

Sales taxes are even more regressive than property taxes, placing undue burden on those least able to pay. According to the Institute for Taxation and Economic Policy, Pennsylvania's middle class pays 1.9 percent of its income in general sales tax vs. 0.4 percent of income for the richest 1 percent of families. By contrast, the middle class pays only 2.5 times as big a share of its income in property taxes as do affluent families.

The Caucus proposal to extend the sales tax to food would make this situation worse. The poorest fifth of families spends 27 percent of its income on food at home vs. less than 4 percent for the richest fifth.

Extending the sales tax to business and professional services -- accounting, advertising, legal services, etc. -- does make sense. This makes it possible to raise the same revenue with a lower tax rate. It also stabilizes sales tax revenues for the future, because consumption of goods now subject to sales tax keeps dwindling as a share of total spending.

But even with a broader sales tax excluding necessities, we should avoid a big increase in total revenue from sales taxes -- especially since Pennsylvania already has one of the 10 least-fair state and local tax systems.

With respect to school funding adequacy and equity, the jury on the Commonwealth Caucus proposal is still out. More precisely, the jury is still waiting to hear a case. The Commonwealth Caucus has so far put forward no proposal on how the state should distribute revenue to schools.

Would state funds replace local school taxes dollar for dollar? That would mean richer districts receive from the state two or three times as much funding per pupil as poor ones.

Would state dollars be distributed to districts on an equal per pupil basis? That would mean a major increase in funding schools in lower-income areas but a major cut for schools in upper-income. The first of these is needed, but the second is politically untenable.

How can we draw from the Commonwealth Caucus proposal to craft a consensus reform?

On the revenue side, a better approach to eliminating local school taxes would rely more heavily on the state income tax. To protect the middle class, we should exclude the first part of income from the state personal income tax, as with personal exemptions on the federal income tax.

The state could also enact a state property tax. Unlike local property taxes rates, usually higher in poor districts when schools are funded locally, a state property tax would have an equalized rate.

In conjunction with a broader sales tax, state income and property taxes could raise revenues in a way that is more fair and that does not fuel community decline.

On the spending side, a politically realistic proposal must maintain spending at current levels in affluent districts while increasing funding for lower-income rural, urban, and older suburban districts. That means higher overall taxes for upper-income Pennsylvanians.

But the reality is that upper-income Pennsylvanians would benefit as well from strengthening communities and supporting higher quality education across the state.

Besides, affluent Pennsylvania can afford slightly higher taxes. According to the most recent comparisons, Pennsylvania's state and local taxes as a share of personal income rank 14th lowest out of the 50 states, and lower still for the top slice.

The bottom line: Pennsylvania is within reach of manageable property taxes, stronger communities, adequately and equitably funded education, and overall taxes that remain affordable as well as fair.

The Commonwealth Caucus has put itself into a position to be a major contributor to such a path-breaking reform. Actually achieving reform will require caucus members to take one more step toward putting the public good first, in the process transcending a tax debate too often as polarized and ideological as a media caricature.