Ending School Property Taxes
Pennsylvanians face many obstacles in today’s rough economy. These problems include the poor job market, constantly rising prices of daily goods such as food and gas, and worrying about leaving a better world for the next generation. One problem, however, looms larger than most - our ever-increasing property taxes.
School property taxes must be abolished. We need something beyond more of the same "property tax reform" - we need school property tax elimination. Education is expensive and it is an expense we ought to undertake. I support adequately funding and improving our schools so that Pennsylvania students remain competitive in the US and the world. What I oppose is doing this on the backs of seniors and the poor.
The current system of school property taxes hurts our communities in several ways. First, these taxes are higher in poor neighborhoods. Lower income communities often have higher millage rates than rich neighborhoods and as the wealthy flee our cities this problem only gets worse. Second, property taxes kill off local farms. Farmers simply do not make enough money to pay ever-increasing property taxes and are forced to sell to developers or go bankrupt. Third, and perhaps most cruelly, property taxes also rob far too many seniors of their greatest personal investment. These people worked hard for their entire life and now, on social security or a meager pension, are booted from their homes because they can no longer afford to pay school taxes.
Finally, property taxes hurt homeowners and home-buyers. The significant amount of taxes many of us pay in the Lehigh Valley is a huge disincentive for potential home-buyers, keeping the resale value of our properties artificially low. Property taxes also pervert the idea of home ownership. Paying a fee to the government every month or being kicked out of your home makes you a renter and the government your landlord.
Many in Harrisburg and elsewhere will argue for property tax reform or relief rather than abolishment. They are counting on the people forgetting earlier such attempts - and their ineffectiveness. The most recent reform attempt came in 2006, when officials passed a law that they said would give voters a voice in school tax increases. Act 1 was billed as a major overhaul of our property tax system designed to reduce tax burdens and limit budget increases. Instead, what it did was line the pockets of casino lobbyists and create a sham referendum system.
Act 1 was supposed to require school districts to submit any tax increase over the ‘index’ to a referendum vote by the tax payers. Unfortunately, Act 1 also included numerous exceptions that made the referendum requirement a shame. Recently, some of those exceptions were removed; however, there remains little force behind the Act and districts continue to raise taxes at will. Last year, for example, 199 districts had budgets over the index and 197 were granted an exception from the referendum.
It should be clear now why school property taxes must be eliminated. The next issue is how to fund our local schools. There are many ideas for property tax replacements but the most likely candidate would be an increase in the sales tax - likely one or two percent. Initially people are opposed to a sales tax increase but consider that if your school tax is $3,500 per year you would need to spend $50,000 per year on taxable goods to pay that same amount in taxes. Many interest groups will lobby hard to keep their goods or services excluded but most of the reasons they give will be a smoke screen to hide their efforts to gain favored status in Harrisburg. If the reform is to be effective, and generate sufficient funds for schools, any exceptions must be kept to an absolute minimum.
One plan that has made a lot of news recently is HB 1776. This plan calls for an increase in the personal income tax to 4%, a sales tax rate of 7%, and increasing items subject to sales tax while maintaing the food and clothing exceptions. I like much of what the bill does, however, I am not blindly committed to it. I would prefer a much simpler bill. In my view, overly long bills allow lobbyists and politicians to slip issues past the voters. I would prefer to see this issue split up into several bills that address separately the removal of the property tax and then a bill that implement a new system of school funding. Regardless, I will continue to examine HB 1776, as it will no doubt undergo many amendments, and seek to add my own input on this or other bills attempting to remove school property taxes.
While I cannot pledge my unconditional support for HB 1776, I will pledge to work to pass the best possible bill that removes school funding from property taxes. I will also work to strengthen the voice of voters in property tax increases by removing more exceptions that allow school districts to skirt the referendum mandate of Act 1.