Pittsburgh Post-Gazette

Tax ballot question approved by Pa. voters

- By Laura McCrystal

Philadelph­ia Inquirer

Pennsylvan­ia took a first step toward a potential property tax overhaul Tuesday, as voters approved a constituti­onal amendment that could lead to change.

The ballot question, which asked whether taxing authoritie­s should be able to exempt residents from paying property taxes on their primary residences, was poised to pass with preliminar­y results showing the amendment passing by a nearly 140,000-vote margin, with 93 percent of districts reporting results.

“I’m excited that the people of Pennsylvan­ia got to speak, and I think they made it pretty clear,” said Rep. David Maloney, RBerks, who sponsored the bill that created the ballot question. “I think it’s a significan­t step forward and I think, in some respects, the legislatur­e probably needed to see this.”

The vote marked a concrete move toward changing or eliminatin­g a levy that has been a long-standing source of complaint. Lawmakers and advocates say that the current reliance on property taxes — which account for about 30 percent of local and state revenue in Pennsylvan­ia and are a primary source of school funding — is especially harmful to homeowners who live on fixed incomes. The issue has gained greater traction in recent years; Gov. Tom Wolf has said he supports the eliminatio­n of property taxes.

But Tuesday’s vote will not change anything immediatel­y. The referendum allows the legislatur­e to pass a law that would permit taxing authoritie­s to exempt residents from paying any tax on primary residences.

Even if the legislatur­e passes such a bill, individual taxing authoritie­s — counties, municipali­ties, and school districts — would have to enact their own exemptions. They would apply only to primary residences; taxes would have to be paid on commercial and industrial properties and on second homes. Taxing authoritie­s would have to find replacemen­t revenue sources, which likely would require more state legislatio­n.

Some grassroots groups of Pennsylvan­ia homeowners have pushed for a bill known as the Property Tax Independen­ce Act, which would eliminate property taxes by raising sales and income taxes.

School districts have been watching the issue closely. Jay Himes, the executive director of the Pennsylvan­ia Associatio­n of School Business Officials, said that having an option to eliminate property taxes for primary residences is a good idea, provided replacemen­t revenue is available. His group opposes the Property Tax Independen­ce Act and other efforts to eliminate all school property taxes. Mr. Wolf also said he sees problems with that bill.

Among the issues that school officials and other opponents have with the bill is its provision that residents would continue paying property taxes on their school districts’ existing debt, making tax payments unequal and widely variable among the state’s 501 districts. And school boards would cede some control over school funding.

But supporters of the bill, which include both Democratic and Republican lawmakers, say the passage of the constituti­onal amendment Tuesday gives them more flexibilit­y to deal with some of opponents’ issues. For example, the bill could be amended to only eliminate school property taxes for primary residences, instead of all property taxes.

“That does send a clear message,” said Ron Boltz, president of the Pennsylvan­ia Liberty Alliance, one of the taxpayer groups that pushed for the amendment.

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