Tax fantasies
Don’t move toward eliminating property taxes
Pennsylvania voters last week approved a ballot measure that could reduce property taxes. The margin was wide, with 54 percent voting in favor. The ballot language presented to voters was complex, even in the “plain English” version crafted to help the public understand it.
But for many voters who approved of the measure, it’s probable that the question appeared simple: Does this look like it could lower my taxes? In response, they said, yes, please, sign me up.
We were among those urging a No vote on this ballot measure, mainly because it was seeking a constitutional amendment based on many unanswered questions. But we also fundamentally believe that property is an asset that should be subject to tax. Government services provided by property taxes support the value of property; it’s a direct and fair relationship. The funding of public schools is ingrained in property tax; it’s hard to imagine how the system could be upended.
Yes, there are problems with fairness in public school funding — but those can be addressed by finding additional support for poorer districts, not blowing up the system. Property valuations indeed pose an ongoing problem. Every seasoned politician in Allegheny County has scars over the court-mandated reassessments and backlash from homeowners who got a raw deal. But political efforts should be placed on finding ways to tax property equitably (can’t advances in computer science lead to better outcomes in this field?) rather than fanning fantasies of a paradise without property taxes.
Under current law, up to 50 percent of the median assessed value of all homestead property (primary residences) may be exempted. The ballot measure opens the door for much more.
It asked voters whether they wanted to amend the Pennsylvania Constitution to allow the Legislature to pass a law that enables local governments to exempt up to 100 percent of a person’s primary residence from real estate taxes. Note that nothing real has been accomplished yet. The approved referendum just allows legislators to put forward a law enabling local governments to act.
Behind the arm’s-length provision and the mathematical formulas is a longstanding effort to eliminate propertytaxes in Pennsylvania altogether. That’s not conspiratorial conjecture. State Rep. David M. Maloney Sr., a Republican from Berks County, sponsored the bill that created the ballot question. His Reading Eagle op-ed cheering on the ballot measure in July was headlined “A Step Toward Eliminating Property Taxes.”
Many advocates of replacing property taxes with some other revenue are conservative Republicans. Yet Democratic Gov. Tom Wolf has been receptive to the idea, citing it as a way toward more equitable funding of public schools. He has “left the door open to elimination if done in a responsible, fair way, such as not taxing food or clothing,” said spokesman J.J. Abbott. “Now there must be legislative action to address this issue.”
State legislators, however, should not make too much of the results of this referendum, which offered only the pleasant parts of tax reform — getting rid of a tax — and not the reality of making up lost revenue with higher income and sales tax rates. Bills to enable a 100 percent homestead exemption should be shot down.