Wagner vows to do away with prop­erty taxes, but doesn’t say how he’ll do it

Schools statewide raise bil­lions through prop­erty taxes.

The Citizens' Voice - - FRONT PAGE - BY MARC LEVY

HAR­RIS­BURG — Scott Wagner, the Re­pub­li­can gu­ber­na­to­rial can­di­date in Penn­syl­va­nia, had a mes­sage for Vic­to­ria Clark when she told him that she is down­siz­ing from her four-story home, partly be­cause of the mort­gage.

“Un­der my plan, your school prop­erty taxes will go away,” Wagner told Clark dur­ing a stop at her drive­way sale while can­vass­ing in her sub­ur­ban Har­ris­burg neigh­bor­hood ear­lier this month.

End­ing the abil­ity of school boards to raise bil­lions of dol­lars in prop­erty taxes is one of Wagner’s most prom­i­nent cam­paign planks, one that he con­sis­tently ad­vo­cates as a salve for over­bur­dened tax­pay­ers and fixed-in­come el­derly strug­gling to keep their homes.

Elim­i­nat­ing more than $13 bil­lion in school prop­erty taxes col­lected statewide has been a cause for some law­mak­ers in Penn­syl­va­nia for well over a decade. And while Wagner crit­i­cizes the man he’s chal­leng­ing, Demo­cratic Gov. Tom Wolf, for fail­ing to de­liver on it, Wagner avoids say­ing how ex­actly he would ac­com­plish it.

“Here’s the bot­tom line: every­body has the abil­ity to go to the poll on Nov. 6 and vote for me for gov­er­nor and it will get it done,” Wagner told a fo­rum on school prop­erty taxes in Wilkes-barre last month.

For years, law­mak­ers sym­pa­thetic to the cause have tried, and failed. Un­re­solved fights in­clude how to raise the money to re­place school prop­erty taxes. Op­po­nents in­clude prom­i­nent or­ga­ni­za­tions, such as the Penn­syl­va­nia Cham­ber of Busi­ness and In­dus­try — which en­dorsed Wagner for gov­er­nor — and the Penn­syl­va­nia School Boards As­so­ci­a­tion.

Prop­erty taxes play an out­size role in pay­ing for Penn­syl­va­nia’s pub­lic schools be­cause Penn­syl­va­nia plays one of the small­est pro­por­tional roles of any state in help­ing to foot the bill.

It is 45th out of 50, sup­ply­ing less than 38 per­cent of to­tal rev­enue, ac­cord­ing to fed­eral data from 2016. It is a dy­namic that crit­ics blame for driv­ing in­equities be­tween fund­ing lev­els in poorer and wealth­ier school dis­tricts.

Ex­ist­ing pro­pos­als to re­place the lost money re­volve around in­creas­ing state taxes on in­come and sales, money that the state would then dis­trib­ute along with bil­lions in aid it al­ready sends to school dis­tricts.

Busi­ness or­ga­ni­za­tions worry about small busi­nesses pick­ing up a dis­pro­por­tion­ately large share of the shift­ing tax bur­den. School boards worry about los­ing fi­nan­cial con­trol to the state, giv­ing up a re­ces­sion­proof rev­enue source and be­ing stuck with a state gov­ern­ment un­will­ing to ad­e­quately un­der­write district costs.

Then there’s the mas­sive wealth trans­fer — from av­er­age tax­pay­ers to wealth­ier school dis­tricts — if school prop­erty taxes are re­placed with higher state taxes on in­come and sales.

An As­so­ci­ated Press anal­y­sis of state data found that 75 per­cent of school prop­erty taxes were col­lected by school dis­tricts in the top half of av­er­age house­hold in­come in 2016-17, the lat­est data avail­able. Half of all school prop­erty taxes were col­lected by the wealth­i­est quar­ter of school dis­tricts.

“So con­se­quently, it al­most in­sti­tu­tion­al­izes the in­equities that are out there,” said Mark Dirocco, ex­ec­u­tive direc­tor of the Penn­syl­va­nia As­so­ci­a­tion of School Ad­min­is­tra­tors.

For his part, Wolf floated a $3.2 bil­lion plan in 2015, his first year as gov­er­nor, and said last month that he had not seen a bet­ter plan.

Un­der Wolf ’s plan, most of the money — just over $2 bil­lion — goes to dis­tricts in the bot­tom half of av­er­age in­come, but the pro­posal went nowhere in the Re­pub­li­can-con­trolled Leg­is­la­ture.

Wolf has, at times, said he sup­ports elim­i­nat­ing school prop­erty taxes, but he also said last month that he wants dis­tricts to main­tain author­ity over school fi­nances while mak­ing the state “a bet­ter part­ner than they are now.”

Elim­i­nat­ing school prop­erty taxes would put Penn­syl­va­nia in a small group of states — in­clud­ing Arkansas, Ver­mont and Hawaii — in which there is lit­tle lo­cal fund­ing role.

It’s not clear that elim­i­nat­ing school prop­erty taxes would nec­es­sar­ily threaten the qual­ity of schools.

Rut­gers Univer­sity ed­u­ca­tion pro­fes­sor Bruce Baker, who stud­ies in­equal­ity in pub­lic school fi­nance, said school qual­ity is less about the source of the fund­ing and more about the cu­mu­la­tive amount of state and lo­cal fund­ing.

Back at the drive­way sale, Wagner didn’t ex­plain to Clark how his plan would elim­i­nate prop­erty taxes, Clark didn’t ask and the con­ver­sa­tion moved on to an­other topic.

Wagner left, say­ing an aide would call Clark to dis­cuss his prop­erty tax plan.

But, Clark said, no­body ever called.



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