Property tax plan needs tie to fair funding

To be clear, we support property tax reform in Pennsylvania as a necessary step to addressing school funding inequities and an unfair burden on property owners on a fixed income.

However, we remain concerned about the current property tax elimination measure in Harrisburg.

The property tax measure currently proposed is a windfall for business and wealthy school districts and will end up costing middle class taxpayers more than they pay now in taxes, an independent analysis has found.

“Far from providing relief for working families, recent proposals to eliminate school property taxes in Pennsylvania would increase taxes on the middle class while sabotaging the chance to adequately fund Pennsylvania schools for middle-and low-income families,” begins the study,“Who Pays for Property Tax Elimination?” by Keystone Research Center.

The group which authored the study has been widely criticized by the Pennsylvania Taxpayers Cyber Coalition as an organization with ties to the powerful Pennsylvania State Education Association teachers’ union. Keystone Research Center states on its website that a portion of its funding comes from organized labor groups, and many of its board members are affiliated with labor unions, including PSEA.

That doesn’t change the statistics in the House Bill 76 proposal which show this version of tax reform does nothing to address the troubling issue of school funding inequity.

The proposals currently under consideration replace local property tax revenue with state revenues, meaning wealthier districts that choose to raise their property taxes to benefit their schools, would now see their property taxes disappear and the higher cost of their education spread among all state taxpayers through sales and income taxes.

For example, “affluent Lower Merion School District in Montgomery County would receive 22 times as much in state funds for school property tax elimination ($23,219 per student) as the high-poverty Reading School District in Berks County ($1,034 per student),” the report notes.

In the 125 most affluent school districts, state funding would average $10,703 per student as opposed to the $3,721 the 125 poorest school districts would receive.

As the current proposals are written, there is no tie to the issue of fair funding and no plan to distribute taxes collected statewide in a way that makes up the losses for poor districts.

Pennsylvania currently ranks 46th in the nation for state contribution to education and ranks number one in the gap between rich and poor districts. The bills now proposed would do nothing to change that.

Instead of a rallying cry for property tax elimination, we suggest a measured consideration of tax reform tied to the school fair funding formula adopted last year. The formula crafted after a task force study determines school funding by taking into account things like poverty, special education population and local tax effort.

To be effective, the formula must be applied to the entire state education revenue stream instead of just 6 percent, as is the case this year. For tax reform to be meaningful in Pennsylvania, the system of how monies are allocated must be reformed.

We are all for property tax reform to change a system that has for too long been a burden on middle class and fixed income homeowners while benefitting real-estate wealthy school districts. But it must be tied to fair funding to address the long standing inquities.

Just as Pennsylvania taxpayers deserve a more equitable system of taxation, so do all children in Pennsylvania deserve a fair chance at a good education.

Fair funding must be part of property tax reform to meet that most basic right.

Pennsylvania ranks 46th in the nation for state contribution to education and first in the gap between rich and poor districts.