Forum explores tax referendum
Constitution which requires that all property in Pennsylvania be taxed equally.
Approval will allow the Legislature to move toward exempting up to 100 percent of the property assessment on “homesteads” and “farmsteads.”
To qualify as such, a property must be the “primary residence” of the owner of the property, meaning rental properties would not qualify, not would commercial properties.
In the case of farmsteads, it must be at least 10 acres, occupied by the farmer and can then also include all auxiliary buildings and property to be qualified as a “farmstead.”
Currently, the law allows at most, either of these two types of properties to have up 50 percent of the median property assessment in a county, township, borough or school district to be exempted from property taxes on homesteads and farmsteads.
Proceeds from the state’s gambling operations currently provide the money to pay for the refunds or credits made possible by those exemptions and it is the same dollar amount for each property, no matter its assessment.
To fund the current 50 percent exemption costs about $3 billion.
If the referendum is approved, it would empower the Legislature to enact “empowering” legislation to allow that exemption for homesteads and farmsteads to be increased to 100 percent of assessed value.
How that is done, and whether it’s done at the state or local level, is not yet decided. Also undecided is what source of revenue would be tapped to replace that lost by the loss of property taxes revenues on those types of property.
“What the General Assembly might do with this expanded authority is unknown,” according to a explanatory pamphlet made available at the forum by the Pennsylvania School Boards Association.
John Callahan, the chief advocate for PSBA, was at the forum Thursday and said his organization has taken no position for or against the referendum, adding that as its worded, the referendum would not interfere with a school district’s ability to levy property taxes.
“The measure sounds intentionally vague,” resident Steve Hacker told the panel. “You have to have alternative funding, otherwise you starve the school districts. I feel like there is no solid plan.”