How to avoid people being taxed out of their homes
It is apparently becoming fashionable to refer to the school property tax as “the hated tax.” This is the tax that, incidentally, bolsters the value of our property, educates the workforce that will pay for senior citizen benefits such as Social Security and Medicare and insures an educated public that is essential for our democratic society.
There’s really only one thing wrong with school property taxes: they are too high. It’s instructive to consider why these taxes are high. The cost of providing universal education is expensive. It requires buildings, transportation and the services of thousands of professionals.
But there are factors that exacerbate these expenses — unnecessarily — that are the result of legislative mandates or failures to act. A few are worth mentioning. Schools are mandated to administer standardized exams, at the cost of millions of dollars, that are of zero benefit to either students or teachers. Yet state officials insist on them.
There is the “school choice” craze, supported by many legislators. School districts in Monroe County are mandated to spend $20 million every year in tuition for redundant charter schools, whether brick-and-mortar or at-home cyber schools, because some people prefer these schools over public schools. Taxpayers must pay for this “choice” even though there isn’t a single failing school in Monroe County. (For what other “public need” provider do we have choices? None.)
Additionally, the State House recently
passed legislation that diverts some $200 million away from public schools to provide scholarships to private and religious schools through the Educational Improvement Tax Credit program.
Finally, the Stroudsburg, East Stroudsburg and Pocono Mountain school districts are underfunded a combined $40 million every year because the state Legislature fails to distribute education money according to its own fair funding formula.
State Sen. Mario Scavello suggested in a Pocono Record editorial that property tax elimination fails because of regional differences in the perception of the burden imposed by the tax. Sen. Scavello wrote that “the fight for reform is generally between the less-populated, yet faster growing regions like ours and the slower growing, more populous urban areas of the commonwealth. Any area with a population that has remained stable or declined has seen less pressure on the school tax. Less people means less buildings and fewer staff needs.”
He is correct. School taxes are not onerous in most Pennsylvania districts. But what he neglects to acknowledge is that much of the opposition to school tax elimination is the result of the terrible flaws in the legislation. For instance, the Pennsylvania House/Senate Bill 76 would freeze existing school funding inequities in place. Monroe County would forever be underfunded by $40 million. Additionally, the legislation would hand the state legislature an additional $14 billion. Only the most credulous believe that all this money would then go toward the public schools.
Elimination of property taxes could stimulate a population influx of thousands. School districts, stripped of their own funding, would have no wherewithal to accommodate an influx of students, since state funding would be bound by an inflexible state formula that makes no allowance for changes in student population. Monroe County experienced this in the 1990s. Moreover, wealthy school districts would reap the majority of state money.
School taxes do need to be reformed. People should not be taxed out of their homes. But there are ways to target specific problems.
Start by requiring regular and frequent reassessments in order that all taxes assessed are equitable and aligned with current values. Index property taxes to income. Many jurisdictions use “circuit breakers” that limit tax obligations depending on income.
There is no rational reason to exempt from taxes a particular demographic simply because of age. Not all senior citizens struggle financially. We (I am one) are already exempted from state taxes on retirement and Social Security income.
Finally the state must step up to the plate. Currently, the state provides an average 37% of the cost of Monroe County schools. They should be providing 50%, which the state could easily do if the Legislature would cease giving away the public’s natural gas patrimony to special interests.
Residents and supporters pack the state Senate hearing room in April in support of Sen. David Argall’s bill to eliminate school property taxes and replace them with higher income and sales taxes.