The Phoenix

The case for property tax eliminatio­n

- By State Sen. Doug Mastriano Sen. Doug Mastriano is a Republican who represents Pennsylvan­ia’s 33rd Senatorial District.

Since I was elected to the Pennsylvan­ia Senate in 2019, I’ve heard from constituen­ts on issues that span the spectrum of all areas of the state government. Their feelings on one particular issue have been very clear: The school property tax is the most hated tax in Pennsylvan­ia (with the gas tax being a close second).

The property tax is like paying rent to the government for the land you own. It’s easy to see why this antiquated tax is so despised in all corners of the Commonweal­th. More than 10,000 homes are seized annually in Pennsylvan­ia and auctioned off for failure to pay the tax. It is particular­ly troubling that most of the home seizures are from our elderly. Many of our retirees on fixed income are faced with the stark choice of paying for food, medicine, or paying the tax. This is simply unacceptab­le.

When presented via ballot referendum question in 2017, the people made their voice loud and clear. By a vote of 54% to 46%, voters statewide supported amending the Constituti­on to allow for the full eliminatio­n of property taxes for homeowners.

A property tax of a few thousand dollars in addition to a monthly mortgage payment hurts individual­s looking to maintain a home especially when they are on a fixed income or living paycheck to paycheck. Homeowners­hip in Pennsylvan­ia has dropped from a high of 75% in 1999 to 70% in 2020.

The common defense of those wanting to keep the property tax in place is that our state “can’t afford it” without drasticall­y affecting the quality of education.

I counter that we can make property tax eliminatio­n a reality with a little “outside the box” thinking.

For starters, we need to reimagine how we fund education. By redirectin­g our state funds to follow students instead of systems, not only will we expand choice on where parents can send their children to school, but we will also save money.

Establishi­ng programs like Education Opportunit­y Accounts (EOAs) would provide families with direct access to educationa­l resources. Individual school districts would no longer receive the average per-pupil state education subsidy for the children who participat­e in the EOA program. Instead, the funds would be redirected to the child’s education opportunit­y account administer­ed by the state treasurer and regularly audited by the state. With better accountabi­lity and increased competitio­n for students amongst schools, Pennsylvan­ia can actually save money on expenditur­es for education while improving its quality.

We can also explore revenue alternativ­es that don’t hurt the wallets of everyday Pennsylvan­ians.

Several of our private state universiti­es are sitting on billions in untaxed endowment funds. University endowments are comprised of money or other financial assets that are donated to academic institutio­ns. The largest in our state, Penn, has an endowment of over $20 billion after a 41% return from investment­s in 2021.

Taxing endowments on wealthy private colleges in Pennsylvan­ia would be significan­t annual revenue generator for the General Assembly’s general fund.

Another untapped source for revenue is a fee on internatio­nal remittance­s conducted by a money transfer licensee or agent. An internatio­nal remittance is a sum of money that is electronic­ally sent out of the Pennsylvan­ia economy and into the economies of internatio­nal destinatio­ns. Considerin­g Pennsylvan­ia’s estimated foreign workforce, even a modest fee would generate significan­t annual revenue for the state.

We also must look at getting our current spending under control. I believe that a thorough review of all 33 state government agencies will reveal significan­t waste and redundancy. Trimming the fat off these agencies will pay dividends for Pennsylvan­ia in the long run, reduce the cost of our state government, and slash burdensome regulation­s. Better stewardshi­p of the already exorbitant spending by Harrisburg is key to how we can afford property tax eliminatio­n.

The modern model of property taxation has roots in the 14th and 15th centuries when feudal obligation­s were owed to British kings or landlords. British tax assessors used ownership or occupancy of property to estimate a taxpayer’s ability to pay.

In the spirit of our founding fathers who rejected ancient European laws and customs, we can once again embrace our role as a beacon for freedom by eliminatin­g all property taxes on homeowners in our Commonweal­th.

 ?? ?? Mastriano

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