Re­form lo­cal prop­erty tax

The Times-Tribune - - World -

An ef­fort to elim­i­nate school prop­erty taxes ended this year in a 24-24 dead­lock in the state Se­nate. Now one of the idea’s prin­ci­pal cham­pi­ons, Repub­li­can state Sen. David Ar­gall of Schuylkill County, thinks the Leg­is­la­ture will get past that dead­lock in 2017 and fi­nally elim­i­nate school prop­erty taxes.

He and fel­low sup­port­ers have not yet re­vealed a spe­cific bill, but ac­cord­ing to Mr. Ar­gall, Penn­syl­va­ni­ans want the change.

“They know that the prop­erty tax sys­tem is old, it’s ar­chaic, it’s rot­ten at the core. The only way to fix it is to elim­i­nate it, and that is our num­ber one goal for next year,” Mr. Ar­gall said.

There is zero doubt that the Leg­is­la­ture must di­min­ish the role of lo­cal prop­erty taxes in fund­ing pub­lic ed­u­ca­tion and shift that bur­den to the state gov­ern­ment, which has the broad­est pos­si­ble tax base. And there should be a ma­jor re­duc­tion in prop­erty taxes as a re­sult. But the state gov­ern­ment should not elim­i­nate prop­erty taxes be­cause do­ing so would cre­ate its own set of prob­lems.

The bill that pro­duced the dead­lock this year would have elim­i­nated the school prop­erty tax. It would have re­placed about $13 bil­lion that it gen­er­ates each year by in­creas­ing the state per­sonal in­come tax from 3.07 per­cent to 4.95 per­cent, and in­creas­ing the sales tax from 6 per­cent to 7 per­cent and ap­ply­ing to a host of goods and ser­vices that are now ex­empt.

Al­though no one would mourn the prop­erty tax’s death, it would cre­ate an eq­uity is­sue. The tax’s elim­i­na­tion would con­sti­tute a mas­sive tax break for wealthy res­i­dents and a rel­a­tively mod­est one for most tax­pay­ers, mak­ing it a tax shift in more ways than one.

And there is the ques­tion of ad­e­quate school fund­ing. In ad­di­tion to the in­come and sales tax in­creases, the bill that failed this year au­tho­rized a school dis­trict wage tax, but only if ap­proved in each dis­trict by lo­cal ref­er­en­dum. Good luck with that.

Prop­erty tax re­form is long over­due; Mr. Ar­gall and his col­leagues de­serve credit for pur­su­ing it. But the re­sult should be a mas­sive shift of the bur­den to state gov­ern­ment that rec­og­nizes the need to fully fund ed­u­ca­tion. That, in turn, means re­tain­ing a mod­est prop­erty tax as part of fairly dis­tribut­ing the bur­den while al­low­ing school dis­tricts to meet their needs.

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