A western Pa. lawmaker has a plan to fix property taxes. Will the Legislature act on it? | Mark O’Keefe

March 3, 2020 6:30 am

Everyone agrees that Pennsylvanians pay too much in school property taxes.

The problem is there’s no agreement on what should be done to solve the problem. That’s why nothing’s ever been done about rising property taxes over the years. And that’s why there’s little chance of anything getting done this year despite lots of talk about it.

Meanwhile, property taxes are forcing senior citizens out of their homes. And they’re a a large obstacle to young people seeking to buy homes.

The biggest concern about property taxes is they raise about $14 billion to educate Pennsylvania’s students across the commonwealth.

So, if property taxes are reduced or eliminated, some other revenue sources will have to be tapped to make up for the shortfall.

A state Senate working group emerged from a month-long study with five options, offering mixed bags of tax reduction with some combination of increased income and sales taxes.

However, none of them have gained any traction. While there’s opposition to raising any tax, there’s been a lot of controversy about the sales tax.

That’s because there are a ton of exemptions to the sales tax, including  food, clothing, textbooks, medications, residential heating fuelsburial items, work uniforms and equipment, personal hygiene products, newspapers, veterinary services, and farming supplies just to name a few. There will be fierce opposition to eliminating any of them.

There’s also concerns that eliminating all school property taxes provides a windfall for commercial property owners and those with lavish second or third homes.

One bill that avoids those problems is being pushed by Pam Snyder, D-Fayette; Marcia Hahn, R-Northampton, and Rosemary Brown, R-Monroe. Their measure would eliminate school property taxes for owner-occupied residences via the homestead and farmland exclusion while keeping them for owners of commercial properties, including businesses and landlords.

“The number one complaint I hear from people is about property taxes. Everyone wants to know why we haven’t done something about them,” Snyder said. “This bill would take care of that problem especially for senior citizens being forced out of their homes and young people looking to buy their first house.”

“The bill has bipartisan support which is important,” added Snyder.

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She noted the state would have to come up with $8 billion if property taxes for owner-occupied residences are eliminated. She said that money could be made up by increasing the income tax by 1.8 percent from 3.07 percent to 4.87 percent.

While the rise in the income tax would be bad for low-income residents, it wouldn’t hurt senior citizens since Social Security payments are exempt from Pennsylvania’s income tax.

“The personal income tax is considered one of the more stable taxes levied in our state, and this will ensure districts will have the necessary funding for their schools.”

Snyder is also hoping that a new funding formula can be developed if the bill is passed. Snyder and other lawmakers have complained for the years that the state’s reliance on property taxes hurts students in rural and poor areas that don’t have the tax base of more affluent areas.

Snyder admitted it could be difficult getting lawmakers from affluent areas to change the current funding system which has benefited their residents but hopes that something can be worked out once her bill is passed.

However, Snyder admits she has heard nothing about whether or not the bill has any chance of passing this year.

“It’s up to the [state House Speaker Mike Turzai]. He’s the one who controls the calendar and the agenda. He decides which bills should move forward and so far we’ve heard nothing,” Snyder said. Turzai, who recently said he will not run for re-election in November, couldn’t be reached for comment.

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Another big problem is that even though it’s only March, time is running out for the bill to be passed this year.

The Legislature is on an annual recess for budget hearings, and doesn’t return to session  until March 16. From then until June 1, the state Legislature will only be in session for 18 days. The month of June will be taken up with budget negotiations leaving little or no time for action on such as complicated and controversial an issue such as property taxes.

After the Legislature recesses at the end of June, they likely won’t return until the middle of September and they will only be in session for 13 days the rest of the year.

There’s no chance that the property tax issue will come up let alone be resolved during that time frame, especially before the general election on Nov. 3. All members of the state House of Representatives and half of the members of the state Senate will be up for re-election that day. Lawmakers will be loathe to vote on anything that could hurt their chances of winning re-election.

The bottom line is that any action on property taxes will have to be taken very soon. If not, residents will have to wait for next year or who knows how long for property taxes to be reduced or eliminated. At the rate the Legislature is going, it may never happen.

Capital-Star Opinion contributor Mark O’Keefe, of Mechanicsburg, Pa., is the former editorial page editor of the Uniontown Herald-Standard. His work appears biweekly. 

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Mark O'Keefe
Mark O'Keefe

Opinion contributor Mark O'Keefe, of Mechanicsburg, Pa.,  is the former editorial page editor of the Herald-Standard of Uniontown. His work appears biweekly on the Capital-Star's Commentary Page.