School property taxes are the most hated levies in Pennsylvania.
Senior citizens who don’t have any children in the schools pay a large part of the taxes whose constant increases makes it hard for them to stay in their houses.
On the other end, high property taxes make in increasingly difficult for young people to buy houses.
Their elimination or at least reduction of property taxes has been talked about for decades but nothing significant has been done to solve this ever-growing problem.
Over the years, lawmakers have unable to agree on a viable alternative to the taxes. One legislator, state Rep. Frank Ryan, R-Lebanon, has come up with a serious plan, much better than others which failed to come up with any realistic way of replacing the $16 million raised by school property taxes.
However, his plan, which is now before the House Finance Committee, has almost no chance of ever becoming law.
Ryan’s plan calls for increases in the income and sales taxes, which have been talked about endlessly in the past.
But he threw a new wrinkle in, taxing income for retirees. While his plan would exempt Social Security benefits, employee contributions to defined contribution plans, and military pension or survivor benefit payments, it would include all types of other income earned by retirees. Currently retirees pay no income taxes, and any type of change will certainly be controversial.
Ryan maintained that some tax increases are needed, contending that school property tax rates are forecast to double in 17 years and triple in 30 years.
Pennsylvania must institute the tax or face long-term consequences, Ryan said.
“Everybody wants to get rid of property taxes as long as the other person is the one who is going to pay the replacement tax,” Ryan said. “It is clear that any solution will require sacrifice on the part of all Pennsylvanians.
“Pennsylvania is not a growth state. We are attracting seniors. You know why? We don’t tax retirement income. We’re one of six states in the United States that don’t.”
“I’m going to guarantee you this, the next recession we’ll have to start taxing retirement and you’ll still have property taxes. You can see the handwriting on the wall,” added Ryan.
Recognizing the complexity of his plan, Ryan unveiled a calculator that allows homeowners to calculate the impact the plan would have on their tax bill.
In a statement, Ryan outlined the benefits of his plan.
“House Bill 13 would end Pennsylvania’s archaic reliance on property taxes that unfairly burden our growing population of seniors and stifle our economy,” said Ryan. “It would enable us to transition to fair and reliable funding sources for our schools, which will provide more effective management at the local level. If we do nothing, Pennsylvania residents will continue to lose their homes and the precarious nature of school funding will continue.”
However, no matter the benefits, it’s very unlikely that Republicans will do anything that remotely resembles passing a tax increase, especially with the governor’s race on the ballot in November and many legislative seats up for grabs.
Consider that Senate President Pro Tempore Jake Corman, R-Centre, is making his opposition to Gov. Tom Wolf’s proposed tax increases one the biggest parts of his campaign to become the state’s next governor.
But Wolf’s biggest proposed tax increase was actually very close to Ryan’s plan to eliminate property taxes. He also wanted to increase sales and income taxes to reduce property taxes. Republicans refused to negotiate with Wolf and the impasse eventually caused the longest budget stalemate in the state’s history. And Wolf’s proposal contained no tax increases for retirees.
A budget wasn’t passed until the following spring and was never signed into law by Gov. Wolf. It became law when Wolf refused to veto the measure.
So, it seems very unlikely that Republicans would now go along with taxing the income of senior citizens for the first time. Furthermore, the plan comes up at about the worst time ever with inflation soaring and all the uncertainty surrounding the war in Ukraine.
Also as usual is the Legislature’s light schedule, which makes it hard to do anything never mind something as complex as property tax reform.
The House will only be in session for 15 days until budget talks begin in June. It will only be in session for six days in September and three in October.
The Senate will only be in session for 12 days until June. No schedule has been announced for the fall.
Such inaction makes it very likely that school property taxes will continue to be the most hated levies in Pennsylvania for years to come.
Opinion contributor Mark O’Keefe, of Mechanicsburg, Pa., is the former editorial page editor of the Uniontown Herald-Standard. His work appears biweekly on the Capital-Star’s Commentary Page.
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