Property tax reform won't reverse runaway spending
The cause-and-effect arguments being posed in defense of the current real property tax reform seem a little skewed.
Identical House and Senate bills, if enacted, would eliminate the school tax portion of property taxes and replace it with revenue from increased income and sales taxes.
The Pennsylvania Association of Realtors strongly backs the measure, and it should: elimination of the largest share of property tax is intended to enhance home sales. The head of the association’s RealReform76 campaign, Chuck Liedike, conducted a town hall meeting this week in Lyndora to lay out the benefits of reform. They include:
n Increased sales and personal income taxes shift the burden to those who earn and consume the most.
n Older homeowners, in particular, would be more financially secure.
n Income and sales taxes are more stable than other taxes, even in a down economy, and can easily be predicted.
n The bill creates a state “education stabilization fund,” which initially would provide schools with funding equal to the revenue from property taxes that year.
n Individual districts can increase funding by implementing a personal or earned income tax through a voter referendum.
If it were a simple matter of tax fairness, then the state reform would make sense. Everybody should be in favor of an equitably shared tax burden. Everybody should support efforts to keep senior citizen homeowners financially secure.
But there’s more going on that tax fairness. There’s also an ever-continuing increase in the revenue demands of local school districts. According to the Pennsylvania associations of school business officers and school administrators, school districts continue to reel from recession, the elimination of the federal stimulus and jobs programs, reductions in state revenues and historic increases in the spiraling cost of mandated school pension payments. In many cases, schools have no option but to cut staff, increase class sizes and eliminate educational programs.
Consequently, school budgets and property tax rates have continued to rise, but not for the benefit of education, but rather, to cover rising costs of pension mandates wages, medical benefits and energy.
Liedike addressed an objection to the bill, calling it a myth that it would threaten local control of school districts. He said districts can continue to spend their money however they want.
That contention misses the main point: It’s not a question of whether the state or the school district collects the money. That’s our money making the schools run.
As such, it seems as if the reform package attempts to camouflage the tax at a time when everyone — taxpayer and school official alike — should keep in mind the painful cost of public education.
After five years of crippling recession, school districts statewide were forced to do what everyone else does in a tight economy: they actually reduced spending.
Property tax reform may or may not be a good idea, but let’s not confuse it with a cure for runaway spending in a protracted recession.
