Voters in Pennsylvania will decide on Nov. 7 whether to pay less money for their school (or county or municipal) real estate taxes.
Sounds simple, doesn’t it? Who would vote “no” to paying less money in taxes?
The Constitutional Amendment question on the ballot states: “Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?”
Wow! When I read “to exclude from taxation up to 100 percent of the assessed value of each homestead property” I jumped for joy.
To exclude “100 percent of assessed value ...” I immediately thought of all the ways I could spend that extra money.
My next thought, however, was more disheartening – if school real estate taxes (or county, municipal and/or school) would not be paid via a property tax bill, where would the money come from?
My search sent me to Ellen Millard-Kern, chief of staff for state Sen. Pat Browne, R-16th.
According to information provided by Kern via Stacey M. Connors Esq., Browne’s chief counsel, majority chairman, Senate Appropriations Committee, “If the ballot question is approved by the voters, the General Assembly will still need to pass additional legislation to allow this.
The language of Senate Bill 1285 provides: “The General Assembly may, by law: Authorize local taxing authorities to exclude from taxation an amount based on the assessed value of homestead property. The exclusions authorized by this clause shall not exceed [one-half of the median assessed value of all] 100 percent of the assessed value of each homestead property within a local taxing jurisdiction.
“A local taxing authority may not increase the millage rate of its tax on real property to pay for these exclusions...”
OK, the millage rate cannot be increased.
But, where will the money come from?
Connors’ email continues: “Senator (Mario)Scavello (R-40th) has circulated a cosponsor memo for legislation to do just that – to fix the dollar amount at 100 percent of assessed value for the Homestead Exemption.
“A second bill in Senator Scavello’s proposed legislative package provides for an increase in the PIT to offset owner-occupied residential school property taxes.”
OK, so Scavello is thinking about the possibility of increasing the Personal Income Tax to pay for the loss of revenue.
“Senator [Kim] Ward, R-39th, has also circulated a cosponsor memo for a constitutional amendment to allow the General Assembly to adopt legislation that would grant any local government in Pennsylvania, with voter approval, the option to eliminate property taxes and choose from alternative taxing options to make up for the loss in revenue, such as PIT, sales and use tax, or any other tax under the Local Tax Enabling Act.
“Senator Ward’s legislation would allow the General Assembly to enable property tax elimination in areas where it is needed, but hold harmless the taxpayers and school districts in parts of the state that don’t think paying more in income and sales tax is the best answer for them.”
Now, Ward is adding alternative taxing options, including PIT, sales and use tax or any other tax under the Local Tax Enabling Act.
Hmm, the Municipal Election is on Nov. 7 and how to make up the loss in revenue is still not decided.
According to the voters guide published by the Lehigh County League of Women Voters, “Proponents say the amendment would be the first step in changing the system so that an inability to pay property taxes could never again result in the loss of homes that people have worked their whole lives to pay for.
“Opponents say that the amendment allows taxing authorities to replace a stable tax source (property) with unstable ones (income and sales taxes) that fluctuate with the economy and could be subject to legislative manipulation. Additionally, opponents fear that allowing districts to eliminate property taxation could lead to a loss of local control of education and to a significantly diminishing commitment to public education.”
And finally, more information from Connors: “... The sponsor of the legislation authorizing the constitutional change notes that this legislation provides the potential for the elimination – not just the reduction – of residential school property taxes via the homestead exclusion.
“The impact the proposed Homestead Exclusion expansion will have on a person’s property taxes and the sources of replacement revenue will ultimately depend on the legislation adopted by the General Assembly and how much of the additional exemption a local taxing authority decides to use.
“The only thing that cannot happen is that a local taxing authority may not increase the millage rate of its tax on real property to pay for the exclusion.
“During this process, local property taxpayers will have the opportunity to lobby their state and local elected officials to craft the property tax structure that best suits their local needs.”
Now that I like ...
Control is ultimately is the hands of the local taxpayer, the local voter.
We, the people, will be given the opportunity to tell our elected officials what is best for us, what is best for our local community.
Don’t drop the ball. Depending on the vote on Nov. 7, there may still be more work to do.