Property Tax Reform On The Horizon? Don’t Count On It

Property Tax Reform On The Horizon? Don’t Count On It

Calling the state wide property tax system that funds school districts as well as municipal and county governments across Pennsylvania, “a bad penny that seems to keep turning up,” Terry Madonna and Michael Young, the state’s premier political prognosticators, turned their focus this week to efforts in Harrisburg to reform the state’s broken property tax system.

One alternative being looked at according to the piece in The Tribune Democrat is a bill sponsored by Rep. Seth Grove (R-York) that “provides school districts the option of replacing some or all of their property taxes with three other taxes, including the earned income tax, and two business taxes.”

Even though Grove’s bill recently passed the house, our State Senator, the Honorable (I use the term sarcastically) Dominic Pileggi is insisting HIS idea that property taxes be replaced with more gambling revenue be considered.

Funding education on the backs of losers at the state’s 12, soon to be 13 casinos. Great idea, don’t you think?

Money quote from the Madonna/Young article:

“Pennsylvania’s property tax paradox poses a genuine mystery: If voters hate the property tax, politicians rail against it and policymakers criticize it, why is this tax we love to hate still in place, in fact, raising more and more revenue year after year?

“The short answer is that our legislators haven’t figured out how to abolish or substantially reduce the tax while still funding the schools.

“The long answer is more complicated. Fundamentally, no one yet has resolved how simultaneously to solve three vexing problems – problems that, left unsolved, preclude meaningful tax reform.”

The three vexing problems the wise men (and a few women) in Harrisburg haven’t be able to resolve according to Young and Madoinna?

  • Sustaining local government viability: The property tax is the largest source of revenue available to school districts and local governments.
  • Money, money and more money: If property taxes were abolished, it would take an estimated $11.5 billion annually to replace the lost revenues.
  • Sorting out the winners and the losers: Just as there “ain’t no” free lunch, there also isn’t any way to reform the property tax without producing both winners and losers.

Madonna and Young are optimistic real reform might be possible saying ordinary Joe’s and Jill’s unable to pay their taxes aren’t the only once concerned.  According to the article, policymakers and educators have joined the ranks of everyday citizens, saying “public schools of the 21st century must be financed mostly by broad-based state taxes or fees.”

Call me a skeptic, but I won’t be hopping on any tax reform bandwagon any time soon.  State government in Harrisburg is badly broken, lacks any credible leadership and in 2014 will be totally distracted by far more important (to them anyway!) issue of winning reelection than to spend much, if any, of their precious energies and political capital resolving an issue that really matters to those Joe’s and Jill’s they claim to represent.

Modonna’s and Young’s piece can be read in its entirety here.

 

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