For the past several years, a group of mostly conservative thinkers has advocated patriotic-sounding Property Tax Independence Act, In a bid to make themselves sound like the Founding Fathers, they call their bills HB 76 and SB 76. Their logo also is surrounded by 13 stars. I guess that's in honor of the 13 original states or something. Basically, their plan is to phase out property taxes over two years and then play their fifes and drums and recite the Pledge of Allegiance.
No question about it, property taxes are unpopular. They are particularly unfair to seniors on fixed incomes.
But SB76 and HB76 are just tax shifting proposals. According to The Wharton School economist Robert Inman, the property tax is probably the fairest of all the taxes imposed by local government. His basic argument is that all taxes are bad. But as we all know, they are a necessary evil. He explored which taxes do the least harm. Believe it or not, it's the property tax.
According to Inman, the fairest way for a City to tax is by moving from a mobile to an immobile tax base. Commuter taxes, wage taxes and gross receipts taxes just drive business and jobs away. Lowering the wage tax will result in more job, more income and encourage people to live where they work by investing in real estate. He would increase real estate taxes, but homeowners who live in their homes would be afforded a partial exemption.
All of this was in a 2009 Task Force recommendation that was never implemented.
51 comments:
Talk, talk, talk, talk.....
People cannot afford these taxes. Especially school district taxes. Those clowns cannot control their spending and have no limit on what they end up charging home owners. They will run the young and the old out of their homes. Taxes now are higher than mortgage payments.
Yet these politicians talk and talk. Another committee meeting. When will we see results?
yep they trot out the example of the poor widow struggling on a fixed income.
ALEC has been pushing this bull.
it should be called the "Landlords pocket more cash act"
the reality is landlords, mansion owners and the corporate critters do not want to pay taxes of any kind.
Will the landlords drop their rent if the property tax goes away?
not a chance.
The mansion owner gets to pay nada.
wal mart gets to pay nothing but still gets to use the local services like police and fire for nothing.
as far as the poor widow there is a solution---- expand the rebate program for property taxes for seniors(above the existing program)
if you raised the sales tax to fund that program most would understand.
but the backers of the property tax removal are using the poor widow example as a smokescreen for their own agenda.
they are not interested in that poor widow--otherwise why not push for an increase in the rebate program for those who need some help?
when you mention expanding the rebate program to those prop- tax removers the answer you get is crickets.
also you could still pay property taxes if the local government can show an emergency need or major repair.
so how long does it take for a sudden emergency need for a high school football stadium arrives.
one last thing is that the sales tax money would be doled out by the state legislators so any hope of local control over say school spending goes right out the window.
not to mention you are sending more money to Harrisburg.
there are no guarantees that all the extra revenue generated will be applied to school expenditures.
so the Harrisburg critters will find a way to short change the local government and use those funds elsewhere.
the end result will be a higher sales tax and you will still have property taxes.
of course you will pay those-- the corporate folks will get exempted.
There is no "emergency need for a high school football stadium " that's nonsense! This issue should be combined with review of "tax free" properties and what they actually benefit. Look around ,see Which tax free holds the interest of the good of the public or public interest. The politicians should be held to the fire if they don't change the way we are doing business in this century! This issue is deeper than it appears .this is about paying the freight and free rides cost money too. Ask your representative directly .
to make it easier for the poor widow try doing the following.
first have a reassessment of property taxes in the local area.(house value)
if i am living in my house for say ten years and the house next to me gets sold the new owners tend to pay more in property taxes then i do.
why?
the snowplow and the trash truck service both of us just the same but he pays more.
not fair.
there are ways to reduce this inequality but most people do not know nor take the time to fix the problem.
stop the corporate giveaways on property taxes.
no one from the local government told me--hey thanks for choosing to live in the town so as a reward for moving here you do not have to pay property taxes for x number of years.
for example the town i live in has a hospital with an emergency room.
this means they pay no property taxes.
this hospital owns 36 percent of the land in the town.
every doctors office is owned by the hospital so all of this land generates no revenue for the local town.
of course the hospital gets the streets plowed and fire/police for nothing.
i get to pay for their missing taxes.
the true solution to the poor widow problem is to expand the property tax rebate program based on income.
if you need to raise the sales tax if needed then fine.
it is a simple and easy way to fix the problem without upending the whole established system.
the property tax removal folks are just shilling for the corporate world and do not give a rat's ass about a senior who could use some help keeping their house going on a fixed income.
Many of us believe in private property, in the principle that we actually own our property, but in effect, the school teachers union owns our property and we pay them to live in it. We pay the maintenance, we pay for the improvements, for which they most likely will raise our rent.
It discriminates against those that own property, why should just those that own property pay for the schools.
It has no relation to our ability to pay.
They love property taxes, it has the leverage to allow them to satisfy their spending and building desires. Many that are unrelated to education, like astro turf and new stadiums. Schools should be out of sports and be replaced with athletic associations, just like little league. Face it, little johnnies chances to play in the nfl are slim.
You may have 5 adult wage earners living in one resident and then a 80 year old widow in her residence. How is this fair.
eliminate property taxes, replace with a wage tax and a per capita tax on those 21-70
Tie raises to teachers to the increase in receipts of the earned income tax. We actually went near ten years without an increase in the receipts, but the teachers received 2 to 4% every year, Making the plight of the residents worse.
A real administrator has to make due with what they have, not just dip into the citizens pocket every time they think they need, or are overcome with envy of the neighboring school districts.
5.34
from sb76
"Each year thereafter, districts would receive their reimbursement from the State Treasury on a quarterly basis with a cost of living adjustment.
A portion of the school property tax would remain only to pay off debt service that is on the books as of December 31, 2016.
Under this proposal, any school district seeking to spend above the allotment from the state would have to ask the voters for their support in a referendum. School districts may locally increase the PIT or Earned Income Tax if approved by the voters in that district."
so the State gets to tell you how much the local school gets.
so if you think the local school gets shafted you get to go to Harrisburg to complain.
those State legislators now get to determine the funding levels for your school.
if your legislator has seniority or power then you are fine.if not the kids lose.
you still have property taxes to pay of the debt.
the State will then starve the school districts while using the extra tax money elsewhere.
leaving the locals to plead for funds by referendum.
which would end up with more schools falling apart and short changing the students.
as to a football stadium some examples
https://sportsday.dallasnews.com/high-school/high-schools/2017/07/19/timeline-high-school-football-stadium-arms-race-went-15-60-million-costs
seems some towns really like football.
5.40
"It discriminates against those that own property, why should just those that own property pay for the schools."
anyone who rents is paying the property tax thru their rent.
if you want to have a progressive income tax within the State then fine.
but remember that the tax only applies to income.
at the local level there are too many exemtions from earned income-- dividend income(from stocks) does not count nor capital gains or social security.
somehow earning a buck by working is different then earning a buck from the inherited stock you got from grampa.
be prepared to listen to the whining of the inherited wealth crowd about how they are being oppressed.
from the hr1776 analysis
"The elimination of property taxes increases the pre-tax profit of business entities that remit property tax."
"The elimination of property taxes would significantly reduce the property tax share and would clearly increase the attractiveness of the Commonwealth for business location and expansion."
translated -- we want to remove taxes on businesses.
the myth that they care about the poor widow is just that a myth
The problem isn't the way we tax, it's how much we tax. PA significantly spends beyond it resources for education. We rank in the 20s in per capital income and top five in per student spending. The PSEA is one of the strongest statewide teachers unions in the country. Think about that the next time someone plays the "it's for the children" card. It's time to cut spending and live within our means. No three card Monty taxing scheme is going to get this done.
6.35
in my town the local high school has six football coaches.
they also needed thousands of dollars for new protective equipment after a student broke his neck for the second time.
now where was the guiding wisdom of those coaches after the first time the kid broke his neck?
as to spending who gets the funds?
the Chemistry teacher wants supplies to teach students or the second defensive football coach wants a new golf cart to ride at practice?
the local townsfolk like high school football so the schools are just supplying what the public wants.
that can change if the local people want it to.
is she up for re-election soon? That's what this is about. her and all the others. nothing positive gets done by politicians like her.
Initiate a school voucher program to empower parents where to send their children to school
This is a joke. A legislator holding a round table discussion on taxes? These clowns, [and Ms. Boscola is one of them], can't even write up a state budget; yet alone a new taxing system. This Commonwealth is full of archaic laws and taxing systems because these do nothing politicians are incapable of sitting down with each other and hammer out a fair encompassing taxing system. Look at the gasoline taxes,[highest in the nation], that were supposed to rebuild our very aging and crumbling highways. This money goes to pay State Police who cover overly rich townships like Lower Macungie Township. This legislature can't even impose a fair user fee for these services!
7.20
so you do not mind your tax dollars being used to send a kid to a religious school?
even a Madrasa?
good for you
Bernie, what kind of spirits will be serve at this round table event to sedate the minds of those talking points.
Looks like a PSEA lobbyist or school district superintendent has hijacked this thread. School taxes are too high and its not about turf football stadiums. Special education, mandates, pensions, and healthcare are the big cost drivers.
Eliminate useless administrative positions that do not contribute to educating the children. Then reduce school taxes appropriately.
@6:05,
...."anyone who rents is paying the property tax thru their rent"...
You are partially correct. Landlords pay taxes on income properties. However, anyone living in public housing does not contribute anything in school taxes. Pulbic housing is owned by entities such as the Bethlehem Housing Authority, a government agency. Therefore, all properties are completely tax exempt (local, county, school). The change will have everyone contribute something to education.
7.55
"and its not about turf football stadiums"
i said six coaches but i was wrong.
six coaches and eight other specialists.
and the school spent
"the school board voted 8-0 to bid an additional $1.5 million in renovations to the Alumni Field compound, which is used by the football, field hockey and soccer teams."
on top of
"about $965,000 worth of work was earmarked to renovate the field house and replace lighting and fencing."
so right there is 2.5 million.
not counting the salaries of 14 people.
not to mention the costs for upkeep and maintenance.
a million here and a million there and pretty soon you are spending some serious money for high school football
8.03
"anyone living in public housing does not contribute anything in school taxes"
so your saying poor people are the cause of high property taxes?
compare the taxes that people in public housing would pay vs the corporate giveaways and it would seem the corporate folks are getting a better deal.
you forgot to mention that churches are exempt as well.
so should they pay for the land they own in the form of property taxes?
should they pay into the system?
i would be willing to bet there is more acreage in churches then in public housing.
"What’s more, all 50 states and the District of Columbia give them a pass on property taxes too"
https://www.forbes.com/sites/robertwood/2015/09/22/lets-tax-churches/
compare the taxes that people in public housing would pay vs the corporate giveaways and it would seem the corporate folks are getting a better deal.
Corporations contribute to our economy by producing goods and employing people. They borrow money from lenders and consume raw materials and other products. Incentives granted towards those who support our economy are paid back easily.
Anything not directly academic in school must be funded by the participants. Teachers must contribute to their health care like the rest of the country does. We cannot continue hemorrhaging money.
The problem with this concept is that pretty much everyone's research on the topic is outdated. The folks who support the elimination of the property tax use data from the IFO that's several years old and their calculator asks for 2012 data. The report cited in the blog is from 2009. There isn't any current data and analysis on how the elimination of the property tax would affect the current economy and current demographics in the state.
Another problem is that the analysis of what to do has always focused on the 100% elimination of the tax only. No hybrid mix of some property tax/some sales tax, no sliding scale property tax based on household income (similar to how we pay federal income taxes), etc. or reducing the number of things schools can use tax revenue to fund. For example, the dollars go farther if schools can't fund athletic programs out of them.
The fundamental issue is that Pennsylvania has too many fixed income taxpayers on opposite ends of the spectrum that have a difficult time paying any taxes and a paralyzed legislature in Harrisburg that refuses to make difficult decisions when it comes to pensions.
A single family home converted into a 2-family unit homes does NOT pay twice the property tax as it did before conversion.
An apartment building of 12 (1000 sq.ft.) dwellings does NOT pay 12 times the school tax of a single (1000 sq. ft.) dwelling unit.
Why not?
8.46
"Corporations contribute to our economy by producing goods and employing people. They borrow money from lenders and consume raw materials and other products. Incentives granted towards those who support our economy are paid back easily."
i employ people when i hire them for various things,i borrow money from lenders and i consume the finished products.
incentives are paid back easily?
where was my incentive to move into the town?
where was the township telling me i should get a free pass on property taxes?
as romney said "corporations are people"
so why do i NOT get the same benefits as a corporation/person?
the snowplow clears the road in front of that corporation just like my street.
the difference is that i get to pay the corporate tab as well as mine
8.52, forget hybrid bull shit, they are always trying to add new taxes and lower property taxes, Then raise them both. the property tax is a remnant of an agrarian society that has not existed for 60 years or more.
The burden needs to be spread out across society not just focus on property owners. Schools and teachers need to be compensated in relation to the private sector.
and then there are pensions, only in government can people retire at their full highest wage after 40 years service. at 75% after 30 years. So a teacher can retire at 52 with 75% of their full salary. No one, but no one who is paying these taxes gets that. But they say they are professionals and deserve these elitist benefits paid for by hard working citizens who will need to eat cat food to keep them happy.
8.52
" teachers need to be compensated in relation to the private sector."
in my school district aside from football coaches (they get more?) the avg teacher makes 102 thousand a yr(and pension).avg years teaching is 26 years.
70 percent have masters degrees and about 15 percent have doctorates.
so if i worked for a major corporation say as an engineer with a doctorate and thirty years time or management would i be getting 100k a yr with good benefits and pension?
probably would.
" The report cited in the blog is from 2009. There isn't any current data and analysis on how the elimination of the property tax would affect the current economy and current demographics in the state."
I was unable to find more recent data, but it might be out there.
"Looks like a PSEA lobbyist or school district superintendent has hijacked this thread."
As opposed the alt right types who try to hijack many of my other threads.
"the myth that they care about the poor widow is just that a myth"
Unfortunately, no myth. I see the sheriff and tax sales. Poor widows and the elderly are often dispossessed. I think in many instances, they have dementia. I would support a reform that eliminates homeowners who have reached a certain age.
"We rank in the 20s in per capital income and top five in per student spending."
And this is a bad thing? Our most valued resource is our children.I would want them to have the best education possible.
9.48
when i said caring about the poor widow is a myth i meant the reasoning for the elimination of the property taxes.
the property tax removal has been an ALEC suggestion to legislators for some time.
the primary aim is to remove property taxes for business.
the suffering of seniors on a fixed income is not the main priority of those folks.
the measure of a society is how they treat folks in need.
getting funding to be able to rebate property taxes for the elderly on fixed income is something worthwhile.
i can agree to pay a higher income tax to do that.
making sure walmart pays no property taxes is not worthwhile.
Bernie, you are correct this is NOT tax reform, it is simply a shifting of burden.
"Don't tax me, don't tax thee, tax the man behind the tree". (Attributed to Russell Long, US Senator from Louisiana 1948-1987, but variants found in print back in the 1930's already)
Taxation IS a necessary evil. There are three broad categories: (1) sales/consumption; (2) income; and (3) assets/property. Logically a balance among the three is more desirable in the interests of "fairness". The property tax is NOT perfect; but it is the most difficult to "cheat" and it is the lowest cost to administer.
However, this proposal is NOT a good idea. It does NOT eliminate the property tax and the necessary administrative assessment costs remain for Counties and municipal government as well as the remainder school taxes for debt service etc.
There is NO guarantee that once raising income and sales taxes to keep the proposal "revenue neutral"; that in the coming years will likely be "re-engaged".
At the end of the day, as various commenters have said, it fails to address the real problem which is ever-spiraling costs of public education in Pennsylvania. It is not necessary to pick on any one reason, we all have our favorites, but the real issue is bringing COSTS down--NOT merely shifting burden, which is especially popular among seniors who have become a popular voting block to curry favor with.
Let's not forget that the state has failed to properly fund schools and has lost a case in the Pa Supreme Court over this issue.
I thought schools were funded by local school taxes, not the commonwealth ?
Schools are funded by both local school district taxes and state/federal money. No matter where the money comes from or how much money it is, school districts spend 75-80% (approximately) on salaries and benefits, including administration, and only about 5% goes into the actual "classroom". That's budget wise. The amount of money is not the problem. How the money is spent is the real problem. Unless and until that issue is addressed, no proposal will work. There is never anything, including this issue, where the solution would be "fair", or "equitable" to everyone. "Fair" and "equitable" are a matter of perspective. I would question the nonprofit status of institutions such as LVHN and SLUHN. There is a lot of land involved, which is not taxed because of this status.
852...lets be honest, all degrees are not equal. A degree in sciece ed only requires level 200 courses in math and science. A BS requires 300 and 400 level courses in math and science. In private sector, one has to take on more responsibility/performance to justify pay increase or you price yourself out of work. Most private sector employees are at will employees. Unlike many of the boomers, getting early outs there is no pension or contracts.
If we are going to make public sector pay equal to private, what about making private sector benefits and retirements equal to public sector? I would like 2.5 months off in the summer and snow days and end the work day at 3:30.
Sadly, people in their 50's getting early outs and younger generation told they have to work until their 70s. Our pay, our benefits, our retirements are minimized to pay for the benefits of those receiving golden parachutes. The more I see the pay and benefits gap, the more I think Universal medical has some merits. All pay...all benefit.
Then there is the whole other discussion of 20 year and out and double dipping.
Jeff, the money spent on the salaries and benefits paid to teachers certainly goes into the classroom. I have no problem with eliminating a lot of the administrative overhead, which does seem very top heavy at most school districts I have seen. But I would never begrudge a good wage to a person who is entrusted with the education of our children.
Would you knowingly give to a charity that had 75 percent administrative costs? I'm not against paying for great or good teachers ,I agree with Bernie - too many admin and too much on stuff that is waist. Bus costs are not streamlined and redundant issues . So ,restriction of cash flow restricts waist /costs as I see it. Here EASD is in my opion operating with CONTEMPT to the tax payers.
""We rank in the 20s in per capital income and top five in per student spending."
And this is a bad thing? Our most valued resource is our children.I would want them to have the best education possible. "
Can't there be some middle ground? If all that was money was delivering a better product, I might agree. But that hasn't happened. We don't have a revenue problem. We have a spending problem.
Than there is the all mighty LVHN that just so happens to fall in the category of tax exempt.
The salaries are not the problem, it is the pension system which is bankrupt. schools districts this year pay in over 32% of salaries into the pension. show me a 401 k or any pension that the employer pays 32%.
Raise the Sales Tax.
EVERYONE pays the Sales Tax (eventually). Rich people spend more, so they pay more. That's what this is about, right?
Not quite. But I will wait for the discussion before making up
My mind.
Another useless meeting by a pretty much useless office holder.
2.49
and in the past the State chose not to pay into the teacher pension system.
they sold the idea of the constant great returns that wall street was providing.
no consideration was given to a market crash.
somehow that error means the teachers get screwed?
The teachers got screwed? Are you kidding, the taxpayers are getting screwed. HOw are the teachers getting screwed?
My daughter has been a teacher for about 12 years. I spent about 10 years as sort of a fly on the wall in many faculty lounges and classrooms as a guest of many teachers across the state. I understand the investment of teaching. I have many stories. Teachers garnered my respect for having to deal with difficult, no win situations. And that was the early 1990s! I did not mention teachers in my comments. I do not want to bash teachers as a group. I see your point. None the less, budget wise, school districts spend 75-80% (approximately) on salaries and benefits, including administration, and only about 5% goes into the actual classroom budget. That ratio remains the same.
8:52. What district do YOU LIVE IN?? No LV district has these stats.
Jeff, I don't know how valid your data are, but do know that money spent on salaries and benefits, i.e. compensation, most definitely go into the classroom. It pays the teacher who is in the classroom.
J'excuse I mean 9:40.
In any labor intensive field. private or public, most of the budget goes to pay and benefits. That is like saying most of water is make up of hydrogen and oxygen. Is there a point to that point?
@8:20AM,
a.)There was no inference that poor people are the cause of high taxes. But, I'd rather have 10 people who currently pay nothing, pay, say...$20/year each (just an example) than have my taxes increase by $200 every year while they continue to contribute nothing and weigh even more heavily on the system.
b.)Churches don't have school children using the system funded by taxpayers.
12.12
i would rather have a Church pay for clearing the road of snow with a snowplow just like i get to pay.
and the corporation and the hospital.
all three of those get public services but pay nothing for it.
if 50 percent of the land is exempt from paying taxes who does the major burden fall on?
another thought is if a family has one kid and pays say 20 bucks should a family with four kids pay 80 bucks?
why should i subsidize the duggar(19 and counting) folks?
do people with no kids get a discount?
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