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3/02/2017 6:06 am  #1

Why we need to abolish school property taxes (column)

The battle continues!

Why we need to abolish school property taxes (column)

If there’s one thing that gets Pennsylvania’s homeowners fired up, it’s school property taxes. I heard it loud and clear from thousands of voters as I campaigned for state representative last year. Only one person was “OK with the current system.” No wonder – he has three kids in school and pays $3,000 in school taxes to cover nearly $50,000 worth of educational services each year.

Thirteen years ago, the Commonwealth Caucus introduced legislation to implement the Plan for Pennsylvania’s Future. This bipartisan, pro-growth plan would completely eliminate school property taxes (then $6 billion) and other local nuisance taxes, while creating a stable funding system for public education through a lower, but broadened, 5 percent sales and use tax (SUT).By the spring of 2017, the school tax burden has ballooned to $14 billion.

To replace school property taxes, pending legislation (SB76) now requires increasing the Personal Income Tax (from 3.07 percent to 4.95 percent) and broadening and increasing the Sales and Use Tax (from 6 percent to 7 percent), exposing the limitations of Act 1 to contain costs and the failure of the lottery to provide meaningful relief to homeowners. Even so, thanks to the tireless work of the Pennsylvania Coalition of Taxpayer Associations and the Pennsylvania Taxpayer Cyber Coalition, poll after poll shows overwhelming support by taxpayers for SB76.Apparently fearing its passage, however, two professional associations, PASBO (the Pennsylvania Association of School Business Officials) and PSBA (the Pennsylvania School Boards Association) have mounted a coordinated effort, funded by taxpayers, to kill SB76 before it gets a hearing in the Senate.

They’ve even sent representatives around the state to “educate” school boards and the public about the dangers posed by SB76 to taxpayers, school directors and the future of public education.To add a bit of balance, I’d like to discuss some of the problems with the current system.First, Article 3, Section 14 of the Pennsylvania Constitution, says the General Assembly (not the local school district) shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the commonwealth. Evidence of the state’s abrogation of its responsibility is the upward spiral in costs and taxes as academic performance stagnates.Second, since Act 1 went into effect in 2007, school property taxes here in York County have increased an average of 31 percent (from 22 percent in Dallastown to 41 percent in West York).

Inflation was 19 percent. This year’s base index is 2.5 percent, outstripping inflation again, and exceptions to cover pension contributions are also on the table.Third, the underlying assessment system is so distorted it’s almost impossible to explain, let alone implement. I looked at assessments and taxes for York Suburban’s school directors and superintendent to illustrate the situation. On the “winning” side of the ledger is a home whose assessment is $52,000 under a reasonable market-based assessment. The “loser” is a home that sold last July, assessed at more than $113,000 over its market-based assessment. The winner saves $1,560 and the loser pays an extra $3,420 each year.

Guess who’s going to appeal his assessment!Fourth, today, the General Assembly has no incentive to solve the pension problem. Not one of the proposals currently before the legislature will actually decrease pension payments. At best, schools’ contributions will hover between 30 percent and 35 percent of salary for the foreseeable future.Fifth, property taxes dampen home sales. Young families can’t afford to buy houses and homeowners can’t sell at reasonable prices.

In York City, property taxes are nearly as high as the mortgage itself. In the suburbs, tax payments are 30 percent or more of the total monthly payment. On the flip side, potential sellers have lost so much equity over the years that they either stay put or suffer large losses if they do sell.Sixth, school taxes severely undermine the economic competitiveness of the region and the state. Developers and investors demand (and get) generous tax abatements from school boards, producing a smaller tax base and higher tax rates for the rest of us.Right now in York County, median school taxes range from $2,175 in West Shore to $4,000 in Dallastown. With the passage of the SB76, school boards will get funding from the state to make up the difference; the state will finally be forced to create an equitable, sustainable education funding formula that doesn’t penalize or reward our children based on their zip codes; and the state will have to deal directly with the pension crisis it created and other unfunded mandates.

Locally, eliminating school tax will reduce our total tax bill by at least 65 percent, making the greater York area one the most attractive places to live and create jobs in the entire Mid-Atlantic region. No other plan secures our property rights or puts the responsibility for education and pension funding squarely where it belongs – in the General Assembly.

Joel Sears lives in Spring Garden Township.

Last edited by Common Sense (3/02/2017 6:06 am)

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3/03/2017 8:36 am  #2

Re: Why we need to abolish school property taxes (column)

I agree that funding schools solely based on property taxation is no longer a good idea.  The result has been that poor school districts tend to get poorer while wealthier school districts get richer, thus widening the gap in educational opportunities.


3/03/2017 10:25 am  #3

Re: Why we need to abolish school property taxes (column)

I don't see anywhere NEAR the 65% reduction in school taxes that the author claims. The amount needed will basically be the same so it is a matter of WHERE the money comes from. I understand that cities have a lower tax base than suburban districts and they are at a distinct disadvantage. That is a problem with most cities and needs to be addressed. But those thinking that the bill for schools will magically go away, they are dreaming. For those on fixed incomes and depending only on SS, there is also a burden that in addition needs to be addressed. The shifting of costs from one pocket to another will leave some paying less and some paying more. That is the way is has to be. 

I am satisfied with my local taxes and district (Central). They provide a good educational experience for the monies expended. Although I have had no children in school for years, I am happy to support the current system as it has benefited both my children as well as the general property values of the district by offering a good system for prospective parents. 

BTW, the writer of the article lives in a York Country school district that a lot of prospective parents look to when deciding to change districts. Suburban has been at the top of the rankings for as long as I can remember. 

"Do not confuse motion and progress, A rocking horse keeps moving but does not make any progress"

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