How realistic is property taxes reform?

What to look for on Smart Talk Monday, June 12, 2017:

Efforts to bring property tax relief to homeowners or eliminate property taxes in Pennsylvania have gained momentum in recent years.  The property tax is perhaps the state’s most hated tax.  However, there are challenges to just making it go away.

The property tax is the biggest local source of income for schools.  Pennsylvania’s 500 school districts bring in about $13 billion a year from property taxes.  Obviously, that money would have to be made up somewhere and therein lies the biggest challenge.  Proposals have been made to replace property taxes with higher income and sales taxes and tax more items that aren’t subject to sales taxes now.

No matter how the revenue is replaced, some taxpayers would pay more and others less meaning there are winners and losers.

School districts aren’t thrilled with eliminating property taxes because they’re reliable and aren’t necessarily impacted by ups and downs in the economy.

On Monday’s Smart Talk, we get a comprehensive report on the latest property tax reform proposals.  Kevin McCorry, a Keystone Crossroads reporter stationed at WHYY in Philadelphia joins us.

Also, Ron Boltz of the anti-property tax group Pennsylvania Liberty Alliance weighs in. 

emails

– Before we can fix our property tax problems, we need to fix our legislature. The problem is that our current system of redistricting creates extreme right and left wing legislators who won’t compromise. We need redistricting reform like that proposed by fairdistrictspa.com                                                                                   – Jim

– How about a “Land Tax” instead? More objective! Allows an owner to improve a property without necessarily an increased tax!            – Paul, Fayetteville

– If schools would prioritize academics and place less emphasis on athletics, could they not operate effectively on less of property owners’ tax money?

The school district I support with my tax dollars, seems to not be satisfied with adequate sports facilities, but think it necessary to have expensive facilities that far exceed that which is needed for high school students to meet physical education requisites.         – Donna, Newville

– Taxing Real Property for any reason is UNCONSTITUTIONAL.  The government gets away with it because of the ignorance and apathy of the Tax Paying Citizen. 

The other issue with the Property Taxes is the Compounding of  USURiOUS 10% INTEREST — TWICE thru the payment period…Initial….Face…Final…ILLEGAL !!

PA Constitution PROHIBITS USURY…which is any interest over and above 6% ????   – Gerald

– As a tax preparer, I realize many people are unfamiliar with the uneven nature of who is taxed in PA.

It is important to realize that people over 62 make up over 18% of the population in PA, and retired people in PA are not required to pay tax on most of their income, including social security, pensions, IRA’s, 401K’s and even a large part of their dividend and interest income.  They also pay no local taxes, which are based on earned income.  That means that the only taxes they pay for state and local services are real estate taxes and sales taxes.

If we eliminate the real estate tax, we need to find a way to include the income of retired people, many of whom have significantly more wealth than working people, in the tax base.

Also, retired people complain they have no children in school, but a major expense in school budgets is frequently pension costs driven by the time that retired people and their children were in school during the baby boom.                                                         – Mary 

– I know there was always childless couples, individuals and seniors who did not use the school system when I was going through school and that helped pay for my education….BUT…things have become SO complex and expensive across the board that I think with the current system there should be a permanent cap on an individul’s prop tax at age 62.  I’m an advocate of public schools but to hear about people who are losing their homes in order to fund the schools is absolutely ridiculous!       – Susan, Lancaster

– I’m really tired of the I have no kids so I shouldn’t pay property taxes argument. It’s call a social contract. I owned a house at 28 and didn’t have kids till I was 34.

My difficulty with HB76 is that from my reading of the bill, the funding inequity would remain.

Our property taxes are $400 a month – school, city, and county. Honestly that seems like a deal given all the services provided. I’m really unclear as to what folks think is fair? I get that if your annual income $10,000 this kind of expenditure is difficult. How many individuals in PA have an income that doesn’t support their ability to pay for their property taxes? I imagine it is mostly our seniors? When one buys a house one is aware that there are property taxes, and they don’t go away once your mortgage is paid off. Isn’t that called planning and, ahem, “taking responsibility”.                                                                – Amy, Lancaster

– I’d like to comment about the folks who say they don’t benefit from school taxes because they do not have children. Most people have attended school and at that time they did not pay school taxes.  Other people who either had children or did not children pay the school taxes at that time. So almost all citizens benefit from the payment of school taxes. 

Further all citizens benefit from having educated children who become productive citizens and performed vital services including our doctors and nurses,  our engineers and scientists  and productive citizens contributing to society. We know that those Who do not succeed and education are more likely to become criminals. And we don’t see a lot of people complaining about paying their state taxes for prisons and correctional  facilities. 

There are many taxes state federal and local that benefit particular people and groups, but overall each of us benefits in someway from most taxes.                 – Debby

– The passage of the school property tax bill goes a long way at capping the current inequities that exist because there is a property tax.  It is the property tax that exacerbated these inequities and will continue to make those inequities greater in the future if we continue on the path we are on.     – Jim

– My husband & I have a lovely home in Northumberland County – our property taxes are between $4-5K. We don’t have children. Now as the youngest of five children myself, I am fine with subsidizing the education of current and future generations; however, I do feel that our tax system has to be improved. I worry about shifting the burden to personal or sales tax where lower income or retired individuals will be unfairly targeted. I would support diversifying public education funding beyond property tax to include personal income if PA changes our constitution to allow for progressive taxation. The wealthy should pay a higher rate than the working class.                        – Nicole, Hernodon

– As a landlord, I guarantee you that renters are paying real estate taxes.  We pass them along.                                                                                         – Mary

– The idea that renters aren’t paying property tax is a fallacy. That cost is passed on to renters by the landlord. We all pay for the common good of public education.

However, lifting the property tax without evenly distributing education funding would force our poorest families to pay the grossly inequitable cost of educating our wealthiest students.    – Andrew

– Consolidating school districts to the county level would provide significant economies of scale and move the state to a more equitable distribution of resources.  We own 3 properties in Lancaster although our primary residence is still in Virginia where we own a home that equals the value of all three properties in PA.  Schools are run by the county and our property taxes are roughly $4200.00 a year.  We pay in excess of $13,000.00 for the three properties in PA.  Arguments for local control seem to perpetuate a system of inequitable distribution of resources.            – Martha