Op-Ed: Voters to Consider Property Tax Relief Measure on November 7

An Op-ed Column by Senator Don White

“Why can’t Pennsylvania eliminate my property taxes?”

That’s a question I frequently hear whenever I talk with folks in communities across the 41st District. It’s one that doesn’t have an easy answer.

For nearly 40 years the legislature has wrestled with tax reform and we have yet to find a solution that provides relief to property owners. I have supported several proposals, but unfortunately the number of legislators backing any of those plans hasn’t reached a majority in both the House and Senate.

The main obstacle to an agreement often revolves around the proposed ways to replace the revenue schools and municipalities would lose if the property tax was eliminated. To put this in perspective, the 500 school districts in Pennsylvania generate nearly $15 billion in property tax revenue.  So if we look to eliminate all school property taxes statewide, that’s how much revenue would need to be found from another source.

The other source?  Most likely income taxes, sales taxes or a combination of both. And how would it be distributed ‘fairly’?   Most likely a statewide formula that would ensure a ‘dollar for dollar’ replacement for the revenue lost by total elimination.

With those basic challenges in mind, it is easy to see why a tax reform plan that may be perfect for Ford City or Homer City may not fit as well in bigger cities — like Pittsburgh or Philadelphia —  and vice versa.

Since a statewide solution continues to be problematic, the General Assembly acted over the past two legislative sessions to give the Commonwealth and local taxing bodies new options to address the issue.

Pennsylvania voters will be asked on November 7 to consider a proposed constitutional amendment expanding Pennsylvania’s existing homestead exclusion.

Currently, the Pennsylvania Constitution allows for the exclusion of up to 50 percent of the median assessed value of an individually owned primary residential property from taxation.  What this means is it is currently unconstitutional to eliminate property taxes on an individual’s homestead/farmstead without also eliminating it on every other taxable parcel in a given municipality, or statewide. 

If approved by the voters on November 7, the amendment increases the allowable exclusion to 100 percent. That approval provides two potential pathways:

1 – The legislature can consider legislation allowing municipal (counties, school districts, townships and boroughs) governments to totally eliminate the homestead/farmstead property tax on a primary residence within their boundaries.

2 – The legislature can explore ways to totally eliminate the homestead/farmstead property tax on a primary residence statewide.  Removing the current constitutional requirement that a broad elimination of property taxes must occur on all properties such as retail and commercial tracts, narrows the scope of revenue needed to exempt properties across the Commonwealth from property taxes. 

The question that will appear 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?

Voters must carefully consider this question and recognize its approval opens new pathways for the potential elimination of property taxes on an individually owned primary residence.  Such elimination continues to be a primary objective for me, and I believe the vast majority of constituents I represent. 

 

 

Contact:          Joe Pittman     jpittman@pasen.gov