You get a vote on property tax issue

At Tuesday’s election, Pennsylvania voters will get a chance to weigh in on whether they want to get rid of property taxes.

Like most things, however, nothing is ever simple. Even if voters like the idea — and we imagine they will — it doesn’t mean that property taxes will be scrapped, at least not right away.

The referendum is only a first step in bringing about such a seismic change. Currently, the state Constitution permits local governments — counties, municipalities and school districts — to exclude up to 50 percent of the median assessed home value from a homeowner’s tax bill. However, the referendum on the ballot will allow voters to decide whether the maximum homestead exclusion could be increased to 100 percent of primary residences. This measure does not apply to businesses or industries.

For example, under the current homestead exclusion, if the average home value in your school district is $100,000, up to $50,000 can be excluded from your tax bill.

If the resolution amending the Constitution is approved, the General Assembly would still have to pass a law to implement the change, and local governments would still be responsible for establishing exclusion amounts for homesteads within each district.

Of course, the $64 million question is: Where do taxing districts get the revenue if the property tax is axed? The most logical answer would be an increase in other taxes such as the local income tax.

Still, proponents of passage of the referendum say it would be a significant step in moving away from property taxes as the premier revenue-producer.

Among those cheering on passage is State Sen. David Argall, R-Schuylkill, who has been the prime mover for elimination of the property tax. His efforts came oh-so-close in 2015, when he originally introduced the measure with strong bipartisan support. It was defeated after Lt. Gov. Mike Stack, who serves as president of the state Senate, broke a tie vote.

Argall is still plugging away trying to muster support for his measure, which would eliminate all property taxes, including businesses and industries.

Argall said he has an open mind about the proposal coming before the voters Tuesday and would consider an amendment to his bill that eliminates the taxes for homesteads only.

Referring to the referendum, Argall was quoted as saying, “It gives us more flexibility. I believe it helps us build additional support for the concept.”

School district officials are not keen about Argall’s bill, because they know that the property tax is a consistent and reliable source of income. Fear of an unknown alternative is a scary prospect, they agree.

Real estate taxes in Pennsylvania are among the highest in the nation. According to the Tax Foundation, homeowners pay an average of 1.46 percent of the value of their home in taxes, which ranks the state as 10th nationwide.

Not surprisingly, New Jersey has the highest rate, with homeowners in the Garden State paying 2.44 percent of their home’s value.

When you go to the polls Tuesday, your choice on the question is “yes” or “no.” Here is the text of the question that you will find in front of you: “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?”

The bill that put the referendum on the ballot was sponsored by state Rep. David Maloney, R-Berks, who said he has been deluged about complaints about the property tax, especially from senior citizens who are retired living on fixed incomes.

The property tax has been around since Colonial times, but criticism of it as a main funding source goes back to the early part of the 20th century. A leading critic in the early 1900s called it “one of the worst taxes ever used by a civilized nation.”

By Bruce Frassinelli | tneditor@tnonline.com