Proven: Property Taxes are Inherently Wrong!

Sometime when I’m out talking about school property tax elimination there are those who point out that all taxes a really a tax on our property, whether that be income or real estate.

There is a point to what they are saying but I think those who cling to this mentality as a tool to oppose school property tax elimination are also clinging to a delusional reality.  The delusional reality is not that all taxes are a tax on our property, but the delusional reality rests in that by saying so they think that somehow the taxes on our homes is the same as the tax on our income.  It isn’t and let me explain why.

Let’s start from the assumption that they are correct (and I do believe that they are); that all taxes are actually taxes on our property (not in the terms of real estate but in the terms of property as all things that rightfully belong to us).

If this is true then we have to ask the question “should all those taxes on the things belonging to us demonstrate some level of equality?”.

Look at the PIT and the Sales Tax.  The PIT tax is a tax on new income only.  The Sales Tax is a tax on newly purchased items.  Both are equally applied to all residents (3.07% of your income and 6% sales tax on items we purchase).  The only place this is not true is Philadelphia and Pittsburgh when it comes to the sales tax but that has little to do with the state.  They did that to themselves.

Unlike the tax on our homes, both of those taxes are framed around an ability to pay.

Now compare those taxes to the property taxes.  With 67 counties, 500 school districts and 2561 municipalities we have a potential for 3,128 different levels of taxation.

Let that sink in for a minute.  We have seen little to nothing as far as increases in our PIT and SUT taxes in the last 20 years.  The property tax, however, has gone up 149%.  The number of tax increases on Pennsylvanians to make that happen is almost unfathomable.  If only 10% of our schools, municipalities and counties raised our taxes each year that would mean, over the span of 20 years,  a total of 6,260 tax increases.

Perhaps you can explain to me again why you fear that if we centralized the funding of education through a state PIT and SUT tax we would see increases in those taxes annually but you have no problem with the thousands of tax increases at the local level.

The revenue generated through the PIT and SUT taxes grow naturally with the economy and they do so without the need to increase those taxes.  That isn’t true when it comes to the property tax.  The revenue can only increase through raising the tax.  It will not increase naturally on its own.

Where the PIT and SUT taxes are based on actual values determined in a fair market, the taxed value on our homes is not.  Home value is achieved by an arbitrary but allegedly educated guess on home values through an assessment that has continually been proven to fail at its objective of making the property “more fair” as though such a thing were even remotely possible.

In a fluctuating market your wages may vary but the tax you pay will also fluctuate with those changes.  In a down economic time, you may lose your job and, as a result will not be paying a PIT tax until you are, once again, employed.  In that same down economic time, your spending will likely decrease so the revenue generated from the SUT will drop.  This a natural effect in a market based economy and system of taxation.  This reflects ability to pay.  You don’t continually pay an SUT tax simply because you own something, only when you buy something new.

Even in those down economic times, revenue generated through the PIT and SUT at the state level actually increased without tax increases.  During those same times the revenue generated from property taxes also increased but only because the tax rates increased as well.  SO while the majority of the state was struggling through a recession, their taxes on the very homes they lived in increased to meet the demands of the tax collectors.

The housing market is reflected in that same market.  In down economic times, home values also drop but the assessed value of your property will not reflect the economic downturn because it is artificial; not natural.  In fact house values fluctuate constantly.  That fluctuation is caused by several factors.  The assessed value on your home will not fluctuate unless there is a reassessment countywide or you become the victim of some school districts decision to spot reassess you.  In the majority of cases your assessed value will go up.

One reason for the fluctuation of house value is market demand.  Certain aspects of your home will make it more appealing to sell depending on the desires of those seeking to purchase a new home.  That is natural.  The real fair market value of a home is determined by an agreed upon price established by a willing buyer and a willing seller.

By contrast there is nothing natural about the assessed value of your home.  It’s artificially generated using formulas that don’t really work.  If they did we wouldn’t see the number of successful appeals that follow every countywide reassessment.

The property tax will also impact the value of a home.  Property taxes will actually take away from home value.  It will lower the value of your home and every tax increase adds to that drop in value to you as a homeowner.  As your home value drops, the assessed value does not drop to adjust for the impact of the millage increase.  It stays the same even though the real value of your home may have just decreased because of the tax increase.

Again, this is because it does not follow the natural process of the economic ebb and flow.  The arbitrarily determined value of your home determines the tax you will pay and that arbitrarily determined value will not naturally ebb and flow with the economy.

Show me any other tax that works like that.

Show me any other tax that requires something like regular assessments and a state tax equalization board, both of which require additional revenue to make work (even though they don’t actually work when it comes to doing what they were created to do).

If we were to judge real estate taxes simply by the standard of other forms of taxation we come to the same conclusions we always reach when we talk about the property tax in terms of real estate.  Its simply wrong.

Oddly enough, the majority of our opponents admit that.  When pressed, our opponents will tell us that they know the property tax is unfair.  They will admit that it creates inequities.  They will agree to the inherent flaws of the property tax but they still defend it.

There are those that go so far as to say that something should be done, but, when you press them for their solution, they have nothing.  What usually follows is then a defense of the property tax that they just admitted was unjust, inequitable and unfair. Isn’t that the epitome of hypocrisy.

No matter how it’s spun the property tax on our real estate remains the most regressive and most unfair tax in existence.  It begins by using a false assumption of wealth based on an even greater falsehood of assessed property value.

The fact that we do assessments begins with stating that the property tax, at the time of need for reassessment, has created inequities in taxation.

Let that sink in.  Reassessment happen because, they admit, the property tax has created inequities.  We have reassessments because they know and admit that the property tax system doesn’t really work when it comes to the matter of fair or equal taxation as required by our Commonwealth Constitution.

It then sets out to do what it never really accomplishes because it never really makes it fair.  We will spend millions in these reassessments adding to the cost of the property tax and yet it never accomplishes what it sets out to accomplish.  It is just one of the many flawed aspects of government interference that have arisen because we have a property tax.

The property tax on our homes assumes that our homes actually generate the income necessary to pay the tax.  It doesn’t.  While, over time, our homes do generate equity, that equity never translates into money to pay the taxes. We don’t really see that equity unless we refinance or we sell that home and then there’s already another tax in place to nail that equity.

At the same time, some of that equity is actually consumed by property tax increases making our homes less valuable than they would be without it.  When the Independent Fiscal Office studied this issue they stated that the elimination of the property tax would actually add, on average, about 10% to home values when the homeowners actually wanted to sell their homes.

Would we sit idly by if, in their attempts to fill the budget gap, state legislators told us they were going to establish a state job assessment policy where the taxes on our income would no longer be based on our actual wages but on what some firm determined we should be earning.  Let’s say you are earning $40,000 and are currently paying $1,228 in PIT taxes but this assessment system determined you should be earning $45,000 in that job so you taxes will now be based on the assessed value and not what you actually earn…in this case an additional $153.5?

Would we sit idly by if the same government for the same reason would tell us that from this point forward the sales tax will not be based on the actual selling price of the item we purchased but determined by some assessment firm?  You want to purchase a new big screen TV at Christmas that’s on sale for $100 less than the suggested retail price.  The normal selling price of that TV is $600 but you can now but it for $500 paying and additional 30 in taxes.  Then when you get to the register you are told that the $500 Tv has actually been determined to be worth $800 and your sales tax, under the new assessment policy would not be $30 but $48.  Now imagine that happening for every sales taxable item you purchase over the course of a year and think how much more ti would cost you.  Would we think this was fair?

And yet this is exactly what is happening year after year with our homes!

Over the decades, Government has admitted that the property tax is inherently flawed and egregious.  If they hadn’t we wouldn’t have seen so many flawed attempts to fix it.  Every solution tried so far to fix the problem has failed.

The State Tax Equalization Board was created in 1947 to supposedly make the property tax fair.  It failed.  In fact, in 2008 a report on the Board was a scathing indictment of flawed formulas, inaccurate reporting and practices.

At the time Auditor General Jack Wagner announced his office found so many errors in the State Tax Equalization Board’s (STEB) revised property values for 2008 that it brought subsequent reports and the impact on government aid and property taxes into question.

Mr. Wagner said the errors’ impacting local school property taxes, which represent 60 to 70 percent of a Pennsylvanian’s tax load, were so bad that they would be impossible to calculate.

“What STEB influences is the school subsidy by state government to local school districts,” said Mr. Wagner. “The simple fact remains it should be right, it should be accurate, and we have no sense of confidence it is today.”

Mr. Wagner said unless the STEB, which has an annual operating budget of $1 million and a three-member board, corrects the information in the 2008 and 2009 reports, Gov. Tom Corbett should consider abolishing it and either contracting the market value assessment out to a private firm or integrating the agency into the state Department of Revenue.

Did they?  No they didn’t.

Apparently the solution to that was simply to change the name of the board and making the website less transparent.  The whole concept is unfair because it uses averages to determine a common level ratio.  Those above the average will benefit, those below it pay more.

Realizing that property taxation was outpacing many taxpayers ability to pay, Act 1 was passed to place limitations on future tax increases.  It was supposed to restore some level of local control by saying that when a school district wished to exceed the Act 1 limit it had to go before voter referendum.   When it originated it contained 10 exemptions the school districts could use to avoid voter referendum and they certainly did make use of them.  It was a failure.   School districts applied using one of the 10 exemptions and in every case those exemptions were approved in rubber stamp format through the Department of Education.

Did they fix that?

Well, the fix, we were told, was to eliminate 7 of the exemptions.

It also failed.  Roughly 1/3 of the school district annually still apply for and are rubber stamped in their approval using the three exemptions.  Voters never get to decide because the school district never has to go to them for approval.

We’re talking about 160 to 200 school districts a year that do not have to turn to voter referendum because of the exemption.  Its not always the same school districts so over a period of time the majority of the school districts can apply for and receive the exemption from voter referendum.

Over and over again the current auditor general has found questionable uses of tax payer moneys in some of our school districts.  He makes recommendations but that’s all they are.  Current law doesn’t require that those recommendations are followed.  They can simply choose to ignore those recommendations.

An attempt was made to fix that this year in a bill introduced by Frank Ryan of the 101st District.  Once in the Senate, the bill was amended so as to render it useless and now it will return to the House.  Ryan has stated that, as a result of the amendments he will have to now vote against his own bill.

There was also the gambling fix where we told that we could see major reductions in our property taxes even to the point of elimination if we allowed legalized gambling into the Commonwealth.  We were told we would see near elimination but that couldn’t have been further from the truth. The meager crumbs that fell from that table in the form of a reduction that was quickly eaten away by later real estate tax increases.

We’ve seen programs like Keystone Opportunity Zones where time limited exemptions are made to businesses. This was also a flawed concept no matter how well intended.

This gives an unfair advantage to the business receiving the exemption for a limited time period over other business in the area.  Not only have that, but the taxes on everybody else had to increase to provide for the exemption to that business including increasing taxes on other competing business in the area. Can anyone really call that type of tax program fair.

The fact that we implemented Keystone Opportunity Zones was a clear admission to the fact that we have a serious problem with property taxation.

Do they work?

For every success story of the Keystone Opportunity Zone, there are a hundred stories of businesses that establish through the Keystone Opportunity Zone and once the exemption expires, they close the doors and move elsewhere.  It fails because, ultimately, the temporary exemption no longer exists and the business simply can’t afford to stay open and pay the taxes.

The thing is that we already know that exempting those businesses from the property tax actually works in attracting new business to our communities.  It stops working when the exemption expired.  What makes it fail?  The Property Tax.

Eliminating the property tax would see those businesses locating in Pennsylvania, creating jobs in our communities, which generate both PIT and SUT taxes along with other local taxes. They would then remain because the fear of the property tax returning is gone.

Eliminating the property tax for the same competing business would also remove the unfair advantage we see through the current system of Keystone Opportunity Zones since all businesses would be exempt.  It eliminates the need for the inequity the Keystone Opportunity creates while also eliminating to need to pass the cost for property tax exemption on to homeowners and other businesses.  It then generates fair market competition between the businesses.

Of course if you are large and powerful business you may not want competition so protecting the status quo, which forces many of the smaller businesses to look elsewhere, would benefit them.

At the root of the Keystone Opportunity Zones we also see a flawed approach to solving problems in Pennsylvania.  The cost of implementing a Keystone Opportunity is not measured.  We really don’t know ho much it costs to implement because we don’t keep track of those statistics so when a supporter of the Keystone Opportunity Zones tell us how much revenue these businesses generated, they leave out a very important aspect…how much it cost.

If 1 million is generated from a Keystone Opportunity we are to applaud and say, “job well done.” but in many cases where independent agents have studied the cost, we aren’t actually making money, we’re losing it because they cost more to implement and maintain than they produce.  If property taxes were eliminated there would be no cost in making the entire state a Keystone Opportunity Zone because there would be no government agency involved in the process and no cost would be passed on to other taxpayers.

It preserves the intent of the Keystone Opportunity Zone without the cost to homeowners and other businesses.  It does so in a way that is fair and equitable and no longer allows the state or local governments to manipulate power in picking winners and losers which might contribute to the reasons for some of the opposition as well.

As property taxation has become an unsustainable problem for many homeowners one of the solutions being floated it that we can ease the burden of the property tax (that doesn’t mean fix the inequities which can’t be fixed-it just means make the tax cheaper so we ignore the moral dilemma of the tax for a little longer) by taxing non-profits.

In order to be exempt from property taxation a non-profit must provide  a service to our community.  If we begin to tax the property of these non-profits we are going to limit their resources in the services they provide.

Supporters of taxing non-profits seem to especially like to point to taxing churches and they always roll out mega churches when they do so.   It assumes that the mega church in the local area is rolling in funding functioning off the same false premise that property can measure wealth.

Besides for every large church, there are a hundred smaller churches, each struggling to pay their bills.  You see as our tax burden increases our ability to contribute to charity is limited.  The rising property taxes are already negatively hurting smaller churches and in a way, it’s the property tax which becomes a major contributing factor in giving falling off so they are already paying a price, though not directly.

I get that there are non-profits out there taking advantage of the tax environment.  It’s not all of them though and its not even, in my observation, the majority of them.

Here again, even if you start taxing the property of non-profits, you haven’t fixed the inequity or unfairness of the tax.  It doesn’t fix that which is inherently wrong with the tax to begin with.

All you’ve done is temporary found a new revenue source that may (or may not) actually lower the property taxes for everyone else for a very short period of time.  In very short order any reduction you see will soon disappear as the property taxes continue to increase along their historically proven path.

The simple truth is that you cannot fix the property tax on our homes because it is inherently flawed.  You cannot fix something that was broken at its inception.  No matter how its spun, the property tax is wrong, both ethically and morally wrong.  It is wrong because it’s never actually reflects an honest value of a home resulting in as much as 60% of the homeowners in the state paying more taxes on the estimated assessed value of their homes than their home is actually worth.

Tell me again, what other tax does that.

Imagine going to your doctor and being told that you have a fatal disease.  The doctor then tells you that there’s a cure to the disease to make it go away completely but he’s not interested in that fix so he’s going to try a series of other things that won’t cure the disease but might make it easier to manage.

Would you go to another doctor?

Well that’s what’s happening with the property tax.  Our problem is that we can’t go to another doctor because their isn’t one.  Your tax collector is your tax collector and you do what they say or they take your home from you.  End of story.

When it comes to the school property tax, some have chosen another doctor.  They have issues with the public education system and they move their children out of the public schools into private schools.  It doesn’t matter, the school property tax collectgor still comes knocking on your door.

Let’s translate that.  You go to the store and purchase a new TV.  You pay for the cost of that TV and the taxes associated with it.  Then the tax collector shows up at your door and wants to levy another tax on you for a TV you didn’t purchase simply because they can.   This is the TV they want you to pay taxes on and they have the authority to make you pay the taxes for that TV.  Would their be an outcry?

Of course there would but that’s how the school property tax works and where is the outcry?

The sad thing here is that even defenders of the real estate property tax admit to the flaws.  Deep down they know it is wrong but they defend it primarily because many of them benefit from it in some form or another.  That benefit comes at the cost of many people losing their homes often for reasons totally out of their control; an illness, death, faltering economy where family sustaining jobs are harder to keep and find.  Since the property tax is not rooted in ability to pay and the property tax outpaces the rate of inflation, it’s not really all that difficult of find yourself in a situation where you can no longer afford to keep up with the demands of the tax collector.

Even though your home may be paid in full, the property taxes can outpace your ability to pay resulting in something you are supposed to completely own being stripped from you.  Once stripped from you, the value of your home is irrelevant to the auction block all that matters to the auction block is that property taxes are paid in full.  Your home can be sold out from underneath you for pennies on the dollar to some profiteer who will then turn around and resell your home for a profit.

Homes sold on the sheriff auction block do not have a track record of being sold for the assessed value of the property.  For good reason.  They can’t.  In fact, the majority of homeowners couldn’t sell their homes for the assessed value on their property even if they tried and yet we will be told that the assessed value is fair for purposes of taxation and a just reflection of our home values.

Adding insult to injury, if they resell that home for a lower price than the assessed price, the new buyer can now appeal the taxes on that property based on the selling price and get a lower tax rate on the same home from which you were evicted.  The new owner could be living in the very same home that you were forced to leave and then pay lower taxes than you ever could.  Tell me how that is not wrong!

The whole premise of the property tax is based upon a lie propped up by system that has created programs that fail to do what they are supposed to while costing us millions more in the process.  The lie is that the property tax can somehow be made fair.  It cannot.

Homeowners did not create the current inequities we see in school funding; those in place to oversee and levy the tax created them.  Even though we did not create it, we are seen as being accountable to pay for it through an inherently flawed system of taxation.

The current unfunded debt of the pension system had nothing to do with homeowners.  It isn’t like we had the opportunity to actually vote on it.  We did not create it.  The Public sector through our legislators created it.  Even though we did not create it, we are seen as the ones accountable to pay for it through an inherently flawed system of taxation.

It has been said that insanity is “doing the same thing over and over again and expecting different results”.  That is what our opponents want the rest of us to accept: the insanity of protecting the status quo, to reapply the same fixes that never fix; to maintain the same system that can easily be proven to be inherently wrong.

They can tell us that property taxation provides a stable revenue stream for the tax collector.  They cannot tell you that the property tax creates any sense of stability for the person who has to pay for it.  If they have to leave that out of the equation and they realize the instability it creates for the tax payer than the entire premise of stability is framed around the same lie that props up the property tax.  That somehow it can be fair and equally applied in relation to the requirements of the Commonwealth Constitution which states that (article 8, Section 1) All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax.  They aren’t.  The millage rates may be the same in any territorial district but because the mills are applied to the arbitrarily determined value that doesn’t not honestly reflect actual home value the taxes can’t be made to conform to uniformity.  It’s simply impossible!

They can tell you a lot of things in their attempts to justify the property tax but the one thing they can’t tell you is that it is fair or that it is equitable.  That makes any justification of the property tax the same lie that props up the property tax to begin with.

The property is wrong by every measure.  The property tax can never be made right.  When that happens there is only one justifiable course of action.  The complete and total elimination of the thing that is wrong!  Anything else is just an excuse.

Thomas Jefferson wrote, in our Declaration of Independence that ‘Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

The cause for elimination is neither light nor transient.  While in the past we have been disposed to suffer as long as the property tax was sufferable, for many we are already way past that point in time, for others it is approaching.  It is long past time to end this train of abuses.  It is time to do the right thing because its the right thing to do.

Eliminate the property tax and replace it with a system that is both fair and equitable.

Only one bill actually accomplishes this and that bill is HB/SB 76.

 

 

 

Stack: Politics and Property Taxes

Today Brad Bumstead broke a story in Lancaster Online about an investigation into Lt. Governor Mike Stack’s expenditures at taxpayers expense.  You can read the full article here: Lancaster online

It turn out that, on top of a $162,000 salary; On top of paying for the home he’s living in; On top of providing for his pension and other Cadillac benefits; on top of paying for his transportation. We pay for his groceries including when he entertains lobbyists and other special interests.

Lt. Governor Stack has not been above controversy during his tenure as Lt. Governor.  Gov. Tom Wolf has stripped Stack of his state police security team and drastically cut his mansion staff after allegations of abuse of staff were brought to light through more of Brad Bumstead’s journalistic efforts.

Bumstead also reported that records showed Stack’s office billing taxpayers more than $73 k in almost 2 years, including $15k on orders from Amazon.

It must be a lovely life to get a salary of $162,000 that doesn’t have to go towards transportation, housing, healthcare, pensions groceries and purchases from Amazon.  We even pay for his ability to entertain lobbyists and other special interests who sometimes are working very hard against the best interest of the people in this commonwealth.

As angry as this situation with Stack makes me, I am frustrated when some have defended him citing that previous Lt. Governor’s engaged in the similar activities (except, perhaps, the abuse of staff and state police) as though this somehow justifies all this additional spending.  This type of taxpayer plunder is wrong…it doesn’t matter who is doing it.

I guess Frederic Bastiat, in his essay The Law, was right when he wrote “Slavery, protection, and monopoly find defenders, not only in those who profit by them, but in those who suffer by them.” 

As angry as this makes me, it also know it’s part of a larger problem.  Lt. Governor Stack is little more than a poster boy for a problem that exists in Pennsylvania Government.

The median household income for working families in the commonwealth is a little more than $50,000.  That means that for 1/2 of the Commonwealth working families are earning less than as their entire household income.  Stack individual income is pulling in $162,000 or more than 3 times the household income of 50% of the population of the Commonwealth.  The working family is also paying for their own homes.  They are paying for their own retirements through 401(k) (if they have one at all), paying their own housing, utilities and groceries.  Many of them are seriously struggling with healthcare costs.  On top of all of this Pennsylvania is among the worst states in the nation when it comes to property taxes.

Our legislators are earning more than $80,000, far more than 1/2 of the working families entire household incomes.  While they don’t benefit from the same privileges that Stack has been abusing, they have plenty of perks of their own.  We have a legislative system where free haircuts are provided for legislators, we pay for a meteorologist for weather reports for them because, apparently, local news station weather just isn’t good enough for them.  We have a Per Diem expense account with virtually not accountability checks.

It was reported that some legislators used the Per Diem money to purchase homes in Harrisburg that they rented to other legislators who used their Per Diem’s to pay that rent.

When they are in session they can use Per Diem money to provide for their meals.  They can, and most of them do, participate in the pension system that is unlike anything available to the majority of working families in this Commonwealth.  They can, and the majority of them do, participate in a Cadillac healthcare system that is unlike anything seen in the private sector.

We live in a state that is listed in the top 5 most corrupt state governments based on persons in the government who were actually caught and convicted of political fraud and corruption largely tied to campaign finance violations. We’ve had judges convicted of promoting pay to play legal games. We have a teachers union who bills taxpayers to provide for ghost teachers….paid as teachers from property tax dollars but not teaching. They are doing the work of the unions. That same teacher’s union benefits from a system that forces taxpayers to pay for the collection of their union dues.  That same system protects prevailing wage laws which can add as much as 30% to the cost of new buildings and renovations.

In spite of countless attempts to reform these laws, all to little avail, we just can’t seem to see the expediency from our legislators if working for the taxpayers of this commonwealth as we do when we see the expediency in protecting their own self-interest.  Can anybody remember the middle of the night pay raise?

They didn’t seem to have much trouble finding the time to push through the pensions that have created a $70 billion plus unfunded liability that becomes the financial responsibility of working families in this Commonwealth.

They don’t seem to have any trouble pushing their resolutions through the legislative body to rename roads or designate special days out of the year to recognize everything from mushrooms, to diseases, to just about anything else they can come up with.  If you follow the legislative sessions, you know these are more than commonplace in the process….less known is that each of these things actually carry a cost to the taxpayers of the Commonwealth.  Some of it very little, but some with very hefty price tags.   At a time when the state is looking at trying to fill a $2 billion dollar plus debt hole in their budget, every dollar counts.

As Citizen’s Alliance of Pennsylvania (CAP) recently reported, the revenue package to fund the budget included millions in corporate welfare on to of the million we are already providing.

One item being pushed is more film tax credits.  Not satisfied with a $60 million film tax credit to subsidize Hollywood millionaires, the Senate included a new category of a “Film Production Tax Credit District.” The Districts, up to two of them, must be at least 55 acres, on deteriorated property, contain at least one “qualified” facility and six soundstages…and the list goes on.  The description of the qualifying district to receive this money is so detailed that it appears written to specifically be steered to a designated district.

The revenue bill passed in the Senate and everyone who voted yes has no problem with forcing their unqualified district who will be ineligible to receive any benefit from these earmarks and then to have their constituents send that money to other districts who will.

Let’s turn to Bastiat again “But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.”

We live in a state that, for 35 years, we have fought for the elimination of the school property tax.  As 10,000 people lose their homes each year as a result of an egregious property tax largely because they can’t keep up with the pensions and other demands of those in the public sector, we see every effort by law makers and special interests to interfere and stall any attempts to enforce the protection of homes granted to us in Article 1, Section 1 of the Pennsylvania Constitution.

The most recent effort has been going on for almost 10 years through HB/SB 76.  This isn’t a bill where we are looking to be exempted from taxation or in shirking our responsibility to education funding.

We are simply asking that the property tax, which is not based in any sense of the word on ability to pay, be replace with a more fair and equitable system through a PIT and SUT tax.  We aren’t asking for a free ride.  We just want the funding of education to be based on ability to pay.

What we have seen is a legislative process that has a thousand excuses, few of them based on moral/ethical rights or wrongs, but largely based on protecting the governments power to take away our homes instead of protecting the right to our homes as the Constitution demands.

Oddly enough, as this article started out discussing Lt. Governor Stack, who receives a $162,000 salary and lives high at the taxpayers expense became the tie-breaking vote to kill SB 76 in 2015.

Apparently us paying for his luxuries is perfectly fine and to me, his tie-breaking no vote was the equivalent of Marie Antionette looking at the plight of the French working families and saying “Let Them Eat Cake!”  As long as he can still purchase lump crab meat on the taxpayers dime to entertain his lobbyists and special interest friends, 10,000 people losing their homes is not his concern.  In fact his tie-breaking vote helped assure that every year since 2015, 10,000 more people would continue to lose their homes.

In the past few months we have participated in a series of town halls that have included opposition to the legislation.  These town halls came because of the pressure we placed on legislators to do so because, quite frankly, the majority of them weren’t doing it on their own.

The objective was to bring the legislators out to see the response of the people once these town halls were presented.  Instead of living in their ivory palace shielded away from the voice of the public, they couldn’t possibly know the concerns of the people or the difficulties they face.  After all, when you don’t even have to pay for your own haircut, how could you possible know what it’s like to live in the real world?

We also welcomes the opposition because experience has shown us that their arguments against 76 are little more than misdirection and misrepresentation.  We knew that but the majority of the people in the public don’t.  Those who attend these town halls quickly see through these misdirection and misrepresentation tactics.  They see the complete disconnect between those who administer this egregious tax and the people who have to pay them. In the words of many who have attended and spoke to us afterwards…they see the ARROGANCE!

While it’s not easy to sit through the opposition talking points.  We welcomed it and in every case, no matter how hard our opponents have tried to stack the odds against us, we have come away victorious winning the support of more and more of the public while exposing the deflection against this legislation.

Unfortunately, it would seem that the people can handle the truth far better than many of our public sector employees.  When they hear some school administrator or some other agent on the public school lobbyist faction talk about stability they know that the stability argument is arrogantly stating that they want to extort our homes and they don’t care if it cause instability to you so long as it allows them to stay comfortable firmly protected by the status quo.  If the economy tumbles and the people of the commonwealth struggle, tough!  They want to be able to spend as much as they want when they want irregardless of the economic consequences of those who actually have to pay the bills.

“Let them eat cake!”  that’s what the audience hears.  And they get angry.  Sometimes very angry.  Only the unreasonable or those protected by the status quo would fail to understand that anger.

As angry as the news of Lt. Gov. Stack make me, I still see it as a symptom.  Chastising Stack for his actions is a futile exercise if it has no consequences.  I would remind everyone that he’s still Lt. Governor even after abusing staff and state police and other abusive spending practices have been exposed.  I doubt that tomorrow’s hearing on his spending will yield anything more that partisan press.

Stack’s actions, to my way of thinking, are little more than an exaggeration of the common place in the political process in Harrisburg.  It happens all the time, maybe to a lesser degree, but it still happens.  Right or wrong to that way of thinking is irrelevant; personal gain, the preservation of partisan politics setting us against one another so we don’t unite behind a common cause, and the protection of the incumbency is what matters most.

I want everyone reading this to understand that throughout this essay I have spoken about the majority.  I am truly grateful for those in the minority of our government that are working hard to advance the principle of property rights and the protection of our rights to our homes.  I am grateful to those who have refused the pensions and the healthcare.  There simply aren’t enough of them….yet.

Let’s keep these town halls going and then watch us add to their number.

 

 

 

Bastiat, Property Rights and the Betrayal of Founding Principles!

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.”

― Frédéric Bastiat

(NOTE: Before you look at this posting and turn away because of its length…take a breath!
The length of this post is related to the importance of the subject matter that requires that the subject matter be placed within its context.  This is more of an essay on the subject of Liberty in relation to the property tax issue.
I recommend printing the essay and then reading it at your leisure to allow what’s written here to honestly sink in.)

 

I know of no other place where the above statement by Bastiat applies more than in the realm of school property tax.  The institution of education is an important part of our society.   The education of our children should be of importance to any citizen concerned with the future of our Commonwealth or nation.  Because of the importance of the subject of education, we have a responsibility in the oversight of the government systems that manage the subject.  We must make sure that it is both a thorough and efficient system as the Pennsylvania Constitution requires (Article 3: Section 14 – The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.)

Unfortunately the system of education in Pennsylvania has become a sacred institution that views itself as one that cannot be question or challenged.  If one dares to question the institution of public education and how it manages its affairs the institution cries heretic and makes the accusatory claim that the questioner now hates all education and teachers.

Bastiat also warned of this in a statement about socialism but the same mind-set comes into play:

“Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all. We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.” 

In this essay I want to address the subject of how we fund education and how this relates to a piece of legislation that originated with the Citizens of this Commonwealth who, recognizing that the current system of education is neither thorough or efficient, established for themselves a bill that treats all citizens of this commonwealth equally.  That legislation is HB/SB 76-the school property tax elimination act.

While the matter of citizens actually putting a legislative bill together is something rare in today’s society, it’s not something new…here’s something to refresh your memory:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

When Jefferson penned those words he wasn’t laying claim to anything new or original so this isn’t something that originated with Jefferson or with any other of the founders of this nation.  Jefferson himself explained that the purpose of the Declaration of Independence was “Not to find out new principles, or new arguments, never before thought of, not merely to say things which had never been said before; but to place before mankind the common sense of the subject, in terms so plain and firm as to command their assent”  He continued “All its authority rests then on the harmonizing sentiments of the day, whether expressed in conversation, in letters, printed essays, or in the elementary books of public right, as Aristotle, Cicero, Locke, Sidney, &c…”  (Source: Thomas Jefferson: Writings, ed. Merrill D. Peterson (New York: Library of America, 1984), 1500-1501.)

The notion that the government belongs to the people is part of a long and timeless tradition of Natural Law.   The government and its laws belong to us, it resides in us and it is our duty to make certain that it remains so.

The same authors referenced by Jefferson in support of the Declaration of Independence had a common thought about the role of Government.  They unanimously agreed that the primary function and purpose of government was the protection of our right to property.

John Locke, one of the most quoted political thinkers by our founders, went so far as to say “Government has no other end, but the preservation of property.”  The great political minds of the past agreed with Locke leading John Adams to state “The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence. If “Thou shalt not covet,” and “Thou shalt not steal,” were not commandments of Heaven, they must be made inviolable precepts in every society, before it can be civilized or made free.”

Bastiat, in his timeless essay called THE LAW,  explained it this way:

“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”

In spite of these facts, certain organizations have totally rejected the premise that citizens can or should be involved in the writing of legislation and have gone to great efforts to discredit the work of those who have been involved in the creation of this legislation.  These same organizations have rejected the sacred responsibility in government regarding the protection of the rights to property.

However, that such attacks would come from the educational institutions entrusted with the care and education of our children should alarm us.

They complain that HB/SB 76 robs them of local control.  The wording is carefully chosen so as not to reveal what they mean when they say local control but in reading their own words we begin to realize that to them local control means the ability to levy a tax on our property at will without questions or scrutiny in a system that has few checks and balances to allow for a thorough and efficient system of education funding.

Local control to them has nothing to do with the controls of the citizens in a school district or their consent and everything to do with a school districts ability to control us through taxation.

That’s not the vision of America our Founders gave to us.  That’s not the vision of Liberty laid out by the great political minds.  In fact, if we were to explore the school districts rationale through their lobbyist organizations we would discover that their arguments, in the hands of the great political thinkers of the past, is defined by a term alien to Liberty.  They called it Tyranny!

The system of using our homes to fund education is, in reality, a system of legal plunder. This is what our detractors are, in fact, defending.   Please don’t simply take my word for it…here’s what Bastiat had to say:

“Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve… But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay – No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.”

Let’s look at this system, because this system of education funding needs closer scrutiny.

A family’s home value is determined through a system that involves both the law and an assessment firm.  In that law, the assessment firm is not required to enter the home to reach an assessed value of the home.  The interior of the home, the condition of the paint in the inner rooms, the carpeting, the age of furnace…none of the things generally involved in a honest and thorough appraisal of a property for the purpose of the sale of that property is required.   To explain this in short form, the assessment of a property under the law is judging a book by it’s cover.

We have assessments because we have a property tax.  Each county will pay millions to conduct these assessments all for the purpose of collecting a tax.  Without a property tax this cost in the millions would not be required saving it’s citizens that money.

No law can ever be established to make assessments actually reflect the fair market value of a home.  The housing market is a constantly fluctuating market heavily reliant on a value determined by a willing buyer and a willing seller.  That price can not, nor should it ever be, determined by government.

dropped home value charts

As the chart above illustrates, home values dropped drastically as a result of the recession.  Data shows, however, that assessed values of property for the purpose of taxation did not drop to match the sharp decline in home values. How can anyone justify this.  Even now, 10 years later, many homes values have not yet returned to their 2007 values.

The property tax itself impacts the cost of the home.  In doing so it actually decreases the actual value of the home.  This is just one way that the property tax plunders our personal property.  In the case of a recession, where property taxes continue to increase as they did in Pennsylvania, it further lowers the home value and makes a recovery in the housing market more difficult to come back from.

School districts, however, will ignore this.  They warn that if HB/SB 76 passes and we hit another recession the revenue drop through PIT and SUT taxes would not sustain the increases they want to see in their school budgets.

That delusional thinking is simply ignoring the reality of a situation like this.  During a recession jobs are lost, hours and wages cut and these things impact a persons ability to keep up with the property tax.  It is ridiculous to think that the school district should just continue to raise property taxes when the majority of people are struggling.   That think has slowed the recovery in Pennsylvania and in many cases, working families have still not recovered to the per-recession levels in income or actual home worth.

Consider that Pennsylvania lost 7,500 in population in 2016 with working families leaving the state to find a more friendly tax climate.   Consider that home ownership has declined where rental properties continue to grow.  The property tax becomes a contributing factor because the property tax plunders the economic value of a home.

A report was released in late July explaining that the The average weekly wage in Pennsylvania during the last three months of 2016 was $1,039, a 2.3 percent decrease from the fourth quarter of 2015, according to the the Bureau of Labor Statistics. That wage decline impacts the ability to pay the property tax because the assessed value of the home will stay the same even though the home value has actually depreciated.  Is that any way to create a system for taxation that is fair or equitable?

About 30% of the property tax goes to pay for a pension debacle that was created by state legislators and unopposed by the educational complex.   Here we have a situation where some homeowners are denied funding to invest in their own retirement in order to provide for an excessive retirement plan for others that far exceeds anything available in the private sector.

Again using carefully chosen wording many school district officials complain about the pension but one must actually listen to what they are saying.  It’s not that they think the pensions are too extravagant, their complaint rest solely in that it’s not adequately funded.

Remember, these are the people entrusted with the education of our children.

If I spend more than I am capable of repaying, the problem isn’t that I don’t have enough money to pay my bills.  The problem is that I’m spending more than I should be.

The problem with the current public sector pension isn’t simply how much it costs but that it costs more than the people can afford to pay.  It is unsustainable.

From the inception of the current pension scheme the design by legislators was to make the primary burden of this fall on home owners.  In fact when this bill was debated on the House floor a few years back Rep Eli Evankovich stood on the floor of the House and demanded “How will we pay for the pensions if we eliminate the property tax”

Let’s paraphrase that  “How can we continue to plunder homes to pay for the pension if we eliminate the property tax?

We know that there are many in Pennsylvania who can not retire if they want to remain in their homes.  Even though their homes are paid for in full, they can’t keep up with the ever rising cost of education so they can’t retire if they want to keep that home.  Here we have an instance where some are denied the ability to retire so that others can retire….not just retire, but retire early.  Does that sound like an thorough or efficient system of education funding?

I’m not saying that those in the public sector shouldn’t have retirement plans.  I’m simply saying those retirements must reflect the persons who must pay in their ability to pay.

That becomes a major part of the problem with the property tax in funding education.  It’s not based on ability to pay.

The property tax assumes income worth by an assumed value on that property.  As stated above, this assumed value through assessment can never actually represent  actual market value.  It’s an arbitrarily value determined following the laws provided but those laws ignore that this assessed value can not possibly reflect fair market values.  No matter how its spun, if the assessed value of your home is greater than the price you can obtain for it in an open market, the homeowner winds up paying taxes on property  value that they do not actually possess.  Even if that home’s assessed value is just $1,000 more than the actual fair market value, the homeowner will annually be paying taxes on $1,000 worth of property they don’t possess.  Over time this will add thousands of dollars in taxes being paid on property the home owner doesn’t actually own.  How is that not legal plunder?

Even though the private citizen’s home generates no real actual annual income, the property tax treats the home owner as though the property is generating an income that’s sufficient to pay that tax.  It doesn’t.

This gives commercial properties an advantage over the home owner when it comes to property taxes.  The commercial property does, in fact, generate an income.  The commercial property can also add the cost of their property tax to the goods and services they provide and then pass that cost on to the consumer.  In fact, they must do this if they are to stay in business.  This results in the homeowner not only being asked to pay for the taxes on their homes to provided education funding but to also pay for the property tax of a commercial entity through a higher cost of goods and services.

When this comes to the manufacturing of a product, the impact can be far greater because of the Cascade Effect of property taxation which was discussed in detail in a previous blog.

That home owner will also pay towards education funding through a state income tax when money is allocated each year through the education funding formulas and driven out to the school districts.  That home owner also pays the 6% sales tax to fund education.  The largest portion of the taxes generally comes from the property tax though so the home owner is taxed far greater in funding education than others, including the corporations, many of whom also oppose HB/SB 76.

Bastiat had something to say about that opposition as well:

“The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protected and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.
Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.”

The home owner however does not have the ability to defer the cost of his property taxes to anyone else.  When the taxes exceed their ability to pay it’s a matter of being forced to sell, find additional revenue by taking on second and third jobs, or cutting other necessities like food, clothing and medicines.  If that isn’t plunder, I don’t understand the definition of the word.

The property tax is often defended by using the term stability.  The argument is made that the property tax is a stable revenue source for the tax collector.  This argument totally ignores the instability it generates for the people who must actually pay the tax.

It demonstrates a government thinking that is upside down.   The profit of the plunderer should not be considered, instead the cost to those being plundered needs to take a higher precedent.

Bastiat warned:

“As long as it is admitted that the law may be diverted from its true purpose–that it may violate property instead of protecting it–then everyone will want to participate in making the law, either to protect himself against plunder or to use it for plunder.”

Now look at the myriads of lobbyists that infiltrate our representative system.

Have you ever called a legislator to be told that they won’t have dialogue with you because you don’t reside in their legislative district?

I am willing to wager that a lobbyist has never been told the same thing.  Legislators will tell us that these lobbyists represents concerns in their community.  So do you, especially when it comes to the property tax.  The property tax impacts every home owner in the state and there isn’t a single legislator who ever held office that doesn’t have home owners in their district.

The property tax may vary from school district to school district and county to county, but the overall impact of the property tax reaches out to contaminate the economy of the entire state.

Lobbyists outnumbered Pennsylvania lawmakers 5 to 1.  In 2015 various companies, industries and organizations sent 1,160 lobbyists to the capital to cheer for and protect their interests and ideologies.  That showing was more than any lobbying effort of the previous five years combined, according to state records.

In 2014, there were 222 lobbyists operating in Pennsylvania – a 423 percent increase from the previous year.

Are these lobbyists actually representing your best interest?  The fact is that while the majority of these lobbyists admit that there is a problem with the property taxes the same majority also opposes virtually any effort to reform the system and this is especially true when it comes to the school property tax independence act – HB/SB 76.

Violating your property rights to provide for themselves is a common practice.  They don’t seem to care how much it costs you so long as it benefits them.  The home owner doesn’t have the options of KOZ’s or LERTAs, The homeowner is never told that we are too big to fail.  The homeowner doesn’t see the subsidies of entitlements through Corporate welfare that the larger business entities as provided.  Many of our smaller family owned business are also denied the same protections that are granted to the larger corporate world.  Why?  Because the large corporate world can afford to pay the lobbyists that influence legislative activity including stalling bills like HB/SB 76.

One only has to watch the hearings on legislation.

At one hearing we had representation from the PTCC, the one voice united in support of school property tax elimination.  Sitting opposite to us where a myriad of organizations who also opposed us.  The Chamber of Commerce (whose local county offices include major representatives of the educational complex); Keystone Budget and Policy Center (whose board consists of members of the educational complex); the PSEA (the union representing the educational Complex); the PSBA (The organization representing the school board of the education complex); PASBO (Business official affiliated with the educational Complex); PASA (Administers in the educational complex).  So there we were, one voice facing the voice of many through different organizations but all those organizations had a single thread in common.  That is how the lobbyists faction works, create multiple entities to create the illusion of diversified groups when in reality it’s only one group….the education complex.

We are on our own to defend ourselves but defend ourselves we must.  We can not allow this reality to defeat us.

It is simple a matter worth stating that if you are defending the status quo, you stand in opposition to the principles that founded this nation.  You stand in opposition to the principles of liberty.

What you are defending is the legal plunder of our homes even if you yourself are a victim who simply doesn’t feel the pain that so many others have felt.

“Slavery, protection, and monopoly find defenders, not only in those who profit by them, but in those who suffer by them.” ~ Frederic Bastiat

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixing School Funding Inequities!

In a recent Letters to the Editor in the Lebanon Daily News the proposal of School Property Tax Elimination through HB/SB 76 was dismissed as merely an effort of robbing Peter to pay Paul.

The logic used to reach this conclusion is confusing to me because that’s exactly how the current system of Property Taxation works.  We penalize home ownership and force home owners to pay the lion’s share of education funding in the Commonwealth which results in some very harmful aspects when it actually comes to educating our children.

In 1972 a presidential study was conducted on education finance that reached the following conclusion:

“Significant disparities in the distribution of educational resources have developed among school districts. Though every State has made some effort over the years to reduce the disparities, the results have been only partially successful at best. That, we believe, is because the States have relied on local district financing for the bulk of educational revenues….” 1972 – The President’s Commission on School Finance, Final report.

45 years later and nothing substantial has been done to deal with the inequities in school funding in Pennsylvania.  In fact, in those 45 years things have become worse in Pennsylvania.   Pennsylvania now ranks 3rd highest in the nation for reliance on the local school property tax for education funding leading to some gross inequities in education funding across the Commonwealth.

Should the quality of a child’s public education in the most fundamental areas of Reading, Math and Science skills in Pennsylvania be based on their zip code or on the economic status of their parents?

The reliance on local property taxes to fund education has created gross inequities in education funding in Pennsylvania.   Until those inequities have been successfully capped, those inequities will only continue to grow especially under the current economic status.

Across the commonwealth state-funding at the local level varies from school district to school district.  It is true that, in most cases, the property-wealthy school district will see less money from the state than the property-poor school districts.  That’s why we have a state funding formula but even with the recent changes to that funding formula the state funding never balances the funding to school districts to reach some form of equity in funding per student.

A symptom of the so-called “Traditional School Finance Problem” is characterized by high spending and lower tax rates for property wealthy districts and low spending and high tax rates for property poor districts.

For many living in the property poor districts moving is not an option.  Choosing which school districts to raise their children isn’t a possibility.  They are restricted by their economic means.

The arguments made by wealthier school districts of local control through property taxation so that wealthier districts can continue to spend more with lower tax rates while property poor districts spend less with higher local tax rates ignores the fact that we are talking about all of the children in our Commonwealth when it comes to providing them with reading, math and science skills.   None of those educational aspects should be local.  Where you live should not determine your ability to obtain proficiency in those educational skills.

The longer we rely on the Traditional School Finance mechanisms or…the status quo, the greater the inequities.

If we ever want to achieve equitable funding of students in our schools, a critical step begins by locking down the current inequities and not allowing them to grow further through local property taxation.

What if we created a situation where we could change the status quo in such a startling way that things like Reading, Math and Science skills could be equitably funded at the state level while other more local decisions like the local sports and music programs could be more locally funded?

Is it thorough and efficient funding of public schools to have a funding system that allows for some school districts to succeed while others fail?

Doesn’t our Commonwealth Constitution REQUIRE a thorough and efficient system of public education FOR ALL STUDENTS, not just the wealthier school districts?

HB/SB 76 creates a stable number to build a fair funding formula around.  It caps the current inequities so they can be more efficiently dealt with at the state level through a funding formula.  Future increases based on inflation in years to come would not see the irregularities generated by the current system of property taxation or the constant need to modify the  funding formula.

In doing so we could see proficiency leveling in Reading, Math and Science skills when the money starts following the student and stops being centered on zip codes.

The more local aspects of public education can be adjusted through local Income Taxes with voter approved referendums where the community begins to decide how much they want to put into their more local curricular programs.

It’s a common sense solution to a very serious problem in education funding.

 

 

 

 

 

 

Growing Government by Raising Property Taxes

In a publication from Lebanon County it states that “Unfortunately, there are a rising number of households on public assistance. According to US Census data from 2014, 10.8% of the 9,956 households in Lebanon City receive supplemental security income, up from 8.9% in 2010.  9.3% of households receive cash public assistance income, up from 5.2% in 2010.  29.4% of households have received food stamp/SNAP benefits in the past 12 months, up from 21.1% in 2010.”  In looking at other 3rd Class cities like Lebanon, this seems to be more common than uncommon.

This publication is part of a program meant to revitalize Lebanon.  It’s called the Business Improvement District (BID) program.

However well intended this program is I don’t feel as though they really understand some of the existing problems that contribute to the issues they cite above.

I find it incredibly ironic that in these types of publications no correlation is made between the rising school district property taxes and the impact this has on the families in our communities.

Many of the people mentioned in the above statistics aren’t home owners so we often mistakenly think that, since they don’t pay an actual property tax bill, they don’t pay towards the property tax.

It continually amazes me that so few understand that when the property tax goes up on the property of a landlord, the cost of rent will increase to accommodate for that cost.  This is just one aspect of the Cascade Effect of the property tax.  And no, that increase doesn’t automatically make a landlord a bad person.

A landlord must make a profit on the property they rent or they won’t be landlords very long.  A least they have to be breaking even.  Higher property taxes results in higher rent. As rent increases the spending ability of the individual decreases unless their wages also increase to make the increase necessary to meet that rental increase.  That’s not the case as we’ll see later.

When the school district raises the property tax on a landlord, the rent goes up for the renter.  For many working families, this means less disposable income which contributes to the rise in supplemental security income, cash public assistance income and Food Stamp/SNAP benefits.  The money to provide for these services doesn’t just fall off trees.

As those revenue needs grow, that money has to come from Federal and State programs which means that we have to pay the taxes that support these programs.  As a result, the State and Federal government must either increase existing taxes, look for new things to tax or cut services in other areas.

The same applies to a business owner who rents their property.  When the land owners school property taxes increase, the business owner sees an increase in their rent.  That revenue has to be made up somewhere so it’s either cut operating costs (less employees, lower wages, fewer jobs) or raise the cost of the goods or services they provide. Any increase in that cost means less money for the consumer to spend on other goods.  That reduces consumption which reduces jobs.

Look, this isn’t rocket science.  This is simple common sense but let me explain.

In essence we have a constantly rising property tax that cuts in to more people’s disposable income making more people dependent on government programs that have to be paid for from other taxes.

Because the constantly rising property tax has a Cascade effect, every business or service provider that must pay that tax has to pass that cost down to the consumer.  This raises the cost of everything from clothing, food, milk, diapers, baby sitters, doctors, lawyers…you name it.

The constantly rising property taxes are helping to contribute to the need for higher prices on everything we purchase and every service we use.  This creates a greater need for people to turn to government programs to supplement their income in order to provide for the essentials they need to survive.  That greater need creates a revenue problem that results in more taxation that only continues to further drive up the cost of the things we need.

A recent website was launched that tries to defend the property tax in its attempt to stop the passage of HB/SB 76, a bill that would eliminate the school property tax by raising the PIT and Sales Tax to raise the same revenue currently generated by the school property tax.  This modest shift in taxation, which is overtly exaggerated by the anti-76ers, is a revenue neutral tax shift.  That differs from maintaining the status quo which needs constant increases to meet its spending growth.

The shift is a one-time shift that actually undoes a myriad of other tax-shifting programs already in place by the government.  It ends the need for the number of KOZ, LERTA and other programs;  Seriously cuts into the need for Clean And Green; Makes constant and expensive county-wide property reassessments less necessary; Makes property tax abatement programs less costly and necessary and so much more!

That anti-76 website makes the claim that we will see annual increases statewide of $1 billion dollars in the property tax.  That’s annual increases, not a one-time shift to alternate methods of taxation like we would see with HB/SB 76, and yet they somehow think that this is okay…that the existing path is somehow sustainable.

Taking $1 billion more out of the economy next year is a travesty.  It will grow the numbers of families who will need to become more dependent on government supplemental services in order to survive.  Taking $10 billion out of the economy over the next ten years will be devastating which will result in school property taxes almost doubling from their current $12.8 billion statewide to $22.8 billion.

The website that attacks HB/SB 76 makes sure to use pictures of children while making the claims that the passage of HB/SB 76 will hurt the children.  The education industrial complex always does this.  The one thing they don’t want you to do is the math!  They want to appeal to an emotional level that distracts you from looking at what they are really saying.

You see little Johnny and Susie who are 12 years old now and in the 6th grade will be out of school in 10 years when the school property tax will virtually double to hit that $23 billion mark.  They’ll be 22.  If they’ve gone to college they will probably already be facing a massive college debt.  Won’t adding $6 billion in property tax burden by the time they are 18 result in fewer children being able to afford a college education?

Certainly increasing mom and dad’s property tax burden so that that it adds more than half to what they are paying now will make college funding less affordable for many.   If they are paying $3,000 in school property taxes now and this increases like the anti-76ers claim, their school property tax will be approaching $5,000 annually.  By the time these children reach 22 years of age their parent property taxes will have doubled.

For those who haven’t gone to college it’s out into the workforce in a dwindling job market in the Commonwealth.  Stagnate wages and rising taxes will have made things more difficult for jobs to stay in Pennsylvania making it more difficult to find a job with family sustaining wages.

From 1970 to 2014, Pennsylvania ranked a dismal 49th in job growth, 45th in personal income growth, and 48th in population growth according to the Commonwealth Foundation. Granted that doesn’t put us in last place in each category yet but maintaining the status quo and doing what the anti-76ers want will keep us on the path to getting there.

For many the status quo for the future will mean home ownership will be less affordable with an additional $10 billion in statewide school property taxes to pay so they will turn to renting.  Rather than investing in their own future through the purchase of a home, they will be investing in the future of others.  Rather than becoming more independent they will become more dependent on others.

With a job market that cannot keep up with the population demands, even with a population that is shrinking as people out-migrate to other states, Pennsylvania faces a bleak future.

As property taxes rise, so will the rent and so will the cost of everything else these children will need to survive now that they’ve reached the age of 22.  The dollar will buy less so they can pay more in taxes to an educational system that said they cared about the future of these children.

Children in school today will be facing the payment of a growing pension debt that is around the $100 billion mark.  Add that to the doubling of school property taxes for an additional $10 billion dollars a year just from the property tax alone according to the anti-76ers.

The $1 billion increase represent the numbers from the anti-76ers.  They admit to this so this is the legacy they want to force on our children:  An unsustainable future where the American Dream of Home Ownership is virtually crushed for a very large portion of the Commonwealth population.

Frankly I’m really tired of the way the school districts and those who choose to protect the status quo exploit children by not being honest with us about the future they are knowingly giving them.  They are the first to roll out the rhetoric of “It’s all for the children” as their excuse for irresponsible actions.  In reality, they are willing to pass on a debt to our future generations that will be virtually impossible to repay and this doesn’t seem to matter to them in the least.

Looking at the statistics from flyer in Lebanon City about this BID program we can add some additional informational data for comparison.

In 2010 the median household income in the city of Lebanon was $33,840.   Today the median household income is, according to census data, $34,072.  In other words, median household income has increased by only $232 in the last six years.  In January of this year the Lebanon Daily News cited the possibility of yet another increase in the city school district property taxes.   They projected that this would amount to an average $119 tax increase for the families of Lebanon City…that’s just for one year.  (http://www.ldnews.com/story/news/education/2016/01/11/taxes-increasing-lebanon-school-district/78622850/)

That represents more than half of the increase the average family has seen in their wages over 6 years; That amounts to a $10 monthly increase in rent, at the bare minimum.

While a later article stated the tax increase wouldn’t be as drastic it would average to an $81 annual increase for the average family in Lebanon City.  $81 times 6 is $486 so if income growth stays the same as its been during the previous six years it will easily outpace that median household income growth in the next 6 years and that’s if there are no increases to go along with this year’s increase over the next 6 years.  That’s not very likely.  Taxes will continue to go up annually in the city just as they always have.

Lebanon City School Property taxes have increased annually since 2010.  Those School Property Tax increases have far outpaced the increase in median household income in the city.   Maybe that’s why the city is also seeing increases in the need for supplemental security income, up from 8.9% in 2010; Maybe that’s a contributing factor for 9.3% of households needing cash public assistance income, up from 5.2% in 2010.  Maybe that helps to explain why 29.4% of households have received food stamp/SNAP benefits in the past 12 months, up from 21.1% in 2010.

Statewide, since 2010, school property taxes went from $11,153,412,489.73 to $12,614,113,562.32.  That’s an increase of $1,487,701,072.59 billion dollars.  That was for 6 years.

Now the anti-76ers are telling us that this is going to go up to $1 billion annually and they think this is sustainable.  They think that, in the next six years, paying an additional $6 billion dollars while median household income stagnates for many families is doable.  It would total an increase of $4,512,298,927.41 billion dollars more than the previous 6 years.

Consider what this has already done to Lebanon City and the impact it’s had on families where those children these organizations claim to care so much about originate; Consider the future they are giving to these same children that they claim to care so much about.

As a resident of the city who lives in the heart of the city we’ve seen more than our share of small apartments that are over-crowded as families double up to save on the cost of increasing rent.  That over-crowding is not conducive to generating a quality education in the classroom:  It’s counterproductive.

School districts cry for smaller classroom size (same size rooms but with less students in them) and the cost of this for many families in our 3rd class cities is over-crowded living conditions when they get home.  Tell me again how that’s all for the children.

In a recent Lebanon Daily news Article related to increasing property taxes it states that the tax increase will include the hiring of include three elementary school teachers to ease overcrowding at a total cost of about $252,000.  Who eases the overcrowding when these children return home to an overcrowded house because families had to double up to meet the rising cost of rent?

Then, to add insult to injury, while families are being forced to do less as their school property taxes far exceed their income growth, we’re told that the hoarding of money in school district reserve funds is rapidly growing.

The State Department of Education tells us that school districts statewide have $4.4 billion dollars in reserve funding at the end of fiscal year 2015-16.  That more than 30% of the total amount of property taxes collected for the year.  It’s an amount equal to 75% of the additional monies in the state budget ear-marked for education.

In just five years the amount of reserve funding in our schools alone grew by $1 billion dollars.  That reserved fund revenue even increased in some school districts that exceeded the Act 1 limits that was supposed to keep things like this in check.

The current system simply isn’t working but that won’t stop the naysayers from piling on in their attempts to protect the status quo.

In this case, however, protecting the status quo will result in growing government.  It will result in creating more people dependent on government programs to make ends meet.  That can only happen for so long before the number of people who need that revenue exceeds the number of people able to pay for it.  When that happens the system implodes on itself.  It is unsustainable.

Many would argue, and I am among them, that this is where we are with the school property tax already.  The growing number of tax delinquency, property seizures, bankruptcy and foreclosures and all indicators.  The growing number of people fleeing Pennsylvania for more tax-friendly states is another indicator.  The reduction of home-owners statistically compared to the growth in renters is another one.

Looking at the growing number of people more dependent on government just to live is alarming.  Perhaps of even greater alarm is the inability to connect these numbers to the rising school property taxes.

Aren’t the statistics in this flyer from Lebanon already an indictment of the failure of the educational system in providing for an education that moves children into a more positive and secure future?  If this is what is happening now….if this is where we are now, I shudder to think what happens when the cost of education in public school doubles statewide but incomes for a large portion of the Commonwealth remains stagnate.

 

 

 

 

 

 

 

 

 

 

Citizens To Protect PA Jobs Attacks HB/SB 76 With Erroneous Claims!

The latest hit piece on SB 76 comes from a group calling themselves Citizens To Protect PA Jobs who claims sole responsibility for the hit piece.

Just who is Citizens To Protect PA Jobs.  One would think, based on the name, that this is a citizen led advocacy group but nothing could be further from the truth.

In 2015, ABC27 ran a story about the group (http://abc27.com/2015/05/29/who-is-behind-pro-drilling-tv-ads-that-questions-taxes-on-the-industry/) which directly tied this group to the Pennsylvania Chamber of Business and Industry.  In that instance they targeted $425,000 for buying television and radio spots across the state, according to the article.  They also launched a similar website to advocate their point of view.

Look, I have no problem with freedom of speech but I’d like to see far more honesty in these types of attack pieces.  This latest attack on SB 76 is anything but honest.

In a form letter they ask you to sign to further create the illusion that this is a citizen led effort and not the lobbyist machine that it is, they make this claim  that we need “$12 billion to make up for the steady stream of revenue that would be lost – and that figure is expected to increase by almost a billion dollars every year.”  They then go on to state “This scheme seems even more risky in today’s uncertain economy and with the monthly fluctuations in sales and PIT returns.”

The claim of $12 billion dollars needed in replacement revenue is partly true.  It’s not, however, revenue lost.  It is revenue that would be collected through a means other than the property tax.   Remember that the number needed for replacement revenue is closer to $10 billion since existing retained debt remains in each school district until that debt is paid off so they are already inflating numbers by more than 2 billion dollars.

That is the first misrepresentation but not nearly as egregious as what follows.

The egregious erroneous claim is the statement that future increases in the school property taxes would amount to $1 billion annually.

I went to the Department of Education website to get my information and the following figures reflect actual numbers, not some number pulled out of thin air to generate fear.

40 years ago, in 1985-86 local property tax revenue statewide was $2,685,042,553.  Over the next 40 years the property tax grew by almost $10 billion dollars to reach the 2015-16 number of $12,614,113,562 currently collected through the local school property taxes.

The Department of Education numbers demonstrate that the average annual increase in property taxes has been $310,680,427 over the last 40 years.  The difference between 2014-15 and 2015-16 school years represents an increase in property taxes of $333,358,460, very close to the annual average cited by the Department of Education.

This letter makes that claim that in the future these increase will suddenly triple going to $1 billion dollars a year.  If that was true, and it isn’t, this would mean that over the next ten years the revenue need from property taxes taxes will almost double going from $12.6 billion to $22.6 billion.

If this were true, and again….it’s not, let’s look at what impact this will have on the economy.

Property taxes will have to almost double over the next 10 years to meet that obligation.

Rental prices will also increase to reflect the increase in property taxes that landlords must pay.

The cost of all the goods and services we use will also dramatically increase.  You see, the property tax becomes a part of a business operating expense.  Any increase in the property tax results in higher prices on the goods and services we use because that expense must be passed on to the consumer.  That will include the cost of the gas we put in our cars, the legal services we use, diapers, food, clothing, healthcare, everything….

This additional cost is multiplied because there is a Cascade effect related to property taxation.  In short, a property tax is levied on every property at every stage of the production of every good we purchase.  That adds layers of increased cost to those goods. You can read more about that on a previous blog (link).

Protecting the state quo, in my opinion is the riskier scheme yet that is what this organization advocates.

Ask yourself, can you afford to see your school property taxes double over the next ten years.

Last year, Pennsylvania saw a massive out-migration of population.  That means that there are less people to pay the school property tax than there were in the previous year.  That places a great responsibility to meet that revenue want on fewer people.  As was reported, this was nothing new.  This is part of an ongoing trend as families move to other more tax-friendly states to live.

At the same time we are seeing a growing need for more government run services to provide tax-payer funded rent relief for low-income families who are seeing their rents become more and more unsustainable.  By doubling the property tax over the next ten years we will make rent even less affordable creating more need for more government programs to subsidize the increasing property tax.  As this increase drives up the cost of food and clothing (and diapers) we will see more people turning to tax-payer funded government assistance just to make ends meet.

In order to protect the status quo of property taxation, we are going to have pay more in taxes through other programs.

Doubling the property taxes over the next ten years will mean more working families will never be able to realize the dream of home ownership.  They will be forced into renting where the cost of the increasing property taxes will force more families to seek out government forms of subsidized rent.

Where is all that additional revenue that will be needed to maintain the status quo going to come from?

Is the purpose of taxation really supposed to be for the purpose of making more and more people dependent upon the government for their very survival?

Yet this is what this letter, without saying so, is advocating for!

To my way of thinking the status quo is unsustainable and it is irresponsible to continue to advocate for the status quo forcing more people into dependency on the government to make ends meet.

Then again, if your bread and butter was coming from school districts and social service programs wouldn’t you want to see those programs grow even if that means destroying the economic future for thousands of Pennsylvania working families?

The fact of the matter is that if property taxes continue to increase by $333 million a year things will be bad enough for those working families.  Triple that and you have devastated the homes of thousands of families.  You will create an environment where only the wealthy will be able to afford a home and forcing everyone else into rental servitude in the recreation of a new society of feudal lords and serfs.

Without a consumer base to support the business and industry community, they will no longer be able to survive unless the government intervenes with more corporate welfare programs and tax-payer support funding of private commercial entities.

Is that the future we want for Pennsylvania?  I don’t know about you but it isn’t the future I want for myself or for my grandchildren!

 

 

 

 

Who Is To Blame?

Note: This is part two of a series about the current opposition to the school property tax elimination bill HB/SB 76.   See this link for part one!

I previously published a post framed around the public educational complex and the depths they will go to hold on to their power.

As unfortunate as that is, the responsibility for this legislation rests on the shoulders of our legislators.

We can get as angry as we want as the special interest’s self-serving opposition to this legislation but the blame rest solely on those we elect to represent us.

The thing about lobbyists and other special interest power is that their power is only enabled by legislators who are willing to cave to their demands.

From the day we started this fight we’ve had very little legislative effort to take this issue to the public.  All of that has happened through the grassroots efforts.  From the door-to-door canvassing efforts to the town halls, to advertising….it has all happened because the grassroots advocacy to make it happen.

We’ve taken time away from our jobs and our families to fight for this issue.  The town halls and every effort to advance this legislation has come from the pockets of those fighting to make it happen.   There is no corporate funding, no special interest funding, it’s been us all the way.

Recently we were told that we aren’t doing enough to fight for this issue at this critical time and while there may be more each of us can do, the fact remains that this issue has not been driven by our legislators the way it should have been.  If there is a change in the strategy, it must the legislators who change.

We’ve seen the countless articles from the educational complex attacking this legislation and we’ve seen letters from citizen advocates trying to set the record straight but what we aren’t seeing is the legislators fighting back.

We’re told that the legislators are getting beaten up by these self-serving special interests but I’d like to know why the misrepresentation of this legislation by these self-serving campaign-funding groups isn’t being challenged by our legislators.

Are they so afraid to take a principled stand to do the right thing? Do they really not care about what is happening to homeowners?

I know there are a few out there who are standing up and fighting back but the reality is that they are so few in number because the illusion of power is what rules and for too many legislators, everything they do is measured by how it will impact their chance at re-election.  Doing the right thing because it’s the right thing to do is, sadly, not an option for them.

That, of course, doesn’t mean we shouldn’t hold them to that standard.  It just means that the reality of the situation is that most legislators won’t.  They don’t have the political will.

Too many of these issues become little more than campaign rhetoric.   They hold these issues out in front of us when they run for office but when it comes time to deliver on their promises they run and hide.

During the 2016 vote on the bill Kim Ward complained because she was told that, while she ran on the issue, while she used it to get re-elected, she was told that she’d never have to vote on it.  In other words, she misrepresented her actual position on this legislation in order to help win the election but she had no intention of supporting it when push came to shove.

Think about that.  How many other issues that face this commonwealth are little more than campaign re-election tools; how many other issues are just campaign rhetoric?

At the state level, the two most pressing issues in poll after poll across the commonwealth continues to be the property tax and the pension issue.   Other regular issues that are stated by constituents include paycheck protection and prevailing wage.

Those issues have been in the forefront of campaign rhetoric for more than a decade and nothing has happened.   When legislation does advance it always fails to deliver on the promise to working families while always leveraging out special advantages to campaign-funding special interests that only make the situation worse for working families in the Commonwealth.

Just look at the much heralded Privatization Bill that passed.   Look at the Small Games of Chance bill that were supposed to help small clubs in the Commonwealth.

When it comes to the property tax we need look no further than the Gambling push in Pennsylvania that was supposed to bring about major reductions in the property tax.   It is just another in a very long series of promises that never happened.

The Pension Debacle exists because our legislators caved to the public sector to give them extended benefits to their Pensions that far exceeded pensions in the private sector.  At a time when most business were abandoning the defined benefit plans for defined contributions and working families in Pennsylvania saw their pensions stripped from them, our legislators greased the wheels of the political machine to go in the opposite direction leaving the rest of the state with an unsustainable pension debt that is still expected to be funded on the backs of home-owners.

When the private sector complains we are always told the same thing.  There is a contract clause in our Constitution that can’t be broken.   We ignore that we changed that contract to give them more and while that contract exists, we are obligated to meet that obligation, however that contract can be changed in the future.  Changes to that contract should only be ignored when they public sector benefits at the expense of the private sector.

The Contract Clause is found in Article 1

  • 17. Ex post facto laws; impairment of contracts.

No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed.

In fact, the current contract did exactly that.  It provided special privileges to the public sector that are not available to the private sector.

That should come as no surprise to us.  Most of Title 22 of the Pennsylvania Code and the Public School Code of 1949 is about granting special privileges to the public sector that are not available to the private sector.

Since our politicians and the Courts who would rule on this are a part of that public sector, we have little hope of seeing this resolved until the people of this Commonwealth actually begin to realize what they are doing to us.

That’s always been the problem.  The people are too busy in their normal lives to get involved enough to make the difference that is needed to bring about real reform.  As Thomas Jefferson explained “accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.”

The ugly underbelly of lobbyist/special interest Power that resides in Harrisburg exists because our legislators allow it to exists because they benefit from it.   The legislators can then hide behind this because we allow them to do so.   So it becomes this long train of abuses that produces little more than a blame game.  Legislators blame the special interest powers while caving in and enabling that power and the lobbyists special interests use their non-profit fronts to blame the legislators all the while creating an image of them fighting against one another for all of us when in reality they are all fighting against the rest of us.

It is a situation where we are just the collateral damage of a political system that has been perverted to extend their power over us in a spirit of subjugation.

It doesn’t matter where you turn, from school districts to local government to the national level, government is more concerned about regulating us and keeping us under their thumb than they are with allowing actual principles of liberty to prevail.  At the same times these institutions will fight against any self-regulating efforts to create actual accountability or responsibility to the people they are supposed to be serving.

If they want to spend more, they do.  We don’t measure the cost while promoting the alleged benefits.

You can’t have a sustainable society working like this.  There is no cost benefit if it costs more to implement than it returns no matter how they spin it.  The KOZ and LERTA programs are perfect examples.  We simply don’t measure the cost of implementation.  We only measure the return.

By not measuring the cost, we never really know how much we are losing, we just live under the delusional falsehood of some return.  If you win $100 at the casino but it cost you $500 to do so, you lost $400.   Unfortunately, that’s how government is working.  We read about the winning but not about how much is cost….about how much we lost.

We watched in Pennsylvania as a fee was attached to gas that made Pennsylvania the most expensive place in the Commonwealth to buy gas.  We were told that it would have no impact at the pumps and they were wrong.  We were told that this money was going to pay for much needed infrastructure repair but we then discover that much of the money is going to pay for State Police overtime.

We watched as Pennsylvania levied a retroactive tax on the vaping industry and we were promised a return through that tax to help balance the budget.  What we saw was vaping shops closing at that revenue disappearing.

We continue to watch as unemployment numbers are manipulated to make it look like things are okay in Pennsylvania when in reality the Census bureau says that only 64% of those between the ages of 18 and 65 who are eligible to work are actually in the workforce.

We continue to watch as Pennsylvania population dwindles.  Last year we saw a population loss of more than 7,000 people which, if the trend continues, will impact the number of congressman Pennsylvania has in Washington to represent us.   It will also impact the number of house reps we have in Harrisburg.

That loss of population impacts a loss in PIT and Sales Tax revenue to the state and a loss of revenue to our school districts through the property tax that will have to be replaced by those who remain.

We see, in study after study, where Pennsylvania ranks at the bottom of the lists regarding business climate, tax burdens, job creation and just about anything where we could and should be doing far better.  At the same time, we are in the top percentage of state where political corruption is a pattern and natural outcome of a commonwealth bent on perpetuating a system of tyranny.

The time for depending on campaign promises as a measure for politicians is rapidly coming to an end.  They might still be able to wallow in that delusion for a while but eventually the piper expects his due and the piper they’ve hired is playing the sound of an unsustainable future.

We can continue to ignore that or we can face it.  It doesn’t have to be bad news if we are willing to do what we must to change the direction of the state and that’s going to require all of us to stand up and do something about it.

Since this change must happen legislatively, and it’s not happening under our current legislators than we have to strategically weed out those who are prone to cave to the special interests or like to make campaign promises they aren’t willing to fight for with the passion these issues deserve.

When it comes to HB/SB 76, we’ve been allowing legislators to get away with lip service for far too long.  We trusted them when they told us they supported the issue but when they didn’t fight for it through their own town halls or in taking it to the media, we turned the other way.

I’ll go so far as to say the following.  This issue is where it is because of the hard work of the citizen advocates who have made it so.  We got it there with damned little help from the majority of the supporting legislators.

While we’ve been out there taking this issue to the public; while we’ve been out there sacrificing our time, energy and resources, at times even reinforcing that we had our legislators backs on this issues, where were the majority of them.  Instead of fighting for the issue they maintained their photo-ops and public image while doing damned little to get this done.

To those legislators who have stood up I give a thankful nod but I repeat, the issue is where it is because we put it there and now we face the potential of losing it all because legislators will not stand up to the educational complex which has resorted to misrepresentation of the bill in their attempts to stop it.

In survey after survey we see that when it comes to the court of public opinion, while the misrepresentations from the education complex has been hard, the public support for the passage of this bill has not wavered.   Instead of looking at those surveys, legislators are willing to cave to the pressures of the special interests who can’t tell the truth about this bill either out of ignorance or by intentional misrepresentation.  There is no excuse for legislators who once supported and now cave other than mere political cowardice to stand up to the campaign funding special interests and their campaign based on deceitful misrepresentation.

If this bill does not move this year, we can be angry at the special interest opposition and we should be, but the failure of the bill to move will rest solely on the shoulders of our legislators.

This bill has been in front of them with very little changes for the past 7 years and if they don’t know the bill well enough by now to defend it, that’s not our fault….that’s their fault.   The fact remains that there are more people in this Commonwealth who can defend this bill better than the majority of the legislators who have claimed to support it.

The question for us is simple, what will we do about it?

The Educational Complex: Is It Really All About The Power?

Pennsylvania is in serious trouble.

A hard fought effort by grassroots advocates across Pennsylvania is now under attack by an educational complex that has one clear message to communicate even when that message is veiled in Chicken Little rhetoric.  That message is clear:  “We don’t care what it costs and we intend to make homeowners pay for it!”

School Board officials love to talk about the unfunded mandates and there was a time that I felt they were truly concerned about the costs but the reality is that they do little to nothing to fight against the unfunded mandates, their argument is only about funding.  It’s simple, it’s not about cost, it’s about funding.

The same is true with the pension problem.  In spite of the fact that the pension system is unsustainable, it’s not the cost, schools just want more funding for it.

In a recent letter from West Chester School Superintendent, he talks about cost and puts it in context:

(HB/SB 76) would cap increases at that rate, except for cost of living. Cost of living increases simply do NOT cover the mandated expenses that our public school system faces.

This new funding system would leave public schools dramatically under-funded and would force them to cut programs and staff.

You see, they have every intent of continuing to spend above the inflationary rates.  If their spending exceeds the cost of living so be it.  What that means to the rest of us is that the cost of education will increase beyond our ability to keep up with it.

While their wages and benefits keep getting better, exceeding far above the rate of inflation, working families across the Commonwealth are expected to do without so they can do with more.

Like the school district, I have an issue with the unfunded mandates.  Unlike the school districts, I despise the fact that our homes are expected to be the funding source to pay for them.  The school districts know very well that as long as the school property tax remains in place, our legislators will not tackle the problems with the unfunded mandates.  They have no incentive to do so.  That’s always been the problem.  An unfunded mandate, whether from the state or the federal level is another assault on homeownership.  It’s a way for the legislature to appease the special interests of the educational complex without raising taxes at the state or federal level.  Instead the taxes get increased locally.

The problem is actually much more complex.  The education industry talks about unfunded mandates as though it’s the single driving reason for property tax increases and that’s simply not the case.  Today’s school budgets see 70% to 80% of their funding going to wages and benefits.   Every time the Unions fight for higher wages, the cost of the unfunded liability to Pensions goes up.

But it’s all about the children isn’t it?

National Education Association’s retiring top lawyer, Bob Chanin, speaking at the NEA’s annual meeting in July, 2009:

“Despite what some among us would like to believe it is not because of our creative ideas. It is not because of the merit of our positions. It is not because we care about children and it is not because we have a vision of a great public school for every child. NEA and its affiliates are effective advocates because we have power.”

“And we have power because there are more than 3.2 million people who are willing to pay us hundreds of millions of dollars in dues each year, because they believe that we are the unions that can most effectively represent them, the unions that can protect their rights and advance their interests as education employees.”

The Union believes that it is their right to tax people out of their homes.  They believe it is their right because they have the power to do so.  The belief in that right is not founded on any basic principle of rights.  It is founded on one thing….POWER!

And it’s that power they are exerting right now to stop HB/SB 76.   Once again, they are resorting to using tax-payer funded resources to make that happen.  Your taxes are helping to pay for their meetings to stop HB/SB 76.  Your taxes are being used as some of these school districts use their tax-payer funded web pages to fight against HB/SB 76.  Your tax dollars are being used to send home prepared letters that include misleading information about HB/SB 76 to families across the commonwealth.

I say once again because our tax dollars are used to collect the dues of the Union members. While they claim that this costs us very little, it still costs us.  It is an additional expense that we have to pay for through our homes.  They tell us this amounts to very little money but if it’s so little why do they fight so hard every time a paycheck protection bill advances in the legislature.

It’s just another one of those things where they don’t care about the cost to us; they just care about maintaining their power.

The fact is that many of these superintendents and school board officials who are passing resolutions and sending these letters homes to our kids haven’t even read the bill.  That’s just too inconvenient for them.  They are told that it is a threat to their power and so they repeat what they are told, true or not.

It really makes me wonder how many other decisions are made because of the internal powers that be in the education complex that become repeated mantra when advancing the agenda’s being put forth by the educational complex.

We are told that school districts are being advised to increase their debt in case HB/SB 76 passes.  We are told that school districts are being advised to increase property taxes in case HB/SB 76 passes.   In both cases it’s not about addressing an educational need, it’s about spending and the lack of control to limit that spending on the schools.  No matter how much they get, they always need more.

It doesn’t matter if that additional spending actually produces results in the classroom because if it did they would have done some serious reanalysis of what they are doing.  It all seems to keep coming back to the same thing: maintaining their power!

That power includes being able to use the tax-payer funded collection of dues to fund re-election campaigns of legislators and then using that funding to help to convince legislators that they can’t win or keep their seats if they lose the Educational Complex Union Funding and support.

The powerful unions built that power by tipping the scales.  They grow their member numbers to increase their power even when student population doesn’t warrant such growth.  They do so through legislative measures that protect these jobs even when a teacher in the classroom may be underperforming.

Now I know that teachers will get offended by that but I’m offended by the fact that more teachers, administrators and school board officials are unwilling to stand up to the unions in dealing with bad teachers and bad policy.  That’s not to say that all teachers are bad…they aren’t but quality education needs good teachers who aren’t hiding behind excuses when the children in their classroom continually under-perform.

No matter how uncomfortable the truth, we must face the facts if we really want to fix the problem and this is a fact that the educational complex will do everything in their power to ignore.   They will constantly frame debates away from this hard hitting issue because it simply doesn’t fit into their narrative.

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We are sold a narrative that smaller classrooms and more teachers results in better education.  The actual results tells us something very different.  After 40 years of pursuing this rhetoric, we see no official results demonstrating that the rhetoric is true.

The public educational complex has done everything in their power to remove competition.  They do so because it’s about the power, not because it’s in the best interest of the children.  The despise school choice almost as much as they despise losing their power over our homes

The latest attack by the public educational complex against alternate funding sources for education is about one thing…Power.   It is a power they will cling to and if they have to use misinformation to hold on to that power; if they have to misdirect tax-payer resources away from the children to spread that misinformation, they will.   They will do all that they can to hold on to their power in the protection of a system of taxation that is regressive and uniformly unfair.   It’s like a very bad game of king of the hill and they will use any means possible to make sure that when it comes to controlling our lives through our homes to advance that agenda of power.

Evidence of the misinformation can be found in the rhetoric from the West Chester School Superintendent when he states:

The new plan would allow school districts to go to voter referendum for capital improvements but not for operating expenses. Within a few short years, we will simply not be able to operate at our current levels, and the quality of our educational system will dramatically suffer.

The statement is completely untrue.  HB/SB 76 allows for local referendum for normal operating costs.  Section 306 of the bill explains the referendum but this school superintendent has apparently chosen to disregard the actual facts in the language of the bill to assist in spreading the misinformation about the legislation.

We’ve seen a great deal of this type of misinformation.  The problem here is that this misinformation is coming from people who have a position of trust in their community who will take the superintendent at his word without checking the facts.   Why would he misrepresent the truth?

We’re told that about $14 billion a year is collected through the property tax.  Another $15 billion is collected through state taxes to further provide for education.   That’s almost equivalent to the entire budget to run the entire state and yet our school districts are telling us that isn’t enough.

At the current rate of growth, school funding will soon exceed the budget for the entire state and the number of people at risk of losing their homes through sheriff auctions, bankruptcy and foreclosure will only continue to grow.   Apparently our school districts are fine with that.  If it helps them maintain their power, why wouldn’t they if all you really care about is holding on to that power.

After all it’s not the school board who shows up at your house to through you out, it’s not the Administrators.  No, they have the local sheriff to do their dirty work.  They can just look the other way and pretend it’s not their fault or, even worse, that’s it’s not happening.

In the public education complex’s rhetoric, they talk about losing their ability to collect previous delinquent taxes if this passes.  Those delinquent taxes will still fall due.  They will still have to be paid.  It’s just more misinformation and misdirection to try a kill a bill that will benefit many in the Commonwealth.  Again, it’s about power.  It’s about their mistaken belief in a right to take away our homes.

While the public educational complex may be responsible for education maybe they should go back and look at the founding principles of our nation which included a strong protection of our individual right to property.   At every step, the property tax remains the greatest violator of those inherent rights and as our Declaration of Independence explains, such violations are how we determine the difference between a just and an unjust government.    As it stands now, the public school system is supporting a system of tyranny in the advocacy of an unjust form of government.

Note: A second article on this topic will follow tomorrow.  As angry as I am at the educational complex for their misinformation and their continual assaults on home-ownership in the protections of their power over us and our homes, the ultimate blame rests on the shoulders of legislators who fear the power of the educational complex more than they are concerned about doing what is right!

 

 

 

 

 

 

Who Watches The Watchers?

News broke over the weekend that the Climate Change data used to create the Paris Agreement on Climate Change was intentionally manipulated using flawed methods and a computer system with bugs that has become so unreliable that none of it’s data can be verified (source: http://www.dailymail.co.uk/sciencetech/article-4192182/World-leaders-duped-manipulated-global-warming-data.html)

I know that I usually remain focused on the issue of School Property Tax Elimination but bear with me for a moment….

What we are seeing is institutional  falsehood and manipulation to promote a preconceived conclusion where it is claimed that “the science is settled” but that science relies on models that are manipulated to reach those preconceived ends.

I’m not a scientist.  This data is too complicated for me to fully grasp so I am reliant upon those charged with supplying me with the correct information that I can process to reach my own conclusions.  When that has been stolen from me by the very people I am supposed to trust, the blame rests solely on them.

We would think that this story would be in every media outlet in the world, especially in America where the free press is still supposed to be the bulwark of our foundation in the principles of Liberty.

What is the common citizen to do when both the institutions and the media that is in place becomes a propagator of falsehoods in these tactics of indoctrination.

I am neither a Climate Change denier not a blind supporter…all I ask is the truth!

You see, when government, or any agency of the government, is more interested in promoting propaganda than they are with telling the truth coupled to a media that promotes the propaganda as fact, where do the people go for the truth?

To my way of thinking, the fear isn’t really that there is fake news out there, because there is fake news.  The fear is that people will stop believing the fake news (propaganda) sanctioned by the government and the many-tentacled-monstrosity they’ve created through their organizations and bureaucracies.

The information about the falsehood’s and manipulation of scientists should be alarming to all of us.  These are people that we should be able to trust.  They have no reason to look any further then in their own mirror for the blame for that lack of trust.

Responsibility and Accountability should be an integral part of Integrity.  That Responsibility and Accountability should be framed around being honest!

This type of activity is becoming all too commonplace.  We can see it happening in our own Commonwealth!

So what does this have to do with the School Property Tax Elimination effort?

As an ardent activist for School Property Tax Elimination, listening to the falsehoods about this legislation, largely from people who haven’t taken the time to actually read the bill, has become commonplace.  It was to be expected.  In the desperation of clinging to the status quo, regardless of how harmful the status quo is, challengers of the status quo must be ostracized.

The issue of school property tax elimination is neither a left or right issue although, as an advocate I have been called both socialist and neo-con.  That is because protectors of the status quo are firmly entrenched on both sides of the aisle.   They simply don’t care if the status quo actually works or not….they will fight protect their treasured status quo while pretending to be fighting for us!

However, two weeks ago school organizations banded together to launch a virile attack against HB/SB 76 largely using falsehoods to promote their claims.  A recent letter from these organizations went out carrying this image on their letterhead:

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Our school organizations have partnered with the PSEA, the powerful state teachers union, in their attempts to trash the school property tax elimination efforts.   Like the alleged “scientists” who stooped to manipulating data to push their climate agenda; these organizations, who we have charged with the education of our children in the public school system, have resorted to propaganda that has been carefully crafted to push an agenda….facts be damned!

The news media has jumped on board to carry their water for them.  Forget fact checking; they just give them the room they need to kill this necessary reform to how Pennsylvania funds public education.

The goals of this agenda are simple to see for anyone who is actually watching:

(1) Stall the efforts of the advocates and the supporting legislators by forcing them to redirect energy away from their priorities.   By using their manipulation as fact utilizing a media as their water boys to create a false legitimization of their information they force us into a defensive position.  A day spent fighting these untruths is a day not spent on getting this bill across the finish.  After all, we have limited resources and they know that.  We aren’t a well-funded machine like their organizations.   We don’t have tax-payer funded advantages like making others pay for their dues collections that can then provide revenue to participate in campaigns such as this.  Nor do we have tax-payer funded websites that can propagate the falsehoods (http://www.nwlehighsd.org/spotlight.cfm?sp=17246&school=0).  If they want to hold a town hall to spread their misinformation they can do so making use of tax-payer resources.  Unlike us, the cost for these promotions doesn’t come out of their personal pockets.

(2) Sap Representatives’ will to support or drive necessary change.  Unfortunately doing the right thing because it’s the right thing to do is not high on the legislative priority list.  Re-election is that priority.   When organizations like this combine to fight the will of the people polls don’t matter nearly as much.   In spite of the fact that in poll after poll, the overwhelming majority of the people support elimination of the school property tax those numbers don’t matter as much as this one:

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That’s just the Union contributions and does not include the spending by other the organizations.  How do we compete with that?

(3) Reaffirm the illegitimacy of the HB/SB 76 advocates: Every time a falsehoods is propagated as fact, a public who doesn’t understand the legislation the way we do is more susceptible to perceive the falsehood as fact.  Unfortunately we also have some legislators who support the concept of property tax elimination but have not taken the time to study the bill nor the issue in detail.  They too, will buy into the falsehoods because, after all, the information is coming from supposedly informed and reliable sources.

These three steps are now commonplace strategies used by propagandists in driving agenda’s where the truth becomes irrelevant.  It’s not so much the three steps that I have a problem with.  My problem is with the tactics used in advancing those steps.

When truth in this equation becomes irrelevant, there is nothing legitimate about those three steps!  The end, in their way of thinking, must always justify the means.

In the past I have attempted to defend the school boards and, truth be known, we do have some school board officials fighting with us.  I have also defended teachers.  I can not defend what is happening now.

How can we trust them?  If we can’t trust them for the reliable information on this legislation why should we believe them when they tell us the reasons for the next school property tax increase?

As I look at that image of logo’s included on their letter I am struck with this question:  Where do we, the working families who pay their bills through our taxes, turn to find our real representation?  It should be obvious to us that we aren’t being represented anywhere here.  Yes, we vote for our schools boards but how much do we really know about them when we cast that vote?

Do we really know if there is conflicts of interest like spouses in the public educational system?  Do we know if they operate a business that personally benefits from the school district?   The fact remains that, as important as these people are in the education process, there is very little vetting of them.  They will then go on to hire our teachers, promote our principals, hire our administrators and choose our curriculum.  Worst of all, they get to decide if we can stay in our homes.  If what they want or concede to exceeds your ability to pay you become part of the collateral damage of a failed and unfair system of taxation!

Why do they fear allowing the public, through no-exemption voter referendum, to participate in the decision making process that will impact our ability to keep our homes?

Why do they refuse to acknowledge this as real local control or, as Thomas Jefferson put it, the consent of the governed?

Do they has so little respect for us that they think we will fail to recognize real need?

This rhetoric of misinformation has resulted in leaving a very bad taste in my mouth.  It has only reinforced my will to fight back!  Unfortunately, it has also weakened my faith in those we have entrusted to oversee the education of our children.

I started this blog by asking a question:  Who Watches The Watchers?

The fact of the matter is that we can not trust them for this information nor can we trust the media to do the journalistic work of digging into the details to tell the truth.  They have demonstrated that we have as much reason to trust them as we would have in trusting a parrot.  All we are going to get is the regurgitated information that’s been fed into them and in this case, Polly wants a cracker…that cracker is the authority of your home sold to us in the guise of “local control”.  They want to control us through our homes and they will go to great lengths to protect that authority over us!

Granted many who are repeating this information are simply fulfilling the role of parrot in blindly repeating the talking points they have been handed.  Perhaps some may think we should blame the parrot because the parrot is just doing what it is supposed to do.  These people, however, aren’t parrots….they have a responsibility to us to demand the truth. Unlike the parrot who can only, by design, repeat what they’ve been told, these are people capable of reason and logic tied to a responsibility to those who have entrusted them to be factual and honest.

Who Watches The Watchers?   That’s our job!   By that I don’t simply mean the leadership of the PTCA/PTCC or leaders of other like-minded organizations who support this legislation .  I mean you and me!  We must remain vigil.

We do have the truth on our side and in this case, we can afford to allow the truth to be silenced!

An Open Letter To The Taxpayers of Pennsylvania

An Open Letter To The Taxpayers Of Pennsylvania:

I am writing to respond to the letters dated January 30, 2017 currently being sent out by a variety of school related organizations to legislators in opposition to HB/SB 76.   I have chosen to include their text (in red) with a response (in italics) to this recent letter.  I apologize for the length of this letter but I felt it was necessary to address these claims as written.

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Their letter begins with this header.  The first image is that of the PSEA.  The PSEA and these other educational institutions are clearly in partnership leaving us all to ask the reasonable question:.  Where, in this massive conglomeration, is the voice of the tax-payer?

The letter begins:

On behalf of our organization and the more than 200,000 Pennsylvanians we represent, we urge you to oppose a plan to eliminate school property taxes (commonly referred to as SB 76). While we recognize an over-reliance on property taxes for school funding exists, complete elimination has dangerous, unintended consequences, and simply goes too far. The proposal would destabilize our public education funding system, create greater inequities, and enhance the divide between state-determined winners and losers.

Response:  It is made clear in their opening sentence that they do not, nor do they intend to, represent the taxpayers.  Their representation is solely for their own interest; Not for the 12 million people of this commonwealth.  Oddly enough the statement actually denies the inclusion of the student population.  The letter is a reflection of their self-serving interest, not in the interest of the students, or the rest of the Commonwealth.

While speaking about dangerous unintended consequences we have been asked to ignore the consequences (both intended and unintended) of allowing this form of taxation to continue for as long as we have.  It has destabilized our homes and our communities adding to the problems of blight and the decline in population as people leave this state for friendlier tax environments.    

It has artificially driven up the cost of rent.  Due to the cascade effect of the property tax it also artificially drives up the cost of everything we purchase.

They have created the very inequities that they now claim to oppose.  If the school property tax is not eliminated those inequities will continue to grow at the sole discretion of those organizations fighting to protect the status quo. 

The passage of HB/SB 76 will actually cap these inequities allowing the General Assembly to address the basic education funding formula using a more stable measure of revenues collected by the replacement revenue through a statewide PIT and SUT.  Since the funding replacement is driven out as a dollar for dollar exchange of the existing property tax revenue collected, the state is not determining the winners and losers.  That amount was predetermined by the school districts themselves.  It is time for these organizations to stop deflecting their accountability to others while denying their own responsibility in creating many of the problems we face. It can’t always be everyone else’s fault!  Deflecting the blame is not a solution!

 We do believe that the Basic Education Funding Formula needs to be adjusted to better reflect cost per student, population and inflation but we also believe that we can never control the inequities until we cap local authority’s ability to raise taxes at will often outpacing inflationary rates.  Our goal, however, was to address the unfairness of the school property tax.  The other problems associated with education funding requires unique solutions and should not be tackled through one massive piece of legislation.  It is irresponsible and unconstitutional in this Commonwealth to expect one piece of legislation to address all of the problems.  These other problems must be tackled individually and we encourage these educational organizations to come up with solutions to the other areas that we can get behind and fight for. 

Based on my past experiences I will not hold my breath for this to happen through the organizations listed in their letter.  Instead we will probably see more citizen advocacy in seeking the solutions to those problems as we have seen with the advancement of HB/SB 76.  You cannot claim to stabilize education funding by creating instability for those who must pay for the bill.  The path we are on is insolvent leading to an unsustainability that these organizations continue to ignore in order to protect their ability to raise taxes at will.  That attitude is simply irresponsible creating adverse effects that extend far beyond the impacts of the school property tax itself.

STABILITY

The property tax is a stable and predictable source of funding for the schools. Unlike personal income or sales, the property tax base is less prone to fluctuate in response to short-term changes in the business cycle or economic recessions. According to the Independent Fiscal Office (IFO), during the Great Recession Pennsylvania’s income tax revenue dropped by 6.5 percent in FY 2008-09. This was compounded by lost sales tax revenue during the same period. The same IFO report indicates that sales tax revenue declined 4.2 percent in FY 2008-09. Over the same period, school property tax revenue grew more slowly but did not decrease. Reliance only upon state taxes would have reduced the amount of money available to public schools to pay for necessary programs during a critical time when many children were facing economic upheaval within their families as well.

Response:  The property tax is only a stable and predictable source of funding for the schools.  That stability is predicated on the instability it creates in the lives of those who must pay for it.  Of course they aren’t even pretending to represent us so why should we think they would care.  

In down economic times, jobs are lost through no fault of the individuals losing those jobs and, as the same report cited by the school groups you’ll note that spending increased during this recession even though people had less money to spend.   The increased school property tax during this time period slowed down the recovery and had a negative impact on the sales tax.  With less money to spend and more owed to the school property tax, tax-payers had less revenue to put back into the business community.  This had an adverse impact on jobs making restoring jobs in the market place more difficult.  By eliminating the school property tax that, by their own admission, increased during a recession, we could see easing in the loss of jobs and decline in sales tax providing for a more rapid recovery at critical times like economic recessions. 

The private sector, in many cases, has seen their wages stagnate since the recession.  They have seen their benefits cut, loss of retirement investments and more difficult times.  This is unlike their public sector counterparts in the public educational system.  It is ironic to me to see the PSEA and the PSBA partnering in their opposition to this important legislation.  Rather than accept changes to the current pension system they are fighting to maintain their status quo and fighting for higher wages.  This is with little regard to the consequences, unintended or otherwise, on those who actually have to pay these taxes to provide for these wants.  At the same time, rather than allow for time for tax-payers to recover from the recession, many school districts went ahead with school building projects, replacing sport playing fields with astro-turf and other projects that could have been postponed, often against the wishes of the majority of the residents in their community.

While, in many cases, our county, municipal and other state governing bodies restrained from increasing the tax burden on the residents during the recession, this was not so with our school districts.  Spending increased.  Wages increased which added to the pension cost.  How many of those increases were not mandated by the State?

They will bemoan that they can’t control the costs and then, as we will see later, complain because of the loss of local control.  What they have refused to do is accept their own responsibility in the increased cost of local property taxes to protect the status quo placing more and more people at risk of losing their homes.

WINNERS/LOSERS

If the property tax is eliminated, not all communities will be winners. Taxpayers in some districts will pay simultaneous increases in the state personal income tax and sales and use tax while still paying school property taxes. In these districts, taxpayers will be subject to double taxation, paying significant state tax increases while continuing to pay some or all of their current school property tax bill and all of their county and municipal property taxes. Additionally, 215 school districts (43 percent of all districts statewide) will retain at least 20 percent of their existing school property tax, and 23 districts will keep at least 50 percent of their current property tax to pay for existing debt. A few school districts will still need all or nearly all of their current property tax levy to fund existing debt payments.

We understand that people generally hate the property tax and the threat it causes to people on fixed incomes. However, there are ways to address that problem without wholesale elimination.

Response:  The last paragraph of this section summarizes the disconnect these organizations have with those who are struggling this unfair and egregious tax.  This is not simply a threat to families or individuals on fixed incomes.  It is a threat that prevents many young families just starting out from purchasing a home to invest in their own future.  Those families must turn to renting.  As the property tax continues to increase it continues to drive up the cost of rent making it harder and harder to move from renting to home ownership.  At the same time, it is forcing others out of their homes.

In the last three years alone median rent has increased by 5.47% according to the Census ACS survey.   The largest factor in the increase of this rent is the property tax.  If those trends continue we would see a 27.4% increase in rent over the next 15 years.  The Study tells us that the median rent today is $848 in Pennsylvania.  If the trend continues in 15 years that median rent would rise to $1080.35. adding an additional increase of $2,248.2 to the average annual rent if we maintain and protect the status quo.  This has the impact of pushing more families into seeking government assistance to help pay for the rent associated with increased as a result of rising property taxes.  That increased the state’s need for revenue forcing cuts in other services or a need to raise taxes in other areas. 

There will always be winners and losers but under this system of property taxations, the working families are always the losers to the benefit of those in the educational industry.

Nowhere in their opposition do these organizations address the inherent inequities that make the majority of homeowners losers under the current system.

Studies by the National Taxpayers Union have demonstrated that as many as 60% of assessed home values are actually higher than the price the home could be sold for in the open market.  In the county that I live in a recent re-assessment was conducted on the 54,000 properties.  60% of 54,000 properties would be 32,400 properties.  A higher assessment than actual selling price results in paying taxes on property we don’t actually own (something that cannot happen with a PIT or SUT, neither of which require constant and expensive reassessments).   Following the reassessment, thousands of appeals went forward and, according to our County Commissioners the overwhelming majority of those appeals were ruled in favor of the homeowner proving the inherent flaw of assessments in leveling the playing field.  I was one of them.  Our home was assessed at $40,000 more than it was actually purchased at the year before the assessment.  Our assessment was lowered but it was still much higher than the price we paid for it.

If the average home is only assessed at $5,000 more than it can be sold, it is generating revenue that is unjustly being levied.  In my town that would mean an additional $136.00 a year in taxes for property value that I do not actually possess.  I have been told by realtors in my area that home values in the area I live have actually declined since the reassessment.    

If the study by the National Taxpayers Union is correct, it is generating more than $4 million dollars a year in taxes on property that the people in my district do not actually own.  Even if that 60% number is too high; even if that number is only 10%: How can anyone justify that as a reasonable form of taxation?

Again, this is something that cannot happen through a PIT and SUT tax.  Only elimination can rectify that unjust method of taxation.  

LOCAL CONTROL

This legislation will have the commonwealth assume virtually all the authority once held by local school boards, effectively eliminating local control. With no ability to raise revenue or make financial decisions at the local level, the state will be responsible for ensuring that districts have the resources to comply with all mandated costs. By removing a local school board’s authority and ability to respond to the needs of its students and residents, the state will be responsible for the financial health of all 500 school districts. As a result, the state will own all cuts to school district programs, staff, and services that occur under this type of legislation.

Response:  Making the claim that school district would have no ability to raise revenue or make financial decisions at the local level is simply not true.  It is an irresponsible claim.  HB/SB 76 has a built in mechanism that allows school districts to levy a local PIT or EIT tax with the consent of the voters for any special project the school board may be considering.  HB/SB 76 also does not remove any of the current Act 511 options in local taxation providing them with other alternatives that our homes to generate income.

While we all agree that unfunded mandates are a problem, how many of these unfunded mandates were put in place at the insistence of the PSEA and the Department of Education?  How many of these unfunded mandates are unique protections and benefits to Public Sector Unions that continue to drive up the cost of Education.  You cannot continue to claim to be opposed to unfunded mandates while fighting against Pension Reform, Prevailing Wage, Paycheck Protection and changes to the current Healthcare system in the Public Sector to bring it more in align with the Private Sector.

In the crafting of HB/SB 76 we went to great lengths to allow school districts to make use of a local Income Tax for special purposes with the consent of the people in the district.  we understood that special needs would arise and we included a section in this bill to allow for those circumstances.  In exchange for that, these educational organizations have chosen to misrepresent that portion of the bill because it doesn’t give then sole authority for the increase.  In other words, it doesn’t allow them to control the locals but, instead, requires local input in their decision making process which truly restores local control.  

This bill does nothing to regulate how the school district spends the money they get through the replacement funding. It is disingenuous to claim otherwise.  Either they are critiquing a bill they haven’t read or they know better and simply don’t care.  

Again, it is the first sentence of their statement in this section that is so revealing.  They admit that fear losing their authority over the locals rather than allow the citizens in their community to become a part of the decision making process.  

The consideration of local taxing options, as some of these bodies have suggested will, only allow inequities to continue and to grow.  Many of our 3rd class urban city schools do not have the resources available to them to make use of local options in the funding of their schools making them more and more reliant on state funding.   Their wealthier rural counterparts may be able to shift to this type of funding since they aren’t land-locked and have the room for business expansion.  If we want to force existing businesses to option out of the 3rd class cities to relocate into the wealthier rural communities, the local option would be the way to do it. 

I would also like to contend that our school districts were granted an independent taxing authority by statutory law.  While our school boards govern our local schools they are not an actual governing body.  They have no authority to pass laws that regulate our communities and their authority is restricted to the local school only with that authority strictly regulated and controlled by the Department of Education and the General Assembly (Public School Code of 1949 and Title 22 of the Pennsylvania Code).  

 I question the granting of independent authority to control local taxation through the school board.  In doing so I contend that, as a result of the rising cost of education funding, our municipal government have had to make cuts in necessary functions such as police, fire and safety protections making our communities less safe.  This has led some rural municipalities to remove local police protection completely to become reliant on State Police protections adding to the cost of maintaining the state police force resulting in higher taxes elsewhere.  The school property tax is putting our homes at risk in more ways than the direct financial burden of the tax itself.  The School Property tax has also led to the implementation of other government supported programs that are paid for through other tax programs.  Rent Subsidies are more necessary because there is a Property Tax, County Taxes are impacted by the need for reassessments, Property Tax relief programs like Clean and Green, KOZ, LERTA, Homestead and Farmstead exemptions and more have all become necessary because there is a property tax.

 I would also like to remind these institutions who administer in the education of our children that our Commonwealth Constitution is still the rule of Law in Pennsylvania.  Article 3, Section 14:

The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.

 If these organizations wish to change our Constitution, there is a process for that.  Let’s not engage in an argument of continuing to undermine our Constitution through questionable means and put this before the people of the Commonwealth rather than continue to blatantly disregard the rule of law in the Commonwealth. While we worked very hard to make sure that HB/SB 76 is in full compliance to our Commonwealth Constitution, this is, apparently, not something our school boards want to consider.  They have suggest taxing business property different from homes which would violate the constitution.  They have suggested making isolated relief, usually focused on seniors, which may garner senior votes but is in violation of the Constitution.  

 It is long past time that we restore an accountability to the tax-payer for how our money is being spent.  When it comes to education funding that requires a radical departure from the path we are currently pursuing. 

I know of three opportunities that were granted by our legislators to allow opposing views to 76 to address their concerns and provide solutions to the problems of taxation.  I participated in one of those round-table discussions.  While they may agree that there are problems with the property tax they have not offered any substantive solutions to the problem.  They choose, instead, to protect the status quo where they benefit only adding to the financial burdens of the rest of us.

 In looking at the header of the letter I am referencing and then in looking at the rhetoric….who, in this conglomerate of educational organizations, is actually watching out for the tax-payers?  One would think that would be the responsibility of the School Board but from their current advocacy against us I am forced to question that.  I am instead reminded of a grievance in our Declaration of Independence which states “He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.”

In the past, letters written by other opposing groups have revealed that these groups have been working behind the scenes in ways that are counter-productive to the best interest of the working families of this Commonwealth.  These organizations have now joined that rank and file.  In the preservation of their own self-interest they are sacrificing the best interest of the entire state by exploiting us for their personal gain.

I say that with great pains.  I take no pleasure in bringing this issues to the forefront.  I also say that understanding that if we don’t confront these things honestly, it will only get worse.   

In closing, I would ask the School Boards, Principals, Administrators, Business Officials, Unions, and others who have contributed to the rising cost of education to justify one simply chart:

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After all, is it really all about the children or the community as it is made to appear in their rhetoric through misdirection or is it just about them and their ability to profit while continuing to abuse the home-owner in support of an unfair and inequitable system of property taxation?