Before you read on I want this point to be very clear. Our system of government is about the best that has ever been crafted by mortal minds. There is nothing wrong with our state or our country that a strict adherence to the moral principles of Constitutional rule of law wouldn’t cure. The problem isn’t with the Constitutional rule of Law, it’s that so many of our elected representatives and the departments, agencies and commissions they’ve erected stand in violation of that rule of law. A Government by the people, for the people and of the people is a government that understands the Sovereignty of the Individual. A government that understands that just governments derive their powers from the consent of the governed also understands the Sovereignty of the Individual. This is a government that understands that all governments should be instituted by the people and their purpose is the protection of our life, liberty and property. This is the America our founders intended for us. This is not the America we live in anymore!
Deception! This seems to be the rule of law for politicians who will stop at nothing in order to push any agenda. Today facebook is all a buzz with the breaking story of the 27 Democrats in Washington who told everyone they could keep their healthcare when the Affordable Care Health Insurance package was being rammed down the throats of Americans. The Washington Examiner ran the original story thanks to Byron York and you can read it here (link), But its not just the Affordable Heathcare Act that is a magnet for political deception and its not just Washington.
Last week the IFO released a report where they painted a rather dismal picture of the next 10 years of Pennsylvania Economics. One that they tried to spin to downplay the obvious. After toiling through the 91 pages I noticed a singular glaring omission-the impact at the local level of the state mandated pension system. Sure that’s not going to be paid for by the state….most of it will be paid for through the property taxes-Eli Evankovich made that pretty clear during the house debate on the 1189 amendment that failed- but is that a reason to just ignore it as part of the economic indicators for the next 10 years in Pennsylvania?.
The reason I believe that it is necessary for the IFO to factor in this growing local tax burden is because it will negatively impact the revenue the state receives from sales and use tax. When the people have less money to spend there will be less revenue for the sales and use tax. I believe far less than the projected numbers the IFO is claiming. I also believe that by ignoring these pension numbers the future housing sales projections are also seriously flawed.
The IFO ignored that same pension debacle when looking at SB 76. You can look at the last 20 years to project future education spending but without factoring in the cost of pensions in education spending in the future, something that will be much different than it was in the previous 20 years, the charts become skewered and falsely represent the facts. As bad as the IFO projections for future education spending look to the average homeowner already, they are missing the mark by several billion dollars already because they chose to ignore the additional burden of paying for these pensions on the local property owners.
It is estimated that the current combined unfunded pension liability stands at $47 billion dollars. Every session that passes where noting is done about the problem it only gets incrementally worse. To begin with we have yet to hit the investment return of 7.5% that was projected in the funding of the pensions. Every year we fall below that mark the burden falls on the tax payer, the majority of which will never see that pension since its only for public sector employees. Certainly the IFO must realize this…if they don’t, I would question how they got their positions to begin with. If, in the last three years the pensions have been under-performing so poorly, what makes them think as the burden increases on the taxpayers, it will improve? Wasn’t this a failed lesson in the ancient practice of bloodletting?
The Poverty level has increased in the state while the median income level has decreased showing a shrinking middle class. Of course when some glitch in statistics appears that presents short-lived good news, that becomes the media and political story of the day but when you step back and start looking at the big picture it paints a very dismal picture of the economic future of this state.
Pennsylvania is sometimes referred to as the cradle of liberty in part because both the Declaration and the Constitution originated in Philadelphia. That may be true but the assault on individual liberty, especially concerning property rights, is going full tilt in this state and homeownership is on the decline as a result (Yes, I know the housing bubble is in part responsible for that but to continually ignore the role that property tax plays in all of this is not merely irresponsible, it’s willful incompetence). The recently released IFO report shows an 11% decrease in homeownership in the last 10 years for 18 to 35 year old’s in the state. They then go on to say that this will level in the future, How? If we continue down this path of using the property of the individual for mass redistribution under the false assumption that because an individual owns or is purchasing their home instead of renting they can somehow afford to carry the burden of education funding on their backs there is no way this will level off.
They certainly see a leveling if the legislative body continues to think that mandates from the state that aren’t funded at the state can continue to be pushed down to the local level where a persons home, which generates no additional revenue, is expected to provide the revenue to pay for those mandates and nowhere is this more evident than with education spending. They just keep handing out the unfunded mandate perks and then let the locals worry about coming up with the money to pay for it all.
Oddly enough both the PSEA and PSBA can’t seem to read the handwriting on the wall and strongly want to maintain the status quo but to also expand the taxing authority of the schools districts to give them more options to dig further into our pockets. Their policy arm, the Keystone Research Center, chooses to ignore the facts as well. Instead they push more deceptions while making ridiculous claims like “10,000 people losing their homes because of the property tax is not reason enough to address the problem!”
Frankly, and call me old fashioned if you want, but I still believe in the founding principle of the reason we entered into society and formed government in the first place was for the protection not the pillaging of property. Nowhere is this principle ignored as it is with the real estate or property tax. Show me one other tax in the state of Pennsylvania that has increased the way the property tax has increased in this state in the last 10 years.
In 2004 we had 1,811,636 students enrolled in our schools, today we have 1,757,678 for a loss of 53,978 students (source: http://datacenter.kidscount.org/). You see what the IFo report fails to tell us is that while homeowership has decreased for those 18 to 35 year old people, the exile of that age group from the state is one of the reasons for the declining student population. That 11% decline is from those who have remained in the state, perhaps because they can’t afford to leave, but then again, many of them can not afford to stay here as well and so we see an alarming increase in the number of families needing more and more social services to survive.
The cost of education in 2004 was 17 billion dollars whereas today it stands at 28 billion. At the same time the number of people defaulting on their property tax bills is growing. The state now stands with more than $1 billion in unpaid property tax debt. That is a $1 billion revenue shortfall at the local level that has to be made up and until those properties become current or are seized and then sold on auction, that debt burden falls on other property owners increasing their costs related to property taxes. The PSEA, PSBA and state legislators with their unfunded mandates seem to think this is not a problem. From the disinformation in the IFO reports, one can assume that they don’t think it’s a problem as well, at least not one to consider when factoring future economics in Pennsylvania.
The problem here is that the future economic status of the state is totally dependent on the discretionary spending of the people of this state. The greater the tax burden, the less discretionary spending capitol and that means less revenue to the state through the sales tax which currently generates the funds for education spending. The less sales taxable items purchased means less state revenue for education and with the growing spending problem in education that means higher property taxes. It then becomes an endless cycle.
Higher property taxes doesn’t just mean higher property taxes. It means less discretionary revenue for property owners in the state. That translates into a weaker business environment for the state which translates into less real jobs in the state… at least real family sustaining jobs.
Quick fixes will no longer work, actually they never have, and the solution is most definitely not to expand the taxing authorities of our school districts which will leave legislators free to push down more unfunded mandates to reward special interest lobbying machines. We need a system of accountability directed at those who generate the costs and those cost generators, especially in education, come from the state through the Department of Education and their regulatory powers through Title 22 of the Pennsylvania Code.
The only way to force that accountability is to demonstrate to them how much these programs actually cost the state by making them accountable to raise the revenue to pay for the programs.
The only way to make that happen is elimination of the school property tax and pushing the entire cost of the state mandated and regulated public school system back where it belongs…in the general assembly.
The only bill that does this is House and Senate Bill 76.
The house leadership and a handful of their cronies spent 18 months on a misinformation campaign doing everything they could to deceive the public about the true nature of these bills. They blamed everyone but themselves for not being able to do what the people of this state want. The opposing lobbyists worked hard to help spread that misinformation. It wasn’t until the house debate where they, accidentally or otherwise, spilled the beans….”How will be pay for the pensions?” Expanded translation, “How do we fund the unfunded mandates?”
In pushing HB 1189 through they also revealed this intention to force the cost of state government down to the local level by expanding the taxing authorities of the school district so they can pay for the state mandated programs through local taxation and all the while they claimed this was about local control even though the bill does not require a voter referendum to expand these powers. As I’ve said many times, when many in our legislative bodies talk about preserving local controls, they mean preserving the control of the locals and further infringing on their personal freedoms and liberties. Their favorite tool of abuse is the school property tax.
America may be angry because they’ve been lied to about the Affordable Health Care act and they should be but for decades, at least since 1965, we’ve been lied to repeatedly about our property taxes and the steady progression of redistributive theft grows faster than all other tax increases and somehow so many in Pennsylvania just don’t seem to care enough to do something about it.
Every promised relief over the past 10 years has been lies, property tax has far exceeded whatever relief we may have seen. We instituted gambling in Pennsylvania in the hopes of property tax relief and when balanced against the increases in property taxes it has done nothing.
Equally ignored by most is the cost of property tax on raw materials. Raw materials is the beginning of the entire economic cycle. Without raw materials there can be no real sustainable wealth. The wood, the minerals, the food we eat….it all begins on someone’s property. The higher the property tax on that land, the higher the cost of the goods we purchase. You see, property tax is simply the thief that just keeps stealing. We’ll tax the land that produces the raw materials; then we tax the land and property that refines those material into consumer usable products; then we tax the property of the shipping companies that move the products; then we tax the property of the warehouses that store the products; and then tax store that sells the product. Finally they tax the home that uses the product and this they call the property tax where a single item can be taxed a half dozen times from the raw material to consumer product with each level of taxation driving up the cost of those goods even further.
Perhaps the greatest lie even perpetrated on the citizens of the state is to fool them into believing they actually are property owners. Not so. For the individual homeowner there is no one to pass the property tax bill to; for them they will find themself in a constant state of rental servitude to the state where the annual tribute will be paid or your home will be seized.
To my friends who tell me that I must render unto Caesar the things that are Caesar’s so I should just pay my property tax and stop complaining I have one thing to say to you. My home does not belong to the government. My home belongs to me. Using a faith principle to promote tyranny of claiming I should render my home to Caesar because somehow it belongs to Caesar is about as far away from the founding principles as one can travel.
Now I’ve used that term tyrant before in relation to the property tax so let me explain myself. Both Plato and Aristotle described tyrants as individuals or groups who look to their own advantage rather than that of their subjects, and uses extreme and cruel tactics—against their own people as well as others. I am of the opinion that when it comes to property tax, we see the finest example of this form of the Greek inspired “tyrannos”. The Latin variation of “tyrannus” literally meant “illegitimate ruler”. Again, where it falls upon property tax on the common citizen once again we find a justifiable argument for the terminology. Is a man’s home his castle or not? Under the property tax the individual is not the Sovereign in his home, the state is. Is this then not a usurpation of the throne in the individual’s home? Is this then also not tyranny?
I know that taxes are necessary and when applied by a just government to provide for the necessary functions of government in the securing and protection of our individual rights I get the render unto Caesar argument. When it comes to my home, take the argument elsewhere. My home and the land it sits upon belongs to me. I pay for it and I maintain it! It isn’t adding to my income. In fact, proper maintenance of my home actually requires more of my income. Eventually it will need a new roof and when it does, not only will I have to pay for the new roof, I’ll need to have my property reassessed so that my taxes can go up even more.
Under no conditions should it ever mean the government has a right to my property to tax me out of it and then seize and sell it for a fraction of its worth. If you can defend that and still call yourself an American then I suggest reading the words of our founders once again. You missed something….actually you missed most of it!