The Property Tax Reduction Illusion in Pennsylvania

PA Independent has a story discussing some of what is going around concerned Governor Wolf’s upcoming budget.  They aren’t alone, stories have been popping up in all media outlets but the stories are generally consistent with the PA Independent article.  (http://paindependent.com/2015/02/9023/).  While we won’t know what his budget will be until he makes the budget available to the public there is much speculation that includes yet one more attempt at selling property tax reduction instead of school property tax elimination.

The reduction/relief mentality has never worked. All we have to do is look back to the promised relief from Casino gambling.  Every attempt at relief is just as quickly dissolved by increases in the Property Tax that, in some area of the state, have exceeded the amount of relief offered.  There is also the problem that not everyone is eligible for these property tax relief schemes.  The state picks the winners and losers and it seems that there are always more losers than winners.  Leading those increases are the School Districts.  Not all of those increases are the school districts fault with the plethora of unfunded mandates being forced on them and that’s the major problem with the whole relief instead of elimination scheme.

It is being suggested that we could see an increase in the PIT or the sales tax, or a combination of both and that this would result in a “reduction” of our property taxes.    I find it interesting that those who complained about the implementation of these taxes for the purposes of elimination of the school property taxes saying it would be harmful to the poor, even though the IFO report said otherwise, yet now those same people are saying raising those taxes for reduction and not elimination somehow won’t hurt the poor.

We’ve never denied the fact that HB/SB 76 is a revenue neutral tax shift.  If Governor Wolf proposes a reduction bill that increases the PIT, Sales Tax or both, we won’t see a tax shift, we’ll see a tax increase.   Worse yet, it will kill the ability of getting HB/SB 76 passed.  We’ve been warning that they want to increase the PIT and Sales Tax and that has been behind some of the resistance to School Property Tax Elimination.  If they give us Elimination, they will have a harder time raising those taxes for their own design and that’s where the red flags go up for me.  If they raise the PIT and SUT for reduction instead of elimination, we’ll never see elimination…the problem is we won’t really see a reduction either;  not in the long run

HB/SB 76 has built in controls that cap future education spending to the rate of inflation.  HB/SB 76 would make the State Legislators and their regulating Departments, Agencies and Commissions more accountable for mandates.  If it’s going to increase the school district revenue needs, they’ll have to provide for the funding.  HB/SB 76 also places a no-exemption voter referendum for all school district spending that exceeds their budget allowance.  HB/SB 76 also includes a clause that says that if the revenue collected by the increase in PIT and Sales Tax for elimination exceeds 6% of the necessary revenue, that money is returned to the tax payers by lowering the PIT tax.   That’s what happens when citizen advocates are involved in the writing of legislation; accountability to the people gets built into the legislation.  I have serious doubt that the same measure would be built into the Governor’s proposal if this is the path he chooses to follow.

Don’t be fooled.  We’ll be told that this is a reasonable compromise.  That simply is not true.  The pension debt problem is going to keep growing and that’s going to result in dramatic increases, especially in the school property tax.  This year the employer contribution to PSRS will go from 16% to 21.4%.  It is estimated that this will add an additional $250 million dollars to statewide education costs.  Even if we shift to a 401(k) system that won’t stop the pension problem for existing teachers. It will help but its a band-aid, not a real solution.

We have a first in-last out policy based on seniority, not merit.   The U.S. Bureau of Labor Statistics documents the loss of more than 23,000 education jobs in Pennsylvania through the end of 2012. (U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages). According to the Pennsylvania Department of Education, nearly 11,000 professional positions were lost in just three years (2010-2011 to 2013-2014) (PDE: 2010-2011 Professional Personnel Summary and 2013-2014 Professional Personnel Summary, http://www.pde.state.pa.us/portal/
server.pt/community/professional_and_support_personnel/7429).  Even with the cuts to staff, the pension problem still grows. All future cuts in education employment, unless the first in-last out policy is changed, will result in the new hires under the 401(k) programs losing their jobs doing little to alleviate the existing pension problem.

It’s not just the Pension Tsunami.  The PASA-PASBO Report on School District Budgets was released this month (February) and includes some statistics that we should be aware of before we buy into this whole reduction scheme.  You can read the full report here (http://www.pasa-net.org/BudgetReportFeb2015.pdf)

Healthcare costs:  In the last five fiscal years, 93 percent of respondent districts have faced increased health care costs at least once. Looking specifically at increases from 2013-2014 to the current fiscal year, 81 percent of respondent districts reported higher costs, with a median increase of six percent.

Special Eduction Funding: Ninety-one percent of respondent districts reported increased special education costs at least once since 2010-2011. And while the state’s 2014-2015 education budget included an additional $20 million for special education (the first increase in special education funding from the state in six years), these resources were not enough to offset rising mandated costs at the district level. Seventy-eight percent of respondent districts reported increased special education expenditures in 2014-2015, with a median increase of seven percent over 2013-2014.

This report explains that since 2008-2009 the School Property Tax has increased  an statewide average of 16%. Ninety-one percent of respondent districts have raised taxes at least once over this span, and in every fiscal year, more than 60 percent of respondent districts raised property taxes. Notably, there has been a steady, three-year uptick in the frequency of tax increases since 2012-2013.

The summary of this report includes this alarming statement: A recent quantitative analysis presented at the University of Pittsburgh’s Institute of Politics and Temple University’s Center for Regional Politics showed that basic assumptions around revenues and expenditures would find 50 percent of Pennsylvania districts without the funds needed to meet mandatory costs by fiscal year 2017-2018.

The reduction scheme, as we see it, is little more than an excuse to raise the PIT and SUT taxes to provide a temporary reduction, that will be short-lived as school districts will be forced to continue their dramatic increases in the School property taxes as a result of the Pension burden, Heath care Costs and Special Education funding needs..  Within 3 to 5 years we’ll be paying more in school property taxes than we are now with additional increases in our PIT and Sales Tax.

It should also be noted that almost 180 (more than 1/3) of the school districts did not respond to this survey.  In 4 counties, none of the school districts responded.

We can’t allow this to happen.  While the Constitution requires that the Governor proposes a budget, the funding for that budget is through the General Assembly.  Our legislators must stop using the local property tax to force tax increases on us through these unfunded mandates in our school districts and the only way that’s going to happen is to eliminate the tax through a shift to other taxes that includes caps to that funding so that when more mandates come, the Legislators must be accountable for where that money is going to come from.

Again, don’t let them fool you.  The reduction scheme isn’t going to work.  If your legislator tries to talk you into supporting this, you need to point out the facts to them to demonstrate to that legislator that you see what’s really behind their proposal: using the false illusion of reduction in order to implement higher taxes on all of us.

 

“Rule of Law” or “Rule of Men”

“Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?” ~James Madison (Federalist 62)

As our Nation moved from being under the thumb of British Rule and an unwritten Constitution they established a “Rule of Law” through Constitutions. Many people are unaware of the fact that, after the Declaration of Independence was signed, many of the colonies established Constitutions for their states as an almost immediate response.   Some of these State Constitutions included Declarations of Rights. In all cases they clearly defined the political systems of their state establishing a Rule of Law in each State.  In doing so, long before the war for Independence was won on the battlefield is was first proclaimed through the Declaration of Independence and in the colonies by throwing off their English Charters and replacing them with new Constitutions.  

Those Constitutions reflect an unanimity in the view of governmental structure that reflected the view of the American People of the role of Government in Society.  In each case, as far as the governing bodies, these were negative charters which were intended to limit the powers of those Governing Bodies.

Our Founders, whether that be founders of the state governments or of the federal Government, understood that man, being an imperfect being, was prone to error. They provided these written documents for us to be the rules of law of the governance of the people. They provided these written documents so the citizens of the States would be able to read for themselves what the limitations of government was. They did this because they were concerned about the consent of the Governed.

We also have an elected representative form of Government. Those bodies are divided into three branches of government so that all powers would never be in the hands of one body where they could so easily be abused. This was certainly true in limiting the powers of the Governors of the states since no one individual should have that much power over the people.

Under a Representative form of Government that is also under a Rule of Law the elected representative has a dual responsibility. First they are to represent the people but that representation must be in alignment with the Rule of Law, or the Constitutions of each State. There is a third part to this though, and that deals with delegated powers in relationship to the consent of the governed.

No individual can delegate powers to any other individual that they themselves do not possess. If my neighbor is having economic difficulties, regardless of my own feelings about the situation, I can never delegate to them the authority to steal from the other neighbors. I am left free to help that neighbor to the best of my ability, but I cannot authorize them to do something that is beyond my power to delegate to them. This same is true of our legislators. If it’s not true in a government, then we no longer have a representative government. It doesn’t matter how many people think something is a good idea, a just government, representative of the people, cannot assume an authority that the people themselves cannot delegate to them.

Understanding that this is what we were given in our States, our states convened to establish a Federal Constitution to replace the Articles of Confederation which many felt were inadequate in governing these United States Of America. If we understand the Rule of Law in the states, these delegates to the Convention had a responsibility to uphold their State Constitutions by limiting the powers of the Federal Government to matters only of federal significance that could not be regulated adequately or justly by the individual states.

A written Rule Of Law creates and establishes an order in society. When that Rule of Law is established for the protection of the rights of the people it is supposed to be representing, we create just governments.  This is a society where laws are established from preventing me from doing harm to my neighbor while also protecting my neighbor from doing harm to me. This is a society where my rights to the things that belong to me, my property, is protected by government where that protection is so sacred that I have a right to physically and by force defend that property from the aggression of others. In such a society there is a relative order and there is a relative peace where neighbors can disagree in their political views but they are limited in that expression by a rule of law that forbids them from forcibly making me surrender to their views. Churches can exist side by side with different denominational views in their expression of their faith but are restricted from forcing others, against their will, to abide by those views. That is diversity in the sense of a just government.

John Locke put it like this “All Mankind…being equal and independent, no one ought to harm another in his life, health, liberty or possessions.”  Locke would go on to explain that the primary reason we enter into a society (establish governments) is for the mutual protection of our right to property.

Thomas Jefferson put it this way

“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,”

All of this changes when the Rule of Men, with no regard to the written Rule of Law, begin to govern. That becomes the root of division. That is the root of chaos in society. Mankind is fickle; our views on things change over our lifetime. We can be nuanced by experiences in life that force us to re-evaluate our positions on issues. Mankind, not restricted to a set Rule Of Law but moved by a Rule of Men through opinion creates instability because the laws and their intents can change at the whim of whoever is power.

Madison explained it like this “What is government itself but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” (Federalist #51)

We aren’t angels so we need laws to restrict us from doing undo harm to our neighbors and to protect us from our neighbors doing undo harm to us. Those we elect to represent us are not angels as well, they need a “Rule of Law” that creates internal controls over them. That is where our Constitutions come in to play. Our Constitutions provide the people with an avenue of accountability where the rules are established but it remains up to us to hold those we elect to that accountability.

As we have watched Government grow, we have seen the establishment and empowerment granted to the myriads of Departments, Agencies and Commissions of government. Essentially our legislators have created a forces that has the ability to regulate (legislative), to execute those regulations (executive) while also attaching fines, fees and penalties for those not in compliance (judiciary-since they are the judge and juror in the enforcement of these regulations).

As the public becomes outraged by a specific action, like the actions of the IRS in targeting specific groups, our outrage can then be directed at the Agency or an individual in that Agency and away from the legislators where we seem to forget that they were the ones who granted this authority to begin with. If that agency is exceeding their authority, the legislators are supposed to be the overseers. If they can’t oversee, which is obviously the case, then those powers have to be reined in. The news story then becomes about that personality while ignoring the issues that something like the Department of Education at the Federal level has no Constitutional authority to even exist much less to have the combined powers of Executive, Legislative and Judiciary.

This is where we see the most progressive encroachments of the Rule of Man ignoring the Rule of Law resulting in this assault on our liberties concerning life, liberty and property.

The funding of these Departments, Agencies and Commissions is also creating much of the financial strain on our economy. The Federal Government taxes us to fund these created bodies and then those bodies in turn, using federal grant and subsidy in a well-played scheme that would put organized extortion to shame to hold influence over our State Government. The State Agencies do the same to our local government. They regulate them to death and then promise relief through grant and subsidy that requires more dependence on these bodies. It allows them to drive agendas that for things like Common Core and Agenda 21 and to do so under the radar of the elected legislators who aren’t overseeing what’s happening. In the process, they keep granting these bodies more and more authority. We are seeing with the Act 5 legislation concerning common Core (inappropriately called the Student Success Act). This 600 page bill is intended to overwhelm the average person. Who is really going to actually sit down and try to make sense out of a 600 page bill written in a legal language that few of us can understand? Fortunately we have people who do just that. You can read more about this bill here: https://whatiscommoncore.wordpress.com/2015/02/21/student-success-act-to-crush-religious-freedom-private-school-autonomy-parental-rights-no-on-hr5/

It once again brings us back to Madison who said “It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.” (Federalist #62)

In Federalist 62 Madison would go on to say “Another effect of public instability is the unreasonable advantage it gives to the sagacious, the enterprising, and the moneyed few over the industrious and uniformed mass of the people. Every new regulation concerning commerce or revenue, or in any way affecting the value of the different species of property, presents a new harvest to those who watch the change, and can trace its consequences; a harvest, reared not by themselves, but by the toils and cares of the great body of their fellow-citizens. This is a state of things in which it may be said with some truth that laws are made for the few, not for the many.”

Sadly, the intended Government is no longer the government we have. This is not so much because the “Rule of Law” through our Constitutions have changed but rather that the Rule of Men has been allowed to ignore the “Rule of Law” in those Constitutions. The Government advocated for by Madison in his Federalist debates in defense of the Constitution isn’t what we see today.   The result of this has produced a form of tyranny and has generated the polar divisions of society in America that are becoming more and more hostile towards one another.

While we have seen abridgements of the Rule of Law in previous administrations, our current administration is bent on replacing “Rule of Law” with his own vision in his efforts to fundamentally transform America. America now stands more divided and far less diverse that it was. This is precisely what will happen when the Rules of Men violate the Rule Of Law in the restrictions placed on those who govern through the Constitutions.

 

 

 

 

Deceptions In The War Against Home Ownership?

Deceptions In The War Against Home Ownership?

During an interview, State Rep and Speaker of the House, Mike Turzai made the stunning claim that we would need 60 Billion in replacement revenue to eliminate school property taxes in Pennsylvania.

Actually, at this point in time, total education spending in the state of Pennsylvania stands at $30 billion. $12.7 billion of that is derived from the School Property Tax, another 16 Billion comes from State Funding and the rest is collected through Federal monies and local EIT taxes.

Rep. Turzai seems to be admitting that it was always the design of the lucrative Pension Scheme that they enacted to be placed on the backs of property owners in the state. This would re-affirm Rep. Eli Evankovich’s statement during House hearings on HB 76 when he asked, “How else will we pay for the pensions?”.

As a result of this intentional legislative blunder seniors are losing their own retirement while trying to hold on to their homes so they can provide for the retirement of those in the Public Sector. Some, having lost their own retirement, have lost their homes as well.  Others are on the verge of doing so.  That problem goes beyond Seniors though, even though some legislators seem to think that the School Property Tax only negatively impacts seniors and are using the Senior “bait and switch” to buy senior votes at the expense of everyone else.

Young families just starting out and seeking to buy a home in the State of Pennsylvania where they can establish roots in a community and school district to provide better stability for their families are finding this more and more difficult. That type of stability actually improves educational quality because it cuts down on transient student populations that are the result of shifting Job landscapes and uncertainties, some of which are actually created by exemptions to business because of the property tax problem.

You see, sometimes these families relocate into an area because of a temporary Property Tax exemption offered through Keystone Opportunity Zones (KOZ). A job opportunity is opened for them that will actually help them support and family and establish roots in a community.  Then the exemption status of the KOZ expires and the business moves, relocating to another part of the state. HB/SB 76 would eliminate the Property Taxes on these businesses completely allowing those jobs to remain in that community and those families to continue to stay employed and in their homes.  The investment from existing property owners to provide for the KOZ exemption that is lost every time another KOZ business relocates would no longer be an issue and it would be one more program paid for by exploiting home ownership, that wouldn’t be necessary.  Essentially, the entire Commonwealth would become a Keystone Opportunity Zone where business and the employees in those business would reap the benefits.  Likewise, the communities in which those business exist reap benefits as well.  A more stable population of people investing in home ownership unhindered by fear of improvements to those homes because of what would happen to their property taxes.  That helps the construction company and businesses like Lowe’s and Home Depot in supplying materials for those home related construction jobs.

You see, instead of a system where homeowners are essentially punished through taxation because they wish to provide a home for their families, we shift to a system that is more beneficial to business and consumers creating a form of Symbiosis between the business and the consumer generating support of more basic free market principles.  This positive Synergy benefits everyone including the state.  The more jobs in the state, the more revenue there is through the PIT.  That also generates more disposable income which would result in purchases that fuel the sales tax and again, create more revenue for the state.

While we keep hearing news that the economy is on a track to recovery, many Pennsylvanians aren’t feeling the benefits. We’re watching as the cost of living increases while, in many cases, our own wages remain stagnant or hardly keeping up with the cost of living. We are watching as the Act 1 limits are being ignored and school property taxes just keeping going up and up. While it may impact some sectors of the population harder than others its hitting every sector of the population.

If you are a home owners in the Commonwealth of Pennsylvania, you are now an economic target. You exist to be exploited for the illusion of wealth simply because you own property.

If you are a homeowner in the Commonwealth of Pennsylvania, you are the source of funding the unfunded mandates from Harrisburg and this must come to an end. Actually, there’s no such thing as a unfunded mandate.  All mandates have to eventually be paid for.  An unfunded mandate from the state simply means that it isn’t funded at the state level.  So how is it funded?  You got it…local property taxation; kicking the can down to the local level so they can all high-five themselves for not raising our state taxes.  Thanks for nothing!  Still that legislative deception keeps a lot of legislators in office because people don’t realize how much of local taxation is actually Harrisburg’s fault even though our Commonwealth Constitution clearly forbids the legislative body from interfering with local taxation (Article 3, Section 31)

Only Elimination of the School Property Tax will deal the death blow to the unfunded mandates and make those creating these lucrative schemes that benefit few at the expense of many forcing them to turn to State revenue to find the funding necessary to pay for their actions. As long as the School Property Tax remains in place, legislators, Departments, Agencies and Commissions  will continue to act irresponsibly with regards to local Property Taxation because there is no financial accountability on their part for those actions. They will continue to see the property owners as a revenue stream and not as a constituent that they serve and as such, not be considered in the cost levied against us by the myriad of programs instituted to be paid for through local taxation.

Rep. Turzai knows full well that education costs are not currently at $60 billion dollars. He’s been in the House for too long and he’s been a part of the budget creation process too many times to make that kind of a “mistake.”  Rep. Turzai’s deception however, seems to be all too prevalent in the political games being played where the common working man and woman is always the loser.

As we read about the tampering of temperature data to reinforce Global Warming/Climate Change and the EPA being guilty of rigged data to justify new air standards, we need to understand that this impacts us hardest at the local level. It results in the creation of new ordinances at the local level and greater expense at the local level to implement programs being pushed at the State and Federal levels but paid for through local property taxation.

That was the pension deal that has created this Tsunami. By manipulating data they made promises they couldn’t keep. They gave SERS and PSERS a lucrative pension scheme that would never sustain itself and it was built, by design, to be paid for at the local level through the property taxes. They did this because they could. They did it this way so they could claim they aren’t raising our taxes while we watch as their actions result in necessary increases in property Taxation at the local level.

The Implementation of Common Core used the same tactic. No monies to pay for its implementation and maintenance would come through state funding. It would all be paid for at the local level, through School Property Taxes.

The drive of Agenda 21/Sustainable Development; without local property taxation to pay for the mandated programs to bring the country into compliance with the EPA Green Initiative, Agenda 21 would have hit serious stumbling blocks in its implementation. While Agenda 21 may be a federal Initiative fueled by the U.N., it requires bringing local municipalities into compliance through schemes of massive ordinance packages at great expense to property owners at the local level.

Even Obamacare needed to attack homeowners for funding. Governor Wolf is frothing at the mouth in his anticipation of moving Pennsylvania into another state which expands Medicaid in order to implement Obamacare in the Commonwealth. But with the expansion under ObamaCare, more and more people will qualify for Medicaid without realizing that the coverage is really not free, but instead a hidden secured loan that allows states to attach costs of Medicaid related treatments and expenses to the estate.

When Republican Party candidate for president Herman Cain broached the subject of “estate recovery” on his radio show, he got so many responses that he decided to put his comments into writing:

The problem here is that the ACA is taking away insurance plans that people could afford and simultaneously offering replacements that are more expensive. At the same time, it’s expanding the definition of “low income” by removing asset tests.

If you can’t afford the new, high price … you are forced into Medicaid since, because of the individual mandate, you MUST be covered.

So, the feds have created a situation where you can lose the coverage you could afford, can’t afford the replacement plans, and are forced into Medicaid which will allow the state to come after your assets when you die.

With the expanded definitions under Medicare, millions are going to be invited into the trap of free Medicaid coverage instead of the expensive exchange coverages only to find that they, and their heirs, are facing losing a lifetime of investment into their homes and estates. Make no mistake about it, Governor Wolf knows exactly what he is doing by expanding Medicaid, he’s going after home ownership.

Where we once had a government instituted to protect property and the rights of the owners of that property, we now have a government waging a war on home ownership. While they don’t say it out loud, home ownership is seen as a sign of wealth and the progressive war on wealth (except their own), has become of war on Home Ownership.

As we all know, Home Ownership is a pivotal point of what we once called “The American Dream” That American Dream is under full blown assault as the Progressive mindset continues in their attempts to fundamentally transform America.

The American Dream, under Progressive ideology, is not about working hard to better your own life, to provide for a home for your family, to raise your children while establishing roots in a community. The Progressive Dream is about raping America of her wealth and forcing the country into complete dependence of Government and the protected Corporate Institutions that are free from the persecution of obtaining wealth. There was a word for that kind of society: Feudalism, and there is absolutely nothing Progressive about it.