The opposition to SB 76 claiming that it’s a tax shift and they don’t support tax shifts is really starting to wear on my nerves. Almost 13 billion of the nearly 30 billion that goes towards education funding in Pennsylvania comes from the school property tax. Do people honestly think you can eliminate almost 13 billion dollars in education funding without finding a replacement revenue? I mean, seriously, where do they think the 13 billion is coming from.
Now let’s look at the School Property tax as a means of funding education. It’s already a Tax Shift. It’s a tax that shifts the largest burden of that funding on to homeowners in the Commonwealth. It does so in a seriously regressive system of taxation that impacts the lower income families by taking a higher percentage of their income to provide for the education needs of the children of this state….apparently that kind of a tax shift is alright though. Pardon me if I disagree!
In areas where Property Tax reassessments haven’t taken place, the regressive shift of the burden of property taxes is even more alarming. A common level ratio is applied to the property where all the homes are estimated by a state level agency to come up with an average. That average translates into yet another shift….if you are above the average your burden is shifted down but if you are below the average, your burden shits upward once again placing a greater regressive burden in this tax shifting scheme we call School Property Tax.
Then when you compound the fact that in shifting of the tax placing almost half the burden of education funding on to the backs of homeowners in the Commonwealth it is through a tax shift that is based on an assumption of property worth, not the actual fair market value of a home. If the economy takes a dive, as it did back in 2007-2008 and home values plummeted, the school property tax actually kept going up based on an assumed value on the home that didn’t exist. In reality, people were paying taxes on property they didn’t actually own. Even in more stable economic times, most people are actually paying taxes based on a assessed value of their property that is higher than they can actually realize in a fair market transaction on the sale of that property. So once again we see a shifting of the tax on homeowners based on an assumed value that doesn’t reflect the actual fair market value of a property.
When the economy tanks and the school property taxes aren’t adjusted to reflect the drop in home values, opponents of the School Property Tax Elimination bill also like to roll out the stability of the property tax. That of course needs to be translated into the reality of stability for the tax collector, not stability for the tax payer. In these times it creates incredible instability and hardship for the tax payer, especially for those median income families and lower who sees prices on everything going up while they face stagnate wages or even being laid-off or seeing their job terminated. Apparently your personal economic stability doesn’t matter….all that matters is that the government has a stable form of taxation.
The stability proponents point to the these economic times and say the revenue generated from sales tax drops so property tax is a more stable means of extracting money from the people. Of course it drops and you don’t have to be an economic genius to figure out why….people have far less money to spend because they are paying taxes on property they don’t own. The sales tax revenue is only going to reflect actual revenue collected on the price of actual items, not on an incorrectly assumed value of the item purchased as we see with the school property tax.
Those same stability proponents also point to the drop in PIT revenue during difficult economic times. Again, when unemployment increases the PIT is going to drop and while the Property Tax may remain stable it does so because it is so easily raised. When people lose their jobs and fall behind on their property taxes….no problem just shift the millage rate up a couple of ticks next year and recoup the loses but don’t expect the millage rate to drop with the stabilization of the unemployment numbers because it never does. It was just another excuse to shift the property taxes to claim a bigger portion of our home.
The ease of raising property taxes, especially through the exemptions of Act 1 is yet another type of tax shift. When the School District budget increases that budget has to be balanced, even when it means putting astro-turf on their high school sports fields or butterfly rooms in their atriums. Where will that money come from? Well, just shift the millage rate up a few clicks again and like magic, balanced budget for the school district even if it unbalances the homeowners budget. These taxes continue to shift upwards regardless of how many people face losing their homes or allow their home to fall into blighted condition because they have to choose between repairs or staying in the house. Your budget, your stability…you home: it doesn’t really matter; you are just collateral damage!
The notion that we need to lower education costs is like the elusive pipe dream. In 40 years of complaining about the ever increasing, ever shifting property tax, the cut spending strategy just doesn’t work and it doesn’t work because its just to damned easy to raise the school property taxes. Even our more frugal school districts who have managed to hold the line on school property tax increases say there’s nothing more to cut and next year we’ll see taxes increasing. Some are estimating that as many as 80% of the school districts next year will have to raise their taxes and those statistics are usually wrong because the estimate is lower in some vain attempt of preparing us for more collateral damage.
Instead of a tax shift placed on a specific sector of the population that regressively seizes a higher percentile of income from below median income families that’s based on an assumed estimate of the worth of the item being taxed why don’t we fund education through a system of taxation where the percentage is the same for every person through their PIT and, based on your spending powers, the same level of Sales Tax applied to every purchased….all based on actual value and actual worth not best guess assumptions?
Please don’t try and justify the accuracy of assessment….if they were accurate there wouldn’t be as many SUCCESSFUL appeals in each of these county-wide assessments. If they were accurate we wouldn’t see so many businesses successfully wining their appeals of the their assumed property worth which results in yet one more reason to once again shift up that millage rate to compensate for the lost revenue!
The tax shift excuse is, in my opinion, just that….an excuse, not a reason. When that excuse is rolled out it is done so to preserve the status quo and it protects the most egregious and unfair system of taxation in existence. While rolling out the tax shift excuse it ignores the multiple ways the School Property Tax is, in an of itself, a tax shift; one that is not uniform, regressive and not based on actual worth of the thing being taxed.