What would lead a State Senator, after being a co-sponsor on a bill ever since it was introduced, suddenly jump ship and become a vocal opponent to the legislation?
At the onset, I take no real pleasure in writing this rebuttal to the Senator’s recent claims explaining her no vote. I have found her to be an otherwise respectable member of the Senate and I find myself in agreement with her on most issues. I was in agreement with her on the School Property tax issue up until she changed her position one week before the vote. For me, her explanation amounts to excuses not reasons, something I’ve written about in the past (https://jmrodkey.wordpress.com/2013/12/15/send-in-the-clowns/)
Following her no vote on School Property Tax Independence, Senator Ward turned to the social media to explain her no vote by listing the excuses for turning from a yes vote to a no vote. The problem with her excuses is befuddling since everything she lists as sudden problems have been a part of the legislation since it was introduced. Her excuses are nothing new…it’s almost as though she took her talking points directly from the Chamber of Business and Industry.
Are The Senators sudden concerns worthy or has she just joined the rank and file who site excuses while avoiding detailed explanation and a solution to the problem that has become a war on home ownership? Has the Senator joined the rank and file that views loss of home ownership as the collateral damage of education funding?
Let’s take a look at Senator Ward’s complaints with a response to each claim. In her response the Senator said that the devil is in the details while using talking points without details:
1 – SB76 increases your personal income tax, increases sales taxes and expands the list of products and services that will be taxed.
This is true, however: Currently 12.7 billion dollars is collected from Property taxes for the purposes of School District Funding. That revenue has to be replaced somehow. After a careful analysis of previous Elimination bills a lot of work went into the preparation of a blended replacement tax that would be a revenue neutral shift away from using our homes and apartments as revenue streams to fund education to a more responsible funding mechanism. When the Senator became a co-sponsor on the bill several years ago, this apparently wasn’t a problem. It only became a problem a week before the vote was to actually be taken. The only thing that changed was the Senator’s position.
The excuse totally ignores that for the last 20 years School property Taxes have outpaced the rate of inflation. In fact, everything in her excuses ignores this simple fact.
The revenue neutral tax shift isn’t a tax increase, its a tax shift. It replaces the revenue currently generated by school property taxes to a PIT and Sales Tax and it does so in a revenue neutral manner.
The school property tax, on the other hand, is a continuing increase of taxation. By voting no on a revenue neutral tax shift, she voted yes for increased school property taxes putting more home owners at risk for losing their homes in the future.
2 – Personal income taxes will go from 3.07% to 4.95% and sales taxes in Westmoreland County will go from 6% to 7%. Allegheny and Philadelphia will be much higher.
In making her second point the Senator is really just repeating the first point. If the Senator has stayed up to date on this legislation then she is more than aware of the IFO (Independent Fiscal office) report (see above chart). The Senator would then be well aware that school property taxes continue to increase faster than the rate of inflation and the longer it takes to get this bill passed to more revenue will be needed to do the replacement. Her no vote simply prolonged the agony of home owners in the Commonwealth where another push must be made and could result in the need for an even higher PIT increase.
The Sales Tax increase is a 1% increase. For the majority in the Commonwealth that means going from 6% to 7%. Some areas of the state do levy a higher Sales tax and those areas would also see an increase of 1% to there sales tax. The two areas she cited are already paying a higher Sales Tax and they would add an additional 1% to that Sales Tax just like everywhere else in the Commonwealth.
Instead of using Property Taxation to fund education which, regardless of attempts to be more fair through assessments, only continue to prove the inherent flaws with using a guesstimation of property worth as a means to fund education. There is little uniformity when it comes to property taxation. One neighbor could see their home assessed at a higher value than their neighbor even though those home are equal in size and worth in a fair market. Unless they are willing to undergo lengthy and costly appeals, something which is not an option for many working families in this Commonwealth, they are paying taxes on property that the fair market demonstrates they do not own. The Senator chooses not to address this issue perhaps believing it’s not one.
She only has to look to her neighboring district in Indiana County to see the unrest caused by a recent county-wide reassessment. Perhaps the Senator chooses not to see.
Once again, as with point 1, this is not anything new. This has been part of the bill since it was introduced and it was apparently not an issue for her for the entire period she was a co-sponsor. Suddenly a week before, it became a problem for her. Apparently for the three previous years it was okay to talk the talk but when it came time to walk the walk the Senator decided to take a different path.
3 – While the bill is being sold as eliminating property taxes, it doesn’t include municipal or county property taxes, you will continue to pay those.
The bill isn’t being sold as anything other than what it is. The Senator is well aware of the fact, or at least she should be, that complete elimination of all property taxes would be unconstitutional without an amendment. SB76, from its original and for as long as this Senator has been a co-sponsor, has always been clear. This is abut the elimination of the School Property Tax only. David Baldinger, Myself and Ron Boltz, who have all participated as members of the PTCC (Pennsylvania Taxpayers Cyber Coalition) in town halls. have always been very clear that this bill only eliminates School Property Taxes. Every piece of literature published by members of this grassroots advocacy organization and in every hearing on the legislation it has been made very clear that this bill deals only with School Property Tax.
The School Property Tax accounts for 2/3 of the most peoples annual property tax. While few question why it costs so much more to fund education than it does to fund our county and municipal governments combined? It is a question that needs to be addressed, one that I believe points out the inherent problem of allowing school districts to tax at will as well as the legislators and Department of Education to use the School Property tax to impose unfunded mandates on us all.
The School Property Tax is the enabler for runaway taxation to benefit the public sector at the expense of the private sector. How can it be moral to take a persons home because they can no longer keep up with the retirement benefits of those in the public sector?
4 – For almost all districts, it’s actually a reduction and not an elimination of the school tax because of present debt. You will continue to pay school property taxes on the debt service until the debt is paid off. For example one of the districts I represent has a debt until 2038, Taxpayers in that district will continue to pay a reduced school property tax for at least the next 22 years, but will begin paying the increased sales and PIT immediately.
This is the most blatant misrepresentation of facts. It is not a reduction. It is the only bill that completely eliminates all school property taxes. When the bill was drafted…and it was drafted by consent of citizen grassroots and advocacy, not legislators….we looked at the debt issue in school districts. There are some school districts who have no debt at all. These frugal school districts should not be punished for the spending in other school districts.
The fact of the matter is that, for school districts with debt, with the passage of the bill there would be an immediate elimination of 80% or more to your school property tax. The remaining debt in your school district is paid for through a bond that has a sunset date. The legislation prevents the school district from using the school property tax to refinance that debt or to prolong it. Once the debt is paid, the school property tax is eliminated completely. The Senator apparently believes this is unfair to school districts which have accumulated debt while not considering the impact on homeowners in those districts.
Once again, this was always a part of this legislation. She signed on as a co-sponsor and remained a co-sponsor of the legislation until one week before it came time to vote. She had more than enough opportunity to introduce some form of amendment to the bill where she could introduce a better way to deal with School District debt. She did not, not has she introduced any other legislation to address this problem.
5 – If you are a small businessman you will be paying a 59% increase in PIT.
The Senator now reverts back to points 1 and 2. The small businessman will see property tax on his own property eliminated. If that small businessman is maintaining both a home and a separate location for their business, the property tax would be eliminated on both properties. The PIT increase is the same for businessmen as it is for any other individual. The Senator should know that this is because their is a uniformity clause in our Commonwealth Constitution that makes this a requirement. Is the Senator saying that she thinks small businessmen, who benefit most from a well educated work force, should not contribute equally to the education of our Children in this Commonwealth?
Using percentages is a trick used for manipulating numbers to generate a more startling reaction. The PIT increase goes from 3.07% to 4.95%. That increases the PIT 1.88%. Think of it in these terms. Currently we pay 3.07 cents of every dollar towards the PIT. We eliminate the school property Tax by asking everyone to an additional 1.88 cents that goes specifically for education funding. The 3.07 remains in the General Fund. Only the additional revenue goes to education funding.
You are currently paying a millage rate. 1 mill equals 1 dollar for every 1000 dollars of assessed property worth. Multiply your current millage rate and compare that to the 1.88 cents extra and you’ll see the savings generated on the PIT in funding education funding through SB 76. http://www.ptcc.us has a tax calculator that allows you to enter your information to find out how much this means to you in overall savings. For the majority of home owners, this is a tax decrease. The more you earn, the more you will pay but only because you earn more, not because you are taxed at a higher rate. The percentage remains the same The additional Sales Tax is another penny on every dollar spent. That puts spending controls in your hands. The more disposable income you have, the more you will pay in Sales Tax but again, it’s still the same rate for everyone.
The same can not be said about property taxation. Millage varies from County to county and from school district to school district. Assessed values have be proven to be an unfair and irregular way to regulate spending which often leads to paying taxes on property you don’t actually own. If you and you neighbor have similar sized homes on similar pieces of land that a fair market price would indicate as the same but assessed values differ and the assessed value is higher than you can actually sell the property for, somebody or possibly both are paying taxes on property worth they do not actually possess. That can never happen if we shift to PIT and Sales Tax regardless if you are a business owner or a citizen who simply owns a home.
The Senator’s no vote continues you status quo unfairly keeping the burden of education on Home Owners. Remember as a Home Owner you are already paying the School Property Tax, but you also pay a PIT and Sales Tax. The Sales Tax already goes almost exclusively to education funding while portions of the PIT are appropriated for more education funding. You are also paying Federal taxes that fund education. Why do the home owners alone carry this extra burden of the School Property Tax to provide for education that others aren’t expected to directly pay?
6 – School districts can raise PIT via a referendum. For those with no income, what is the incentive to vote NO? The burden will fall disproportionately on the workers and producers.
Currently the workers and producers have no say at all in increases in the property tax. In the future, if a school district wants to build a 30 to 50 million dollar stadium it won’t be 5 members of the school board who make that decision. It will be only through a voter referendum. That referendum means the school districts must be accountable to the taxpayers in the provision of sunset date for the payoff of the money borrowed for the debt and when that date is reached the PIT increase disappears. That puts controls in the hands of the people.
If voters decide to stay home and not vote on that referendum they have only themselves to blame.
Once again, for 4 years as a co-sponsor, this was apparently not an issue. One week before the time to cast her vote it became an issue. During those 4 years, the Senator had plenty of time to address these concerns she may have held about this legislation which included an open invitation for opponents of the legislation to participate in any amendment to the legislation. Where was the Senator then?
While listing 6 points the Senator actually only raises 4 since 1,2 and 5 are the same excuse. This is something that is also not new to those of us who have been debating this issue over the years. Using the distraction methodology of rephrasing the same complaint repeatedly to make it appear as though complaints are so numerous that opposition is justifiable, the reality is that they are just saying the same thing different ways.
The Senator concludes her rationale for her no vote with this statement:
We should continue to work on a solution to eliminate property taxes without the broad based tax increases included in SB76. We should be looking to fix the root problems which cause higher property taxes, such as pensions, instead of masking the problems under a tax shifting scheme. This is why I am a “NO” vote.
Perhaps the Senator, like so many politicians, thinks she can fool supporters into believing that $12.7 BILLION dollars can just disappear from the revenue used to fund education without shifting to other taxes. If the Senator has a magic plan that completely eliminates for everyone without increasing taxes in other areas to find that replacement funding then introduce it…until then her point is a moot one.
When the supporters of SB 76 came together we understood that funding education is important but there must be a better way. We weren’t asking to be excluded from paying taxes to help fund education, as homeowners we were looking for a more equitable way to do so that doesn’t place a higher burden on some at the exclusion of others. After all, isn’t the education of all the children in our public schools everyone’s responsibility?
As far as the pension issue…I agree with the Senator that this contributes to the rising cost of home ownership. I disagree with her conclusion, however that the Pension created the property tax problem. I would argue that’s it was the Property Tax that enabled the pension problem. It allowed legislators to hide behind the local property tax to pass this Rolls-Royce retirement plan for the public sector that is frankly unavailable to those in the private sector while claiming they are responsible for property tax increases which is absolutely untrue. They do bear much of the blame. I believe that until the School Property Tax is eliminated the issue of pensions will not be addressed in the manner in which it should and it will continue to the School property Tax as the vehicle that funds these extravagant benefit programs unavailable to those in the private sector.
The question I would ask the Senator…would the pension increases have happened without the school property tax being in place to provide the funding for it? If there had not been a school property tax in 1990, would the legislators have been as quick to give such a ludicrous pension expansion to employees in the public sector?
Here are some facts the Senator left out:
There are 10,000 people who lose their homes annually because they can not keep up with the school property tax. The Senator’s no vote will allow this to continue. This year that number will increase to more than 10,000 people.
A growing number of bankruptcies and foreclosures directly related to increasing school property taxes continues to plague this state. The Senator’s no vote will allow those numbers to grow.
There are currently 350,000 abandoned properties in the Commonwealth. As each yer passes that number grows incrementally. These abandoned properties add to the expense of County and Municipal governments in relation to crime while driving down property values of neighboring homes. The Senator’s no vote will allow that problem to continue to grow.
The problem of blighted properties in the Commonwealth is a growing problem. For many of these people it comes down to paying the school property tax or doing necessary repairs on their homes….repairs that could actually drive up the assessed value of the property and result in their losing that home. The Senator’s no vote helped assure this problem will continue to grow.
The Senator’s no vote has assured that your school property taxes will continue to increase faster than the rate of inflation putting more homes at risk. By voting no on a revenue neutral tax shift, the Senator voted yes to increasing your taxes and then tried to explain it all away by saying she couldn’t vote for a tax increase. Doesn’t anyone else see the hypocrisy of her claim?
Either Senator Ward was not being honest with the people in the Commonwealth as a co-sponsor or she’s not being honest now. The fact that her excuses are so easily refuted: Well, that up to you to decide….