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!