IFO Report, Aging Demographics and the Pennsylvania Property Tax.

A new report, Aging and the Pennsylvania Economy, from the Independent Fiscal Office gives us some very telling information.  The report tells us that between 2010 and 2017 we had a 5.1% loss in population for Pennsylvania residents up to 20 years of age.  This amount to a loss of about 163,000 school-aged children.  The report projects that this trend will continue and that by 2025 we will see another drop in student population by another 29,000.  I, have to admit to questioning this projected number.  Trends show a great exodus of population among working aged families and I believe this will contribute to a greater loss of student-aged population than projected.

The report continues stating that we saw a loss in working-aged population (20-65) from 2010 to 2017 by 67,000.  The Independent Fiscal Office projects that this will translate into another loss between 2017 and 2025 of 103,000.   This is one of the major reasons I doubt the much lower projected student-population decline.  The majority are children born are to working-aged individuals.  If the Pennsylvania working aged-population declines at a much greater number from 2017-2025 than it did the previous seven years than student-aged population will also continue to decline at a greater rate.

The report also states that senior population is growing.   From 2010 to 2017 the senior population (65-75) had grown by 303,000.  There’s a slight drop in the retiree-aged population (75-84) of 7,000 but a growth in the over 85 bracket by 27,000 all between 2010 to 2017.

We know that there has been an exodus of out-migration in population away from Pennsylvania over the last several years leading to a decline in total state population.  In all those reports that I’ve seen, there is no demographic breakdown of the total loss in population but this report would indicate that the largest demographic leaving the state is the working-aged family.  That will contribute greatly to the loss of student-aged population.  It will also generate a much higher fiscal responsibility on the remaining working-aged families to provide for the growing program needs of a growing above 65 population.

The Independent Fiscal Office report also tells us that total workforce participation has decreased by 2.1% from 1997 to 2017.  In 1997, 64.5% percent of the population aged 20 and over was in the workforce.  Today that percentage is 62.4%  The decline is in Labor Force participation between the ages of 20 and 44.  Not only do we have less working families between the ages of 20-64 fewer of them are in the workforce which tells us that some of the in-migration numbers of people who are relocating to Pennsylvania are also people who are not in the workforce.

For the over 65 age demographics, more seniors are in the workplace than before.  In 1997, 10.2% of that age group was still in the workforce.  Today 19.3% of the 65 and over age group is in the workforce.  Even though many in this age group have already paid for their homes, which makes up the largest debt portion for Pennsylvanians, many of them are forced back in to the work force to provide for the demands of school property taxation.  This is also fueling a growing number of seniors turning to reverse mortgages in their attempts to keep their homes.

This information is important if we are to look at the growing problems related to the dependency of school education funding on a property tax.

First, we’ve seen a seven year decline in student-aged population of 163,000 and yet the cost of educating those children has increased during that same time period.   The Independent Fiscal Office estimates the future statewide property tax burden to increase $530 million annually, or more than 1 billion every two years, according to an earlier report (School District Property Tax Report, released January, 2018)

It other words, from 2010 to 2017 we saw a growth in the cost of property taxation burden by slightly more than $3 billion dollars.  By 2025, we will see an additional growth in property tax burden by almost $5 billion dollars for a total burden of growth that will exceed $8 billion dollars.

In 2010, the cost to completely replacing the school property tax was about $13 billion dollars.  In 2025, that cost will exceed $21 billion.

At the same time, we also know that wages in the private sector are not keeping up to the pace of the demands of the property tax burden.  We also know that the debt burden in the private sector is growing.  The Aging and the Pennsylvania Economy report from the Independent Fiscal Office tells us that housing debt is the largest portion of that debt.  The report also discloses that since 2013 there have been 8,549 reverse mortgages filed in Pennsylvania citing another report “The Graying of American Debt,” by the Federal Reserve Bank of New York.

We know that home-ownership is dwindling in Pennsylvania.  Fewer working families are purchasing homes with more people turning to rental properties to provide shelter from themselves and their families.  Today about 60% of homes are owner occupied with 30% renter occupied and another 10% of the homes vacant (not including designated vacation homes) according to a 2017 report from Penn State University.

Couple this to a declining population and you have a declining taxable base that must meet the demands of the growing education funding mechanisms leaving less disposable income and generating higher debt obligations.

In the 10 year cycle from 1987 to 1997, the Pennsylvania Economic Growth statistic was 2.5%. Over the next 10 years (1997-2007), Economic growth in Pennsylvania dropped to 2.1%; from 2007 to 2017 economic growth dropped to 1.3%.  At the same time, the burden of property tax grew dramatically and yet finding a report correlating the above-inflationary rate of growth in property taxation to the decline in Economic Growth is next to impossible.   Maybe that’s just one of those dirty little secrets we simply do not want to admit.


You simply can’t keep increasing the tax burden on working families and not expect negative consequences, nor can you keep increasing the tax burden on the business communities and not expect to see the negative consequences of fewer jobs, less expansion and even less inwards migration of new industry in the state.  There is a reason Pennsylvania is at the bottom of the barrel when it comes to attracting new businesses to the state.  While Right To Work legislation would help attract jobs to the Commonwealth, 21 other states do not have Right To Work Laws and still manage to attract more businesses to their state than Pennsylvania.  It’s time we start asking why.

It’s true that Pennsylvania has the second highest corporate tax rate, second only to Iowa but even Iowa attracts more business to its state  than Pennsylvania.  It’s also true that while Pennsylvania has the second highest corporate tax rates, it also has the second highest amount of corporate welfare and yet Pennsylvania still can’t attract more business to the state.  Pennsylvania is resource rich and ideally located as a center on the East Coast, and yet we still can’t attract more businesses to the state.  So what’s the problem….it couldn’t be the corporate tax rate coupled to the rising costs of school property taxation…or could it?

Even though state income through PIT and Sales tax is not growing the way it was 20 years ago, it still grows naturally without the need of tax increases.  Even though the population in the state is declining, we have added to the revenue through the natural growth of PIT and SUT revenue in the state without increases taxes.

The property tax simply doesn’t work that way.  In order to generate more revenue, they must raise the taxes because property taxation does not grow naturally with the economy.  Those property tax increases produce economically damaging results.  When the Pennsylvania population declines, the PIT and SUT revenue still increases without tax increases but when student population declines, the revenue demands increases and those demands require tax increases.

Those property tax increases than generate less personal spending statewide because of less disposable income so spending drops resulting is less revenue generated through the SUT tax.  Higher business property taxes results in slower wage growth and less job creation result in slowing the PIT revenue generated to meet state funding needs.

The property taxes increases also contribute to the growing problem of blight in our communities.  With less disposable income, there is less money to re-invest in home maintenance or improvement.

As population declines the need for new home construction slows as well.  According to the Penn State study, Pennsylvania Facts 2017, Pennsylvania ranks 6th among states and the District of Columbia in the proportion of housing units built in 1939 or earlier (26.7%).  That means that 43 other states have higher numbers in new home construction to meet population demands than Pennsylvania.  Could that be because our population demands are declining  while other states aren’t faring as poorly.

The fact of the matter is that unless Pennsylvania changes it course of action, things are not going to get better in Pennsylvania.  While we may a have a state slogan that says “You’ve got a friend in Pennsylvania”, for those of us still living here we can say “Yes, but we have many other friends in many other states who used to be our neighbors in Pennsylvania.”

There has been a recent amount of chatter about replacing the school property tax for homestead only with a PIT only increase.  Looking at the above data, I see this as a recipe for disaster.  While 19.3% of the senior population is still in the workforce, the remaining 80.7% are not and Pennsylvania does not collect PIT revenue from retirement income.

To me, this is an unsustainable option that puts the burden of state education funding on a shrinking number of working families in the state.  I see this as a plan that will accelerate the out-migration of working-families while growing the senior population as well as the in-migration of more younger families who do not participate in the labor force.  Neither results would be part of a plan that looks to the future prosperity of the state.  It is, in my opinion, irresponsible.

Forcing more working families to consider leaving the state may reduce student population but that demonstrates no historical record of reducing the overall cost of education.

We have to get off this course of action that keeps expecting the working families in this Commonwealth to give more and more towards failing policies in this state.  We should be working to attract more working families to the state, not less.  That’s done through making Pennsylvania a better place for family sustaining jobs.  While the reliance on property taxation to fund education remains a dark blot of Pennsylvania’s economic future, going to a PIT only replacement for Homestead only does nothing to attract new industry to the state and discourages in-migration of working families while encouraging out-migration of the same demographic.

Then again, this is Pennsylvania so what else would we expect from a General Assembly that has continually kept Pennsylvania on a path of negative economics results.  To those legislators who have fought to restore Pennsylvania working for common sense solutions to our financial problems, I say thank you. A PIT replacement for homestead only school property exclusion, however, is NOT one of those common sense solutions!



Another Tax Hike in Lebanon City

Well it is 2018 and we already heard from the Lebanon School District.  Lebanon residents will be looking at a possible 6% increase in their millage rates in connection to their school property taxes.  The school millage rates in the city are already the highest millage rates in the county.  City residents pay 20.04 mills which is 5.11 to 6.15 mills higher than anywhere else in the county. A 6% increase would set the millage rate at 21.2424.  That will translate into an additional $1 dollar for every $1,000 of assessed property worth.  A 6% increase in the property tax would be above the Act 1 limits  and that would require a voter referendum for approval but no fear for the school district; they can apply for an exception for the referendum which will be rubber stamped by the department of education.  It’s a sure thing for them.

According to city-data, the median price house in Lebanon County is $168,500.  If that home was located in the city of Lebanon the school property taxes on that home would be $3,579.34 using the new millage rate.  The same priced home in Myerstown would see a school property tax of $2,339.76: a difference of $1,245.58; In the Cedar Crest District the school property taxes on a home assessed at $168,500 would see a school property tax of $2,477.15: a difference of $1,102.19.  The fast is that a $168,500 home anywhere else in Lebanon County pays at least $1,000 a year less in property taxes than for the same price home in the city.  Ask yourself, should taxes on a home be $1,000 more in the center of the city than the same priced home just 3 short miles away in any direction?

Adding insult to injury, the median household income is about $20,000 a year less in the city than it is in the rest of the county.  The income level in the city is so low that the school district went to a free lunch program for all students regardless of income because the overwhelming majority of children qualified, and yet the millage rates their parents pay through the school property tax is the highest in the county….Go figure!

Blighted properties becomes a problem in 3rd class cities.  Lebanon is no exception but when you have less income and pay higher taxes to provide shelter for yourself and your family, where is the money supposed to come from to maintain that property?

Over the last 20 years, home ownership has declined in the city with more properties becoming rental properties.  That doesn’t mean the renter doesn’t feel the crunch of a property tax.  Even though many renters mistakenly think they don’t pay property taxes, when a landlord sees continual increases in their property taxes, they have to make adjustments to the rent to keep up with that tax  The rising cost of rent adds to the problem of transient school population which only adds to the cost of education.    It also adds to the burden or subsidizing housing for low income families.  A rising property tax will raise the cost of rent which will generate the need to provide more revenue to subsidized housing which comes from taxes at the state and federal level.

As a city resident, I’ve seen this for myself.  My neighborhood, in the last 15 years, has transformed from a largely home ownership neighborhood to a rented property neighborhood.  I’ve also seen blight increase, deal with continually changing neighbors, and other problems.   When we moved here we were just 2 block away from the downtown area where there were affordable family restaurants and store

At the same time, the downtown area has slowly transformed from corner drug stores, clothing stores, newsstands, movie theaters and other retail business to become the place to go in the county for pawn shops and bail bonds.   There is very little industry in the city limits, no malls and no major chain grocery stores within the city limits.  More than 30% of the property in the city limits is tax-exempt.  It is any wonder.  When you property tax bill is more than 30% higher than it would be anywhere else in the county, why stay or locate in the city. For the working family, since there are few family sustaining job options for them within the city limits, they travel to work and with higher gas prices, that leaves them with less disposable income to support local businesses.

The KOZ and LERTA properties provide tax abatements but that just shifts the tax burden onto working families and renters.

Then I read an article concerning Cambria County.  Of the 87,000 properties in the county, 12,000 are behind on their taxes: that’s 14% of the properties in the county.  2,100 of that 12,000, or almost 18% of that number, will go up for tax sales this year. The article I read puts all the blame on the delinquent taxpayer and accepts no responsibility for the burden they have put on the property owners that contributes to this problem.

Oddly enough, supporters of property taxation will tell us that property taxes are stable.  I’m sorry but if 18% of the population isn’t paying the tax for whatever reasons, that’s not stability.  The beauty of property tax is that they can just push the unpaid delinquent taxes on those who can and do pay…that is until there’s not enough of them to sustain this egregious practice.

The fact of the matter is that when it comes to homeowners, our homes simply don’t generate any income to provide for this tax.  We pay the tax through our income but since it’s not based on income, it doesn’t reflect an ability to pay.  That certainly evident in Lebanon County where those earning the least b\pay the highest tax per thousand dollars of property worth in the entire county.

That doesn’t seem to matter to the supporters of property taxation.  Since property taxation outpaces rates of inflation, our income also doesn’t keep up with the demands of property taxation.  That doesn’t seem to matter as well.

The article I read concerning Cambria County, the tax collector brags that homes can be bought much cheaper than usual stating that some of the homes sell for as little as $200 in these auctions.  They’ll still have to pay any unpaid taxes or mortgage balances on top of that $200 but let that sink in.

A senior finds themselves in a place where they can no longer keep up with the taxes.  Their home is paid for but with rising costs of heating their homes, medical expenses and other costs of living, the tax exceeds their ability to pay.  The government then steps in and takes that home, sells it for pennies of its worth to some property investment company and the senior homeowner loses all investment in that home including any equity that home had accrued.  Supporters of the property tax call this justice and stability.

A serious injury or illness can leave a family in a difficult position where they face losing their homes.  Even though they can pay the mortgage, they just can’t keep up with the increasing demands of the property tax collectors.  They’ll lose their home.  If it is seized for tax delinquency, they’ll also lose any investment in that home and any equity that home may have accrued.

It forces people into desperate conditions where they try and sell their homes before it’s seized for taxes.  In the event that they do, they’ll often sell it for much less than the home is worth because they’ve been forced into a situation that is out of their control.  The new home owner then takes that lower selling price and appeals the taxes that can result in lower taxes for the new owner than it was for the previous owners who were taxed out of their ability to pay.

The most recent report from the Independent Fiscal Office concerning Property Taxation tells us that the estimated total statewide property tax collections for FY 2016-17 and FY 2017-18 are $14.0 billion and $14.4 billion, respectively. Collections are then projected to increase by roughly 3.3 percent per annum during the forecast period, reaching $17.0 billion in FY 2022-23.  A $3 billion dollar increase from 2017 top 2022 is a little over a 21% increase in property taxes.  Take your current property tax and multiply it by 21% and then ask yourself, in just 5 years, if you will still be able to afford your property taxes.

At the rate that the city of Lebanon is going, the path of Cambria County seems to be the preferred path for the school district.  It is unsustainable there and it’s just getting more unsustainable for more people in the city of Lebanon.

Here in Lebanon City we always hear the same thing every time there is another school property tax increase.  We’re told that it’s just the cost of a cup of coffee day.  We hear this virtually every year.  Over the last 10 years that’s 10 additional cups of coffee even though my home really isn’t increasing in value nor are our family wages.  If it keeps on going up we’ll have to cut back on our coffee intake.  That’s okay though because I really doubt that 10 cups of coffee a day is a healthy option but then again, neither is the property tax.



Time To Separate The Wheat From The Chaff

In November of 2015, the Senate narrowly defeated a measure that would have eliminated the school property taxes.  The vote was a tie vote broken by the Lt. Governor.  Since the defeat of that legislation the taxpayer burden to Pennsylvania Homeowners has increased by more than one billion dollars.  That amount is $19,231 times the median HOUSEHOLD INCOME in Pennsylvania.  Had this legislation passed the additional PIT and SUT in the legislation would have generated an additional $700 million for education funding without the need for additional tax increases.  As far as I am concerned, our opposition owns that tax increase.  It’s their fault that we saw this increase.  They can point their fingers all they want, but it belongs to them.

Those who tell me that they are against tax shifts but are also opposed to tax increases-you’re opposition to SB 76 helped to add to the additional tax burden of one billion dollars on working families in this commonwealth.  You own this tax increase as well.  You’re future opposition will continue to add to that burden to the tune of more than a billion dollars every two years.

The legislation was an attempt to generate replacement revenue to provide for the complete elimination of property taxes for all property including farmstead, commercial, rental and private homes.

We fought against a wide variety of lobbyist efforts who used tools of misinformation and misdirection to create confusion and distractions.  This fight against us included groups that we fought hard to bring about the elimination of their property taxes.  The fight went so far as to use taxpayer money collected through the property tax to fund campaigns in opposition to the school property tax elimination proposal.

In 2017, a referendum went out to the taxpayers of Pennsylvania where they overwhelmingly told legislators how they felt about the school property tax.  That referendum passed by a large enough margin to demand that something be done about it.

Throughout this time, some of us have been working on pushing this measure forward through the legislative body again.  There is talk of shifting to a homestead only property tax elimination bill.  This would eliminate the school property tax on all primary residences in the Commonwealth of Pennsylvania.   This would not include any property that is not a primary residence owned by the homeowner so it would not include rental properties, business properties or farmland that is not used solely for primary residency.

We are restricted at this point in time of publicly commenting on what these alternative proposals will be because we have no definitive plan to work with.  There have been proposals but numbers must be verified before anything definite can move forward.  Publicly commenting on these proposals at this point in time is counter-productive.  As we have seen in the past, our opposition will move in full force at any suggestion of any plan to eliminate school property taxes in any measure.  We have seen that they will resort to misinformation and misdirection to accomplish that goal.

I know this is frustrating.  It is like watching a football game and trying to figure out the strategy of the game from the sidelines.    It is frustrating for us as well.  As much as we want to speak out about the future possibilities, doing so is like giving our opponents our playbook before the game is even started.

It appears on the surface that nothing is happening.  That’s simply not true.

There is much at stake here.  One proposal that moved forward already calls for a homestead exclusion based solely on PIT revenue.  While this might be attractive to seniors we have to also understand that just a few years ago there were 4 working individuals in the Commonwealth for every retired senior.  Recent study indicates that we are quickly moving to a point where this will be 2.4 working individuals for every senior.  Since seniors do not pay an income tax on their retirement, using PIT only to replace the  school property tax is putting that burden on a shrinking tax base.  Some will point to less working families mean less students in the classroom but historically there is no correlation between reducing student population and lowering education costs.  A classroom of 25 children costs as much with regards to wages and benefits as a classroom with 30 students.  The cost of maintaining that room (electricity, heat, etc.) does not decrease because the number of students in that room decreases.  If we reduced the number of students across the state by 10,000 students that only translates into 200 students per school district spread out over 12 grades and kindergarten or 15.4 students per grade.  Besides, is chasing people out of Pennsylvania really the solution to Pennsylvania’s problems.

Some recent studies are applauding the fact that Pennsylvania is a great retirement destination.  On the surface this may sound like good news but without a sustainable tax base you create an unsustainable future for Pennsylvania.   Seniors do not pay a PIT tax on their retirement income.  At the same time, working families are leaving the state.  The number in that exodus is increasing and, if it continues to do so, we’ll hit that 2.4 number sooner than expected.  When we reach a point of 2 working individuals for every retired senior, we cannot sustain the income necessary to provide for the senior programs.  We will be forced to do what many other states have done; start taxing retirement income.  None of that is good news for Pennsylvania but it’s the path we are on unless we change course.

At the same time, wages in the private sector are not seeing the same increases as the wages in the public sector.  20 years later and home values in most parts of the state have still not reached the pre-recession 2007/08 numbers and yet property taxes have continued to increase.  At a meeting with opposition in an attempt to reach a consensus, we heard from charity organizations who talked about the impact on the poor.  Keeping people in poverty is not a solution and that is exactly what the property tax is doing for many.

You cannot keep increasing the tax burden leaving working families with less disposable income and still expect to see economic prosperity.  This year seniors are going to see a very slight increase in their social security benefits.  In talking to seniors. I have found that once the additional cost of medical coverage is factored in to the increase many seniors will actually be getting less next year than they did before.  Others may see slightly more but hardly enough to compensate for the increase in the property taxes they will see.

The trending of school property taxation is a history of a tax that increases at a much higher rate than the rate of inflation.  This results in less disposable income for working families who have less money to spend for goods and services in their communities.   The government solution to this is the creation or expansion of more government programs to provide aid and assistance but that money has to come from somewhere especially since it is not directly coming out of our legislators salaries.  It comes by increasing the tax burden, which only takes more disposable income away from consumers to be used for the maintenance of government programs instead of allowing that money back in to consumer based spending that would grow jobs and allow for the expansion of business.

Some of these tax increases at the school district level are the result of an underfunded pension program.  Other tax increase are the result of poor tax investments that failed to return the investments to the projections expected.  Adding insult to injury taxpayer money is used to pay the investors who take more taxpayer money to invest in stock options that fail to perform.

In the end, there is this general lack of accountability for how the money is spent with all accountability being transferred to property owners who are expected to continue to pay for the failure of the legislative body to maintain their promise to public pensions and a pension system with little accountability with regards to their investments.  It is the property owner who bears all the accountability.

For the property owner who lives in a home that does not generate the income necessary to pay the tax, the buck stops with them.  They can’t pass on the cost of the failures of others on to anyone else.  While everybody else is out there pointing their fingers at each other, it’s the homeowner who gets stuck with the bill.  Unlike a business, the cost cannot be passed on to the consumer because the only consumers related to a home are the people who live there.  The responsibility and accountability for any failures in the part of education and its costs or in the state in properly funding their promises falls squarely on the shoulders of the working private sector families in this Commonwealth.

There are studies on assessment values of homes for taxation purposes that show that assessments are wildly incorrect.  There are studies that indicate that as many as 60% of the homes are assessed at values that cannot be reached in the private market.  Let that sink in for a moment.

Pennsylvania collects almost $13 billion a year in taxes through the property tax.  If 60% of the properties are over-assessed that means $7.8 billion of that property tax income is based on properties that have been over-assessed.   We have no way of knowing how much of that $7.8 billion is taxable revenue on property tax doesn’t exist since over-assessments vary from property to property.  We just know that the revenue collected is more than it should be.  This is something that could not happen with either a PIT or SUT tax.

Let’s look at my county, Lebanon, Pa:  During the last reassessment there were 54,000 properties assessed for taxation.  Using the 60% over-assessment data, that would mean that about 32,000 properties are over-assessed.  Let’s assume for just a minute that the over-assessment is just $2,000 on each of those properties.  The average for the school district millage rate would be about 15.14.  That would mean that each home over-assessed by $2,000 would pay an average $30.28 in annual taxes on property they don’t own.  That’s may not sound like an incredibly high amount but when we multiply that by the number of homes over-assessed that becomes $968,960 in property tax revenue generated from property that doesn’t exist.

We had purchased our home one year before the county-wide reassessment.  When we did we had it professionally appraised.  The following year the reassessment took place and the assessment valued our home at about $40,000 more than the professional appraisers.  We appealed and got it lowered but it’s still about $8,000 more than the professional appraisals value of the home in the fair market.

Adding insult to injury, in Lebanon County the difference between the highest school millage rate and the lowest millage rate is 6.92 mills.   Apparently some people paying more for property they don’t own than others is perfectly acceptable system of taxation to our opposition.  In short, any over-assessed home is paying property taxes on property that doesn’t exist and apparently many legislators and special interest opposition groups are also perfectly okay with this.

Using PIT and SUT tax to fund education removes any possibility of paying taxes on property you don’t own.

There is bitter irony in their opposition.  They’ll complain about sales tax on diapers while ignoring taxes on property that doesn’t exist.  They’ll talk about the necessity of diapers while ignoring the necessity of a shelter.  That type of argument is always the excuse.

You simply cannot talk about not taxing necessities and still support taxing our homes without being a hypocrite.  You can’t talk about not taxing food while you are perfectly fine with taxing the land where food is grown or livestock raised.  You can’t talk about the immorality of taxing food while taxing the properties that convert that food into marketable food products.  You can’t talk about the immorality of taxing food but be perfectly fine with taxing the property of a grocery store.  It’s all sheer hypocrisy.

At this point in time, I can’t really say that the future of SB76 is a sure thing but I do know that it should be.  I do know that we should be demanding another vote on SB76 and if it fails, we’ll know who to blame.   We are running out of time for 76.  Another two years with another billion plus added to the cost of school property taxation will drive the PIT up to unsustainable numbers.  With more schools scrambling to add to their debt in fear of something like 76 passing, we can’t continue to sustain the need for increased revenue.  Most importantly, another two years will mean more people losing their homes.

With the legislative session about to start in a matter of days the time to act is now.

Some of us are working hard with legislators to make it happen.  We need you to do the same.  Complaining about it on social media is not enough.  It’s time to pick up your phones and call your legislators in the Senate, especially to call leadership in the Senate and tell them that before anything else happens with regards to school property tax, SB 76 deserves another vote.  It’s time to separate the wheat from the chaff.








The Vicious Cycle of Growing Government Through the Property Tax

So let me get this straight: The government has recognized that rising rent is a problem. One of the reasons for the creation of this rising rent problem is the rising property tax. So the Government implements a program to subsidize rent. As property taxes increase on a rental property the landlord must raise the rent on the people the government is claiming to be helping because their rent is too high.

The revenue for subsidizing the rent is coming from raising taxation in other areas.  For the property owner, this means that they are paying for their own property taxes while helping, through other taxes and sometimes through the property tax itself, to subsidize the cost of the rent increase for lower income families that came as a result of raising the property tax.

As rent has increased, we also see the desire from government to subsidize the cost of home utilities (heating, electric, etc.) as well as subsidizing phone and internet service for low income families resulting in higher prices for everyone else.  This creates more people who fall through the cracks and grows the number of people who must turn to the government for help to make ends meet.

As property taxes increase the job market isn’t growing fast enough to meet the needs of the growing population so many have chosen to leave the state.  As property taxes increase, more smaller business can not provide wage increases for their employees resulting in stagnate wage growth for many in the private sector.  Many of these small businesses can also not afford to provide for healthcare for their employees.  Enter the government once again to provide costly programs to supposedly ease the pain that the property taxes are creating.

As property taxes increase more farmers struggle to meet the tax obligation.  No problem, the government steps in to create a new program to ease the property tax burden for the farmer.  As a result, the property taxes increase again.  As more farmland is sold off to pay for the taxes, less food is actually being produced in Pennsylvania forcing us to go elsewhere, out of the state, for that food making the food more expensive for the Pennsylvania consumer.  That’s okay though because the government has program to help you ease the burden of higher food costs…to pay for it they just need more revenue from you from other taxes.

Every evidence demonstrates that the property tax is creating more problems and making government more expensive to maintain while contributing to the growing problems of blighted properties.  After all, if you can barely afford to pay your taxes, you can’t afford to keep up with the necessary maintenance of your property.  That’s okay though because the government is there with more programs to help with blighted properties, all they need is more of your income through taxation.

When I hear that the property tax isn’t the problem; that the real problem is government spending, I can’t help but wonder why these people can’t see that the property tax is actually creating the need for so much of this government spending.  The property tax becomes the enabler.

The property tax results in less disposable income for families while making it harder for them to provide for their own families needs.  It doesn’t matter if you are a home owner or you rent the property tax makes EVERYTHING more expensive.  Every business must shift their tax burdens on to the consumer if they want to stay in business.  That means that every property tax increase makes everything we do, everything we purchase more costly, from the loaf of bread we buy to the legals services we use.

Rather than solving the problem that creates these greater expenses for the consumer the government attempts to fix the problem by creating more spending programs which inflates our taxes  all the more.  In doing so they aren’t actually helping the people who need the help the most.  The government is artificially making everything more expensive through increased taxation rather than eliminate the property tax and removing the very thing that is artificially driving up inflation.

It is one thing when the government steps up to provide relief because of a recognized need, it’s another thing when government is actually creating that need and solves the problem by making that need all the greater.  The old expression of the cure being worse than the disease applies except that these cures never actually cure.  If anything they just temporarily ease the pain for some while spreading the disease to others.

It seems to me that the only real winner here is the government!  They raise our property taxes creating a need for government programs that appear, on the surface, to be helping but are actually hurting Pennsylvanians and the economy.

It’s all in creating more revenue wants from the government by taking that revenue from us resulting in less disposable income for us to support our communities through local business which then translates into government grants and subsidies to help local business establish by giving them tax incentives through KOZs, LERTAs and other government programs that have all become necessary because we have a property tax.

No matter how well intended, these programs exist because we have a property tax and as long as we still have a property tax, the need for these programs will continue to grow.

Many of these programs are paid for by increasing the property tax on property owners, which drives up the cost of rent and creates more need for more government programs while forcing more people to become more reliant on government subsidies.

To maintain this property tax we are told we need the implementation of more frequent expensive reassessments that only really result in higher property taxes creating more need for more government programs (more taxes) to supposedly ease the unilateral inequality and cost of the increasing property tax.

While PIT and SUT taxes grow naturally without the need for constant tax increase, the only way to generate more money from the property tax is to increase the property tax.  Every assessment appeal, every abatement, every property tax relief program has the same impact, an overall need to increase the property tax to maintain the revenue turning the majority into losers in these tax relief schemes.

The end result is a creation of a tax system that is rapidly becoming more and more unsustainable for more and more people.  You don’t have to be an economic genius to see that.  You just have to open your eyes and look around you.

It’s a vicious cycle so please tell me again how the property tax is stable revenue from taxpayers to fund public education!

A rebuttal of a letter to school district residents.

Another letter has come out from a school district administrator that is filed with misinformation.  I have serious concerns about a school administrator who sends out a mailing like this to parents in a school district that contains this much misinformation

I’m going to use this post to refute what is in the actual letter.  My Responses will be in red:

Dear Parents and Community Members,
As a supporter of our public schools and the belief that every American child deserves the right to a quality public education, I’m writing to ask for your action at the polls regarding a legislative proposal that could seriously impact the quality of our schools.
Many educators are very concerned about a November 7 ballot question that asks whether the Pennsylvania Constitution should be amended to allow local taxing authorities to exempt homeowners from paying property taxes. We strongly feel the answer to this question should be “NO.”

This ballot question doesn’t include the critical piece of information that according to state law, another source of revenue must be created to replace local property taxes. Legislators are considering that the new revenue source could come from increases in other taxes, in the form of Senate Bill 76. Under SB 76, Income Tax will go up from 3.07% currently to 4.95%, sales tax will go from 6% to 7% and the list of items to be taxed would increase. Those new revenue sources would go directly to the state, and it would be up to the state to determine how much each school district would receive.

Senate Bill 76 and the figures being used here are for complete elimination of the school property tax for all property, not just for homestead property.  The ballot referendum is HB 1285 and is not connected to HB or SB 76.  Here we have an attempt, once again, to deliberately confuse the issue by connecting the referendum to school property tax elimination through SB 76. 

School districts already have the option of reducing their property taxes by 50% through a variety of approved alternate means at the local level.  The referendum simply expands that from 50% to 100%.  Rather than explore other options of school education funding, school districts have chosen to continue to place the lion’s share of this burden on property owners even though the property tax is, in no way, based on ability to pay.  As a result 10,000 people face losing their homes each year….that this doesn’t alarm our school districts is equally alarming to me.

The last sentence is a gross misrepresentation of the legislation which is explained in greater detail following the next paragraph.

This means that under this new funding formula, the state could decide to give more money to urban districts and less to suburban ones, like West Chester. Or, they could determine another complicated funding formula that would once again leave funding up to the state and take away our local control.

The connection to 76 is made and then it leaps to this gross misrepresentation of the legislation.  Under SB76 all money collected through the increase/expansion of the sales tax and increase in the PIT goes into a separate account that is not part of the budget process.  From the revenue collected each school districts get 100% of the revenue they are currently receiving adjusted annually tied to rates of inflation.  The Independent Fiscal Office estimates the annual increase will exceed 3% based on natural revenue growth of the PIT and SUT tax.  This annual increase will not require additional increases in taxation.

In order for education revenue to increase through the property tax it requires increasing the tax burdens on property owners.  The revenue from property taxes doesn’t increase without a tax increase, unlike the PIT and SUT tax.

The superintendent seem to be deliberately trying to confuse the parents who received this letter by tying the Basic Education Funding Formula to SB 76.  They are two separate issues and two separate funding mechanism. 

This paragraph is a contradiction of the the first sentence of his letter to the parents.  To me, the superintendent is making it perfectly clear that he appreciates the inequities of funding and the power of the local school district to create those inequities.

I’ve repeatedly address the myth of local control at this blog and won’t do so here.

Harrisburg struggles to balance its own budget. The General Assembly currently doesn’t have a revenue budget for the current year. How can we leave our own school funding up to them?

Again, the Harrisburg annual budget has nothing to do with the funding through SB 76.  Once passed the General Assembly doesn’t have access to these funds to do with as they please.    It is already appropriated to go to the school districts as the replacement revenue for the property tax

School districts are currently facing so many unfunded mandates. Special education costs are skyrocketing due to no fault of public schools. Pension costs are increasing dramatically, again, because of a state mandate. Many districts are also facing aging buildings and population growth. Without the ability to collect local property taxes, who’s to say that adequate funding will come from Harrisburg to support these essential needs? Legislators have already placed a three year moratorium on construction reimbursement for public schools, because the state is essentially broke. What is next?

School districts have done nothing to stop the unfunded mandates of prevailing wage costs that drive up the cost of school construction and renovations by as much as 30%.  Many of the mandates actually don’t originate in the general assembly so placing all the burden of unfunded mandates on the legislators is misdirection.    Why?

Because the educational complex doesn’t want you to realize that many of these unfunded mandates are coming out of the Department of Education whose board is made up largely of PSEA, PASBO and other school administrators.   Their problem isn’t so much that the mandates are unfunded, they simply seem to want the state to pay for it all.   But since the state actually doesn’t pay for anything, that means they want you, through your taxes, to pay for what they want.

Recently the Secretary of the Department of Education filed an educational plan for Pennsylvania with the Federal Government without submitting the plan for approval to the General Assembly.  This is exactly what they did to push Common Core on our schools.  Even though of Commonwealth Constitution says that it is the General Assembly who is to supply for a thorough and efficient system of education, The Department of Education continually works around the general assembly.

Even though all lawmaking authority is supposed to reside in the legislation branch, the Department of Education, like all of the executive bureaucracies, resides in the executive branch.  Yet these created bodies of government pass regulations and mandates that are paramount to laws which much be followed.  This school administrator doesn’t seem to want to see this change and to restore the Constitutional Rule of law which is supposed to preside over the Commonwealth….Why?

This ballot question does not apply to businesses, which means they will still pay property taxes. Surely, businesses will not be pleased with this inequity, and will want some relief also. They may fight legislators to limit property tax appeals by school districts, as previously proposed. Under this previous proposal, school districts would not be allowed to reassess businesses. This means a business built or purchased for $1 million, and sold for $10 million would only be assessed at the $1 million rate.
While I firmly believe that our school funding formula and system of taxation needs significant reform, I am strongly convinced this kind of back door legislative change is not the kind of positive, sustainable solution that we need. It deserves a much longer, more thorough review, with more equitable and sustainable solutions.

SB76 is the equitable solution but the school districts are fighting us.  So are the lobbyists of the business community.  Neither seems to care what is happening to thousands of families…children, parents and seniors…as they struggle to keep up with the demands of the educational complex in Pennsylvania. 

How many more people have to lose their homes to pay for pensions and benefits given to the public sector that these families in the private sector can’t provide for themselves or for their families?

How much more farmland must we lose in this Commonwealth to the egregious property tax before they admit to the seriously flawed system in place for education funding?

How much more rent subsidy must the government provide because the property tax keeps driving up the cost of rent forcing many families to double and triple up leading to overcrowded housing which is NOT conducive to quality education?

Pennsylvania already ranks 45th in the nation in percentage of state funding for public education. We are already nearly last in the nation for funding! This will only make it worse.

If Pennsylvania increased their funding to school district to meet their constant demand for 50% funding do we honestly think that our school district property taxes would decrease?  No, the next year school property taxes would again increase and then the school districts would be complaining because the state isn’t meeting the 50% mark again.   Besides, SB 76 would mean that 100% of the funding is coming from the state so what’s their real complaint?

Pennsylvania is among the top in education funding per populace.  Thats’s a contributing factor in why we rank 45th in the nation in percentage….The percentage however does not reflect actual dollars being spent.  We give more to education at the state level than most states but it’s never enough for public education in Pennsylvania.  That hasn’t stopped them from continually increasing our property taxes.  In the past 20 years we’ve seen a 140% increase in property taxes.  No amount of money from the state will stop this as long as the property tax exists.

Pennsylvania is also at the bottom of the index for keeping existing business in the state.  We are at the bottom of the index for attracting new business to the state.  Between 2015 and 2016, 45,000 people, one every 11.5 minutes, left the state to live in more tax friendly climates. 

The West Chester Area School District School Board is planning to pass a resolution on October 23 asking residents to vote NO on this ballot proposal.

First of all, how does this superintendent already know this resolution will pass?  Shouldn’t the passage of the resolution require an open vote with public input rather than coming to a school board meeting with a predetermined plan to do as they please?

Since the board has not yet met, nor have they voted on this amendment, the superintendent’s letter is premature demonstrating a lack of priority.  The superintendent’s letter should have waited for the approval and consent of the elected school board which is supposed to be the governing body of the school.   Instead we get a letter that is a gross misrepresentation of a piece of legislation carrying official weight in an attempt to sway public opinion before an important vote on the issue from a paid employee of the school district.

Over the last several months other school districts have carried the rhetoric of the school associations and organizations (PSEA, PSBA, PASBO, etc), none of who are elected by the public, demonstrating a total lack of credibility to me in their continual attempts to misrepresent the legislation. The administrators, business officials, superintendents and school board members who just blindly accept the talking points from these agencies and then repeat them are not without blame. Real Education involves a willingness to check the claims to ascertain that the statements are, in fact, true. That is obviously not happening. So they either repeat this information out of blind allegiance or they do so deliberately. Either way, it’s a sad statement to me about the condition of education in our public schools. After all, these are the same people who are entrusted with overseeing the education of our children.

This problem is then compounded by the opposing legislators who have refused to meet with the public to hear their concerns about the property tax issue; who will not come out to the town halls to learn the facts and then repeat the mantra of the school association lobbyists. The disconnect with the people in favor of the campaign funding school lobbyists is also a betrayal of the trust of the people who elect them.

It’s not all of them (Legislators and school associations alike) but it certainly does appear to be a large percentage of them.

I am angry but, perhaps even more so, disappointed that so many people entrusted with the education of the children of this Commonwealth are so unwilling to check the actual facts and will then stoop to such gross misrepresentation.

Those of us out their fighting for real and necessary tax reform for education funding do so without getting paid to do so and without resorting to misinformation and misdirection to make our points.  Unfortunately we do not have the financial resources nor can we use tax payer collected money to pay union dues or to pay for the promotion of the misdirection we’ve seen come out of the school districts with regards to HB/SB 76. 

If we can’t trust the governing bodies of our school districts to report the facts about a critical piece of legislation, maybe we need to start questioning our trust of their ability to educate our children.  The Auditor General has conducted several audits of school districts and the accountability of those school districts to the tax payers doesn’t paint a pretty picture.  One school district found itself in the courts because of grossly misrepresenting their budget to the public.  The school district lost that case.  This is more commonplace than most taxpayers realize.

Here’s another ranking.  In 2015, Pennsylvania was given an F rating from the center for Public Integrity placing it tied for 45th of the 50 states.  It took a legislative process to make our school districts more accountable to the public in terms of transparency because they didn’t do so on their own.  Even after this, we still have school districts misrepresenting budgets and creating confusion about debt service.  At a recent town hall two different parents in the same school district were given conflicting information about budgets and the retained debt service.

How can the public make informed decisions if they are provided with conflicting information?

Public schools deserve adequate funding. Without it, the quality of our schools will rapidly decline. There is a direct correlation between property values and the quality of our public schools. As the quality of our schools fall, property owners will see their own homes drop in value. This is simply not good for the residents of Pennsylvania.
If you care about the quality of our schools, please vote NO on the Nov. 7 ballot question. The future of our children literally depends upon it.

The Independent Fiscal Office says that the elimination of the school property tax would actually increase property values by 10%. Why doesn’t this superintendent tell the whole truth.  Property taxes do drive down property values.

The current system of education funding is unsustainable.  The growing pension debt is going to increase the cost of property taxation.  The 140% increase we’ve seen over the last 20 years will continue to grow while wages for many in the private sector have stagnated. 

  • We struggle to attract new business
  • We struggle to keep our working families in the state
  • Many struggle just to stay in their homes. 
  • The Property taxes are forcing many to choose between staying in their homes or providing necessary food, meds and clothing for themselves and their family. 
  • The Property taxes are leading to overcrowding in homes as families combine to meet the demands of the tax. 
  • Because of the cascade effect of property taxes, we pay more for the goods and services we use in Pennsylvania.
  • The Property tax is a prime contributor to blight in our neighborhoods.  If you can barely afford to keep up with the taxes, you can’t afford to do the necessary maintenance on those properties.

The property tax has created gross inequities in education funding and as the battle between wealthy school district and poorer school districts grow, those inequities will only become worse.  Many 3rd class cities are landlocked with populations that are far below the state average median income.  Many of those residents can’t afford to move or to live in the higher income communities.  Should those children in those schools be punished because the property tax can’t provide for the same quality of education as their neighboring districts?

If it’s all about the children, shouldn’t it be about the education of all the children, not just the children whose parents can afford to pay more.  As I read it, that is exacty what this superintendent is implying!

The solution to that is not to continue to rely on a funding system for education that requires constant tax increase but to shift to a system of taxation that grows naturally without the need for increases.

One final word on local control.  It’s supposed to mean our control over our school boards which is virtually non-existent.  It’s not supposed to mean their ability to tax us as much as they want, when they want.  SB 76 restores local control to the citizens where all future tax increase at the local level through a local income tax would require the consent of the governed.  Maybe, that’s what they fear the most!




Understanding HB1285

There has been a lot of discussion about a constitutional amendment that will appear on the ballot this November through the passage of HB1285

The proposal will amend the Pennsylvania Constitution to enable local taxing jurisdictions to double their homestead exclusion from 50 to 100 percent of the assessed value of one’s property. Right now, taxing jurisdictions (counties, municipalities, school districts) can authorize a tax exemption of up to 50 percent of a property’s median assessed value.

The amendment bill, House Bill 147, passed last session and has gotten second approval in this session in the form of House Bill 1285, which contains the same language, so it will now go to a voter referendum. This means you’ll see a question about it on ballots this fall.

The amendment passed unanimously in the House (190 votes with 13 members on leave) and, in the Senate passed with 45 yes votes, 2  no votes and 2 members not voting.

It should be noted that the Homestead/Farmstead Exclusion Amendment is a separate matter from actual legislation to force the issue.   The exclusion amendment provides local taxing bodies the option to choose an increased exclusion for taxation which they would have to find from other sources.  It is believed that this amendment would allow for the creation of legislation that could target homestead/framsted property for tax exclusion.

Currently there are no school districts making use of the 50% exclusion so its unlikely that any school district will go to a 100% exclusion.  However, there are County and Municipal governments in the Commonwealth who are utilizing this.  In our fight for school property tax elimination we need to remember that county and municipal property taxes remain and we should be working on seeing that these property taxes are also eliminated.

I firmly believe that, for the County and Municipalities, a more local option is required.  This could create a path to move towards the elimination of property taxes at the County and Municipal levels.

Voting no on this bill would prevent County and Municipalities from enacting a 100% exclusion of property taxes funded through other local means.  It would also prevent the possibility of legislation from making that happen from the state level.

There are those who say that if you vote yes on this, you aren’t supporting HB/SB 76 because no schools will enact it. The statement is only partially true.  No school will enact it is true, but it is still possible to support both this amendment and HB/SB 76. I do support 76 and will continue to fight for its enactment.

I believe that we can utilize the amendment in a way that can actually strength our voice in the call for complete elimination.

Let’s understand the strategy.

As we have seen throughout the process of trying to get 76 passed opposition will go to great lengths to misrepresent the truth about legislation.  Unfortunately, we don’t get to explain our yes or no vote when we vote.  This then creates a window of opportunity for those who oppose us to interpret that vote how they want.

We know that the opposition to 76 is salivating for this amendment to get voted down so they can say they offered 100% elimination to everyone and the voters turned it down.  They will reinforce the false narrative that the public doesn’t want to see elimination.

This is one of the reasons that I believe that a no vote on the amendment can have unintended and disastrous consequences.

The passage of this amendment through a supporting Yes vote will open some doors for us.  That’s always a good thing.  It allows for us to work with legislators to push for a bill that will bring elimination to homestead and farmstead at the County and Municipal level while still pushing for HB/SB 76 to completely eliminate the school property tax.

As with any bills of this nature, the devil will be in the details. That, however, if not the case with the Constitutional Amendment.  There are no details other than it expands the current 50% exclusion to allow for a 100% exclusion. It requires a Constitutional amendment because the Constitution currently does not allow for this through the legislative process.

How that happens will require separate legislation.  We can close doors in opposition to the amendment which will make it harder for us to work with legislators providing oversight on any future bills that come about as a result of the passage of the Amendment.  A yes votes provides us with an opportunity to work towards the complete elimination of all property taxation in the Commonwealth of Pennsylvania.

There is an old expression that says we need to be careful that we do not throw out the baby with the bath water.  I fear that voting no on this amendment to show support for elimination only through HB/SB 76 is an example of the above expression.

Common sense and strategy must prevail and we must continue to make use of every opportunity available to us to advance the issue of complete and total elimination of ALL property taxation.

Critics of the amendment are calling this a distraction.  That may very well have been the intention but its also an opportunity if we take advantage of it and do so wisely.

There are a handful of legislators and some of us advocating for elimination on the inside who see this opportunity and are trying to get ahead of the curve to develop the legislation we will need to make it happen.


Nothing I’m saying here should be misconstrued as full support of the amendment.   I do have some concerns but I want to stay engaged in the process so that there is a potential to work on future legislation that could bring us the complete elimination of all property taxes and to do so in a way that has our input and direction.

Nobody understands this issue the way we do.  We have been able to target and focus on this issue in ways that our legislators and special interest opposition have not.  They are looking at multiple issues.  We have laser focused on the property tax issue and we understand the problems in far greater depth because of it.

I encourage you to vote yes on the amendment and then to stay with us in this fight until we get government completely out of our homes through the elimination of ALL property taxation.

As this process continues legislation will come forward and we will need to judge each piece of legislation on its merits or pitfalls.  A vote yes on the amendment does not mean we must also approve of or support any piece of legislation that will follow.  Just as we have successfully fought against any property tax effort that is flawed or fails to accomplish what it claims, we must continue in that vigilance.

In the end, I still firmly believe that the passage of HB/SB76 is the real solution when it comes to the school property tax.

Let’s lead by example in Pennsylvania by first showing the rest of the states what can and should be done and then show them how to do it successfully!

One final thought:  The opposition to HB/SB76 has demonstrated that their opposition to the legislation has little to do with their excuses and much more to do with things they don’t want to say out loud.  I believe that the notion that the Homestead/farmstead will eliminate this opposition is foolish.  I believe they will oppose anything that seeks to eliminate property taxation and the Homestead/Farmstead exclusion may well allow us to expose more of the hypocrisy of their arguments!




Budget Crunch: Time to contact our Senators

I generally use this blog to write about the fallacy of property taxation in Pennsylvania but I want to tackle something a little different this time.

On Wednesday of last week the house passed a revenue package that calls for no new taxes.  It fills the budget gap by utilizing funds that have been sitting in limbo in accounts of special interest controlled agencies of government hidden away from public scrutiny.  Frankly, these is simply too much of this happening in Pennsylvania.  What good is the office of the Auditor General if they have no power to enforce the recommendations when things like this are exposed through internal audits?

The bill (HB453) just narrowly passed in the house with only 103 votes.

The opposition to this budget revenue proposal has begun rallying the troops to launch a massive campaign to tell Senators to reject this common sense budget that is looking out for the working families of Pennsylvania.  That’s not how they tell it.

If you listen to them they’ll tell you the world is coming to an end if this revenue bill passes.  Using gross misrepresentation they tell a tale of utter catastrophe if this revenue bill actually becomes part of  the funding mechanism of this years budget. What they won’t say is that the alternate is higher taxes, including higher taxes on home heating fuel.  Hey, if you can’t afford to pay your home heating bill after they attack you with new taxes and you have freeze through the winter months, so be it, so long as these agencies of government have large reserves on hand to use for whatever they want with no accountability to us whatsoever.

We’ve seen this same type of misrepresentation used to do everything they can to defeat the common sense school property tax elimination bill.  It doesn’t matter to them how many people have to lose their homes to fund the pension debacle; it doesn’t matter how many seniors have to remain in the workforce so long as those in the public sector don’t have to!

I am beyond angry!

If we stay silent the opposition will win this in the Senate.  We have a handful of Senators who will support HB453 but they need to hear from us to know we have their back.  Trust me, they are hearing from the opposition.  All our Senators need to hear from us!  We should be just as coordinated as those who want to perpetuate the legal plunder of our tax dollars!

We all need to understand that money was allocated to these special interest controlled agencies who took that funding.  Instead of steering that money to programs that were intended to help people in Pennsylvania, including the poor, veterans and farmers, they tucked a portion of that money away into accounts that were away from the scrutiny of the public and the legislators.

As Rep. Russ Diamond stated on the house floor, it was like hiding the money in Mason Jars in the back yard.

These bureaucracies are under the executive office and once appropriated they see little oversight. We should be grateful for PA Rep. Frank Ryan who was the prime on HB453 and other House members who worked diligently to bring this issue to light.  It is, after all, never too late to do the right thing!

The work that was done to find this money by a handful of house members is to be commended.  They bucked the status quo to give us a budget utilizing money that is already there but is not being used for the purposes the money was intended.  They stood up to those who want to see us paying higher taxes; to those who see the taxpayer as the unending revenue stream to milk dry; to those who look at those being devastated by their plundering practices as mere collateral damage of their own personal gain.  The legislators who stood up to them and said no more deserve our support.

While most legislators were on their summer hiatus, these legislators spent the summer in Harrisburg trying to actually balance a budget without raising taxes.  They did so by digging  through these agencies to discover this money not being utilized by the agencies other than to build large reserve funds with some of it in interest bearing accounts.  Opposition wants us to be angry at those who want to hold these agencies accountable to the people.  Our anger should be directed, instead, to the agencies that were doing this to all of us!

As Frederic Bastiat declared: “When plunder becomes a way of life, men create for themselves a legal system that authorizes it and a moral code that glorifies it.”

While the rest of us are expected to pay more and more with less and less, these agencies wanted to protect themselves at our expense.  How are we to trust an agency of government in place to help Pennsylvanians when they participate in the plunder of the very people they claim to want to help?

They have no problem with us having to cut back even more so long as they can protect their own extortion of our money.

Contact Information for the Senators in Pennsylvania can be found here: http://www.legis.state.pa.us/cfdocs/legis/home/member_information/contact.cfm?body=S

Just click on the email icon next to their name to let them know they need to pass HB453 as written.  Tell them that drastically altering the bill (HB453) or voting against it will follow them all the way in to the voting booth.

Together was can all make a difference so speak up NOW!   Don’t let these special interests win while they continue to plunder us for their gain!


When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe.

~Frederic Bastiat

The Insatiable Jaws Of The Property Tax.

Last night my wife and I decided to settle in and watch an older movie.  The movie we choose to watch was 1975’s Jaws.  Neither of us had seen it for a while so we kicked back for an evening of diversion from politics and everything else.

Everything was fine and the movie was serving our goals of diversion and then came the part of the movie where Quint retells the story of the U.S.S. Indianapolis.

Quint explains how 1100 men went into the water as their ship sank.  The nature of their mission was so secret that their perilous position they were in went unnoticed for over a week.  The attempts to rescue them would have to wait until somebody who could do something about it gave the necessary orders that would save their lives.

While the men in the water waited for that to happen the sharks came and the men were essentially unable to avoid the inevitable.  The sharks came and did what they do taking life after life of the men stranded in the water.

When the attempts at rescue finally came, they didn’t save them all in one miraculous scoop.  Each had to wait their turn and with each group of men saved the number of men still in the water lessened but the number of sharks in the ocean remained the same, greatly increasing the odds of becoming the sharks next victim.  As Quint tells it “That was the time I was most frightened.  Waitin’ for my turn.”

Quint ends his story by saying 1100 men went into the water and 316 men came out.

The story Quint tells is an important part of the movie in that it explains his passion and anger concerning sharks.

I’d seen the movie Jaws many times over the years since its original release but as I sat there watching it last evening the story of the Indianapolis took on a whole new depth and meaning for me.

Watching Quint delivery that monologue as only Robert Shaw could have done really got to  me.  I heard in a way I’d never heard it before and at first I didn’t realize why.   It was going through my head over and over again.  I woke up early this morning and realized why.

Quint’s story is a perfect metaphor for the school property tax.

A few days ago I sat in a room during a town hall to defend the need for the elimination of the property tax as a means to fund education.  It’s not the first time for me or for the others who were there with me who believe as I do.  We were there with those who oppose the elimination of the property tax for the purpose of funding education.  It was also not the first time that took place.

Every time I’ve been with opposition I feel as though the casualties of the those who lost their homes to this egregious tax are the ignored victims of a system that seeks only to satisfy itself.  If someone is a victim of that system, so be it.

I made a conscious decision that I would not leave the room that night without reminding everyone about the victims of the property tax.  I was going to put a face on those victims.

As was pointed out during that town hall, the struggle to eliminate the property tax has been going on since the late 1600’s.   Those who have to pay the tax have a natural affinity against it.  The school property tax, however, has not existed since that time.  It’s a relatively new beast in the waters of the property tax and since it’s inception has become the ravenous beast that it is often  to the point of being 2/3 of the entire property tax burden.

The growing numbers of people at risk to losing their homes isn’t because of the county and municipal taxes.  It’s the school tax.

When we talk about the school property tax, the opposition rarely chooses to even mention the victims.  When they do, it’s almost like a “too bad for them” attitude.

While Michael Woods of the Pennsylvania Budget and Policy Center earned a notable reputation for putting that sentiment into words stating “10,000 people a year losing their homes is not a significant enough number to do something about it!” the sentiment is still always there.  The victims of the property tax are the collateral damage of the school property tax almost as though they really don’t matter.

For 35 years we’ve fought, in some form or another, to eliminate the school tax and at every step of the way there is the opposition who tell us they know the property tax is a problem but they fight back against any real attempts to reform it.  As long as they can shield their eyes and not look into the faces of those devastated by this tax, it really doesn’t matter.  It’s just numbers, not people…at least not people they know.

The part of Quint’s monologue that struck me the most was his statement about the rescue attempts.  As some were rescued, there were fewer and fewer men in the water but the ravenous appetite of the sharks did not decrease.  They would come to feed, to take what they wanted whether there were 1100 men or 500 men in the water.

Over the years there have been several programs established by government that exist in the form of targeted relief.  There are those in Harrisburg who won’t support total elimination but are still pushing for some form of targeted relief.

Every time they do this, the number of sharks stays the same with less and less people to go after.  Every time they do this they still don’t alleviate the risk of becoming a victim for those still in the water.

For those still in the water, the risk increases.

Then the opposition has the audacity of talking about winners and losers as though there are no losers under the current system; as though already fallen victims don’t really matter.

To my way of thinking, these targeted relief systems are just Harrisburg’s way of picking potential victims.  To me, targeted relief simply means moving a smaller target off some to put a larger target on others.

The only winners are those who are out of the water; the one who no longer have a target on their back.  The ones still in the water have a potential of becoming the next victim.  They’re still in the losing arena facing the sharks.

I look at the property tax and see the opposition and feel almost as though they think that this dangerous beast is a protected species and they don’t care how many victims the property tax takes because the property tax is only doing what it is designed to do.  All that matters to them is that they have special protections so that the property tax doesn’t do it to them.

I’ve always looked at the school property tax as a predatory tax and, in the past, through this blog, I’ve referenced those predatory institutions that have arisen because there is a property tax.

At the time I got into this fight my next door neighbor was struggling.  The economic recession had hit home and hit them very hard.  Labor cutbacks resulted in his losing his job and he made several attempts to get back in the workforce or at doing odd jobs  in an effort to hold on to their home.

Him and I had become very good friends and our wives used to refer to us as Tim Allen and Wilson from the TV show “Home Improvement” because we spent a lot of time outside talking to one another over a fence.

They lost that fight.  They were forced into bankruptcy because of the property tax.  They lost their home and moved back to their hometown in Pittsburgh to live with family members until they could get back on their feet.

He told me several times that it wasn’t the mortgage, it was the tax.  Without the property tax they could have stayed in their own home.

When his home was finally sold it was sold for pennies on the dollar and the new owners filed an appeal and got a lower tax rate than what was available to my friend.

He was the first face I saw to become a victim of the property tax.  He wouldn’t be the last.  Their home sat empty for 7 years, passing hands from mortgage company to mortgage company before it was finally sold.

Those faces and the stories associated to those faces now numbers in the hundreds.  I have not attended a single town hall where I haven’t heard personal horror stories.

Why doesn’t that happen to the opposition?

Well, for one reason, until these most recent town halls, the opposition never had to sit in a room full of frustrated taxpayers who are still in the waters waiting for the sharks to come while also waiting to see the rescue they need.

That’s just not the opponents world.  From the school boards who can so regulate the control of the dialogue of a public meeting to the special interests who appear as invited guests of people who aren’t meeting to talk about the property tax or to fill the marbled halls of the state Capitol.  In some cases their economic station in life prevents them from seeing what so many of us have already seen.

These town halls have brought them out to face the victims.  These town halls have brought them out to hear from the public.  We have yet to hold a town hall like this with legislators and opposition where, no matter how divided the room at the onset on this legislation, there is overwhelming support by the meetings end.  We’ve yet to lose the debate in the eyes of the public.

Maybe that’s why so many legislators are so reluctant to held them in their own districts.

That’s why we hear ridiculous statements like ‘They lost their home because they bought too much house.”  or “10,000 people losing their homes isn’t reason enough to do anything about it.”  As long as they don’t have to look into the face of the victims of the property tax they can continue to pretend they are just numbers, not people.

That wont last forever though.  Eventually the number of those still in the water will become smaller and smaller and then, when they are the only ones there, will any of us care enough to help.

I hope so.

You see there was recently a push to allow for 100% exemption of homestead and farmstead properties but not for commercial properties.   It’s not the path I want to follow but it may be the path we must take until we can get a bill like 76 passed that completely eliminates the property tax for everyone.

Maybe that’s what it’s going to take to make these people realize how bad this was for the rest of us.

For now, the majority of homeowners are still in the water and the sharks are feeding because that’s what sharks were deigned to do, just like the property tax itself.  We’re in the water and we know the danger we face but those in government seem to not realize how bad it is for us.  Until the order (the law) comes forward from those in place to give that order, everyone is at risk.

Unlike the U.S.S. Indianapolis, they have the chance to come in and save us all at once.  Unfortunately, it doesn’t seem to be the path enough of them want to take.

In some cases they just want to through us a life-preserver to keep our heads above the water for a little bit longer, that is until the shark comes along to pull another one of us under.  As history has shown, these life preservers they throw at us in the form of relief only keep us afloat until the sharks come and then, life preserver or not, another victim is claimed by the sharks.

As for our movie viewing habits, I’m beginning to wonder if it’s possible to escape the political realm through movies or reading a book for that matter.  Now matter what I see or what I read, it’s there.




School Property Tax Elimination: The Moral Imperative.

I’ve received more than a few emails and blog responses asking who I am and why the issue of property taxation is so personal to me.  A portion of this was presented during a town hall on property tax elimination held at Pequea Valley High School on August 30, 2017.

My name is Jim Rodkey and I am a homeowner. I am also a husband, father and grandfather who is seeing what is happening in creating the instability and near impossibility for many in actually using their labor and industry to maintain their homes or to become homeowners.   The opportunities of my generation are slipping from this generation and generations to come if we keep doing what we are doing.

I am also chair of a citizen’s advocacy group in Lebanon County, Pennsylvania that works towards the restoration of the rights of property to put things squarely back where it rightfully belongs, with the property-owner.  Our organization support the current legislation of HB and SB 76 in the elimination of the school property tax introduced through the Pennsylvania Taxpayers Cyber Coalition.

Our Lebanon County organization approaches this from an ideological position. We see the property tax, especially the school property tax, as an arbitrarily unfair and unjust system of taxation.  We believe that no debate on this legislation can justly be presented that excludes the current system of education funding and its inequities of inherent injustice to property owners.

By now, we, as a society, should understand that the property tax is unfair as evidenced by the number of things that have been done to try to fix this system of taxation. They have all failed.  The more we try to fix the property tax system for the purposes of funding education the more unfair, unjust and inequitable it becomes for the taxpayers.  To add insult to injury, those fixes actually cost us more to maintain either through the property tax or through other forms of taxation.

The arguments against the elimination of this egregious tax rest largely in the protection of those who levy the tax against us and rarely, if ever, consider the instability and inherent injustice of the property tax.

We’ll talk about the 60% increases in taxes through the PIT through school property tax elimination while conveniently leaving out that it eliminates 100% of the school property tax.  They’ll use 60% to hide the fact that we are actually talking about 1.88 cents on the dollar.

We find this system of property taxation particularly offensive because, from an ideological standpoint, we agree with our founders and the likes of John Locke, Montesquieu, Cato, Algernon Sidney, Cicero, James Otis and countless others that the primary function of government is the protections of our right to our homes.

We believe that we do have an inherent and unalienable right to our property that no one has a right to take from us regardless of what the current law may say.  The system of property taxation has become a system that Claude-Frédéric Bastiat, in his timeless essay called The Law, identified as legal plunder.  Without the right to property, we become the property of others and we all know what that means.

By what right can anyone justly claim to put my home on the potential auction block in order to provide for things that majority of us cannot provide for our own families; To take from our labor and industry; to take food from our tables to put upon your own while asking us to be satisfied with the crumbs that fall from the table in these failed relief schemes and the fixes that never fix.

As homeowners, we are more than just the collateral damage of a failed, broken, archaic and unjust tax policy.  We are working families who are not looking to escape our responsibility for helping to fund education.  We are willing to pay in other ways that are more equitable.

We do believe that education is important and that funding of the education of our children for future generations is necessary.  The current system, however, is unsustainable.  If truth be told, it is not this bill that puts the future of our children’s education in jeopardy.  It is the current system and the protection of that status quo creating liabilities, which cannot be sustained, that is failing our children.

The struggle to eliminate property taxes has been going on for more than than 35 years in Pennsylvania.  At every step of the way opposition has arisen to do everything possible to crush elimination while, at the same time, doing nothing to provide a fair or equitable alternate solution.   While admitting to many of the inherent problems with property taxation, they will still defend it rather than change it or to honestly look at the egregious nature of property taxation.

My wife and I have gone out on our own and with others across this state for the last seven years at our own expense to advocate for elimination.  We do not get paid to do what we’re doing.  Unlike many of those who oppose us, we do not see gas millage, meals or compensation for time we have invested in this.  Do not get me wrong.  I am not complaining.  We do not expect or feel that we deserve compensation for what we do.

We do this simply because of the importance we see in this issue from an ideological viewpoint.

We believe that the right to our homes is part of a sacred trust.  We believe that government has a duty, an obligation, to uphold and protect or rights to property just as our Commonwealth Constitution in Article 1, Sections 1, 8 and 10 require; Articles that I believe the current system of property taxation and the other systems put in place to maintain it, violate.

As we have traveled across the state, I have seen the true face of the property tax.

I have talked to countless people where it is already too late to save their homes from the tax collector.

I have talked to countless more who are on the verge of losing their homes.

I have talked to others who are sacrificing essentials like food, new clothing and meds in their efforts to keep their homes.

I have talked to people who have been struck with a debilitating illness and, while they could have maintained their mortgage payments, the property taxes stripped or are in the process of stripping their homes out from underneath them.

I’ve met people who have struggled through death of their spouse who now must face the potential of losing their homes as well.  Again, while they may be able to maintain the mortgage the constantly increasing property taxes make staying in their homes impossible.

I have talked to young people who want to buy a home and establish permanent roots in our communities.  They tell me that while they can afford the mortgage, they cannot afford the property tax especially when they look down the road accounting for the historic pattern in the increases in the property tax.

I have talked to veterans who sacrificed for our country, who have fought to defend our rights, and are struggling because of this egregious tax.

I have talked to others who, in part because of the property tax climate in Pennsylvania, have seen their jobs stripped from them who are forced to into lower paying jobs to provide for their family.  Again, while they can keep up with the mortgage, the property tax strips their homes from them.

I have talked to many who tell me they haven’t seen wage increases in 10 years, who have seen their home values decrease, while their property taxes keep increasing at a rate that they simply can no longer sustain.

I have spoken with farmers who tell me that a farm, which has been in their family for decades, is at risk because they can no longer keep up with the demands of the tax collector.

Adding insult to injury, these people are told they lose their homes because they bought too much house.

How does that account for seniors who have lost their homes or forced to sell because they can’t keep up with the taxes?  In many cases they owned their homes having already paid for it in full but, as a result of the ever increasing property taxes, the tax payments exceed what their house payments once were.

I’ve talked to many who tell me the property taxes on their home is more than their actual mortgage payments

I have seen blight with homes because the constant increases of property taxes contributes to an inability to do necessary maintenance on their homes.

I live in a community where I’ve seen, first-hand, overcrowding because of the impact of the increases in the property taxation in making rent unaffordable to families who must double up to meet the cost of rent.  It is not just a senior problem.  The disease of the property tax reaches out to touch all ages from children to their grandparents.

Do we just continue to ignore them to protect the status quo?  Do we continue to accept the twisted logic that 10,000 people losing their homes each years is not significant enough reason to replace what is proven repeatedly to be broken and irreparable?

Isn’t more than more than 45,000 residents—one every 11.5 minutes—from July 2015 to July 2016 fleeing from this state to escape the taxation burden enough evidence to us that we can no longer maintain the status quo?

If not, what more will it take?

We sit here and listen to the blame game and there always seems to be someone else to blame for raising the tax on our homes.  I guess there is plenty of blame to go around…except for one group.  The home-owner can’t be blamed.

We did not create this mess and yet, when you strip away all the rhetoric, it is only the homeowner who is being held accountable.  That accountability extends to this egregious notion that we either pay for the ability to legally plunder our homes or we lose our homes.

How is this not legalized plunder?  How is this not extortion? How is this an acceptable way of doing business in Pennsylvania?  If we cannot fund education without denying the right of home-ownership to those who could, through their own labor and industry, otherwise afford to do so, we have a very very serious moral and ethical problem.

That has to change. We all must be accountable to each other in the funding of education in a way that is fair to all.  The only way we accomplish that is through the elimination of the tax that violates our right to property, the very homes we live in.



Proven: Property Taxes are Inherently Wrong!

Sometime when I’m out talking about school property tax elimination there are those who point out that all taxes a really a tax on our property, whether that be income or real estate.

There is a point to what they are saying but I think those who cling to this mentality as a tool to oppose school property tax elimination are also clinging to a delusional reality.  The delusional reality is not that all taxes are a tax on our property, but the delusional reality rests in that by saying so they think that somehow the taxes on our homes is the same as the tax on our income.  It isn’t and let me explain why.

Let’s start from the assumption that they are correct (and I do believe that they are); that all taxes are actually taxes on our property (not in the terms of real estate but in the terms of property as all things that rightfully belong to us).

If this is true then we have to ask the question “should all those taxes on the things belonging to us demonstrate some level of equality?”.

Look at the PIT and the Sales Tax.  The PIT tax is a tax on new income only.  The Sales Tax is a tax on newly purchased items.  Both are equally applied to all residents (3.07% of your income and 6% sales tax on items we purchase).  The only place this is not true is Philadelphia and Pittsburgh when it comes to the sales tax but that has little to do with the state.  They did that to themselves.

Unlike the tax on our homes, both of those taxes are framed around an ability to pay.

Now compare those taxes to the property taxes.  With 67 counties, 500 school districts and 2561 municipalities we have a potential for 3,128 different levels of taxation.

Let that sink in for a minute.  We have seen little to nothing as far as increases in our PIT and SUT taxes in the last 20 years.  The property tax, however, has gone up 149%.  The number of tax increases on Pennsylvanians to make that happen is almost unfathomable.  If only 10% of our schools, municipalities and counties raised our taxes each year that would mean, over the span of 20 years,  a total of 6,260 tax increases.

Perhaps you can explain to me again why you fear that if we centralized the funding of education through a state PIT and SUT tax we would see increases in those taxes annually but you have no problem with the thousands of tax increases at the local level.

The revenue generated through the PIT and SUT taxes grow naturally with the economy and they do so without the need to increase those taxes.  That isn’t true when it comes to the property tax.  The revenue can only increase through raising the tax.  It will not increase naturally on its own.

Where the PIT and SUT taxes are based on actual values determined in a fair market, the taxed value on our homes is not.  Home value is achieved by an arbitrary but allegedly educated guess on home values through an assessment that has continually been proven to fail at its objective of making the property “more fair” as though such a thing were even remotely possible.

In a fluctuating market your wages may vary but the tax you pay will also fluctuate with those changes.  In a down economic time, you may lose your job and, as a result will not be paying a PIT tax until you are, once again, employed.  In that same down economic time, your spending will likely decrease so the revenue generated from the SUT will drop.  This a natural effect in a market based economy and system of taxation.  This reflects ability to pay.  You don’t continually pay an SUT tax simply because you own something, only when you buy something new.

Even in those down economic times, revenue generated through the PIT and SUT at the state level actually increased without tax increases.  During those same times the revenue generated from property taxes also increased but only because the tax rates increased as well.  SO while the majority of the state was struggling through a recession, their taxes on the very homes they lived in increased to meet the demands of the tax collectors.

The housing market is reflected in that same market.  In down economic times, home values also drop but the assessed value of your property will not reflect the economic downturn because it is artificial; not natural.  In fact house values fluctuate constantly.  That fluctuation is caused by several factors.  The assessed value on your home will not fluctuate unless there is a reassessment countywide or you become the victim of some school districts decision to spot reassess you.  In the majority of cases your assessed value will go up.

One reason for the fluctuation of house value is market demand.  Certain aspects of your home will make it more appealing to sell depending on the desires of those seeking to purchase a new home.  That is natural.  The real fair market value of a home is determined by an agreed upon price established by a willing buyer and a willing seller.

By contrast there is nothing natural about the assessed value of your home.  It’s artificially generated using formulas that don’t really work.  If they did we wouldn’t see the number of successful appeals that follow every countywide reassessment.

The property tax will also impact the value of a home.  Property taxes will actually take away from home value.  It will lower the value of your home and every tax increase adds to that drop in value to you as a homeowner.  As your home value drops, the assessed value does not drop to adjust for the impact of the millage increase.  It stays the same even though the real value of your home may have just decreased because of the tax increase.

Again, this is because it does not follow the natural process of the economic ebb and flow.  The arbitrarily determined value of your home determines the tax you will pay and that arbitrarily determined value will not naturally ebb and flow with the economy.

Show me any other tax that works like that.

Show me any other tax that requires something like regular assessments and a state tax equalization board, both of which require additional revenue to make work (even though they don’t actually work when it comes to doing what they were created to do).

If we were to judge real estate taxes simply by the standard of other forms of taxation we come to the same conclusions we always reach when we talk about the property tax in terms of real estate.  Its simply wrong.

Oddly enough, the majority of our opponents admit that.  When pressed, our opponents will tell us that they know the property tax is unfair.  They will admit that it creates inequities.  They will agree to the inherent flaws of the property tax but they still defend it.

There are those that go so far as to say that something should be done, but, when you press them for their solution, they have nothing.  What usually follows is then a defense of the property tax that they just admitted was unjust, inequitable and unfair. Isn’t that the epitome of hypocrisy.

No matter how it’s spun the property tax on our real estate remains the most regressive and most unfair tax in existence.  It begins by using a false assumption of wealth based on an even greater falsehood of assessed property value.

The fact that we do assessments begins with stating that the property tax, at the time of need for reassessment, has created inequities in taxation.

Let that sink in.  Reassessment happen because, they admit, the property tax has created inequities.  We have reassessments because they know and admit that the property tax system doesn’t really work when it comes to the matter of fair or equal taxation as required by our Commonwealth Constitution.

It then sets out to do what it never really accomplishes because it never really makes it fair.  We will spend millions in these reassessments adding to the cost of the property tax and yet it never accomplishes what it sets out to accomplish.  It is just one of the many flawed aspects of government interference that have arisen because we have a property tax.

The property tax on our homes assumes that our homes actually generate the income necessary to pay the tax.  It doesn’t.  While, over time, our homes do generate equity, that equity never translates into money to pay the taxes. We don’t really see that equity unless we refinance or we sell that home and then there’s already another tax in place to nail that equity.

At the same time, some of that equity is actually consumed by property tax increases making our homes less valuable than they would be without it.  When the Independent Fiscal Office studied this issue they stated that the elimination of the property tax would actually add, on average, about 10% to home values when the homeowners actually wanted to sell their homes.

Would we sit idly by if, in their attempts to fill the budget gap, state legislators told us they were going to establish a state job assessment policy where the taxes on our income would no longer be based on our actual wages but on what some firm determined we should be earning.  Let’s say you are earning $40,000 and are currently paying $1,228 in PIT taxes but this assessment system determined you should be earning $45,000 in that job so you taxes will now be based on the assessed value and not what you actually earn…in this case an additional $153.5?

Would we sit idly by if the same government for the same reason would tell us that from this point forward the sales tax will not be based on the actual selling price of the item we purchased but determined by some assessment firm?  You want to purchase a new big screen TV at Christmas that’s on sale for $100 less than the suggested retail price.  The normal selling price of that TV is $600 but you can now but it for $500 paying and additional 30 in taxes.  Then when you get to the register you are told that the $500 Tv has actually been determined to be worth $800 and your sales tax, under the new assessment policy would not be $30 but $48.  Now imagine that happening for every sales taxable item you purchase over the course of a year and think how much more ti would cost you.  Would we think this was fair?

And yet this is exactly what is happening year after year with our homes!

Over the decades, Government has admitted that the property tax is inherently flawed and egregious.  If they hadn’t we wouldn’t have seen so many flawed attempts to fix it.  Every solution tried so far to fix the problem has failed.

The State Tax Equalization Board was created in 1947 to supposedly make the property tax fair.  It failed.  In fact, in 2008 a report on the Board was a scathing indictment of flawed formulas, inaccurate reporting and practices.

At the time Auditor General Jack Wagner announced his office found so many errors in the State Tax Equalization Board’s (STEB) revised property values for 2008 that it brought subsequent reports and the impact on government aid and property taxes into question.

Mr. Wagner said the errors’ impacting local school property taxes, which represent 60 to 70 percent of a Pennsylvanian’s tax load, were so bad that they would be impossible to calculate.

“What STEB influences is the school subsidy by state government to local school districts,” said Mr. Wagner. “The simple fact remains it should be right, it should be accurate, and we have no sense of confidence it is today.”

Mr. Wagner said unless the STEB, which has an annual operating budget of $1 million and a three-member board, corrects the information in the 2008 and 2009 reports, Gov. Tom Corbett should consider abolishing it and either contracting the market value assessment out to a private firm or integrating the agency into the state Department of Revenue.

Did they?  No they didn’t.

Apparently the solution to that was simply to change the name of the board and making the website less transparent.  The whole concept is unfair because it uses averages to determine a common level ratio.  Those above the average will benefit, those below it pay more.

Realizing that property taxation was outpacing many taxpayers ability to pay, Act 1 was passed to place limitations on future tax increases.  It was supposed to restore some level of local control by saying that when a school district wished to exceed the Act 1 limit it had to go before voter referendum.   When it originated it contained 10 exemptions the school districts could use to avoid voter referendum and they certainly did make use of them.  It was a failure.   School districts applied using one of the 10 exemptions and in every case those exemptions were approved in rubber stamp format through the Department of Education.

Did they fix that?

Well, the fix, we were told, was to eliminate 7 of the exemptions.

It also failed.  Roughly 1/3 of the school district annually still apply for and are rubber stamped in their approval using the three exemptions.  Voters never get to decide because the school district never has to go to them for approval.

We’re talking about 160 to 200 school districts a year that do not have to turn to voter referendum because of the exemption.  Its not always the same school districts so over a period of time the majority of the school districts can apply for and receive the exemption from voter referendum.

Over and over again the current auditor general has found questionable uses of tax payer moneys in some of our school districts.  He makes recommendations but that’s all they are.  Current law doesn’t require that those recommendations are followed.  They can simply choose to ignore those recommendations.

An attempt was made to fix that this year in a bill introduced by Frank Ryan of the 101st District.  Once in the Senate, the bill was amended so as to render it useless and now it will return to the House.  Ryan has stated that, as a result of the amendments he will have to now vote against his own bill.

There was also the gambling fix where we told that we could see major reductions in our property taxes even to the point of elimination if we allowed legalized gambling into the Commonwealth.  We were told we would see near elimination but that couldn’t have been further from the truth. The meager crumbs that fell from that table in the form of a reduction that was quickly eaten away by later real estate tax increases.

We’ve seen programs like Keystone Opportunity Zones where time limited exemptions are made to businesses. This was also a flawed concept no matter how well intended.

This gives an unfair advantage to the business receiving the exemption for a limited time period over other business in the area.  Not only have that, but the taxes on everybody else had to increase to provide for the exemption to that business including increasing taxes on other competing business in the area. Can anyone really call that type of tax program fair.

The fact that we implemented Keystone Opportunity Zones was a clear admission to the fact that we have a serious problem with property taxation.

Do they work?

For every success story of the Keystone Opportunity Zone, there are a hundred stories of businesses that establish through the Keystone Opportunity Zone and once the exemption expires, they close the doors and move elsewhere.  It fails because, ultimately, the temporary exemption no longer exists and the business simply can’t afford to stay open and pay the taxes.

The thing is that we already know that exempting those businesses from the property tax actually works in attracting new business to our communities.  It stops working when the exemption expired.  What makes it fail?  The Property Tax.

Eliminating the property tax would see those businesses locating in Pennsylvania, creating jobs in our communities, which generate both PIT and SUT taxes along with other local taxes. They would then remain because the fear of the property tax returning is gone.

Eliminating the property tax for the same competing business would also remove the unfair advantage we see through the current system of Keystone Opportunity Zones since all businesses would be exempt.  It eliminates the need for the inequity the Keystone Opportunity creates while also eliminating to need to pass the cost for property tax exemption on to homeowners and other businesses.  It then generates fair market competition between the businesses.

Of course if you are large and powerful business you may not want competition so protecting the status quo, which forces many of the smaller businesses to look elsewhere, would benefit them.

At the root of the Keystone Opportunity Zones we also see a flawed approach to solving problems in Pennsylvania.  The cost of implementing a Keystone Opportunity is not measured.  We really don’t know ho much it costs to implement because we don’t keep track of those statistics so when a supporter of the Keystone Opportunity Zones tell us how much revenue these businesses generated, they leave out a very important aspect…how much it cost.

If 1 million is generated from a Keystone Opportunity we are to applaud and say, “job well done.” but in many cases where independent agents have studied the cost, we aren’t actually making money, we’re losing it because they cost more to implement and maintain than they produce.  If property taxes were eliminated there would be no cost in making the entire state a Keystone Opportunity Zone because there would be no government agency involved in the process and no cost would be passed on to other taxpayers.

It preserves the intent of the Keystone Opportunity Zone without the cost to homeowners and other businesses.  It does so in a way that is fair and equitable and no longer allows the state or local governments to manipulate power in picking winners and losers which might contribute to the reasons for some of the opposition as well.

As property taxation has become an unsustainable problem for many homeowners one of the solutions being floated it that we can ease the burden of the property tax (that doesn’t mean fix the inequities which can’t be fixed-it just means make the tax cheaper so we ignore the moral dilemma of the tax for a little longer) by taxing non-profits.

In order to be exempt from property taxation a non-profit must provide  a service to our community.  If we begin to tax the property of these non-profits we are going to limit their resources in the services they provide.

Supporters of taxing non-profits seem to especially like to point to taxing churches and they always roll out mega churches when they do so.   It assumes that the mega church in the local area is rolling in funding functioning off the same false premise that property can measure wealth.

Besides for every large church, there are a hundred smaller churches, each struggling to pay their bills.  You see as our tax burden increases our ability to contribute to charity is limited.  The rising property taxes are already negatively hurting smaller churches and in a way, it’s the property tax which becomes a major contributing factor in giving falling off so they are already paying a price, though not directly.

I get that there are non-profits out there taking advantage of the tax environment.  It’s not all of them though and its not even, in my observation, the majority of them.

Here again, even if you start taxing the property of non-profits, you haven’t fixed the inequity or unfairness of the tax.  It doesn’t fix that which is inherently wrong with the tax to begin with.

All you’ve done is temporary found a new revenue source that may (or may not) actually lower the property taxes for everyone else for a very short period of time.  In very short order any reduction you see will soon disappear as the property taxes continue to increase along their historically proven path.

The simple truth is that you cannot fix the property tax on our homes because it is inherently flawed.  You cannot fix something that was broken at its inception.  No matter how its spun, the property tax is wrong, both ethically and morally wrong.  It is wrong because it’s never actually reflects an honest value of a home resulting in as much as 60% of the homeowners in the state paying more taxes on the estimated assessed value of their homes than their home is actually worth.

Tell me again, what other tax does that.

Imagine going to your doctor and being told that you have a fatal disease.  The doctor then tells you that there’s a cure to the disease to make it go away completely but he’s not interested in that fix so he’s going to try a series of other things that won’t cure the disease but might make it easier to manage.

Would you go to another doctor?

Well that’s what’s happening with the property tax.  Our problem is that we can’t go to another doctor because their isn’t one.  Your tax collector is your tax collector and you do what they say or they take your home from you.  End of story.

When it comes to the school property tax, some have chosen another doctor.  They have issues with the public education system and they move their children out of the public schools into private schools.  It doesn’t matter, the school property tax collectgor still comes knocking on your door.

Let’s translate that.  You go to the store and purchase a new TV.  You pay for the cost of that TV and the taxes associated with it.  Then the tax collector shows up at your door and wants to levy another tax on you for a TV you didn’t purchase simply because they can.   This is the TV they want you to pay taxes on and they have the authority to make you pay the taxes for that TV.  Would their be an outcry?

Of course there would but that’s how the school property tax works and where is the outcry?

The sad thing here is that even defenders of the real estate property tax admit to the flaws.  Deep down they know it is wrong but they defend it primarily because many of them benefit from it in some form or another.  That benefit comes at the cost of many people losing their homes often for reasons totally out of their control; an illness, death, faltering economy where family sustaining jobs are harder to keep and find.  Since the property tax is not rooted in ability to pay and the property tax outpaces the rate of inflation, it’s not really all that difficult of find yourself in a situation where you can no longer afford to keep up with the demands of the tax collector.

Even though your home may be paid in full, the property taxes can outpace your ability to pay resulting in something you are supposed to completely own being stripped from you.  Once stripped from you, the value of your home is irrelevant to the auction block all that matters to the auction block is that property taxes are paid in full.  Your home can be sold out from underneath you for pennies on the dollar to some profiteer who will then turn around and resell your home for a profit.

Homes sold on the sheriff auction block do not have a track record of being sold for the assessed value of the property.  For good reason.  They can’t.  In fact, the majority of homeowners couldn’t sell their homes for the assessed value on their property even if they tried and yet we will be told that the assessed value is fair for purposes of taxation and a just reflection of our home values.

Adding insult to injury, if they resell that home for a lower price than the assessed price, the new buyer can now appeal the taxes on that property based on the selling price and get a lower tax rate on the same home from which you were evicted.  The new owner could be living in the very same home that you were forced to leave and then pay lower taxes than you ever could.  Tell me how that is not wrong!

The whole premise of the property tax is based upon a lie propped up by system that has created programs that fail to do what they are supposed to while costing us millions more in the process.  The lie is that the property tax can somehow be made fair.  It cannot.

Homeowners did not create the current inequities we see in school funding; those in place to oversee and levy the tax created them.  Even though we did not create it, we are seen as being accountable to pay for it through an inherently flawed system of taxation.

The current unfunded debt of the pension system had nothing to do with homeowners.  It isn’t like we had the opportunity to actually vote on it.  We did not create it.  The Public sector through our legislators created it.  Even though we did not create it, we are seen as the ones accountable to pay for it through an inherently flawed system of taxation.

It has been said that insanity is “doing the same thing over and over again and expecting different results”.  That is what our opponents want the rest of us to accept: the insanity of protecting the status quo, to reapply the same fixes that never fix; to maintain the same system that can easily be proven to be inherently wrong.

They can tell us that property taxation provides a stable revenue stream for the tax collector.  They cannot tell you that the property tax creates any sense of stability for the person who has to pay for it.  If they have to leave that out of the equation and they realize the instability it creates for the tax payer than the entire premise of stability is framed around the same lie that props up the property tax.  That somehow it can be fair and equally applied in relation to the requirements of the Commonwealth Constitution which states that (article 8, Section 1) All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax.  They aren’t.  The millage rates may be the same in any territorial district but because the mills are applied to the arbitrarily determined value that doesn’t not honestly reflect actual home value the taxes can’t be made to conform to uniformity.  It’s simply impossible!

They can tell you a lot of things in their attempts to justify the property tax but the one thing they can’t tell you is that it is fair or that it is equitable.  That makes any justification of the property tax the same lie that props up the property tax to begin with.

The property is wrong by every measure.  The property tax can never be made right.  When that happens there is only one justifiable course of action.  The complete and total elimination of the thing that is wrong!  Anything else is just an excuse.

Thomas Jefferson wrote, in our Declaration of Independence that ‘Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

The cause for elimination is neither light nor transient.  While in the past we have been disposed to suffer as long as the property tax was sufferable, for many we are already way past that point in time, for others it is approaching.  It is long past time to end this train of abuses.  It is time to do the right thing because its the right thing to do.

Eliminate the property tax and replace it with a system that is both fair and equitable.

Only one bill actually accomplishes this and that bill is HB/SB 76.