Pa. Lawmakers Tackle Property Tax Reform — Again

Allentown Morning Call

Rep. Madeleine Dean isn’t looking for much — just a solution to a policy question that’s stubbornly resisted being solved for a generation.

That would be property tax reform.

“I hear from constituents all the time about the burden of property taxes,” said Dean, a state House Democrat from Abington,Montgomery County, and member of a special committee discussing the issue.

“I asked to be on this committee,” said Dean, a freshman elected in a special election in May and who will face the voters again in November, “because it’s doing work that can be so valuable.”

Sisyphus, meet the competition.

Sometime before the current legislative session ends Nov. 30, the House Select Committee on Property Tax Reform is supposed to report back to the full House with recommendations on how to fix local school and municipal property taxes.

The system has long been derided as inequitable to taxpayers, school districts and local governments. The panel’s recommendations are supposed to take shape as legislation in the new General Assembly session that starts in January.

“We’re hoping to come up with creative recommendations for a more equitable distribution of the property tax burden,” Dean said.

The committee most recently met Tuesday. And as the closed-circuit television cameras whirred, lawmakers hailing from some of the state’s hotbeds of property tax unrest heard from lobbyists for county commissioners and borough governments.

Each recited the catalog of woe facing local governments in a shaky economy and at a time of growing state government austerity. Namely, that cuts in public funding for such key — and mandated — programs as mental health services and law enforcement mean result in property tax hikes for homeowners.

“In the face of budget cuts and fiscal constraints, we do think it is appropriate for the General Assembly to revisit mandates and whether the money that is provided is adequate and the funding sources are equitable,” Doug Hill, the veteran lobbyist for the County Commissioners Association of Pennsylvania, told the panel.

It wasn’t the first time Hill asked lawmakers to make available to county governments an expanded menu of taxing options, such as earned income taxes and locally levied sales taxes.

Dean and her colleagues nodded sympathetically. They asked concise questions that that might find their way onto campaign bumper stickers. After all, what candidate has alienated a voter by running for re-election on a platform of property tax reform?

Asked if politics was behind the committee’s proceedings, the panel’s chairman, Rep. Tom Quigley, R-Montgomery County, was blunt: “I know there are cynics out there who say this is a ploy. But the alternative was to throw up our hands. This is a way to keep the discussion going. Legislative action will take place next year.”

Quigley said he’s convinced the financial problems afflicting Scranton and Harrisburg, along with a post-election influx of new lawmakers in 2013, mean the chance of a tax reform package being passed might have improved.

“There’s an opportunity to start fresh,” he said.

If that chorus sounds familiar, it’s because it is. In 2002, there was a special legislative session on property tax reform.

In 2009, former state Rep. Sam Rohrer, R-Berks, pushed to eliminate the tax. But while restrictions on property tax hikes have been put into place, structural changes have eluded lawmakers.

Here’s why: Depending upon whom you ask, eliminating local school property taxes (the solution preferred by most reformers) punches an $8 billion to $12 billion hole in the state’s finances. And that money has to be made up somewhere.

Proponents often look to a combination of revenue sources, such as applying the state’s 6 percent sales tax more broadly (eliminating existing exemptions); increasing the personal income tax rate; or tapping state tax revenue collected from casinos.

A member of the panel, Rep. Tim Krieger, R-Westmoreland, is one who sees government spending as the problem.

One recent proposal, the Property Tax Independence Act, is being analyzed by the Legislature’s Independent Fiscal Office to see if its numbers added up. The agency’s report on the bill is due next month, Quigley said.

Those past efforts are a vivid reminder that if it was easy to eliminate property taxes, it would have happened already, said Chris Borick, a political science professor and pollster at Muhlenberg College in Allentown.

“We have a long and fruitless history of efforts to address this ever-present problem,” Borick said. “We have no shortage of stops and starts. At best, they’ve marginally impacted the larger issue of property tax.”

The reason is simple: Lifting the tax burden on property owners puts it somewhere else, causing pain.

Or, as Borick puts it: “The political will quickly dissipates.”

“I’m not under any illusions,” Rep. Krieger said, “that we will find a magic bullet that will make everyone happy.”

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