Op-Ed: The 325 Year Old Problem:  Property Taxes


Since I have been in elected office, the issue that the vast majority of my constituents contact me about and are frustrated with is the local school property tax which is currently the primary way our public schools are funded.

In fact, just recently all Lancaster County property owners received a notice from the county that their properties are being revalued, or reassessed.  This has resulted in even more calls to my office from homeowners who believe that it is well past time to address what is considered one of the most regressive taxes that is imposed.

To be sure, the only agreement among everyone – both taxpayers and school districts alike – is that the current system which relies too heavily on property taxes without respect to an individual’s ability to pay, is in desperate need of reform.

The property tax problem is by no means new.

Remarkably, property taxes have been a significant source of dispute since they were first authorized on January 30, 1683 by William Penn, the Proprietor and Governor of “Pensilvania” and the 13 members of the Provincial Council. 

Within weeks of enactment, hundreds of complaints were filed with the Provincial Council regarding the assessment of property and by 1692, several hundred landowners from the three existing counties in Pennsylvania (Philadelphia, Bucks and Chester) signed a petition to the Assembly listing their frustrations with the property tax and questioning the need for its existence.  A chief complaint was that, “the excessiveness of the tax is placing an undue burden on estates.”

Since that time, throughout the 1700s, 1800s, and 1900s and in the new millennium, efforts have been made to address the relative inequities in taxing property.  Unfortunately, while some minor progress was made, local school property taxes remain a very real financial burden for many homeowners, especially those who are low-income or are on fixed-incomes.

The failure of state government to address one of the biggest issues for many Pennsylvanians is in part what has resulted in an ongoing school property tax “elimination” movement.  Simply put, people no longer believe that we can partially shift taxes and control school property taxes – they believe the only way to address the problem is through full elimination.

As we all know, there is no easy or painless way to meet this goal.  The new taxes required to replace local school property taxes are sobering and the new method for funding our schools has raised some serious questions from school officials.

For example, while details of the new school property tax “elimination” legislation are still being worked out, it is estimated that Pennsylvania’s sales and use tax would increase from 6% to 7% and new items and services currently not taxed would be subject to the sales and use tax.  Additionally, our Commonwealth’s personal income tax would have to rise from its current rate of 3.07% to nearly 5%, resulting in less take home pay for working individuals, families and small businesses.

Instead of collecting revenue locally, all the new money raised from these taxes, combined with gaming revenue, would be used to replace local school property taxes.  The distribution of those funds would be done by formula in law, something that has traditionally not benefited Lancaster County schools.

Finally, previous versions of the bill permit school districts to retain a portion of the property tax to retire any existing debt, so your property taxes may not be fully eliminated immediately.

The appeal of the plan is its insistence that the local property tax should not just be reformed – but that it be “eliminated.”  This is one of the reasons why the overwhelming majority of my constituents have favored the bill, notwithstanding many of the potential negative impacts that could result from such dramatic changes.

Too many times, government is the last entity to finally realize how frustrated people really are about an issue.  The local school property tax debate is one of the most powerful examples of that reality today, and the people are demanding substantive changes, many of which are embodied in the “elimination” bill.

However, as we consider such sweeping changes, I cannot ignore the concerns raised by our school officials and some local business who believe that we must be very careful about overhauling how we finance public schools.

For example, the school districts are right – this legislation does nothing to address what perhaps matters most, the issues driving the increases in costs for education, such as public sector pensions, prevailing wage requirements and other state mandates.  We have to fix those things which are costing taxpayers more than they can afford.

Economic experts and local employers are not wrong either – making such dramatic increases in the sales and use tax, including expanding it to untaxed items, could have negative economic results, particularly for industries in very competitive environments who cannot manage a new 7% tax.

These calls for caution are thoughtful, understandable and well meaning.  Certainly, we do not want to make things worse and I again pledge to continue to make sure that Lancaster County schools are treated fairly so that they can succeed in their mission to educate our young people.

Still, I have always promised to be the voice of the people I represent in Harrisburg. 

They are demanding change, and therefore I have voted for, cosponsored and will continue to support the “elimination” legislation.  In fact, I will support any reasonable plan to eliminate or significantly reform the archaic and unfair local property tax.

Like nearly every property tax payer, I think 325 years is long enough.