May 1, 2007
Act 1 or the so-called Taxpayer Relief Law, coming out of a 2006 Pennsylvania Special Legislative Session in 2006 offers voters the opportunity via referendum for lower property taxes by raising school district’s personal or earned income tax.
Act 1 is without relief. If approved by the voters, taxes are actually increased for many homeowners with income. The truth be told, many families will pay more in total taxes under this law. While exact amounts will vary depending on the school district, a typical family with a household income exceeding $46,000 annually in the Williamsport Area School District will now pay more in overall taxes the first year this law takes affect. This is because the applied formula utilized reaches a point where the additional burden of an income tax overtakes any benefit of a reduction in property taxes.
As the plot thickens, renters would take the stage protesting their automatic increase in income taxes. Because renters do not own property, they would get no relief whatsoever.
The writers of this act have created a story line replaying an important theme that voters would now finally have to approve by referendum any future tax increases. They say this will limit the ability for school boards to raise taxes. Unfortunately, behind the scenes there are allowances for numerous exceptions (i.e. construction projects, health-related benefits, etc…), rendering this provision useless. Why employ referendum power when most spending schemes qualify as an exception to a referendum?
As we look even closer at the script, the disproportionate rebates that may become available under this new law are discriminatory. Completely out of character for effective public policy, it favors property owners with low school property values. Obviously, this favors major cities with typically lower assessed values at the expense of smaller cities such as Williamsport and surounding dsitricts.
We haven’t even touched on gambling revenue that may never even materialize and is arguably the most onerous provision.Without further review, the critics have already weighed in on this one. Although it is not a five star, assuming a resounding defeat at the polls, we may set up a good sequel. This sequel would start the act out with educed spending in Harrisburg. This critical theme played out for the entire act would eliminate the need for any gambling revenue or any other additional taxes.
The answer to true preperty tax reform starts with an accurate definition of the problem. Surely the answer to the problem is NOT defined properly with raising income taxes in an already “overtaxed” society. We then need a comprehensive solution where everyone benefits.
We must fight to keep local control and be sure that goverment at all levels lives within its means.Above all, it must be kept simple.
Personally, I will pass on this show but look forward with great anticipation to the sequel.
Property taxes pose great financial burdens and must be addressed.
By David A. Huffman
Member, Williamsport School Board
Member, PA State Committee GOP
Member, Lycoming County Executive Committee
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