By David Loomis
INDIANA – A banner headline on the front page of The Indiana Gazette recently featured a familiar idea from an unfamiliar lawmaker. Rep. Frank Ryan, R-Lebanon, proposes to eliminate the property tax in Pennsylvania, and he plans to formally introduce his kill bill this week in Harrisburg.
Ryan’s idea is not new. It has been a staple of populist politics in Pennsylvania since Gov. William Penn enacted the first property tax in 1683, according to Jeffrey A. Weber, Ph.D., former associate dean at East Stroudsburg University and former deputy director of the Pennsylvania Senate’s Republican Policy Development and Research Office. Two weeks after enactment of Penn’s property tax, Weber has written, a complaint was filed.
Then, as now, “reform” stalls. “The Commonwealth has a long and valuable history of well-intentioned failure when it comes to the property tax,” Weber wrote.
Rep. Ryan says his bill would “bring Pennsylvania into the 21st Century.” Another property-tax critic, state Sen. Joe Pittman, R-Indiana, has called the levy “archaic.”
ANOTHER MEASURE of the property tax’s longevity is its effectiveness at achieving what it was designed to do since the 1830s – to pay for the education of the commonwealth’s school-age children. If public instruction is important to citizens, then they want a stable source of revenue to ensure the essential mission. Real property – homes, farms, businesses – guarantee revenue better than other more volatile sources, like sales taxes.
If real property owners can’t or won’t pay their tax obligations, the commonwealth can possess the properties to pay the bill and provide for the common weal. Confiscating the contents of a self-storage unit won’t cut it.
This key to the levy’s durability is the target of Rep. Ryan’s 295-page School Property Tax Elimination Act, House Bill 33, that he plans to drop into the legislative hopper on Wednesday. (Ryan also is a co-sponsor of House Bill 76, a favorite hobby horse for property-tax hawks, but House Bill 33 would keep tax revenues in localities, out of Harrisburg’s clutches, he argues.)
Ryan’s proposal would wipe out $15 billion collected every year from property owners. To replace the lost revenue, his measure would:
— impose new taxes on personal income.
— impose new taxes on retail sales of food and clothing, the most basic essentials. Ryan would exempt benefits for low-income recipients of food stamps and other public assistance. (It’s an interesting twist, given Rep. Ryan’s recent vote to cut off cash assistance to the neediest of Pennsylvania’s poor.)
— impose new taxes on retirement income, except for Social Security.
LIKE OTHER STATE OFFICIALS before him, Rep. Ryan may know the math. The second-term representative, after all, is a certified public accountant. But politics suggest a different calculus.
Consider Rep. Ryan’s proposed tax on retirees. Pennsylvania is a magnet for seniors because their retirement incomes are not taxed, as they are in 42 other states.
But Rep. Ryan’s bill would tax retiree income, except for Social Security. In an interview published August 1, Rep. Ryan justified this by describing seniors as a strain on the public purse.
“We are becoming a much older state because of our favorable tax status,” Ryan said. “One of the biggest cost drivers in the Commonwealth for our budget is the cost of seniors.”
That is not an argument tailored to attract the support of an influential and vocal voting bloc of older Pennsylvanians who retired to the Keystone State because of its favorable tax treatment.
Similarly, narrowing the property-tax break to homeowners only would ignite opposition from businesses. Imposing taxes on food and clothing (including diapers) would arouse advocates for the poor – and it would ensure a veto from Gov. Tom Wolf, who has called that provision a non-starter.
DESPITE THE LEGISLATIVE LABYRINTH, interest in Rep. Ryan’s bill understandably is keen among Indiana County taxpayers, as The Gazette’s front-page play of his proposal suggests. Memory of the county’s 2015 property-tax reassessment still stings here.
But the problem of county officials avoiding political responsibility by kicking that can down the road for a half century is a problem that can be remedied as it has been in other states – by legislators requiring more frequent and regular reassessments, with state subsidies attached as carrot and stick for county commissioners.
Pennsylvania history of property-tax abolition is a twice-told tale of Sisyphus. It’s a non-starter in other states, too. The National Association of State Legislatures reports that no state has abandoned the property tax as a source to pay for public schools.
One state put property-tax abolition to voters in a constitutional question on the 2012 ballot. “However, North Dakota voters chose by a large margin not to abolish the local property tax,” the association reported.
A SIMILARLY CAUTIOUS local approach was reflected in remarks of state Rep. Jim Struzzi, R-Indiana, who told The Gazette he did not want to eliminate property taxes at the expense of retirees.
“A new tax on retirees would be counterproductive to the goal of lightening the burden property taxes place on senior citizens and those on fixed incomes,” Rep. Struzzi said.
David Loomis, Ph.D., emeritus professor of journalism at Indiana University of Pennsylvania, is editor of The HawkEye.
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