Understanding Property Tax Elimination

Another problem with the legislation is the shift from commercial/industrial taxpayers to residential taxpayers. An analysis shows that $3 billion dollars was paid in real estate taxes by commercial and industrial taxpayers in Pennsylvania annually. A study by the Independent Fiscal Office shows that these taxpayers will not generate an equal amount of revenue from the increased personal income tax and increased sales tax. The study shows that they will only be contributing one third of what they paid in real estate taxes. Therefore, the burden shifts once again to the residential taxpayer. In Towanda 28.27% of property tax revenues come from commercial/industrial property owners.

Under the proposed legislation, the state would fund school districts at the level that they currently collect in real estate taxes. This will just exacerbate the inequality in funding between school districts that already exists in Pennsylvania. School districts in Bradford, Sullivan and Tioga counties would receive between $3,191.83 to $12,490.31 per student in real estate tax replacement state funding. The legislation does not look at what the cost is to educate a student even after a lengthy study to address this issue in state basic education subsidy. Poorer school districts would receive less funding than wealthier school districts yet pay the same personal income tax and sales tax increases.

How will the state fund property tax elimination when their revenue collections are down? How will schools remain open when the state does not pass a timely budget and they no longer have local revenue to rely on? Pennsylvania funded public education in Towanda with Basic Education Subsidy at 39% of total revenues collected by the district in 1989/90, while in 2015/16 the state only funded it at 27%.  This shift is what has caused local school property taxes to escalate during that time. The state statistics will show an overall funding of schools has remained constant. However, this number includes the state share of pension subsidy. The pension increases were not a local decision, but rather based on state decisions.

Please contact your local legislators to ask them not to support any legislation introduced that does not truly eliminate property taxes:

Hon. Tina Pickett

321 Main St.

Towanda, PA 18848

570.265.3124

717.738.8238

 

Senator Gene Yaw

Senate Box 203023

Room 362 Main Capitol

Harrisburg, PA 17120-3023

717.787.3280

800.443.5772