Op-Ed: Residents Take Part in Telephone Town Hall; Property Tax Reform Questions Posed

On December 5th, over 8,600 residents participated in my Telephone Town Hall discussion providing a legislative update on recent action by the General Assembly.  This type of meeting allows callers to listen in, offer opinions, and even ask questions from the comfort of their own home.  It’s a simple and straightforward way to have a good dialogue, given many people’s hectic schedules this time of year.

I had the opportunity to field a number of state-related questions from callers throughout the 24th District, and there were many questions asked about the elimination of school property taxes, as well as the recent property tax referendum contained on the November 7th election ballot. 

Similarly, no issue generates more calls and letters to my office than that of school property tax reform.  Finding a way to significantly reduce or eliminate this burden on homeowners remains a top priority for me.  I have co-sponsored legislation that would shift away from the current school property tax system, in turn, moving to a higher Personal Income Tax and a higher and expanded Sales Tax.  There is no question that we need to find a solution that eases the burden for homeowners, while at the same time guaranteeing Harrisburg does not shortchange local school districts.

Voters, indeed, made their voices heard on this issue by approving (54 percent to 46 percent) the ballot question allowing local taxing bodies the option to completely eliminate property taxes through the existing homestead exclusion.  Specifically, what the proposed amendment to Article VIII of the constitution would do is increase the exclusion level to up to 100 percent of the value of each “homestead,” or primary residence, in a municipality, county or school district. The current exclusion level, adopted in 1997, is capped at 50 percent of the median assessed value of all homesteads in a local taxing jurisdiction.

The question that appeared read as follows:

            “Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?”

There has been a lot of confusion surrounding this referendum since the language was released earlier this year; and confusion still remains following its approval. 

The approval of this amendment gives the General Assembly the ability to pass legislation allowing local taxing authorities to exempt up to 100 percent of the assessed value of each homestead from taxes. 

It’s important to note that property owners will not stop paying all school taxes immediately. Money to replace that lost property tax revenue would have to come from somewhere. New taxes could be imposed or other tax rates could rise. It might be at the local level or perhaps at the state level.

The bottom line is that this approach would allow local taxing authorities the option to completely eliminate the property tax for homeowners in their area, which may be a more attractive choice for them.   

It is important to repeat that passage of the referendum is step one. Now that it has been approved by voters, the legislature will have to pass a bill expanding the homestead exclusion program.

We, as elected-officials at all levels of government, need to ensure residents, whether working or retired, are not forced out of their homes by excessive property taxes. I hope that the legislature will act swiftly to bring much needed relief to Pennsylvania’s residents.