PA's Anti-Property Tax Ballot Question a Threat to Local Budgets

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The November 7th general election is shaping up to be a sleepy affair, but it's still important to show up and vote, and not just because it's good to vote twice a year. Anti-property tax activists quietly slipped a really bad ballot question onto the ballot, and at this point it's probably going to pass unless people show up to sink it.

There are two questions on the ballot this Tuesday. The first is a bond question that asks voters to approve a City bond for $172 million, which will fund capital projects related to transit, streets and sanitation, municipal buildings, parks, recreation, and museums, and economic and community development. The funding breaks down this way:

  • Transit: $ 4,767,309
  • Streets and Sanitation: $ 23,997,918
  • Municipal Buildings: $ 95,666,840
  • Parks, Recreation and Museums: $ 32,325,872
  • Economic and Community Development: $ 15,242,061 

The second ballot question is a threat to local budgets across the Commonwealth, and is being pushed by anti-property tax activists whose goal is to kill property taxes at the local level (predominantly seniors who are tired of paying for public schools when they no longer have school-aged children.) The question is a bit convoluted, but ably summarized here by the Committee of Seventy in their 2017 election guide:

This measure—the Homestead Exclusion Amendment—would change Section 2(b)(vi) of Article VIII of the state constitution to enable the state legislature to pass a law allowing local school boards, municipalities and counties to exclude the entire assessed value of each primary residence (homestead or farmstead) in their jurisdictions from taxation if they chose to do so.

This could significantly reduce—and in some cases eliminate--- residential property taxes in those jurisdictions. Local taxing bodies have been able to exclude up to 50 percent of the median assessed valuation of all properties in their jurisdictions since 1997, but few have done so.

State legislation to eliminate local school property taxes as a revenue source, and replace them with higher state income taxes, has been gaining momentum in Harrisburg. The bill has so far failed to pass, so this ballot question kicks the debate down to the local level, where it's easier for anti-tax activists to win elections.

Conceptually, replacing property taxes with other kinds of revenue could be a good idea since tying school funding to local home values in highly-stratified housing markets and school catchments is like jet fuel for segregation by race and class.

But in practice, all state-level property tax replacement bills to date (reintroduced each year as H.B. 76, a hokey reference to 1776) have suffered from a fake math problem where they don't fully replace the lost revenue, and in practice would deliver huge cuts to education spending. That's kept supporters from clinching enough votes at the state level, but local-level policymaking isn't nearly so visible to voters, so it's possible some municipalities will just go ahead with it, consequences be damned. 

If the ballot measure passes, the state legislature would have to actually pass a bill enabling municipalities to exempt primary residences up to 100%, and local governments would each have to vote on whether to adopt the policy. So it's not the end of the debate by far, but politically, this would be a big win for the anti-property tax movement, and represent a step toward passing legislation like H.B. 76.

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  • commented 2017-11-05 15:04:20 -0500
    You noted: “Conceptually, replacing property taxes with other kinds of revenue could be a good idea since tying school funding to local home values in highly-stratified housing markets and school catchments is like jet fuel for segregation by race and class.” It also makes sense conceptually because other taxes (like income and sales) are more closely related to a person’s ability to pay. Property taxes are not particularly a “fair” tax.