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Senator Robert C. Jubelirer
(R-30)
Floor Remarks on Property Tax
Relief
July 3, 2004
For thirty years, property tax
relief has been the most debated, most proposed, and least achieved issue in
Pennsylvania politics.
The reasons for this are many
and well-documented. It is difficult to find acceptable and reliable substitute
taxes and revenue sources. It is difficult to determine a distribution formula
that satisfies the different regions of the state. It is difficult to generate
substantial state money without triggering a loss of local control.
But the biggest difficulty is
in getting the taxpayers to trust the result. This suspicion is deeply-rooted.
It explains why the local tax plan put before the voters in 1989 was rejected by
better than a 3-1 margin. If anything, taxpayers have grown more wary in the
intervening years. They hear too much talk from officials about ways of raising
additional revenue, and not enough about effectively controlling spending. So
the key to responsible, publicly acceptable property tax relief has always been
finding a way to assure taxpayers that property taxes will not jump back up
again.
The package before us, with the
combination of state-funded relief and a local exchange of taxes, offers the
prospect for significant reductions in property taxes for many Pennsylvania
homeowners. At the same time, through the back-end referendum, we give many of
our citizens their first-ever chance to have a hand in controlling school
property taxes in the future. This is a well-constructed, regionally-balanced,
taxpayer-friendly approach.
In terms of the local exchange
of taxes, this measure incorporates a concept that has been in play for fifteen
years. Give people a choice on opting in, through a front-end referendum. Then
give them a say about property taxes in the future, through a back-end
referendum. It was the approach included in Act 50, but only a handful of
school districts ever gave their citizens the opportunity to make the choice.
Unfortunately, several thousand school directors have denied the tax relief
hopes of several million homeowners.
This plan delivers property tax
relief without the drawbacks involved in having the state absorb local
responsibility for education. By far, the greatest portion of property tax
reduction comes through the local exchange of taxes, thus keeping local
education local.
Every member has received an
outpouring of opposition from education groups, and from groups involved in
school construction, filled with dire warnings. Much of this is overwrought,
and much of it is just plain wrong in misrepresenting the ballot experience in
other states.
Pennsylvania school districts
have fewer restrictions on their spending and taxing powers than districts in
any state in the nation. Yet, this has not produced either the academic results
or the community harmony that the advocacy groups are supposedly defending. If
the problems are so great in the states with more severe referendum requirements
than what is proposed here, why do they not trail us in educational
performance? The answer is that the issues are not linked. This dispute is
more about board power and less about the interests of education or the
implications for quality education.
The school boards have tried to
play the victim. Why are we being singled out, they ask? They conveniently
neglect to mention that other local entities have caps on millage, a stricter
check-rein on spending than the back-end referendum.
Perhaps the most difficult
balancing act has come in defining the exceptions. Simply, the goal is to
recognize exceptional circumstances affecting districts without rendering the
referendum requirements meaningless. Our success can only be measured through
experience, but this bill will finally yield that experience.
There has been a test case,
almost in the shadow of the Capitol, in the Central Dauphin School District.
That district certainly has not become the sort of educational disaster area
commonly described by referendum foes. They have negotiated a teacher
contract. They have undertaken to build a huge new high school. And their tax
increases are much more modest than neighboring districts. Has it been harder
to put together a budget? Sure has. Has this worked to the benefit of the
families paying the taxes? Absolutely.
A couple of years ago, one of
the school directors offered a highly revealing comment. He said that they now
had to do their budgeting backwards. They had to determine how much money was
coming in, and then decide spending priorities. I am not sure that he
recognized the irony -- this is how taxpayers believe it should be done.
If someone, somewhere thought
we could quiet every gripe about school funding, or concoct a smooth and
seamless system of school taxation, that was truly wishful thinking. But we
have produced a property tax relief plan that is broad in its benefits and that
cannot be stymied by recalcitrant school boards.
The bottom line consideration
is that nearly everyone believes that cutting the dependency on property taxes
is a desirable thing. So there are two methods involved in this bill --
state-funded relief, and new local tax authority. The tradeoff, the
non-negotiable item from the taxpayer point of view, is that it will never again
be open season on taxpayers where school property taxes are concerned.
Property tax relief has been
promised many times, by many people, in many ways. Now, in 2004, we can redeem
those promises with a realistic, reasonable, and responsible result.
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