Research Packet | 2017 Property Tax Ballot Referendum
LINE: A November ballot question will ask voters whether local taxing authorities should be able to exempt residents from paying property taxes on their homes.
What would the ballot question do?
change immediately if the ballot question passed in November.
- School districts, counties & municipalities would have the option to exempt taxpayers’ primary residences from property
- Note: commercial and industrial properties would still be taxed if a local government or school district enacted the
law, taxing authorities can choose to exempt taxpayers from paying up to 50 percent of the median assessed value of all homes.
- The proposed change would expand that exemption, making it possible for local governments to exempt
ALL taxpayers from paying ANY property taxes on their primary residence.
official text of the ballot question:
“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
Why is the ballot measure being championed by lawmakers?
by the Philadelphia Inquirer:
- Rep. David Maloney, R-Berks, who sponsored the bill that created the ballot question, said he receives weekly — and sometimes
daily — complaints about property taxes from his constituents, especially those who are retired and live on fixed incomes.
- “I had an elderly lady walk into my office unexpected,” he said. “She pulls out her property tax bill out of her pocketbook and
said, ‘Sir, I can no longer pay this. Do you know how to help me?’ ”
Background information of property taxes:
- In Pennsylvania, systems in place for property assessments and distributing school funding have sparked additional complaints
about the real estate tax system.
- Currently, property owners pay tax rates set by their county, school, and municipal governments.
- FACT: School taxes account for the largest share of property-tax bills, and Pennsylvania’s school-funding system has long been
How do Pa. property taxes compare with other states’?
property tax collections account for about 30 percent of local and state tax revenue, according to a study by the Tax Foundation.
- Our tax rates are among the HIGHEST in America; Pennsylvania homeowners pay, on average, 1.46 percent of their home
value in taxes, according to another Tax Foundation report, which ranks the state 10th nationwide for the highest effective tax rate. New Jersey, by comparison, has the highest effective tax
rate of any state, at 2.44 percent.
- ***Pennsylvanians pay about $14 billion a year in school property taxes alone***
Association of School Business Officials
- Jay Himes, Executive Director
Mr. Himes has
said his group thinks the option to eliminate property taxes for primary residences is a good idea — as long as a sound revenue replacement is found.
- But Mr. Himes and his association strongly oppose the Property Tax Independence Act and efforts to eliminate the school property
tax. Under that bill, school districts would continue charging for property taxes to cover their existing debt until it is paid off, and county and local property taxes would remain the same. That
would lead to even more unequal payments for homeowners depending on their school district, Mr. Himes said, and would not be total elimination of the tax.
officials also oppose the loss of local school board control over education funding under proposals to eliminate the school tax.
- “We don’t have a perfect tax system in place for school districts and we haven’t had one for decades,” Mr. Himes
said. “It, however, is an inordinately complex and difficult issue because otherwise we’d of had a solution by now.”
Events on the horizon:
If the ballot
measure is adopted by Keystone State voters, the legislature would need to find alternative sources of revenue before taxing authorities could move forward with enacting property tax
Advocates for the Property Tax Independence Act say that the referendum could help them achieve the elimination of school property taxes.
- Sen. David Argall, R-Schuylkill, is the prime sponsor of that effort, which has attracted support from both Democrats and
Republicans. It was defeated after Lt. Gov. Mike Stack broke a tie vote on it in 2015.
- As reported by the Philadelphia Inquirer:
- Mr. Argall said he is open to amendments to his bill, which still lacks enough votes to pass. If the measure passes this fall, for
example, he could amend his bill to eliminate school property taxes only for primary residences rather than all properties.
- “It gives us more flexibility,” Mr. Argall said of the ballot question. “I believe it helps us to build some additional
support for the concept across the state.”