For Property Tax Relief, Give Voters Control
Should voters have the right to approve property tax increases? This is a central point of contention within a rumored budget framework that purports to provide Pennsylvanians with property tax relief.
In exchange for increasing the state sales tax to 7.25 percent—with higher amounts in in Allegheny County (8.25 percent) and Philadelphia (9.25 percent)—Pennsylvanians are promised significant property tax reductions, to tune of $1.5 billion.
Unless taxpayers are given proper control over property tax rates, however, nothing would stop school boards from large tax increases in future years. This could completely negate any tax relief doled out by the rumored budget agreement.
Thankfully, Sen. Don White's SB 909 would protect taxpayers from this scenario by requiring voter referenda when a school board requests higher taxes. This commonsense legislation makes school boards accountable to the residents in their districts. Could property taxes increase under SB 909? Yes, but school boards would have to make a compelling case to raise taxes—and voters would be given the opportunity to vote yes or no.
Act 1 in 2006 promised Pennsylvania voters access to tax hike referenda. However, Gov. Rendell pushed for nearly a dozen exceptions which excused school boards from actually facing voter approval. Since then, the Department of Education has approved 1,438 school districts for waivers from referenda, including 172 in 2015-16. It is common, too, for districts to receive multiple exceptions in the same year (pension obligations and special education costs are the most common).
Number of Districts Approved for Exceptions
SB 909 eliminates these exceptions and empowers taxpayers with control over local taxes. Currently, 34 other states require a school district to hold a referendum vote in order to approve the levy of school taxes or an increase in the tax rate.
Predictably, the requirement for voter referenda has been met with fierce resistance the Pennsylvania School Board Association (PSBA) and other staunch defenders of the educational status quo. PSBA executive direction Nathan Mains recently penned this piece, foreshadowing the dystopian world in which SB 909 passes and taxpayers are given a voice:
Scenario 1: In five years or less, school facilities will start to see the effects of no investment in their upkeep. Roofs start leaking because there is no money to fix them, buildings are overrun with weeds because maintenance staff were let go. Students are injured as ceiling tiles and drywall start to crumble.
Scenario 2: Pennsylvania student achievement rates over the next decade are compared to the results of Third World countries because the state has opted not to meet its financial obligation of funding public education and has instead left each community to its own devices.
Needless to say, the hysteria is reaching fever pitch. The central claim from the PSBA is that voters will always reject potential tax increases, forcing school districts to make draconian cuts. However, this flies in the face of the experience of other states which employ voter referenda.
Consider Ohio, where voters approved 85 of 101 potential increases to school taxes in 2015. Older data from New York, New Jersey, and Michigan tells the same story: Taxpayers approved more than half of all school budgets, tax increases, or bond issues.
Here’s the bottom line: Taxpayers are willing to raise their own taxes when districts demonstrate the need for additional revenue and a plan for responsible spending.
A budget agreement that shifts taxes without providing local control is a bad deal for taxpayers, who deserve a voice—especially given the astounding growth in property taxes since 2004. Even including the “relief” from slot machine revenue, passed in 2004, property taxes have grown by 34 percent.