PA Property Tax Reform
Wednesday, February 01, 2006
In regards to: Property Tax HB854 as amended by the senate
Senator Noah Wenger, Chairman
Senate Box 203036 Harrisburg, PA 17120-3036
Senator John Wazniak, Chairman
Senate Box 203035 Harrisburg, PA 17120-3035
Dear Senator Wenger and Senator Wozniak,
I understand that the complete elimination of property taxes is a difficult but not an impossible task. I didn’t want to sit idly by while this extremely important issue is debated. Currently I am residing in the City of York and my school taxes were around $2500 for 2005-2006 and my house is valued roughly at about $100,000. My taxes are paid entirely from my Social Security Disability check and I have no option to earn more income. I perceive my current situation as precarious at best especially with the outrageous increase in heating costs.
After reading the introduction of the HB854 as presented to the senate I’m a bit confused by the need to raise PIT 3.27 percent in order to eliminate school property taxes to replace the current property tax revenue of $10.3 billion. Well let me rephrase that. If I assume, just for arguments sake, that I earned $68,000, the median income in PA, a year and I paid 3.27 ignoring deductions and other adjustments to income that I would be paying $1836 a year which is only $664 less than I currently pay and I consider school taxes in the City of York to be some of the worst that I have encountered. Maybe I’m simplifying this a bit too much but if the tax base is larger, as it would be if there were an increase in the PIT, I would expect that all property owners would be paying a lot less. The numbers just don’t seem to “add-up” so to speak.
But on with my point. If property taxes are not eliminated in their entirety, I foresee that the cities and counties will see this as new found income and start taking advantage by increasing their tax rates and justifying it by saying that we no longer pay school property taxes of course causing our taxes escalate in yet another direction. This is bad business. I don’t know what the percentage of homeowners is to non-homeowners but I would be very curious since these non-homeowners would be impacted the most. It is time that all people that are part of our communities take financial responsibility for the programs and services available to them. This responsibility should not rest only on the property owners. This undo tax on the property owner just serves to cause yet even more blight in our cities by landlords that have no financial interest in maintaining their properties.
I think it is imperative that school funding be shifted to PIT and city and county be shifted to LIT. Although EIT would be more desirable than a sales tax increase, it still only taxes part of the community that receives benefit from the tax expenditure. I also understand that in the late ‘90’s, I believe, there was an attempt to eliminate property taxes and the senior citizens blocked it over concern of having their retirement “nest eggs” drained by taxation. I think that this is an education issue with the seniors. I don’t think they understand that although a PIT increase would tax their “nest egg” interest, and that is the important part to understand that it is not taxed against their savings in their entirety – just the interest, but they would no longer pay property taxes and should actually see a net reduction in their yearly taxes.
So how do we proceed:
§ The impact of the tax shift must be made very clear to the public. It should give specific examples at various incomes and various situations (retirement vs working, etc) and should be mailed to all PIT taxpayers or as an alternative it could be specific to each individual taxpayer based on their last years PIT filing. The same should be done for city and country taxes.
§ An immediate tax freeze on all property taxes.
§ Each year the PIT would increase by some percentage, we don’t want “sticker shock” to cause everyone to panic. And each year the property taxes would be reduced by the increase in the PIT dollar for dollar.
§ As gambling revenue becomes available to the state it should reduce the effective PIT increase dollar for dollar which will serve as a buffer against the increase in PIT making it lower than expected each year giving the taxpayer a mental “it’s not as bad as I thought it would be”.
§ The additional increases in PIT & LIT should be kept as separate line items and in separate funds in order to avoid “dipping” for other programs.
Of course to avoid a spiraling increase in PIT & LIT we need to address some other issues but I’ll save that discussion for now.
Respectfully,
In regards to: Property Tax HB854 as amended by the senate
Senator Noah Wenger, Chairman
Senate Box 203036 Harrisburg, PA 17120-3036
Senator John Wazniak, Chairman
Senate Box 203035 Harrisburg, PA 17120-3035
Dear Senator Wenger and Senator Wozniak,
I understand that the complete elimination of property taxes is a difficult but not an impossible task. I didn’t want to sit idly by while this extremely important issue is debated. Currently I am residing in the City of York and my school taxes were around $2500 for 2005-2006 and my house is valued roughly at about $100,000. My taxes are paid entirely from my Social Security Disability check and I have no option to earn more income. I perceive my current situation as precarious at best especially with the outrageous increase in heating costs.
After reading the introduction of the HB854 as presented to the senate I’m a bit confused by the need to raise PIT 3.27 percent in order to eliminate school property taxes to replace the current property tax revenue of $10.3 billion. Well let me rephrase that. If I assume, just for arguments sake, that I earned $68,000, the median income in PA, a year and I paid 3.27 ignoring deductions and other adjustments to income that I would be paying $1836 a year which is only $664 less than I currently pay and I consider school taxes in the City of York to be some of the worst that I have encountered. Maybe I’m simplifying this a bit too much but if the tax base is larger, as it would be if there were an increase in the PIT, I would expect that all property owners would be paying a lot less. The numbers just don’t seem to “add-up” so to speak.
But on with my point. If property taxes are not eliminated in their entirety, I foresee that the cities and counties will see this as new found income and start taking advantage by increasing their tax rates and justifying it by saying that we no longer pay school property taxes of course causing our taxes escalate in yet another direction. This is bad business. I don’t know what the percentage of homeowners is to non-homeowners but I would be very curious since these non-homeowners would be impacted the most. It is time that all people that are part of our communities take financial responsibility for the programs and services available to them. This responsibility should not rest only on the property owners. This undo tax on the property owner just serves to cause yet even more blight in our cities by landlords that have no financial interest in maintaining their properties.
I think it is imperative that school funding be shifted to PIT and city and county be shifted to LIT. Although EIT would be more desirable than a sales tax increase, it still only taxes part of the community that receives benefit from the tax expenditure. I also understand that in the late ‘90’s, I believe, there was an attempt to eliminate property taxes and the senior citizens blocked it over concern of having their retirement “nest eggs” drained by taxation. I think that this is an education issue with the seniors. I don’t think they understand that although a PIT increase would tax their “nest egg” interest, and that is the important part to understand that it is not taxed against their savings in their entirety – just the interest, but they would no longer pay property taxes and should actually see a net reduction in their yearly taxes.
So how do we proceed:
§ The impact of the tax shift must be made very clear to the public. It should give specific examples at various incomes and various situations (retirement vs working, etc) and should be mailed to all PIT taxpayers or as an alternative it could be specific to each individual taxpayer based on their last years PIT filing. The same should be done for city and country taxes.
§ An immediate tax freeze on all property taxes.
§ Each year the PIT would increase by some percentage, we don’t want “sticker shock” to cause everyone to panic. And each year the property taxes would be reduced by the increase in the PIT dollar for dollar.
§ As gambling revenue becomes available to the state it should reduce the effective PIT increase dollar for dollar which will serve as a buffer against the increase in PIT making it lower than expected each year giving the taxpayer a mental “it’s not as bad as I thought it would be”.
§ The additional increases in PIT & LIT should be kept as separate line items and in separate funds in order to avoid “dipping” for other programs.
Of course to avoid a spiraling increase in PIT & LIT we need to address some other issues but I’ll save that discussion for now.
Respectfully,
posted by cityguy at 8:09 PM
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