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Sen. Robert C. Jubelirer
Testimony on Property Tax
Relief -- Special Session
October 19, 2005
Unlike the Yankees and the
Red Sox and the other teams bounced from the baseball playoffs, we get a fresh
set of swings at the property tax fixes being pitched.
The many competing plans that
are emerging, and the widespread belief that we must produce a solution before
the calendar turns, are factors combining to give renewed impetus to property
tax relief.
Sticking with the status quo
is just not an option. Too many hard-pressed Pennsylvania homeowners are left
without a remedy and without hope, unless we give them another chance to receive
relief, and determine and decide an avenue for fairly accomplishing it.
I have introduced property
tax relief legislation every session since 1990. I am familiar with the intense
sense of urgency and rising frustration homeowners feel. I anticipate
continuing resistance from special interest groups to any proposal that puts any
kink in the hose of taxpayer money. I understand the difficulty of getting
consensus on a set of changes that gains public acceptance and has a chance of
being widely implemented.
A future limitation on
raising property taxes is essential to the taxpayer interest. The most
fundamental principle of property tax relief is that there must be an effective
mechanism to prevent property taxes from bouncing back up again after a shift is
made. If there is an attempt to grant new tax authority without substantial
limitation on existing authority, and some are proposing just that, we will
become reacquainted with a staple of early American politics – tar and feathers.
As long as Pennsylvania
school boards possess the most unrestricted spending and taxing powers in the
nation, we will have rampant citizen unhappiness irrespective of what is put on
the local tax menu. Hence the backend referendum, which taxpayers applaud and
school boards revile.
There was a test of sorts
through Act 50. Now, it is no secret that commentators and education spending
advocates fall all over themselves declaring Act 50 a failure. It was only a
failure in terms of getting districts to participate. To those who declared it
would not work, I always put the question: “How do you know until you try it?"
Where it was tried, it worked, and met with approval from taxpayers. Did anyone
see those districts go out of business? Did anyone see the students suffer
educational deprivation? Did anyone see the school budgeting process implode?
Of course not, because the opposition rhetoric is divorced from the reality.
We know now that Act 72 did
not contain sufficient inducements for 80% of the school boards to give reform a
chance. Many of the opponents of Act 72 kept talking about how complicated and
confusing it was, mostly because they wanted to reject it unseen and unstudied.
Any broad plan on this
subject is going to be complex and complicated. What I am offering for
consideration is not necessarily a simple plan, but it is easy to describe.
The bill I introduced
featured a November 2005 ballot question in school districts that had opted
out. This was based on the polls consistently showing that taxpayers want real
protection against huge property tax jumps in the future.
Obviously, we are past the
point where a November question is doable. But it is absolutely doable to have
a special election on backend referendum next February. That way, the districts
approving the question will be working on the same timetable for implementation
that the 100 plus participating districts already will be.
Beyond that, we would afford
school districts another chance to opt in, but only after gambling revenues are
actually available.
My preference would be to
divorce the gambling dollars from this debate. Given the likelihood that step
will be tough to accomplish, we ought to at least wait until there is a
reasonable prospect of money from that source actually being available. That
way, school budgets can be built on reliable expectations and meaningful
printouts.
Then, given that many school
districts might stay adamant about not participating, we offer a safety valve
provision, allowing taxpayers a ballot question if the school board rejects this
second chance at participation.
As much as many would like
everyone to realize the dual benefits of property tax relief and taxpayer
protection, I doubt that we can achieve this through a mandate. The biggest
problem with simply mandating Act 72 is the deep antipathy many people have to
linking gambling dollars and education funding. If state government forces
school directors into a decision they detest, they will resist, and probably
poison the well on whatever we do now just as thoroughly as they did on Act 72.
To the extent that we can encourage participation, rather than dictate it, we
are ahead of the game.
Pretty much lost in the
discussion of Act 72 was how much property tax relief was available through the
subsequent shift at the local level to a higher wage tax. That provides
significant relief, while not stripping districts of prerogatives for
educational decisionmaking as a state usurpation of funding responsibility
would.
It is not impossible that
consensus could form around a plan that would deep-six Act 72. If that is to be
the case, I will do everything I can to ensure that there is a meaningful
backend referendum requirement.
What I have described is one
approach. In the end, we will likely merge pieces of plans into as much of a
consensus as can be reached on the most politically explosive and divisive issue
of the generation.
There is an important
footnote to this discussion. I do not minimize the depth of feeling on the part
of those who would like to eradicate property taxes entirely. The problem is,
there has never been a set of alternative taxes developed that was both
satisfactory and sufficient.
That underlines the final
point. Freezing this and cutting that is immensely popular, but finding
alternatives and making the numbers work is rugged business. Nevertheless, we
must emerge with a solution that has some staying power, one that puts taxpayers
in a better situation than they are in today. For thirty-five years that has
been the Holy Grail of Pennsylvania politics, and we face some hard choices and
tough decisions if our quest is going to end in the next thirty-five days.
Senate Holds First Special Session Hearing on Property Tax Reform
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