Property tax reform vital
Published: March 22, 2013
Every year, some lawmakers introduce a bill to eliminate school property taxes and establish a modern method to fund public schools. Every year, critics complain that the proposal is simply a tax shift.
Well, of course it is a tax shift. So is the current system, under which state lawmakers shift to local school districts what should be their state-level responsibility to pay for education.
Pennsylvania relies more heavily on local property taxation for public school funding than most other states, and the results aren’t pretty, directly relative to schools and indirectly relative to other levels of local government.
The state government should bear the burden for education funding because the Pennsylvania Constitution mandates an “adequate” public education for every child in the commonwealth. It is impossible to meet that modest standard because of the wide range of economic conditions across the state’s 500 school districts. Reliance on local property taxation guarantees vast disparities in the abilities of local districts to provide “adequate” education.
State-level taxation to replace local property taxes not only would ensure the broadest possible tax base for public education, but eliminate the economic disparities that result from the differences in local tax bases.
Eliminating the school property tax would have an added positive impact. Municipal and county governments also rely on local property taxation, but the vast majority of that limited pie goes to school districts. Shifting school taxation from the local to state level would go a long way toward resolving municipal government financing statewide.
A state House bill introduced last week would replace school property taxes with a 29 percent increase in the state income tax, to 4.24 percent, and a 1 percentage point increase in the state sales tax, which would be expanded to include sales of more goods and services.
Whether that is the correct mix is open to debate. But that Pennsylvania needs a better system should be a closed debate. The school property tax is not just unfair, but destructive.
State lawmakers should get serious about eliminating it in favor of a fairer system to spread the tax burden and distribute school funds.