Oct 21, 2017 4 min read

On Nov. 7, voters across Pennsylvania will weigh in with a decision on a ballot question aimed at the elusive goal of homeowner property tax relief.

Specifically, the question before voters is a proposed constitutional amendment, overwhelmingly approved by the General Assembly in two consecutive sessions, that seeks to empower state lawmakers with the constitutional authority to authorize all local taxing jurisdictions to “exclude from taxation up to 100 percent of the assessed value of each homestead property” within each of these jurisdictions.

The amendment, if approved, expands upon an existing and partial “homestead exclusion” overwhelmingly approved by Pennsylvania’s voters 20 years ago. Ostensibly, the new constitutional amendment would lead Pennsylvania’s property tax-weary citizens to believe that homeowner property taxes will somehow magically disappear if the question is approved.

Unfortunately, that’s not the case.

The real question behind the question is whether and when our state lawmakers will actually grant local jurisdictions viable alternative revenue options to reduce or eliminate property taxes. Unless we shut down our courts and our jails, close our schools, and eliminate the full range of county, municipal and school district services, local jurisdictions have no way to dramatically reduce, let alone eliminate, homeowner property taxes without an alternative revenue source. Even if we wanted to, we are barred by another constitutional provision from increasing commercial property taxes to reduce homeowner property taxes.

The truth is, for well over four decades, there has been enough rhetoric to send thousands of balloons skyward in the debate over how to finally reform Pennsylvania’s antiquated system of local government finance. To make our local taxing structure more broad-based and fair. To finally relieve the burden of the inequitable property tax, a levy which, in too many cases, has been blamed for taxing people out of their homes.

And yet, here we are, 20 years after the first “homestead exclusion” amendment was overwhelmingly approved by Pennsylvania’s voters. It’s a constitutional provision that, except for relatively modest homeowner school property tax relief from slots gaming, never came close to being fully implemented by school districts, or to being implemented at all by counties and municipalities. Pennsylvania’s counties are still waiting for action by the General Assembly to enable us to implement the 1997 amendment, as we remain hamstrung by a straightjacket of state law that only allows us to levy property taxes.

The new ballot question does, however, raise new hope – hope that an honest discussion can ensue and hope that positive action may finally result.

First off, an honest discussion must begin with the truth of the challenge. The total local property tax bill in Pennsylvania – for schools, counties and municipalities – is more than $18 billion, according to figures from 2015. A very preliminary estimate of the homeowner portion of that tab is about $11 billion.

And while we credit the advocates of proposals that would completely abolish school property taxes, the bane of many of our constituents, those proposals call for a substantial and consequential tax shift. It would increase Pennsylvania’s state personal income tax by 60 percent, from 3.07 percent to 4.95 percent, expand the state’s sales tax base by roughly $5 billion by taxing currently untaxed products and services, and increase the sales tax rate from 6 percent to 7 percent.

Our statewide county commissioners association has advanced a proposal calling for what we believe would be a good start to finally achieving some meaningful property tax relief. Instead of a one-size-fits-all proposition, our proposal would grant counties the option, where it would work and make sense, of either a capped county-based sales tax of up to 1 percent, a capped county-based personal income tax of up to 1 percent, or a capped county-based earned income tax of up to 1 percent for the sole purpose of slashing property taxes.

Our plan is revenue-neutral, meaning that all new dollars generated could not be used for anything other than property tax reduction. The objective is twofold: to ensure that counties cannot use the new revenues to increase spending; and to ensure that the state continues to provide adequate funding to counties for the programs and services it mandates.

We respectfully call upon our state legislators, whether or not the new homestead exclusion referendum is approved, to work with counties to fashion a responsible plan that will actually work to relieve property taxes. After all, no matter the jurisdiction, it’s all coming out of the same taxpayer’s pocket.

Hertzler is a Cumberland County commissioner and serves as the chairman of the Assessment and Taxation Committee of the County Commissioners Association of Pennsylvania (CCAP).