Morning Call – March 16, 2005

Property Tax Substitution

 

Dear Friends,

            Good morning. Would you vote your county commissioners, school directors, and municipal elected officials out of office if they chose to abandon the property tax and substituted a tax on sales or income instead? After I read the Morning Call’s story (Feb. 15) about county commissioners asking state lawmakers to let them use taxes other than property taxes, I called State Senator Rob Wonderling (R-24th) and State Representative Paul Clymer (145th) for their thoughts.

            Senior citizens living on fixed incomes complain about property taxes. So do business owners if they own their own properties. In previous columns, I’ve interviewed Bucks County Commissioners from both parties who would abandon the property tax if given the power. I’ve never met a legislator, county commissioner, school director or municipal leader who praises the property tax.

But until now, the legislature won’t let the 67 counties, 501 school districts and more than 2,600 municipalities determine what and how is the fairest method to tax for services? The million-dollar question is: why is the legislature so reluctant to let local government make that determination for themselves?

Why won’t the Pennsylvania legislature allow local governments to substitute a tax on sales or income instead? I’ve concluded that the state legislature won’t relinquish control over something they presently have. After you read Wonderling’s and Clymer’s answers, you may have a better clue.

            “The General Assembly’s been loath to allow county governments to tax without oversight,” Wonderling began. “It’s a function of traditional history. There’s always been tension between counties and the legislature.”

            Would you vote for a bill, which gave local governments the right to determine the answer for themselves, I asked? “I’d want to know what kind of tax and what purpose the tax was for,” Wonderling replied. “But yes, I would be supportive of the concept.” And then he drove home the point. “But the state needs to have oversight,” he added.

            Clymer was more cautious. A lot of “what ifs” surfaced. “The legislature must have oversight,” he said. “If you had recommendations from the three types of local governments, that could create problems.”

I answered with a question. What does it matter if different counties, school boards and municipalities use different tax methods? Why does taxation have to be uniform? If Bucks County substitutes a sales or income tax for the property tax and Montgomery County doesn’t, what’s wrong with that, I asked?

“You’d have a hodgepodge system,” Clymer replied. “You could create a firestorm. What about unforeseen consequences? If you changed to a sales tax and the economy worsened, would that create a strain on the people? You need public hearings,” Clymer continued. “What is the economic impact? I think you would convene a meeting of the county commissioners, the association of school boards, the association of boroughs and townships to get information.”

            Personally, I believe that each of these local forms of government should conduct hearings…but independent from their neighbors. For example, if the county commissioners held hearings in the 13 regions of Bucks County, the elected officials would find out fast whether the concept to abandon the property tax had merit. Would tax payers be happier with a tax levied on sales or income instead?

Clymer told me that he’d make inquires about how local governments could start the ball rolling for change. “I’ll get back to you,” he promised. Clymer is a man of his word. “I’m open to new ideas,” he concluded.

 

            Sincerely,

            Charles Meredith