The Pennsylvania House adjourned for the week without passing property tax reform. Three days of debate only accomplished a whittling down of proposals. The Commonwealth Caucus offspring died overwhelmingly and then John Perzel threw a high hard one at Democrats: a proposal to exempt only senior citizens. A traditional Democratic demographic hit hardest by real estate property taxes, concentrating relief to seniors would make Republicans look good and Dems bad coming into a critical election year.
Perzel's idea uses the cash hauled in from slot machines and target that money exclusively for elder Pennsylvanians. Those over age 65 with incomes under $40,000 would have their school (these proposals only deal with school taxes, not county taxes) real estate taxes eliminated.
The debate on HB 1600 now comes down to either reducing taxes for everyone or eliminating the tax for those over 65. This is a tough call for Democrats. Many of those calling for reform aren't seniors and they are very vocal. Passing Perzel's bill would be a complete reversal of the promises made by the legislature when it passed slots legislation. They promised assistance to all property owners in exchange for the casinos.
Property tax reform is the single biggest issue in Pennsylvania. Many voters will support or oppose incumbents based on these votes and/or the success or lack of reform. What I find interesting are the seniors who own large, expensive homes but claim they cannot pay their taxes. I suppose they are the same people who bought new cars every three years and went on expensive vacations rather than invest their funds for retirement. I've even watched some of them attend community and government meetings wearing expensive fur coats.
Many seniors opt to trade down to smaller, more affordable homes when they retire. I saw this in my own family. As one's income shrinks with retirement most people choose to live within their new means. Others do not. The counter argument to this is that once one pays for their home the government shouldn't have the right to take it for non payment of taxes. I can't say I disagree with that.
However we all have an obligation to support our communities. Each of us uses roads, bridges, schools, police, fire, and emergency services. We all should contribute and we all should invest in our communities. We all benefit from public education. We either went to school, work with people who did, are supported in our senior years by those working and paying into Social Security and Medicare, and by those toiling in commerce and industry who attended public school. We all have a stake in the success of public education and, conversely, should support this.
The question is how. Business and industry have a genuine vested interest in public education. An educated worker is a productive one. America has the most productive workforce in the world in spite of the constant criticism of public education. We do turn out a labor force capable of doing the job. Business and industry should contribute to education and they do via property taxes. I don't think that should change.
Those wealthy enough to afford second homes, be they vacation or investment are clearly better off financially. Investment properties should continue to be taxed. Contrary to many ignorant letter writers I see in newspapers, renters do pay property taxes: they are factored into their monthly rents. When taxes go up their rents go up proportionately. I've never known a landlord who didn't pass along their real estate tax expenses to their renters. This is why the state tax rebate program run with lottery proceeds includes renters.
How will House Democrats deal with Perzel's proposal? The Post Gazette calls it a curveball. Do they go along and give Republicans something to crow about with senior citizens? They cannot afford to alienate these voters and they also must be careful about angering everyone who gets screwed after being promised lower taxes. Stay tuned for this one.