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LEHIGH VALLEY WEATHER

State senators say school property taxes #1 complaint

Mark Twain once observed that the only difference between a tax man and taxidermist is that “the taxidermist leaves the skin.” That was the sentiment of most of the over 200 people who crammed into Bethlehem Township’s meeting room Wednesday night for a town hall on property taxes.

The forum was hosted by state senators Lisa Boscola (D-Northampton), Mario Scavello (R-Monroe) and Dave Argall (R-Schuylkill). Each is a co-sponsor of the Property Tax Elimination Act, which was defeated in 2015 when Lt. Governor Mike Stack broke a 24-24 tie to send this reform measure to perdition. But Argall has resurrected the legislation and is conducting town halls statewide to whip up support.

All three state senators agreed that the public is clamoring for a change.

“It’s the number one issue I face,” Boscola said.

“I can’t get a flat tire fixed without someone bringing it up,” Argall added.

Under Argall’s proposal, school property taxes can only continue to be levied to pay off existing debt. Once that happens, the school property tax is eliminated. For school districts that have no debt, there will be no property tax.

How will schools then be funded?

Through an increase in income and sales tax.

State income taxes will rise from 3.07 percent, where they have been since 2004, to 4.95 percent. Sales tax will rise from the current 6 percent, where it has been since 1968, to 7 percent. The sales tax will also be expanded to include many items that are now exempt, from non-prescription drugs to clothing.

School districts will receive the same sum, dollar-for-dollar, they would have received in property taxes. Every year, annual school funding will rise based on the percentage increase in the Pennsylvania Average Weekly Wage or the percentage increase in sales tax revenue, whichever is less.

Is this enough?

In 2013, the state Independent Fiscal Office concluded that sales and income tax increases would “more than off-set a reduction in property taxes.”

School districts that would like to collect even more revenue will have to take their case to the voters and ask them to approve an increase in earned income tax, which would expire after four years.

Property taxes will still be collected for municipal and county governments.

Among those joining the trio of state senators was Ron Boltz of the PA Coalition of Taxpayer Associations. He and Boscola both said the current system is antiquated.

“We no longer earn our living from our homes as we once did,” explained Boltz. He added that school taxes have increased 146 percent between 1993 and 2013, while wages only grew 80 percent.

Jim Rodkey with the Lebanon County Property Rights Committee was also invited to speak.

“No tax should have the power to leave anybody homeless,” he said. “If we can’t do this without stealing people’s homes from them, then we have a serious problem.”

Most people in the sometimes raucous crowd were there to support the elimination of school property taxes. They included people like Frank Farina, who told everyone he is an 83-year-old veteran who lives alone.

“Our seniors on fixed incomes are the clear winners,” Boltz said.

Bob and Jan Kistler, both sporting property tax elimination T-shirts, made the trip from Palmerton. Bob Kistler noted that Pennsylvania has the country’s second highest number of people who are moving out of the state. The lead reason they give for leaving is high property taxes.

Supporters of school property tax elimination even included Wilson Area School Board Director Mike Ryan. He complained that over the past two years, his board has been forced both to dip into reserves and raise taxes by 6 percent.

One member of the audience also complained about free school lunches for impoverished children. Boltz made clear, however, that he supports public schools.

“We are not trying to get out of funding our schools,” he said. “We are just looking for a more fair way.” He added that, under the current system, 10,000 homeowners are dispossessed at sheriff’s sales every year because they are unable to pay their property taxes.

The audience also included Bethlehem School District’s Supt. Dr. Joseph Roy. He never spoke. He listened. But when his name was mentioned by a speaker, there were scattered boos.

Linda Robertson, one of the few people who seemed to be concerned about an outright elimination of the property tax, noted that a regressive sales tax will be imposed on daycare, non-tuition college fees and even caskets.

“Who wants to pay a tax on caskets?” Argall quipped. “The good thing about that is you only do it once. Property taxes are over and over.”

Robinson was loudly booed when she warned that “[i]f something sounds too good to be true, it usually is too good to be true.”

After that, the audience was admonished by Jeff Garis, who was representing the state Budget and Policy Center.

“If you want to convince people in other parts of the state, you better have a more respectful dialogue,” he warned.

After that, the audience was more polite.

Garis had another,more substantive point. He pointed out that there are huge “educational disparities” throughout the state. One school district might be able to spend $20,000 per student while others are unable to spend even half that amount. Property tax elimination just locks in that disparity, which will then continue.

Boltz said the funding formula can be adjusted to eliminate any disparity.

Another person who raised concerns was Bethlehem’s Deb Hunter, who complained that the state is now slashing farmland preservation funds while big box warehouses are being built.

“A lot of them are going into tax incentive zones and now you are going to eliminate their property taxes?” she asked.

Salisbury Township’s Elizabeth Lechner wanted to know why so many school administrators oppose this tax.

“They are afraid of change,” Argall answered. “This is a major, major change in the way we do business.”

Bethlehem Supt. Dr. Joseph Roy scoffed at that notion in a morning-after interview.

He said the town hall was a one-sided presentation in which superintendents like him were portrayed as bogeymen. He had even asked to participate but was told it was not “that kind” of forum.

“It was disingenuous to suggest you could have an enormous tax shift and everybody comes out ahead,” he said. “It’s just not possible mathematically. If somebody’s paying less, somebody’s paying more, and it’s the working family.”

Dr. Roy also slammed the notion of limited government activists wanting to invest more power in the state legislature, which actually created the problem in the first place by failing to properly fund schools.

“They can’t even pass a budget,” he observed.

PRESS PHOTOS BY BERNIE O'HAREIt was standing room only at Bethlehem Township's meeting room as over 200 people cascaded into a town hall on school property tax reform.