Our opinion: Tax reform: Again
For more than a quarter of a century the Pennsylvania General Assembly has been talking about school tax reform.
Mind you, the verb here is “talking,” not enacting.
Oh, sure, there have been a few bills here and there, but no substantial reform of the system that requires or even allows school districts to shift the burden of paying for education from the regressive property tax to other, more progressive, levies such as sales tax, personal income tax or business taxes.
We call the property tax regressive, because it is not calculated on the basis of someone’s ability to pay. If a person retires and their income is cut in half, their property tax doesn’t follow suit. Their home assessment is not reduced, the tax rate on that assessed valuation doesn’t adjust.
Income taxes are based on income, whether it is a flat tax or a graduated tax, although the graduated tax is even more adjustable.
What has been the Achilles heel of education tax reform in the past has been that nasty word attached to it: “Tax.”
There is always a fear that a change in the way taxes are collected will simply be a way for taxing bodies to extract more from those being taxed, a sneaky way to raise taxes under the guise of making them more fair.
There is now yet another attempt to shift away from property taxes to fund local school districts.
On Monday, a state House committee gave its approval to a plan by Rep. Seth Grove, R-Dover, that would allow school districts to convert all or part of their local revenue stream dollar-for-dollar to earned income and business tax.
From this point the complications will begin to mount. Businesses, already reeling from Pennsylvania’s tax structure, and looking at some light at the end of the tunnel with some reductions on the horizon, aren’t going to look favorably on paying a new tax to school districts.
Individuals are going to look at the idea and resurrect the old fear that it’s all just a trick to raise taxes. After all, would the conversion eliminate the effect of Act One, that state law which prevents school districts from raising their property taxes over a certain amount based on a formula without a referendum?
In the end, we predict a rough road ahead for Mr. Grove’s proposal, while we applaud his motives.