Energy - November 3, 2017

Property Tax reform on Nov. 7 ballot

Pennsylvania voters will have a chance weigh in on property tax reform during next week’s election. A referendum on property tax reform is scheduled to be on the November 7th ballot. The referendum reads as follows:

“Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?”

The change would allow for the exclusion level to increase to 100 percent of the value of each primary residence, rather than just half of the median assessed value of homes in a school district. Commercial properties would still pay property taxes. The change requires a constitutional amendment, which is an extensive process. Identical legislation had to be passed in two consecutive sessions before the measure could be added to the ballot. Additionally, there is a revenue piece at play. Should property taxes be eliminated; school districts, municipalities and counties will need to find alternative sources of revenue to replace what will be lost. It’s unclear where that revenue would come from in most places. It could lead to other new taxes or increases in current taxes. When the measure passed in two consecutive sessions, only two Senators were no votes. Sen. Michele Brooks (R—Mercer) and Sen. Scott Hutchinson (R—Venango). Senator Brooks reiterated that issue is “too important…to not have full transparency…” She noted that the concern that the referendum would just open the door to increase the personal income tax and sales tax.