Grassroots Effort Pushes Along PA Property Tax Reform

By Andrew Staub | PA Independent

Tammy Keener of Berks County clapped, cheered and even cried Tuesday morning as state senators on the Finance Committee debated legislation to eliminate school property taxes.

When the panel narrowly approved Senate Bill 76 — known as the Property Tax Independence Act — she jumped to her feet, applauded and shouted blessings to the lawmakers from her spot in the crowd.

“All our hard work is not in vain,” Keener said. “I might be able to stay in my home. Oh, my God.”

It was a gratifying day for Keener, who earlier this summer paid her property taxes with dollar bills to protest the school funding mechanism. While much of the talk about property tax reform — what will or won’t work and what’s fair — has focused on stark numbers, the scene was a reminder that it’s an emotional debate, too.

Keener’s annual property tax bill is about $3,000, and she’s unsure if she can afford it next year; her husband lost his job and she can’t work because of her health.

“Life happened, and I prepared for the worst, but even worse happened,” she said.

After Tuesday’s committee vote, Keener and other advocates of property tax elimination could celebrate, at least for the day.

There’s no guarantee the legislation will clear the Senate Appropriations Committee or pass the full chamber. Plus, the state House has already rejected the premise of Senate Bill 76 once and passed its own version of reform that would give school districts the option of replacing their property taxes with an elimination tax, which could be composed of several tax streams.

While proponents of elimination say the House proposal guarantees nothing, plenty of lawmakers have their own concerns about Senate Bill 76 — even if they agree property taxes are problematic.

The legislation would replace about $12 billion worth of school property taxes dollar-for-dollar by increasing the state’s personal income tax from 3.07 to 4.34 percent and expanding sales taxes while raising them from 6 percent to 7 percent. Critics argue that would set up a volatile funding stream for schools already struggling to make ends meet.

The state’s Independent Fiscal Office has found sticking with property taxes would generate $2.6 billion more than the Property Tax Independence Act by fiscal 2018-19.

Sharon Ward, director of the Pennsylvania Budget and Policy Center, a left-leaning think tank, said in a statement she was disappointed the committee “advanced a bill that is so damaging to public education in Pennsylvania.”

“It’s time for the governor and legislature to put children first and offer the real solution — more state funding for schools so local school districts aren’t so dependent on property taxes for revenue,” said Ward, whose organization joined with a long list of other entities earlier this year to denounce the legislation.

Another part of the debate has focused on the fact Senate Bill 76 would make winners and loser of different constituencies if it made its way into law.

Homeowners would get a break as the price of school funding is spread among a bigger pool of people.

At the same time, residents and visitors would pay a 7 percent sales tax on clothing valued at more than $50, as well as foods not on the WIC list, which includes items the federal government considers essential for good health, such as fresh meats produce and dairy. Some have argued that would hurt poor residents.

More services would also be taxed, meaning it would cost more to go to the movies, have a suit dry cleaned or hire an attorney.

Most residents would not see immediate elimination of their property taxes, either. Districts could still charge a reduced property tax to pay off construction debt under Senate Bill 76.

Still, Donna Merritt, who sat next to Keener and held her hand during part of the committee meeting, believes the current system is unfair.

“You never really own your home with this type of taxation,” Merritt said. “Even if you paid your house off, you’re still indebted to the schools, and they will take your home if you don’t pay your taxes.”

The Finance Committee’s vote came as something of a surprise, given that just last month the prime sponsor of the legislation, state Sen. David Argall, R-Schuylkill, had acknowledged he was developing a backup plan to move the bill because it didn’t have enough votes to clear the committee.

Instead, it passed 6-5, drawing cheers and whistles from the crowd.

“I think there’s some issues that need to be discussed yet, and I hope it’s done civilly,” said state Sen. John Wozniak, D-Cambria, the only Democratic member to vote for the bill. “But I think what you have is you have a head of steam and you have inertia now. And for the first time in my career, I’ve seen some very serious effort being made in trying to address the issue of property taxes.”

Asked what might have contributed to the legislation’s revival, given the dismal outlook before, Wozniak said “grassroots has a lot of power.”

Keener and Merritt are part of that movement, helping collect signatures to push for property tax elimination. On Tuesday, their mission took them to Harrisburg, where Keener found herself dabbing her eyes with a tissue as the committee prepared to vote.

“I’m passionate, and I do get emotional,” Keener said, tying part of that to her illness. “But I’m fighting for everyone. This is my last fight, and I’ve been going nonstop.”

Andrew Staub can be reached at Andrew@PAIndependent.com.  Follow @PAIndependent on Twitter for more.