- STOP TESTIMONY BEFORE THE HOUSE FINANCE COMMITTEE
CHAIRMAN LEVDANSKY, COMMITTEE MEMBERS, I COME TO YOU ON BEHALF OF 118,410 CITIZENS WHO SIGNED STOP PETITIONS SEEKING THE ABOLISHMENT OF ALL PROPERTY TAXES ON PRIMARY RESIDENCES. MY NAME IS BOB LOGUE...JUST ONE OF THE THOUSANDS OF COMMON CITIZENS WHO HAVE OVER THE LAST FIVE YEARS PLAYED AN ACTIVE ROLE IN THIS GRASSROOTS EFFORT TO ONCE AND FOR ALL ABOLISH THIS HORRIDLY INACCURATE, UNFAIR AND UNJUST TAXING SYSTEM.
WE BEGAN WITH PETITIONS, JUST TO DETERMINE WHETHER THERE WAS SUFFICIENT SUPPORT FOR SUCH AN EFFORT. WE HAVE NO BUDGET, NO STAFF JUST VOLUNTEER CITIZENS WHO COPIED AT THEIR OWN EXPENSE, CIRCULATED AT THEIR OWN EXPENSE AND RETURNED TO US AT THEIR OWN EXPENSE PETITIONS FROM ALL AROUND THE STATE. IN ABOUT THREE MONTHS WE HAD 40,000 SIGNATURES ...AND IT EVENTUALLY GREW TO THE 118,410 SIGNATURES I MENTIONED BEFORE.
WE SECURED THE BEST STATISTICS WE COULD FIND AND FORMULATED A PLAN FOR THE TOTAL ABOLISHMENT OF ALL PROPERTY TAXES ON PRIMARY RESIDENCES. SCHOOL, COUNTY AND MUNICIPAL. SENATOR SEAN LOGAN WROTE OUR LEGISLATION AND INTRODUCED IT IN THE SENATE IN 2003, AND REP. MARC GERGELY INTRODUCED OUR LEGISLATION IN THE HOUSE IN 2003. UNFORTUNATELY THE MAJORITY PARTY AT THE TIME REFUSED TO PERMIT IT TO EVEN BE DISCUSSED DESPITE OUR LEGISLATION HAVING 64 LEGISLATORS AS BI-PARTISAN CO-SPONSORS IN THE TWO HOUSES.
NOT WANTING TO BE A GROUP SIMPLY ASKING FOR ABOLISHMENT OF A TAX, WE ALSO OFFERED IDEAS ON HOW TO REPLACE THE LOST REVENUE.
WHAT WE HAVE LEARNED OVER THIS PAST FIVE YEARS SINCE OUR MOVEMENT BEGAN HAS SOLIDIFIED OUR BELIEF THAT REAL ESTATE PROPERTY TAXES DESERVE TO BE DUMPED ON THE SAME TRASH HEAP OF SOCIETY ON WHICH SLAVERY, INDENTURED SERVANTS AND DEBTORS PRISONS HAVE BEEN DUMPED.
PROPERTY TAXES ARE BASED ON PROPERTY ASSESSMENTS. HOW MUCH IS A PROPERTY WORTH. ACCORDING TO THE PENNSYLVANIA TAX EQUALIZATION BOARD, PROPERTY ASSESSMENTS IN EVERY COUNTY IN THE COMMONWEALTH ARE WRONG. IN YOUR PACKET YOU WILL SEE JUST HOW WRONG THEY ARE AS I HAVE PROVIDED YOU WITH A LOST OF THE VARIANCES IN PROPERTY TAX ASSESSMENTS IN EVERY COUNTY. LISTEN TO JUST A FEW EXAMPLES OF THE VARIANCES IN A FEW OF OUR COUNTIES.
NOT ONE COUNTY IS NEAR THE INTERNATIONAL ASSOCIATION OF ASSESSMENT OFFICERS FIGURE OF 10%. THE IAAO SAYS IF THE VARIANCE ON YOUR ASSESSMENT IS TEN PERCENT ABOVE OR TEN PERCENT BELOW THE TRUE MARKET VALUE OF YOUR HOME....THEN IT IS CONSIDERED ACCURATE. THINK ABOUT THAT....IF YOU AND I HAVE EQUAL MARKET VALUE HOMES...AND YOUR ASSESSMENT IS TEN PERCENT TOO HIGH...AND MINE IS TEN PERCENT TOO LOW...YOU WILL BE PAYING TWENTY PERCENT MORE SCHOOL, COUNTY AND MUNICIPAL PROPERTY TAXES THAN ME. ON A TOTAL PROPERTY TAX BILL OF $3,000....THE DIFFERENCE YOU WILL PAY IS $600 PER YEAR MORE THAN WHAT I WILL PAY. AND THAT IS CONSIDERED ACCURATE BY THE IAAO.
IN ALLEGHENY COUNTY THE VARIANCE IS OVER 30%.
YOU WOULD PAY 1,800 MORE IN PROPERTY TAXES THAN I WOULD ON A PROPERTY OF THE SAME VALUE.
ALLEGHENY COUNTY HAS SPENT OVER $30 MILLION TO TRY TO GET THE ASSESSMENTS RIGHT. AND AFTER ALL THAT EFFORT ALLEGHENY COUNTY ASSESSMENTS CAN RANGE AS MUCH AS 30% TOO HIGH OR THIRTY PERCENT TOO LOW.
IF THE ASSESSMENTS ARE WRONG...THEN THE TAXES BASED ON THOSE ASSESSMENTS MUST BE WRONG, TOO. THAT'S WHY THE ENTIRE SYSTEM MUST BE ABOLISHED.
SOME SAY...WELL IF YOU ASSESSMENT IS WRONG APPEAL IT. SO WE FORCE ELDERLY, INFIRM, ILL, PEOPLE TO A HEARING, SOME YOUNGER CITIZENS MUST MISS WORK TO FIGHT FOR A SO CALLED FAIR ASSESSMENT. IF THE COUNTY ASSESSORS CAN'T GET THE ASSESSMENT RIGHT...WHAT'S TO SAY THE HEARING EXAMINER IS ANY MORE COMPETENT TO GET IT RIGHT?
IF I'M WEALTHIER, I HIRE AN ATTORNEY FOR $350 TO FIGHT MY CASE. I CAN HIRE AN PROFESSIONAL APPRAISER FOR $400 TO $500 TO HELP THE $350 ATTORNEY. THEY APPEAL THE ASSESSMENT FOR ME. IF I STILL AM NOT SATISIFIED WITH THE RESULT OF THAT HEARING, I CAN SPEND ANOTHER $63 TO APPEAL TO COMMON PLEAS COURT. AND IF IT WANT TO BE EFFECTIVE THERE, I CAN SPEND MAYBE $500 TO HIRE AN ATTORNEY TO REPRESENT ME IN THE COURT HEARING. CAN MIDDLE AND LOWER INCOME FOLKS AFFORD $1,300 FOR SUCH APPEALS? NO, BUT UPPER INCOME FOLKS CAN...SO WE HAVE A SYSTEM WHICH FAVORS THE WEALTHY AND DUMPS ON THE LOWER INCOME HOMEOWNERS WHO CAN'T FIGHT BACK WITH THE SAME PROFESSIONAL ASSISTANCE.
RESPECTED REALTOR, HOWARD, HODDY, HANNA LAST YEAR TOLD A LEGISLATIVE PROPERTY TAX REFORM HEARING IN HAMPTON TOWNSHIP, THAT PROPERTY ASSESSMENTS ARE JUST PLAIN WRONG. HE SAID IT IS IMPOSSIBLE TO CORRECTLY ASSESS INDIVIDUAL HOMES BECAUSE THERE ARE JUST TOO MANY VARIABLES. HE ADDED THAT NO AMOUNT OF MONEY SPENT ON REASSESSMENTS COULD EVER CORRECT THE ASSESSMENTS. HE ALSO SAID PROPERTY TAXES HURT HOMEOWNERS AND THE REAL ESTATE INDUSTRY.
WHAT HAPPENS TO THOSE WHO CANNOT PAY THEIR PROPERTY TAXES...DUE TO ILLNESS, LOST EMPLOYMENT, FINANCIAL SETBACKS.
ONE OF THE SPOUSES DIES AND NOW THERE IS JUST ONE SOCIAL SECURITY CHECK. THEY FALL BEHIND ON THEIR TAXES....PENALTIES AND INTEREST ARE ADDED...SOMETIMES PRIVATE COLLECTION FIRMS ARE HIRED WHO IMMEDIATELY ADD AS MUCH AS $1,000 TO THE HOMEOWNERS DEBT.
TENS OF THOUSANDS OF TIMES PER YEAR...HOMES ARE THEN SOLD AT SHERIFF SALE...WE ESTIMATE A MINIMUM OF 30,000 TAX SALES AND SHERIFF SALES ARE HELD PER YEAR IN PENNSYLVANIA. 30,000 INDIVIDUALS OR FAMILIES LOSE THEIR HOMES, SOME ON TAXES THEY NEVER EVEN OWED.
WHEN A HOME IS SOLD AT SHERIFF SALE....THE SO CALLED DELINQUENT HOMEOWNER LOSES NOT ONLY THEIR HOME, BUT MOST OR ALL OF THE EQUITY BUILT UP OVER MANY YEARS OF PAYING FOR AND MAINTAINING THAT HOME.
EXAMPLE: LET'S SAY YOU HAVE A HOME WORTH $50,000 AND IT IS PAID FOR. YOUR DELINQUENT TAXES, PENALTIES AND INTEREST ARE $5,000. AT THE SHERIFF SALE THE HOME IS SOLD FOR TAX, PENALTIES AND INTEREST...$5,000. WHAT HAPPENED TO THE $45,000 IN EQUITY THE DELINQUENT OWNER HAD IN THE HOME? IT IS STOLEN FROM THEM... AND GIVEN TO THE PERSON OR COMPANY WHO BOUGHT THE HOME AT SHERIFF SALE AUCTION.
SOME SAY MOST DELIQUENT TAXPAYERS ARE DEADBEATS. LET ME ASK YOU IF A DEADBEAT IS WORSE THAN AN ARMED ROBBER?
IF I HELD YOU UP WITH A GUN AND TOOK YOUR WALLET. THEN WAS ARRESTED AND FOUND GUILTY OF MUGGING YOU. IF THE JUDGE SENTENCED ME TO JAIL TIME, PLUS RESTITUTION, FINES AND COURT COSTS TOTALING $5,000...MY FINANCIAL DEBT TO SOCIETY THEN IS $5,000. COULD THAT JUDGE THEN SAY...MR. LOGUE, DO YOU HAVE ANY LEGALLY ATTAINED SAVINGS BONDS. YES, YOUR HONOR...$3,000 IN SAVINGS BONDS IS SAVED UP OVER THE YEARS. THE JUDGE SAYS...OK, EVEN THOUGH YOU PAID YOUR $5,000 DEBT TO SOCIETY WE ARE GOING CONFISCATE YOUR $3,000 IN SAVINGS BONDS. DO YOU HAVE ANY 401 K PLAN FROM WHEN YOU WORKED AT KDKA? YES, YOUR HONOR...IT HAS $12,000 IN IT. OH, GOOD SAYS THE JUDGE, WE'RE GOING TO TAKE ALL THAT, TOO.
CAN'T BE DONE YOU SAY? IF MY DEBT TO SOCIETY AS A MUGGER IS $5,000 IN RESTITUTION, FINES AND COURT COSTS, THEY CAN'T TAKE MY OTHER LEGALLY ATTAINED ASSETS? WHY THEN CAN WE TAKE $45,000 OR MORE IN LEGALLY ATTAINED EQUITY IN A HOME FROM SOMEONE WHOSE DEBT TO SOCIETY OF PROPERTY TAXES, PENALTIES AND INTEREST IS JUST $5,000? WE TREAT DELINQUENT HOMEOWNERS WORSE THAN ARMED ROBBERS.
I HAVE PROVIDED THE COMMITTEE WITH A PROPERTY TAX REFORM COMPARISON CHART THAT I WOULD LIKE TO GO OVER WITH YOU.
IT COMPARES THREE BASIC PROPERTY TAX CONCEPTS:
THE STOP PLAN THAT CALLS FOR TOTAL ABOLISHMENT OF ALL PROPERTY TAXES ON PRIMARY RESIDENCES, A PLAN THAT WANTS TO JUST ABOLISH SCHOOL TAXES...AND THOSE PLANS THAT CALL JUST FOR A REDUCTION IN PROPERTY TAXES.
GO OVER THE CHART
AT THE ENCOURAGEMENT OF SENATOR SEAN LOGAN, A DEMOCRAT AND SENATOR JANE ORIE, A REPUBLICAN; THE PENNSYLVANIA SENATE VOTED 50 TO NOTHING...TO HAVE THE STOP PLAN EXAMINED BY THE STATE'S TOP FISCAL AND BUDGET EXPERTS AT THE LEGISLATIVE BUDGET AND FINANCE COMMITTEE.
THE RESULTS OF THAT STUDY PROVED WHAT STOP HAD BEEN SAYING SINCE 2002. THE STOP PLAN IS FISCALLY SOUND, IS VIABLE, AND WILL ALWAYS PROVIDE SUFFICIENT REPLACEMENT FUNDS FOR OUR SCHOOLS COUNTIES AND MUNICIPALITIES WHEN ALL PROPERTY TAXES ON PRIMARY RESIDENCES ARE ABOLISHED. THE STUDY STATED THAT THE STOP PLAN WILL TOTALLY REPLACE THE REVENUE IN BOTH GOOD AND BAD TIMES WITHOUT RAISING THE SALES OR INCOME TAXES BEYOND THE LEVELS INCLUDED IN THAT PLAN. COPIES OF THIS STUDY ARE AVAILABLE BY CONTACTING PHIL DURGIN AT THE LBFC AT (717)783-1600.
WE BELIEVE THIS IS MORE THAN A TAX ISSUE...INSTEAD IT IS AN ECONOMIC DEVELOPMENT ISSUE...AND WE BELIEVE ABOLISHING PROPERTY TAXES ON PRIMARY RESIDENCES WILL CREATE AN ECONOMIC BOOM UNLIKE ANY IN RECENT TIMES IN EVERY COMMUNITY AND COUNTY IN THE STATE. IT'S A HOUSING ISSUE....THE GOVERNMENT SPENDS MILLIONS TRYING TO HELP PEOPLE OWN A HOME....WHEN PROPERTY TAXES ON PRIMARY RESIDENCES ARE ABOLISHED....THERE WILL BE NO MORE TAX EQUITY PAYMENT AS PART OF A MORTGAGE...SO MORE LOW AND MIDDLE INCOME FOLKS CAN BUY HOMES. IT'S A COMMUNITY DEVELOPMENT ISSUE: NOW WHEN SOMEONE PURCHASES AN OLDER HOME FOR THEIR FAMILY AND FIXES IT UP, THEY ARE PENALIZED WITH HIGHER PROPERTY TAXES. SO PEOPLE SAY WHAT'S THE USE AND OLDER HOMES SIT AND WASTE AWAY.
IT'S A JOBS ISSUE. HOMEOWNERS ARE RELUCTANT TO IMPROVE THEIR HOMES, BECAUSE OF THE INCREASES IN PROPERTY TAXES THEY WILL BE PUNISHED WITH FOR ADDING SIDING, NEW WINDOWS, A PAVED DRIVE WAY, A ROOM ADDITION, GARAGE, ETC. WE THINK ONCE THERE IS NO PROPERTY TAXES ON THESE PRIMARY RESIDENCES, MORE PEOPLE WILL INVEST IN THEIR HOMES AND HIRE COMPANIES AND WORKERS TO DO IT.
IT'S A SOCIAL PROGRAM...BECAUSE THERE WILL BE MORE PEOPLE BUILDING WEALTH THROUGH HOME OWNERSHIP THAT WILL HELP THEM TAKE CARE OF THEMSELVES IN THEIR LATER YEARS. ELIMINATE THE PROPERTY TAXES ON PRIMARY RESIDENCES AND YOU'LL SAVE THE STATE LOTTERY OVER 6O MILLION A YEAR WHICH CAN BE USED TO EXPAND THE RENT REBATE PROGRAM. OUR PLAN WILL PROVIDE EVEN MORE MONEY FOR COUNTIES, MUNICIPALITIES AND SCHOOL DISTRICTS...BECAUSE THEY ARE FULLY REIMBURSED FOR THEIR LOST PROPERTY TAX REVENUE AND THEY GET 100% OF THE MONEY INSTEAD OF ABOUT 85 OR 90% THEY NOW GET DUE TO THE DISCOUNT GIVEN TO THOSE WHO PAY THEIR PROPERTY TAXES EARLY, COMMISSIONS PAID TO TAX COLLECTORS OR TAX COLLECTION AGENCIES, LATE ARRIVING REVENUE, AND NO REVENUE COMING FROM ABANDONED PROPERTIES. ...PLUS THEY STILL GET THE REVENUE FROM PROPERTY TAXES ON COMMERCIAL AND INDUSTRIAL PROPERTIES; THEIR LOCAL EARNED INCOME TAXES, ETC WHICH WILL INCREASE AS THE ECONOMY INCREASES.
MUNICIPALTIES DON'T COLLECT 100% OF BILLED TAXES EITHER. INSTEAD, THEY GET ANYWHERE FROM 70 TO 90%...WHICH MEANS THEY LOST ANYWHERE FROM TEN PERCENT TO 30% OF THEIR BILLED PROPERTY TAXES.
COUNTIES NOW COLLECT AROUND 85%, I'M TOLD...BUT COUNTIES ABSORB THE COST OF ALL THE ASSESSMENTS, REASSESSMENTS, HEARINGS, ETC. SINCE ROUGHLY 3/4THS OR MORE OF PROPERTIES IN EACH COUNTY ARE PRIMARY RESIDENCES—HOMESTEADS AND FARMSTEADS—THAT MEANS THE COUNTIES WOULD NO LONGER NEED TO ASSESS AND REASSESS AND HAVING HEARINGS, ETC. ON 3/4THS OR MORE OF THEIR PROPERTIES. IN ALLEGHENY COUNTY, THERE ARE SOME 550,000 PROPERTIES....IN ROUND FIGURES 400,000 ARE PRIMARY RESIDENCES. ALLEGHENY COUNTY'S ASSESSMENT OFFICE BUDGET IS SLIGHTLY OVER $7 MILLION A YEAR. UNDER OUR PLAN...ELIMINATING 3/4THS OF THEIR WORKLOAD CAN MEAN A CUT IN THE SIZE OF THAT BUDGET DOWN TO MAYBE $3 MILLION A YEAR. THAT'S A HEALTHY $4 MILLION DOLLAR SAVINGS TO TAXPAYERS. ECONOMIST, DR. MARK HENDRICKSON, FACULTY MEMBER AT GROVE CITY COLLEGE RECENTLY WROTE THE FOLLOWING ABOUT PROPERTY TAXES ON HOMES. ...AND I QUOTE: THIS FORM OF TAXATION IS TOTALLY ANTIQUATED, APPROPRIATE IN AMERCA'S 19TH CENTURY AGRARAIAN SOCIETY BUT OUT OF PLACE TODAY. IN THE 1800'S WHEN THERE WAS NO INCOME TAX, IT WAS CONSIDERED NONE OF THE GOVERNMENT'S BUSINESS HOW MUCH MONEY ANYBODY MADE, THE PROPERTY TAX SERVED AS A PROXY FOR ONE'S INCOME. THIS MADE A LOT OF SENSE THEN, BECAUSE IT WAS LOGICAL TO ASSUME THAT THE CITIZEN FARMING 80 ACRES HAD A HIGHER INCOME THAN ONE FARMING ONLY 40 ACRES. THE HOMESTEADS OF MOST AMERICANS ARE NOT THEIR SOURCE OF INCOME, BUT MERELY WHERE THEY LIVE. WHY, THEN, TAKE MORE MONEY FROM A CITIZEN WITH A HOUSE OF 1500 SQUARE FEET THAN ONE WITH 900? ONE OF THE ELEMENTARY PRINCIPLES OF PRUDENT TAXATION IS THAT, IN ORDER TO AVOID HARMING CITIZENS, TAXES SHOULD TAKE INTO CONSIDERATION THE INDIVIDUAL'S ABILITY TO PAY. TODAY, ONE'S ABILITY TO PAY DEPENDS FAR MORE ON ONE'S INCOME THAN ON THE SIZE OF ONE'S HOUSE. TO CONTINUE TAXING PEOPLE AS IF THEIR HOUSE WERE GENERATING THEIR INCOME IS ABSURD. END QUOTE. DR. HENDRICKSON CALLED FOR THE ABOLISHMENT OF PROPERTY TAXES.
STOP IS ASKING THIS COMMITTEE, OUR LEGISLATURE AND OUR GOVERNOR, NOT TO JUST DO WHAT IS EXPEDIENT...AND THEN HAVE WRESTLE WITH THIS PROBLEM AGAIN YEAR AFTER YEAR, INSTEAD DO WHAT IS RIGHT...ABOLISH ALL PROPERTY TAXES ON PRIMARY RESIDEENCES AND REPLACE THEM WITH MORE SENSIBLE, FAIR, MORE BROADBASED AND ACCURATE TAXES.
I KNOW THAT HIS HEARING WAS TO BE FOCUSED ON HB1600. AS A STAND ALONE PLAN, STOP OPPOSES HB 1600 BECAUSE IT COMBINES A TEMPORARY REDUCTION IN PROPERTY TAXES WITH A PERMANENT INCREASE IN SALES AND INCOME TAXES---ONE OF CHAIRMAN LEVDANSKY'S FAVORITE LINES OF OURS. THERE IS NOTHING IN THE LEGISLATION THAT WILL PREVENT PROPERTY TAXES FROM RISING AGAIN.
HOWEVER, IN AN EFFORT TO MOVE THIS ENTIRE ISSUE FORWARD TO A PERMANENT CONCLUSION WHILE STILL HELPING THE HOMEONERS ARE THE EARLIEST POSSIBLE TIME, STOP PROPOSES THE FOLLOWING IN THIS CHRONOLOGICAL ORDER:
1. SINCE ABOLISHMENT OF PROPERTY TAXES REQUIRES A CONSTITUTIONAL AMENDMENT....WE PROPOSE THAT HEARINGS COMMENCE IMMEDIATELY ON THE CONSTITUTIONAL AMENDMENT WHICH WILL BE INTRODUCED SHORTLY IN THE HOUSE BY REP. GERGELY. IT IS TIME TO GIVE THE CITIZENS THE RIGHT TO VOTE ON THIS ISSUE.
2. WE PROPOSE THAT FOLLOWING THE HEARINGS, FIRST PASSAGE OF THE AMENDMENT OCCUR BY THE LEGISLATURE. THAT WOULD DEMONSTRATE TO THE CITIZENS TWO THINGS: FIRST, THE SINCERITY OF THE LEGISLATURE ABOUT ABOLISHING PROPERTY TAXES...NOT JUST REDUCING THEM, AND TWO, THAT THE LEGISLATURE WANTS TO LET THE CITIZENS BE HEARD ON THIS IMPORTANT ISSUE.
3. HB 1600 OR SIMILAR LEGISLATION COULD THEN BE ENACTED TO PROVIDE THE HOMEOWNERS WITH A TEMPORARY PROPERTY TAX REDUCTION...WHILE WE AWAIT THE CONSTITUTIONAL AMENDMENT PROCESS. HOWEVER, WE ASK THAT HB 1600 BE AMENDED TO INCLUDE A SUNSET PROVISION, THAT SIMPLY STATES IF THE LEGISLATURE FAILS TO PASS THE PROPERTY TAX CONSTITUTIONAL AMENDMENT A SECOND TIME IN 2009—WHEN THE NEW LEGISLATURE IS SEATED, THE PROPERTY TAX REDUCTIONS AND THE INCREASES IN SALES AND INCOME TAXES IN YOUR BILL, WOULD EXPIRE. AGAIN, THIS DEMONSTRATES THE DESIRE OF THIS COMMITTEE, OUR LEGISLATURE AND OUR GOVERNOR TO GIVE THE CITIZENS THE RIGHT TO VOTE ON A PROPERTY TAX AMENDMENT. AND YOUR DESIRE TO SOLVE THIS PROBLEM COMPLETELY AND PERMANENTLY.
4. IN EARLY 2009, THE LEGISLATURE COULD PASS THE AMENDMENT A SECOND TIME...PRODDED BY THE SUNSET PROVISION IN HB 1600, AND IN NOVEMBER, 2009 THE CITIZENS WOULD BE GIVEN THE RIGHT TO MAKE THE FINAL DECISION ON ABOLISHMENT OF PROPERTY TAXES ON PRIMARY RESIDENCES. IF THE CITIZENS VOTE YES, THE LEGISLATURE AND GOVERNOR HAVE THE MANDATE TO ENACT THE REPLACEMENT TAXES TO REMOVE THE FINAL 50% OF THE PROPERTY TAXES ON PRIMARY RESIDENCES AND THE PROPERTY TAX ON PRIMARY RESIDENCES WOULD BE DUMPED ON THE SCRAP HEAP OF SOCIETY WHERE IT BELONGS.
TO SEE SB 717-718 VISIT www.grandoldusa.com Our house bill will be posted as soon as it is available from Rep. Gergely.
THANK YOU FOR YOUR KIND ATTENTION.comments (4)
- End property taxes, forget reassessment
THE FOLLOWING EDITORIAL APPEARED IN TODAY'S READING EAGLE NEWSPAPER, READING, PENNSYLVANIA.
THE STOP MESSAGE IS GETTING THROUGH SLOW BUT SURE AND MOMENTUM IS BUILDING FOR TOTAL ABOLISHMENT OF ALL PROPERTY TAXES ON PRIMARY RESIDENCES. PLEASE SEND THIS EDITORIAL TO EVERY PENNSYLVANIAN YOU CAN, INCLUDING YOUR LOCAL NEWSPAPER EDITOR, YOUR LEGISLATORS, YOUR COUNTY AND MUNICIPAL OFFICIALS.
August 10, 2007
End property taxes, forget reassessment
The Issue: A Richmond Township man has filed suit in an attempt to force the Berks County commissioners to order a countywide reassessment to make property taxes more equitable.
Our Opinion: Inequities always develop with property taxes. The best way to avoid those inequities is to eliminate property taxes.
One of the inherent problems with the property tax — regardless of whether it is used to fund schools or municipal governments — is that it never can be levied fairly.
The moment that every property within a particular taxing body is assessed on the same standard, one of those properties is reassessed as a result of an improvement or some other factor.
Over the years long-time homeowners who have made no major upgrades see their properties assessed at a much lower rate than a similar residence down the block or across town.
And then there is the problem of new homes, which are assessed more or less on their sale price, which usually is much higher than what some had paid for a similar property 10 or 20 years ago.
Ultimately what winds up happening is that those people who buy newly built homes and those who have made renovations wind up with higher assessments than those who bought their homes decades earlier. And those higher assessments mean greater tax bills, even if the properties are worth the same and taxed at the same rate.
It is not always the case, but more often than not this results in younger families, often first-time buyers, paying more than their share in taxes, while older, long-time homeowners pay less than their share.
Some counties have attempted to make their property taxes more equitable through regular — and costly — countywide reassessments. That way the range of property values doesn’t get too far out of line from one revaluation to the next.
Berks County, for whatever reason, never has been one of those counties. In fact the last — and only — countywide reassessment in Berks took place in 1994. At that time some property owners who purchased their homes 40 years earlier had their assessments based on the $15,000 they paid for the properties, while a neighbor, who had bought a similar property in 1990, had his assessment based on a purchase price that was 10 times $15,000.
Similar inequities have been allowed to develop during the last 13 years as real estate prices, especially in the suburban and rural sections of Berks, have soared. Nevertheless the county commissioners have been reluctant to even consider another countywide reassessment.
They believe it would hurt too many property owners who have seen the value of their properties rise dramatically since 1994.
That is why J. Garth Swartley, who built a house last year on an 18-acre tract in Richmond Township, is suing to force a reassessment. He is on the high side of that inequity, and he doesn’t think it is fair.
Meanwhile those on the low side of the inequity — many of them retired — don’t want to see their assessments and taxes increased so that Swartley and others can get a break.
There is no doubt the inequity exists, and where one stands on the issue more than likely reflects how long he or she has owned his or her home.
But the answer is not a reassessment. That only will start the cycle over again, and the problem will recur in another 10 to 15 years.
The answer is the elimination of the property tax, replaced by a more equitable combination of taxes, the most prominent of which would be the income tax.
Under such a system, the more you make, the more you pay, and you don’t have to worry that inflated real estate prices some day will pit neighbor against neighbor during another reassessment.comments (7)
- The Monkey On Our Back
For thirty years the homeowners and taxpayers of Pennsylvania as well as the governors of both parties, the legislators, school boards, county and municipal officials have had the property tax monkey on their backs. Thousands of hours of discussion and debate, millions of taxpayers dollars have been expended trying to find a solution to the property tax nightmare.
Our current governor and current legislators have the opportunity to once and for all solve this problem and make Pennsylvania the most attractive state in the nation to own a home and establish a residence.
ONLY ONE PLAN IS THE PERMANENT SOLUTION TO HOMEOWNER PROPERTY TAXES IN PENNSYLVANIA. ONLY ONE PLAN WILL MEAN THE GOVERNORS AND LEGISLATORS WILL NEVER AGAIN NEED TO ADDRESS THIS ISSUE AND CAN FOCUS THEIR TIME AND ENERGIES ON OTHER ISSUES FOR THE BETTERMENT OF PENNSYLVANIA.
ONLY ONE PLAN COMPLETELY AND PERMANENTLY ABOLISHES ALL PROPERTY TAXES ON ALL PRIMARY RESIDENCES (HOMESTEADS AND FARMSTEADS) IN PENNSYLVANIA. The STOP PRIMARY RESIDENCE PROTECTION PLAN.
SENATORS: Please speak with Senator Sean Logan or Senator Jane Orie about SB 717-718.
REPRESENTATIVES: Please speak with Rep. Keith McCall or Rep. Marc Gergely about the soon to be introduced STOP legislation in the House.
HOMEOWNERS: Want the property tax monkey off your back once and for all? No more phony, incorrect property assessments; no more assessment hearings; no more school, county or municipal property taxes to pay. No more sheriff sales and stolen equity for so called 'delinquent property taxes.' No more property tax escrow payments as part of a mortgage. For the first time in history you will truly own your own home...not merely rent it from the school board, and county and municipal officials. Ask your State Senator and Representative to support the STOP LEGISLATION TO ABOLISH ALL PROPERTY TAXES ON PRIMARY RESIDENCES.
Note: The STOP plan was found to be fiscally sound and viable in a study conducted by the Legislative Budget & Finance Committee. Data from the PA Revenue Department concurs with the LBFC findings. Please share this article with everyone you can!comments (3)
- IMPORTANT INFO ABOUT THE STOP PLAN
Please share this with everyone you can by forwarding this E-mail, printing and mailing this article, or posting it on bulletin boards, etc.
As our STOP Property Tax Abolishment Legislation is being reintroduced in the PA House and Senate, it is important to understand what is being done and why.
Question: Why do we need a constitutional amendment to abolish all property taxes on primary residences?
Answer: The PA Constitution allows only a 50% difference between taxation on various types of property. In other words, primary residences (homesteads\farmsteads) can only be taxed at a rate 50% lower than industrial\commercial properties.
Question: What will the STOP constitutional amendment do?
Answer: It would change the constitution to allow primary residences (homesteads\farmsteads)to be taxed at 0%, without changing how industrial and commercial properties may be taxed. It would prohibit school districts, counties and municipalities from imposing a property tax on primary residences (homesteads\farmsteads.)
Question: Are there advantages to abolishing property taxes via constitutional amendment?
Answer: Yes. If all property taxes on primary residences are outlawed via constitutional amendment, property taxes could never be revived by a future legislature and governor, without first amending the constitution again. And the citizens have the final vote. It is your protection that once all property taxes are abolished on primary residences via constitutional amendment, it is very unlikely they could ever be revived.
Question: How is a constitutional amendment enacted?
Answer: The proposed amendment must be passed during two separate, two-year legislative sessions by the PA House and Senate If it were passed by the legislature during the current 2007-2008 session, it could then be passed in early 2009 and put on the ballot for the voters in the November election in 2009.
Question: Is there such a thing as an EMERGENCY amendment.
Answer: Yes, the constitution does allow for emergency amendments which require just one passage by the legislature before the emergency amendment goes to a public referendum. The constitution does NOT define an emergency. We believe the loss of tens of thousands of homes every year to a highly inaccurate assessment and property tax system; the theft of the `delinquent' owners' equity far beyond their debt to society; and the disruption of the lives of tens of thousands of our citizens constitutes an emergency.
Please share this with everyone on your E-mail list. Post it on online bulletin boards. Print it and pass it out to friends and relatives.
It is essential that as many Pennsylvania citizens as possible be aware of this vital information. –Bob Logue, STOP Primary Residence Protection Plan. Learn more at www.grandoldusa.com and on the STOP Page at www.spedunkie.comcomments (7)
- Time to abolish antiquated property tax
By DR. MARK W. HENDRICKSON | Tuesday, July 10, 2007
Property taxes in Pennsylvania appear locked into a long-term uptrend. In recent years, there have been huge increases in the portion of the property tax that finances county government. County officials have levied these increases to pay for the unfunded mandates imposed by the state government in Harrisburg . The largest share of the property tax funds the public school districts, and virtually nobody foresees a time when the expenditures of those districts will stop rising. These ongoing pressures for additional tax revenues raise the question: Is it politically and economically feasible to continue raising property taxes in the coming years?
Some might look at the results of a recent ballot proposal in Lawrence County and conclude that Pennsylvanians prefer a property tax over others types of taxes, but this conclusion is unwarranted. When offered the opportunity to receive a modest reduction in the public-school portion of their property tax in exchange for a 1 percent increase in their earned income tax, voters in every school district in the county overwhelmingly voted against it. The context here is crucial. Voters were not opposed to property tax relief, but to a package deal that represented an overall tax increase.
We have a political stalemate in Pennsylvania, because Harrisburg has mandated that the only permissible reform to public-school funding must be structured like the Lawrence County proposals. The psychology is all wrong. It's hard for voters to get excited about a proposal that makes an obnoxious, already-high tax just a little less high (i.e., the property tax) at the price of ratcheting up another obnoxious tax -- the income tax -- when the federal/state/local taking of income is already at an uncomfortable level. If Harrisburg really wants reform, it needs to emulate the boldness of the Michigan government in the 1990s, when it totally scrapped the property tax for school funding, and replaced it with a 2 percent hike in the state sales tax. I suspect that Pennsylvania voters would be far more comfortable with an increase in one type of taxation if it were offset by the complete removal of another type of taxation. If you give Pennsylvania voters the chance to eliminate one part of their tax bill completely, then tax reform has a fighting chance for approval.
The larger, more fundamental problem here is the property tax itself. This form of taxation is totally antiquated, appropriate in America's 19th-century agrarian society, but out of place today. In the 1800s, when there was no income tax and it was considered none of the government's business how much money anybody made, the property tax served as a proxy for one's income. This made a lot of sense then, because it was logical to assume that the citizen farming 80 acres had a higher income than one farming only 40 acres. Today, though, the homesteads of most Americans are not their source of income, but merely where they live. Why, then, take more money from a citizen with a house of 1,500 square feet than one with 900? One of the elementary principles of prudent taxation is that, in order to avoid harming citizens, taxes should take into consideration the individual's ability to pay. Today, one's ability to pay depends far more on one's income than on the size of one's house. To continue taxing people as if their house were generating their income is absurd.
An additional fault of the property tax is that it can jeopardize home ownership. On the surface, it appears that once a person has paid off the mortgage on his house, then he owns it free and clear, but this is not so. If the homeowner falls on hard times and can't pay his property taxes, the sheriff comes and confiscates the house. Under the present system, a person doesn't really "own" his home completely, but in effect rents it from the local government which permits him to keep it only so long as the "owner" continues to pay taxes on it. We have heard of senior citizens -- wonderful, law-abiding citizens who worked hard for decades to buy their own home -- having to sell their home because they couldn't afford the taxes. This is abominable. And how many of America's homeless persons became so because they fell on hard times and were evicted from their homes because they couldn't pay their property tax?
In an era when it has been the federal government's policy to facilitate home ownership as a central feature of "the American dream," it is anomalous for local governments to make it difficult for some citizens to keep their homes. The property tax is outmoded, unfair, irrational and destructive. It's time to abolish it.
Dr. Mark W. Hendrickson is a faculty member, economist, and contributing scholar with the Center for Vision and Values at Grove City College.comments (1)
- SEN. LOGAN STOP NEWS RELEASE
logan STEPS UP CALL TO ELIMINATE HOMEOWNER PROPERTY TAXES
MONROEVILLE, May 17, 2007 - On the heels of the overwhelming vote against the state's Act 1 tax-shifting proposal, state Sen. Sean Logan (D-Allegheny/Westmoreland) today announced that he is reintroducing legislation that would totally eliminate homeowner property taxes.
"The voters spoke loud and clear," Logan said. "They don’t want partial property tax relief or complex tax shifts. They want property taxes eliminated."
Logan's S.T.O.P. (Stop Taxing Our Properties) proposal, Senate Bill's 717 and 718, would totally eliminate property taxes on primary residences by generating $7.7 billion through the use of gaming proceeds, establishing a graduated income tax rate and increasing the state's sales tax by 1 percent.
"For decades, citizens have called for basing school taxes on one's ability to pay," Logan said. "Establishing a graduated income tax scale is the most equitable way of achieving that goal."
Logan said taxpayers who make less that $100,000 per year would keep the state's current 3.07 percent income tax rate and see no income tax hike. The highest income level under his proposal ($400,000 or more) would pay an additional 4 percent in income taxes.
All of Pennsylvania's neighboring states have graduated income tax rate scales.
Backed by numerous western Pennsylvania lawmakers, Logan has championed the S.T.O.P. proposal since 2003. The S.T.O.P. organization, founded by former Pittsburgh radio personality Bob Logue, has gathered 118,374 statewide signatures calling for the elimination of homeowner property taxes.
Logue credited Logan for stepping forward to introduce the S.T.O.P. bill; as well as his support for a Legislative Budget & Finance Committee study that determined that the STOP legislation was fiscally sound and would provide all the necessary replacement taxes in both good and bad economic times.
"It is time to stop the charades of property tax reductions, and abolish this costly, inaccurate, divisive and economically depressing form of taxation on homeowners," Logue said. "The S.T.O.P. organization encourages all citizens who want the property tax system reformed correctly, dramatically, and permanently to encourage their legislators to support Senator Logan's legislation."
Logan said his proposal calls for two changes to the state's Constitution. One would allow homeowner property to be taxed at a different rate than business property. The other would allow for the graduated income tax rate scale.###
EDITOR'S NOTE: FOLLOWING IS THE CO-SPONSORSHIP MEMO SENATOR LOGAN SENT TO ALL SENATE MEMBERS TODAY:
I intend to reintroduce a two-bill package that would totally eliminate the property tax in Pennsylvania.
The first of the two-bill package will be an amendment to the Constitution that would do two things in separate questions on a referendum. The first question that would be asked is if voters would approve Pennsylvania taxing properties differently, in my proposal, continuing to tax commercial and industrial properties and eliminating property taxes on primary residences. Additionally, a second question would need to be asked that would ask the voters if they would approve changing Pennsylvania's Personal Income Tax from a flat 3.07% to a graduated income tax scale. I have received a legal opinion that it is okay to place both of these issues into one piece of legislation; understanding that they will be asked as separate questions on a referendum.
If both questions would be successful, then according to the Legislative Budget and Finance Report pursuant to Senate Resolution 3 of Special Session No. 1 of 2005, we would need to generate approximately $7.7 Billion, which is property tax totals for local, county and school districts on primary residences only. In the second of the two-bill package, I propose to replace this lost revenue using the graduated income tax rates listed below:
Total revenue generated under this graduated income tax system would be approximately $5.2 Billion; leaving a balance of $2.5 Billion from the $7.7 Billion needed. This additional revenue would be generated by increasing the Sales and Use Tax by 1% generating approximately $1.5 Billion and using the anticipated $1 Billion from gaming revenues. THE SALES TAX BASE WOULD NOT BE EXPANDED. This brings the total to the needed $7.7 Billion as estimated by the Legislative Budget and Finance Report.comments (43)
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