Bob Logue

MOST FREQUENTLY ASKED QUESTIONS ABOUT STOP PRIMARY RESIDENCE PROTECTION PLAN

Question #1: Will the STOP Primary Residence Protection Plan bankrupt our Schools?

Answer: Absolutely NOT! In fact it will help our schools and here is why. First, the STOP Legislation guarantees 100 percent replacement funding to our school distrcits for any lost revenue due to abolishment of all property taxes on primary residences. The replacement revenue is established on a base year, and has an annual cost of living increase built in. It is written in the legislation.

Further, the STOP plan will encourage people to remain in our school districts and others to move into our school districts. As population and employment increase, tax revenues from earned income taxes and from expanding commercial and industrial development will mean additional revenue for our school districts.

Read the STOP legislation for yourself at www.grandoldusa.com Help enact the STOP (Primary Residence Protection Plan) Legislation and improve our schools and neighborhoods. Help keep young families in Pennsylvania.

Call or write to your legislators and the governor and tell them you want them to support the only true property tax reform being offered in Harrisburg—the STOP legislation: SB 717-718 and HB 1947-1948. Demand total abolishment of all property taxes—school, county and municipal-- on all primary residences (homesteads\farmsteads).

And demand it be done by constitutional amendment that guarantees once the property taxes are abolished, they cannot return without a vote of the citizens.

Bob Logue, STOP (Primary Residence Protection Plan), Box 306, Fairbank, PA 15435 or ucblogue@verizon.net

Question #2: Will STOP under-fund our county government and damage services?

Absolutely NOT! The STOP legislation will provide each county with 100% of the base year property taxes they would lose with the abolishment of all property taxes on primary residences, plus an annual cost of living adjustment. And that’s not all!

Currently the counties spend sizable amounts of revenue to collect the property taxes. Example: In 2005, Allegheny County spent $7 million dollars just in the assessment office, and needed a $2.7 million dollar grant from Governor Rendell to attempt to get caught up on their work. Further, because of slow payments, disputes, refunds if a taxpayer wins their assessment appeal, and those properties that are abandoned from which the counties get nothing, the counties do not collect 100% of all property taxes due.

Counties also spend substantial money for sheriff’s office personnel to handle property tax sheriff sales and evictions. Counties spend more money on the Common Pleas courts to hear property tax appeals.

Counties often secure tax anticipation loans from banks to operate the government until property tax revenue begins to arrive. They must pay back the loan AND INTEREST.

Under the STOP Plan, the counties will not only get 100% of ALL primary residence property taxes due, they get their money in a timely fashion so there is no need to borrow operating capital.

Primary residences make up about two-thirds of all properties in a county on average. Since there would be no need for assessments\reassessments, property tax hearings, sheriff sales or court hearings on any primary residences, counties will save a substantial amount of taxpayer’s money. Example: In Allegheny County if the county saved two-thirds of its annual assessment office budget, the savings would amount to some 4 to 5 million dollars every year.

Let’s recap: Each county now spends sizable amounts of money to assess\reassess and collect property taxes from primary residence homeowners. The county loses, or is delayed in receiving a percentage of the funds due because of delinquency or assessment challenges, and on abandoned properties. The county spends considerable property tax related sums of money for personnel in the sheriff’s office, and Common Pleas court for property tax appeal hearings. And, the counties must pay interest on any tax anticipation loans.

Under the STOP Plan, the counties would save up to 2/3rds of their assessment office budget; and save additional funds in the sheriff’s office and Common Pleas Court. Plus, the counties get 100% of their property taxes from primary residences (and an annual cost of living increase); and because they get the money in a timely fashion no tax anticipation loans are needed.

So counties spend considerably LESS money…due to lower expenses, and collect MORE money. It’s a win-win situation for the county government and the taxpayers.

Question #3: WILL THE STOP PLAN HURT BUSINESSES? Absolutely NOT! There are NO business tax increases in the STOP legislation. Read the legislation for yourself at www.grandoldusa.com The truth is, the STOP Primary Residence Protection Plan will help businesses and help business owners and managers. HERE’S HOW:

  1. The STOP Plan abolishes all property taxes –school, county and municipal--on primary residences. Most business owners and managers own their own homes. A tax free home would be most beneficial to them.
  2. What Pennsylvania businesses need most are more customers. Through the enticement of a tax-free home forever, the STOP Plan will attract more people to live in Pennsylvania. More citizens equal more potential customers.
  3. The STOP plan will attract and retain more young families. A tax free home forever will entice families to want to establish their primary residence in Pennsylvania. This will help reverse the aging of our population. Younger families tend to have greater purchasing needs for the adults as well as for their children. Some will be entrepreneurs.
  4. Property taxes on homes deter growth. Potential homeowners are reluctant to purchase a home when they have no idea how high their property taxes may escalate.
  5. Pennsylvania continues to lose citizens to lower tax states. And our higher tax counties are losing residents to lower tax counties within our state. Example: Allegheny County’s population has shrunk by 48,000 during 2003-2004. Neighboring counties with lower property taxes are not declining. The US Census Bureau projects continued stagnation for Pennsylvania’s population for the next quarter century. This lack of population growth has a horrible impact upon our Pennsylvania businesses.
  6. Corporations attempting to recruit top notch talent to come to, or stay in Pennsylvania would have a tremendous tool in an entirely tax free home for their executives and upper level personnel—as well as skilled blue collar workers and workers in general.
  7. Property taxes deter current homeowners from improving their home. They realize any major home improvement or expansion is going to lead to a sizable property tax increase. For every building project that is NOT undertaken by a homeowner, companies lose business.
  8. The STOP Plan with it’s objective of tax free primary residences, will mean a boom for banking, real estate, law, home construction, home remodeling, construction materials, home furnishings, various trades—plumbers, electricians, roofers, etc.;and related fields. This boom will ripple through the economy, generate thousands of private sector jobs, and touch every area of the state.
  9. As the Pennsylvania economy and the local economies of the individual counties, school districts, and municipalities grow, the quality of life for business owners and everyone else improves. As the local economies grow…there will be a greater number of people, businesses and industries to share the burden of paying for our schools, counties and municipalities. In a stagnant or declining economy—evident in Pennsylvania and many of its cities, towns and rural areas—businesses close and people leave. Those remaining businesses and citizens must pay higher taxes to support government services. Cuts in services impact the quality of life for everyone.

The STOP Plan IS the BEST plan for BUSINESS…because it’s the BEST plan for PEOPLE. And BUSINESSES NEED PEOPLE as customers, managers, supervisors and workers! --Bob Logue, STOP Primary Residence Protection Plan, Box 306, Fairbank, Pa. 15435

Question #4: WHY IS A CONSTITUTIONAL AMENDMENT NEEDED AND HOW WILL IT HELP? Currently, the Pennsylvania constitution requires that all real estate be taxed the same. Since the STOP Plan calls for abolishing all property taxes on primary residences only, a constitutional change is required.

While getting a constitutional change is more difficult, it also makes more sense. Why? Because if property taxes on primary residences are abolished through a constitutional amendment and a referendum vote of the citizens, the property taxes can never be revived without another constitutional amendment and another vote of the citizens.

The other plans being touted DO NOT contain a constitutional amendment. The danger with enacting these plans just by legislative action is that a future legislature can reverse that legislation. For example: Let’s say the legislature expands the sales tax to include all food, clothing, shoes, day care, utility bills, insurance premiums, and most everything else as the Commonwealth Caucus wants.

And abolishes the school property tax. There is nothing to prevent a future legislature from reinstating the school taxes and keeping the 5% ‘tax almost everything’ sales tax in place. You could be paying school taxes again on top of the increases in sales tax, and realty transfer tax.

Since the Commonwealth Caucus plan keeps the entire assessment\reassessment system in place and every property in the commonwealth will continue to be assessed and reassessed; it would be quite easy for the future legislature to reinstate the school tax. The system to collect the school tax would already be in place.

The STOP (Primary Residence Protection Plan) is the only plan that calls for a constitutional amendment to guarantee that the abolished property taxes on primary residences (homesteads\farmsteads) cannot be revived without a vote of the citizens.

Under the Emergency Amendment provision of the current STOP legislation, the amendment would need to be passed just once by the legislature and could go to the voters in the Spring 2006 primary. If the Emergency Amendment provision is not constitutional, then the legislature would need to pass the STOP amendment twice—once in the current session (2005\2006) and again in 2007.

Either way, after 30 years of waiting for true property tax reform, it is not too long to wait until 2007 (just a little over a year away) to have it done correctly and permanently if we must wait that long.

DO NOT support any legislation that abolishes only one of the three property taxes on your home and leaves the other two property taxes and the assessment\reassessment system in place.
DO NOT support any legislation that just REDUCES property taxes. The taxes will only be raised later.
DO NOT support any legislation without a constitutional amendment. Otherwise the property tax changes could well only be temporary.

Q5. WILL THE STOP PRIMARY RESIDENCE PROTECTION PLAN HELP OR HURT MUNICIPALITIES?
Without any question, the STOP Primary Residence Protection Plan would be tremendously helpful to our state’s municipalities. Here’s how:

*** Currently, the municipalities collect as little as 70% of the property taxes they bill due to non payment, abandoned properties, and tax collection commissions. Under the STOP plan every municipality would promptly receive each year 100% of the base year property taxes billed on primary residences, plus an annual cost of living escalator.

Municipalities would continue to receive property taxes from industrial and commercial properties, as well as earned income taxes, and any other taxes or fees now collected.

*** All municipal expenses involved in billing, collecting and refunding property taxes (should the homeowner win an appeal),
or
legal actions for non payment of property taxes, including sheriff sales, etc. on primary residences would be totally eliminated.

*** The STOP Primary Residence Protection Plan encourages individual home ownership, since the plan abolishes school, county and municipal property taxes only on primary residences Municipal officials have told STOP that one of the greatest problems municipal governments face is dealing with absentee landlords. Ownership changes attitude! Homeowners who have an investment in their home will often take better care of the property—which improves the quality of life for those living nearby. Because the value of their individual property is at stake, these homeowners are more likely to be concerned with and involved in building or maintaining a quality neighborhood.

*** Because the STOP plan would abolish the monthly tax escrow payment portion of a mortgage for all home buyers, a greater number of our citizens would be able to become home owners.

*** Under our current system, we penalize with higher taxes those who improve their primary residences. If you add siding, new windows, a deck, build a garage, a paved driveway, or add most other amenities, and that investment in your home and neighborhood, improvement will be penalized with a higher assessment and higher taxes. This is obviously a disincentive for these improvements.

Since under the STOP Plan there would no longer be any property taxes on primary residences, there would be a tremendous incentive for individuals and families to purchase and improve homes in our communities throughout the state. That would greatly improve our communities, help to stabilize and increase our population, and encourage businesses to come to the community to serve these additional citizens.

*** Having people build, remodel, and otherwise improve their primary residences would create substantial sales for the community’s businesses and generate jobs in every community in the commonwealth.

MUNICIPALITIES HAVE EVERYTHING TO GAIN AND NOTHING TO LOSE UNDER THE STOP PRIMARY RESIDENCE PROTECTION PLAN.

Please share this with Governor Rendell governor@state.pa.us ; your state Senator and Representative, and everyone you know.

Share this information with your county commissioners. Ask them to get educated about The STOP Primary Residence Protection Plan and read our legislation by visiting www.grandoldusa.com Ask the county commissioners to contact their legislative delegation and urge them to support the STOP legislation: SB 717-718 HB 1947-1948.

Bob Logue, STOP, Box 306, Fairbank, PA 15435 ucblogue@verizon.net or boblogue@spedunkie.com

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