Lawmakers tackle property tax reform
HARRISBURG – Until about five years, officials in Montgomery County and about half of the state’s counties collected a substantial amount of their revenues by taxing personal property, such as stocks and bonds. But a state court ruling forced county officials to abandon that practice, declaring it unconstitutional. To make up for the lost revenues, real estate taxes in Montgomery County were raised by 29 percent.
“It hit people on fixed incomes the hardest,” County Commissioner Ruth Damsker recalled. “We are now dependent on property taxes. There’s no other source.”
With the Legislature now taking up the issue of property tax reform in a special session, Damsker of Cheltenham hopes something can be done about the county’s tax pred icament.
Damsker and 80 other officials from counties around the state came to the state Capitol on Monday to ask their legislators to pass reforms that will allow county governments to raise revenues through sources other than property tax. Most of the discussion thus far has focused changing the tax system for municipalities and school districts.
“We don’t want to be forgotten, so we’re going to lobby,” said Damsker, who planned to meet with state lawmakers from Montgomery County later in the day. “We’re asking state legislators to consider options, not only for school districts but also for county governments. We want a comprehensive tax reform piece of legislation that’s not just directed at the schools. It’s important because we’re also totally dependent on the property tax.”
Officials from Fayette, Greene and Washington counties also made the nine-hour roundtrip.
“Tax reform is the biggest issue facing everyday Pennsylvanians,” said Sean Cavanaugh, vice chairman of the Fayette County Commissioners. “People are tired of the legislators talking about tax reform. The people want it.
“If you’re going to cut the property tax, I think fiscal responsibility and accountability should be paramount and priority number one. Then, number two, you have to shift the tax. The only way I see is an [increased] income tax or sales tax.”
The County Commissioners Association of Pennsylvania wants county officials to have a menu of options for raising revenues. The group wants county governments to be able to reduce the real estate tax in proportion to revenue generated by other sources of income, such as a personal income or sales tax. Commissioners say that the present tax system does not equitably or adequately reflect a homeowner’s economic condition and places an unfair burden on some property owners, such as senior citizens.
“What is important is options,” Damsker said, “because different counties have different needs. It’s important to let local officials be able to choose so they can tailor it to their needs. For example, a county that has a big tourism industry might be better off with a sales tax. For some counties, staying with a real estate tax might work best.”