Cap needed
Property tax hikes should be limited Capping taxes is comparable to capping an oil leak. BP’s first fumbling efforts to stop the flow from its leaking well in the Gulf of Mexico failed miserably. It was only when the company installed an effective cap that the leak was stopped.
Pennsylvania’s school property tax cap is much like BP’s initial oil cap. It is riddled with holes and has done little to slow the flow of dollars from taxpayers to school districts.
Although the public supposedly has to approve any tax hikes that exceed an inflationary index, there are so many exceptions that school districts routinely go above the “cap” without an OK from voters. The index itself is a moving target that fluctuates from year to year and varies based on a district’s property values and household income.
The so-called cap is nothing more than a farce, a charade, a hoax, an illusion – you pick the word.
On the other hand, the New Jersey Assembly, at the urging of Republican Gov. Chris Christie, last month passed a law that imposes an across-the-board 2 percent cap on annual property tax increases by counties, school districts and municipalities. The law allows a few exceptions for costs beyond the control of localities, such as pensions and health care. Otherwise, the cap can be exceeded only with voter approval.
“A hard cap of 2 percent with limited exceptions that puts final authority to exceed the cap in the hands of the people is the substantial and sustainable reform New Jersey needs,” Christie said after the legislation passed.
The cap comes on the heels of April’s school elections in which New Jersey voters rejected nearly 60 percent of school budgets. The voters sent a message and the legislators in Trenton heard it loud and clear.
We realize that New Jersey’s average property tax bill of about $7,300 a household is the highest in the nation. It should be pointed out the state’s average household income and property values are among the highest in the nation, too. Furthermore, New Jersey has no local earned income tax.
The tax cap is only part of the solution to the skyrocketing cost of schools and local government. Christie has proposed other measures to control property taxes, including a limit on how much arbitrators can award in salaries and benefits to municipal police and firefighters who are prohibited from striking. (New Jersey teachers also are not allowed to strike.)
Some have raised the concern that wealthy communities would be more likely to override the cap than poorer communities. That may happen, but even without a cap, voters in affluent communities could elect candidates who are willing to spend more on teachers, police and municipal services.
We believe a tax cap forces spendthrift governments to live within their means. The people, not the politicians, decide whether to increase spending above the limit.
Pennsylvanians who want to see meaningful controls on property taxes should start lobbying the Legislature to amend the misnamed Taxpayer Relief Act of 2006. The current porous “cap” should be replaced with one that will be airtight.
New Jersey’s cap may not be ideal, but it certainly has the potential to help beleaguered taxpayers. Unless Pennsylvania takes similar action, one day our state may have the dubious distinction of having the highest property taxes in the nation.
Bucks County Courier Times