Pennsylvania's property tax referendum has a long way to go if it passes
Pennsylvania voters can decide through a ballot referendum next week if local governments and school districts should have the ability to exempt them from paying property taxes on their homes.
The question sounds like a no-brainer, but if it passes and state lawmakers go along with it, municipalities and school districts would have to make up the lost revenue through some other tax.
“It sounds good,” said Allegheny County Executive Rich Fitzgerald. “We'd all love to eliminate property taxes, but you can't eliminate it unless you have a replacement.”
The referendum on the Nov. 7 election ballot asks voters:
“Shall the Pennsylvania Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100 percent of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?”
What that means is state lawmakers would have the ability to create a law giving counties, municipalities and school districts authority to eliminate property taxes on a person's home, according to state Rep. David Maloney, D-Berks, who sponsored legislation that led to the referendum.
It would not exempt commercial and industrial properties.
The state Homestead Exemption now allows taxing bodies to exempt up to 50 percent of the median value of all homes within their jurisdictions.
“What this amendment would do is take that language to 100 percent of assessed value (of a home),” Maloney said.
Maloney, who has supported property tax relief efforts since he was elected in 2010, called it the No. 1 issue for his district.
“It's toxic,” he said. “I have senior citizens who will walk into my office and they'll say, ‘I've come to the place where I cannot pay it. How can you help me?'”
Pennsylvanians have decried property taxes, particularly school taxes, for decades, according to state Sen. Wayne Fontana, D-Brookline.
“They already have the power to do 50 percent, and nobody does it,” he said. “The underlying effect of this referendum is it's actually making us choose again between property tax, or wage tax, or sales tax, or some other tax.”
Paul Leger, Pittsburgh's finance director, said the city couldn't afford to increase the current exemption without another revenue source.
The city exempts the first $15,000 of a home's assessed value; Allegheny County exempts $18,000; and the Pittsburgh Public School District exempts $29,447.
In 2018, 310,233 tax parcels in Allegheny County — up from 308,177 this year — will qualify for the exemption, resulting in $26.2 million in exempted payments, according to county spokeswoman Amie Downs.
“First of all, it has to pass the voters because it's a constitutional change, then it has to pass the Legislature, then it has to pass all the individual municipalities that have to implement it,” Leger said. “It would be years before you really saw the result of it, and many municipalities probably wouldn't do anything because you don't have to.”
Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or firstname.lastname@example.org.