School Property Tax Reform

3/6/2020

By Rep Steve Mentzer (R-Lititz)
It is my distinct privilege to serve the constituents of the 97th Legislative District. A concern I hear frequently is, when will the General Assembly pass property tax reform? The fact of the matter is that all Pennsylvanians, should they choose to retire and stay here, will be dealing with constantly rising school property taxes while on a fixed income.

School property tax reform is a legislative priority of mine and it is my belief we are getting closer to a resolution on this issue. I co-sponsored a successful amendment process to our State Constitution which now allows for owner-occupied homes and farms to have up to a 100% exemption from property tax while still maintaining property taxes on commercial property. This would allow for a property tax exemption or reduction for those owning and living in their own home.

Currently, we collect $13 billion from school property taxes across the state. Pennsylvania has a $33 billion discretionary budget with revenue derived from mostly the Personal Income Tax and Sales Tax. So, we would need to make up the $13 billion, which is equal to 40% of this States discretionary budget, if we were to completely eliminate school property tax. Under most school property tax elimination proposals, our Personal Income Tax and Sales Tax would need to go up dramatically, and resistance to increasing those two levies is the stumbling block to reform.

Proposals range from a property tax freeze for those 65 years and older to complete elimination for all property owners. The middle ground seems to be property tax elimination for homeowners in exchange for an increase in the Personal Income Tax.

Constituents in the 97th district are frustrated by the legislature’s inability to make progress on this issue. Much of this has to do with a ‘hold harmless’ policy, which has been in place for more than three decades.

In my next article, I will explain why some legislative districts across the state are unwilling to make reforms to the current property tax structure.