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Saturday, February 05, 2000 Page: 8A
Like an old-fashioned ward heeler buying drinks, doing favors and handing
out cash in the days before an election, Gov. Tom Ridge is expected to propose
property-tax rebates next week that would get to the voters shortly before the
November election.
The rebates, funded through $330 million from the expected 2000-2001
surplus, would be mailed in October, with Pennsylvanians poised to decide
which party will control the General Assembly for the next four years. The
governor, who has always advocated putting aside much of the state’s surplus
for a rainy day, is apparently expecting rain on Nov. 7.
We imagine few of the 3 million eligible property owners – those who own
their own residences – will mind the $100-to-$125 rebates, no matter what the
governor’s motivation. After all, school property taxes have increased by $450
million in the past five years. And expect the measure to pass, since Ridge
has reportedly formulated the proposal at the urging of his fellow Republicans
in the General Assembly and Democrats have called for such rebates in the
past.
But aside from their expected personal and political windfalls, the rebates
have little merit as public policy. They will do nothing to redress the
state’s antiquated, inadequate and unfair tax structure.
State spending on education will continue to grow at a rate smaller than
the growth of school districts’ expenses, with local school property taxes
making up the difference. The state, which once provided 50 percent of the
money spent on public education, now provides barely 37 percent. Neither the
rebates, nor the homestead exclusion option – a property tax reduction for
homeowners funded by a local earned income tax – which has been accepted by
only three districts in the state, will fix the fundamental problem.
The real solution lies in joint reform of state and school taxes.
Altering the state’s regressive, flat income tax to apply slightly higher
rates to higher incomes would produce enough revenue to once again match the
amount raised by school property taxes and provide extra money for poorer
districts whose property tax revenues are inadequate.
School property taxes could be made more fair by allowing commercial and
residential properties to be taxed at different rates – essentially what is
already being done under the homestead option – and by requiring periodic
reassessments.
In the long run, that would put more money in the pocket of the average
Pennsylvanian than the election-year gimmick Gov. Ridge is expected to propose
on Tuesday.