Steel City Cowboy

Wednesday, September 05, 2007

Your Next School Board Meeting Will Be In Harrisburg

One of the major issues in Pennsylvania over the last couple of election cycles has been property tax "reform" or "relief." Personally, I think we should be grateful that Governor Rendell hasn't been able to deliver on one of the largest planks of his election platforms. The sort of reform he has pushed for is nothing short of an anti-market power grab for the strings of Pennsylvania's schools.

First, what's wrong with the Pennsylvania's local property taxes? The main criticisms of the current system, in which each school district levies taxes based on some sort of valuation of real estate, are that:

A: They aren't Constitutional. The Pennsylvania Constitution (Article VIII, S1) states that: "All taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws."

At least that's what a Court of Common Pleas Judge recently used to try to invalidate the property tax structure of Allegheny County. This seems to be quite a stretch to me, as it's pretty clear that this single sentence in the Constitution is there to prevent taxing authorities from capriciously slapping an onerous tax on an individual or class of individuals, eg. a minority group they are trying to run out of town. It simply means that within the area of a taxing authority, the tax laws have to apply across the board.

So really, the argument against Constitutionality is little more than a tactic in the battle against local property taxes with very little grounds in reality. This ruling is being fought, and, even if it doesn't fall, local tax structures will almost certainly blissfully ignore it without a magnification from some higher judicial or legislative authority.

B: They hurt those on a fixed income. While it's true that people on a fixed income (which is political code for the elderly on Social Security or people on some other kind of government support) can be forced from their homes by rising local property taxes, the Constitution actually gives the Pennsylvania General Assembly the power to exempt or relieve from real estate taxes people who, "because of age, disability, infirmity or poverty" (Article VIII, S2, b, ii) as long as the state reimburses the local taxing authority for the lost revenue.

So, the first argument against local property taxes seems to be more of a legal tactic than any kind of real objection. The second has a built-in remedy that the GA could enact if that were what they really cared about. With both of those complaints out of the way, what is the real gripe with local property taxes? I think that it is an attempt to centralize control of eduction at the State level.

One of the benefits of the current tax system that no one seems to mention is that it provides families with a very clear network of choices that allow them to balance their cost of living against government services and, in particular, the quality and timbre of public education. Local property taxes are an excellent way of letting the free market work on government and education. Yes, you can choose to live in a very safe, exurban area with instant access to all amenities and a superb school district. That's a very popular combination these days. So, what's the best system we know of when to balance supply and demand?

Duh. The market system, and locally set property taxes function in exactly that way.

The more desirable configurations of location and services will end up costing more in property tax. And if you think this is just theoretical, it isn't. People, loads of people in Pennsylvania, regularly move into different taxing districts to fine tune their particular needs. Think taxes are too high? Move two miles west into the next district where they are considerably lower. Not too keen on the level of service and education offered there? Well, then, I guess that your current taxes weren't too high after all.

Don't have kids, and want to live in solitude with no one to bother you, including the government? You can choose to live in a rural community with very little in the way of local government services and rock-bottom real estate taxes.

The choice, currently, is yours.

What advantage would there be to changing the current system? Under the current proposals: none.

All of the remedies under consideration at the State level involve reducing local property taxes across the board, or eliminating them altogether, and replacing them with statewide taxes: either sales, income, or a combination of both.

If you think that getting your local school board to listen to you when you have a complaint is tough, just wait until you have to go to Harrisburg to do it. As soon as our local school boards, horrible though they are, are relieved of their ability to adjust local tax rates, they also lose their ability to set local policy. As if our schools, even the good districts, weren't already weighed down by the grimy stink of bureaucrats more interested in their own retirement funds than in helping to educate America's next generation of innovators, leaders and workers.

Get ready for "if you want that State education funding, you have to do what we say." Of course, that already goes on to a certain degree, and it's a great argument to me for school districts staying as far away from Federal and State funding as possible, but when your entire school district's revenue is dependent on State-level funding, then we'll get the same kind of educational wizardry we see from the geniuses who have turned PennDOT into the laughingstock of the nation.

Pennsylvania's system of local property taxes could stand a few tweaks to be sure, but to let the State of Pennsylvania effectively remove taxing authority from school districts and bring it all under its bloated, corrupt umbrella would be a colossal mistake, and most likely the final straw on the back of Pennsylvania's already tax-broken economy.