BCT Editorial – 3/2/06

This page was last updated on March 2, 2006.

Wishful thinking; Editorial; Beaver County Times; March 2, 2006.

This editorial “subtly” argues against voter approval of school district taxes.

Below is a detailed critique of the subject editorial.

“Voting of school district tax hikes hasn’t helped keep Ohio’s rate down

“Most slots-for-tax-cuts proposals bouncing around Harrisburg come with a provision that would allow voters to have some say over school district property tax increases.

“But voting on school levies does not necessarily guarantee lower property tax bills.

“Just look to Ohio, where voters are famous for fighting increases in their property taxes tooth and nail.

“The Tax Foundation’s ‘State Business Tax Climate Index 2006,’ which was released on Monday, was broken down into five major categories, one of which was a wealth index. Property taxes were included as a sub-index within the wealth index and were weighted 50 percent.

“Even though the study was aimed at a state’s business climate, the Washington-based think-tank included property tax collections per capita and as a percent of personal income in its calculations because tax ‘collections as a percentage of personal income form an effective rate that gives taxpayers a sense of how much of their income is devoted to property taxes, and the per capita figure lets them know how much in actual dollar terms they pay in property taxes compared to residents of other states.’

“In other words, property taxes were a huge factor in determining and a realistic assessment of a state’s overall wealth-index ranking.

“Pennsylvania’s wealth tax index ranking was a nasty 45th, a clear indicator of the impact that school district, county and municipal taxes have on property owners. But Ohio’s ranking was even worse - 48th.”

[RWC] The author forgot to mention this index also includes the capital stock & franchise tax. PA’s CS&F tax rate is second only to West Virginia.

“So don’t get too excited about the possibility of voting on school district tax increases. Such legislation might turn out to be one of those ‘be careful for what you wish for you just may get it’ nightmares.

“In the end, it would help matters enormously if more state residents realized that Pennsylvania is not a high tax state. It is, however, an unfair tax state because of its archaic reliance on property taxes to fund school districts, counties and municipalities and some onerously high business taxes.

“It’s time to stop tinkering around with a tax system that is ill-suited and ill-equipped for the 21st century and anti-business and undertake realistic tax modernization of which property tax reform is but one part.”

[RWC] As a reminder, the Times idea of “tax modernization” is the elimination of local taxes in favor of taxes levied by the state and federal governments. An obvious result is an erosion of local control. That position is completely consistent with not liking the idea of local voters getting more “hands on” control of their taxation.

Of course there’s no guarantee voter approval of school district taxes will result in lower taxes. That’s not the point. The point is to give the voters more control. If that results in higher taxes, so be it. At least it was the will of the voters.