BCT Editorial – 2/7/07

This page was last updated on February 9, 2007.

No free ride; Editorial; Beaver County Times; February 7, 2007.

Below is a detailed critique of the subject editorial.

“Property tax relief is a matter of tax shifting, not tax reduction.”

[RWC] Times editorials usually refer to tax shifting as “tax modernization.” It’s unclear why this editorial didn’t follow precedent.

“Despite what you might think about Gov. Ed Rendell’s proposal to raise the state’s 6 percent sales tax to 7 percent, the bottom line is that any local revenue that would be lost if school districts’ property taxes were cut would have to be replaced by funds from another source.

“In his $27.3 billion budget proposal on Tuesday, Rendell told lawmakers he wants to use half of the increase in the sales tax to expand the $1 billion a year in property-tax reductions that slot-machine gambling is eventually expected to generate. (Whether that prediction on gambling revenue turns out to be accurate remains to be seen. We think it’s overly optimistic.)

“The rest of the money would be used to finance other state programs, which is another matter altogether.”

[RWC] The editorial wants us to believe the Times is concerned about spending on “other state programs,” but that’s a deception. As I’ve asked before, when have we read editorials lobbying for spending cuts and restraint? Indeed, most Times editorials on this topic try to convince us we’re undertaxed and we need to spend more on any number of government programs.

For a list of editorials telling us our taxes are OK, please read my critique of “Looking ahead.”

“Of course, what Rendell proposes won’t necessarily come out looking the same after the Legislature gets done with it because the governor is only one of five players in the budget game. House Democrats, House Republicans, Senate Democrats and Senate Republicans - each with their own political needs and agendas - are going to have their say on the final budget product.

“Needless to say, the budget posturing is going to be hot and heavy.

“In one sense, Rendell’s proposal to use the sales tax to reduce property taxes is a start in the right direction. In the past, we have argued that the best way to reduce (but not eliminate) property taxes would be through a statewide levy on sale and/or income, and, without endorsing the specifics of Rendell’s proposal, we continue to do so.”

[RWC] Gee, the Times supports tax increases. What a shock – not.

The idea the Times supports reducing property taxes is not exactly true. The editorial “More please” told us “property taxes in Pennsylvania are not onerous” and lobbied for slot machine tax revenue NOT to be used for property tax reduction. The same was true for the editorial “Misplaced.”

“As this debate unfolds, state residents must remember that there is no free ride on reducing school district property taxes.

“What the state takes away on property taxes it must add to some other levy.”

[RWC] Did you note there’s no call for tax revenue neutrality?

There’s one other thing the editorial failed to note. With his new budget, commonwealth spending will have increased about 31% since Mr. Rendell took office in 2003, from about $20 billion to over $27 billion. Of course, Mr. Rendell shouldn’t shoulder all the blame. We have to remember we had Republican majorities in both houses of the General Assembly during this time.