An Open Letter To Pennsylvania Property OwnersWe honestly don’t know what else to do. We need to reach each and every Pennsylvania Citizen Property Owner [don’t forget, we are the vast majority of Pennsylvania citizens!] and have you understand that school property tax (and possibly all property tax) elimination in Pennsylvania is possible now! We need to do this quickly, because our illustrious elected officials are soon going to let all of us down on a scale that has probably never happened before – even by voting themselves huge pay hikes in the middle of the night! How? By failing to pass the kind of tax and educational reform legislation that will accomplish a fairer tax base, eliminate property tax as the base for funding schools, and provide a more equitable system of overseeing and funding the education of our children. Instead, they (including and especially our governor, Mr. Ed Rendell) seem to feel that property owners will accept token tax relief that turns out to be a mere pittance which is anything but far reaching or permanent. This is clearly not acceptable!
We’ve decided to try cutting to the chase with an open letter to all Pennsylvanians. We challenge every newspaper and media outlet in the Commonwealth to publish it. If you don’t, shame on you. It will mean that you aren’t interested in covering the single most important issue facing all Pennsylvanians right now – even more important than the issue of illegal elected offical pay raises! And it will mean you aren’t really interested in helping all Pennsylvania Citizens to understand that tax elimination plans exist and are feasible!
First and foremost, we need our elected officials in Harrisburg to pass meaningful TAX REFORM legislation. They have had the opportunity at special sessions of the Pennsylvania General Assembly and Senate during the fall of 2005 – and failed! From my point of view, they are completely bent on serving their own interests (or are clueless) and not interested in actually doing anything meaningful and lasting for Pennsylvania property owners [remember; the majority of us!]. Part of that lack of interest stems from the facts that most Pennsylvanian’s either;
1. have not heard about proposals to accomplish property tax elimination – or;
2. have been confused and frightened of them by the very elected officials they sent to Harrisburg to protect their interests - or;
3. are not aware that our current system of funding education is falling apart and needs to be revised……we are all paying heavily for the mistakes and fiscal irresponsibility of local school boards!
Having set the basis for our open letter, here goes.
The Commonwealth of Pennsylvania is a Co-owner of our Homes:As a homeowner we co-own, or have co-owned, our property with a mortgage lender. Upon final payment of our mortgage we terminate this co-ownership and own our homes. Not true! We also co-own our homes with the Commonwealth of Pennsylvania as long as property taxes exist. If for some reason we are unable to pay our property taxes the Commonwealth can begin foreclosure proceedings. I would like everyone to take a close look at the “Constitution of the Commonwealth of Pennsylvania”. Article I clearly states that we have “the inherent and indefeasible right to acquire, possess, and protect property….”. Wake up homeowner’s! Your constitutional right to truly own (possess) your home is being violated. This is a possible ground for a future class action suit, certifying all Pennsylvania property owners as members of the class.
As a Renter how do I benefit from School Property Tax Elimination?At a minimum there will be rent stabilization. Landlords, each year as taxes increase, must raise rent to cover the cost of their tax increase. If there are no school property taxes levied the landlords can pass on this benefit to their tenants.
Many families, perhaps for the first time, will be able to consider the purchase of a home. Most families that rent can budget themselves, within reason, for housing costs. Property ownership however is quite different. Although people may be able to afford the dollar amount associated with a mortgage, they cannot afford the extra amount included in the mortgage for escrowed property taxes. For example, perhaps a family could handle $600.00 per month for a mortgage but when you add to that another $300.00 a month for escrowed taxes it becomes impossible. There is no way to budget for a mortgage when you receive notices every year that your mortgage payments are being increased by large percentages to build more funds into your tax escrow account because of rising school property taxes.
Property tax elimination may put families into their very first home!
Broadened Sales and Use Tax on Food, Clothing and some Services:Did you know that the PA sales tax instituted in 1953 was passed for the purpose of funding education? Ask your elected officials if 100% of these funds are currently being used for education purposes.
Across the nation 20 states charge state sales tax on food and 38 states charge sales tax on clothing. If this has been successful in other states, why can’t it work for Pennsylvania.
On an average grocery order of $100.00 approximately 30% of what is in your grocery cart is already taxed at 6%. If we can indeed lower the sales tax to 5% across the board, the typical increase on food would be about $3.20 on a $100.00 grocery bill.
Some of our legislators have played the “moral issues” card about taxing food and what impact it would have on the poor. Fortunately, in our State, we have systems in place to help the “poorest of the poor” by way of food stamps. This program is currently not subject to taxation so there would be no change.
Low-income families are classified as those that earn $32,000.00 or less for a family of four. In this low income group many own their own homes. The broadened sales and use tax cost is far outweighed by what would be saved in school property tax alone. Homeowner’s who pay $500.00 per year in school property tax (and this is a low estimate) would have to spend $10,000.00 per year on taxable commodities in order to equal what they pay for school taxes. That’s a lot of cash to spend!
Tax on clothing has also raised eyebrows. Again, look at the savings in school taxes before you think negatively about clothing tax. If necessary, there is no reason why families receiving food stamps could not receive tax exemptions on clothing by way of “clothing stamps”. Also, in the State of New York, for example, there are days set aside, especially end of summer for school shopping, where clothing is exempt from taxes. There is no reason why this cannot happen in Pennsylvania also. This can all be accomplished without a drastic impact on any group…poor, low income, middle class or wealthy.
Those that spend more will pay more. What could be more fair?
As far as taxing some services is concerned, again, look at your potential savings in school taxes and what you would have to spend each year to equal what you pay in taxes. If your school property tax is $1,000.00 you would have to spend $20,000.00 on taxable items; if your tax bill is $3,000.00 you would have to spend $60,000.00 on taxable items…you can figure it out from here! This money would now be in your pocket. Use it for children’s college funds, investing, buying a new car. Guess what? It would be yours to spend!
Business to business should not be exempt from sales tax. With what companies would be saving on property tax they can well afford to pay sales tax like everyone else. Businesses cannot fuss about adding sales tax to their services. This is of no cost to them and is passed on to the consumer.
Elimination of school property tax is also a great incentive for businesses to come into Pennsylvania. Relocation of business to Pennsylvania would be more appealing because of the break in property tax and the fact that the general consumer would have more money to spend because of a break in property taxes. Win – win!!
What could be better for the economy than an increase in industry in our State?
Real Estate Campaign Against Property Tax Elimination:The real estate industry promoted a large campaign against tax reform plans because of an increase in real estate transfer tax. Yes, the real estate transfer tax would increase by possibly 1%. This means ½ % to the seller and ½ % to the buyer.
What was not said was this: “the increase in real estate transfer tax could totally eliminate school property tax”.
Would you rather pay an extra ½ % at the settlement table or have a school property tax bill every year for as long as you own your home? Think of the savings…school property tax bills could be anywhere from $1,000.00 per year to $10,000.00 per year depending on where you live and the value of your home. You would save this amount every year for as long as you lived in your home!
Increase in real estate transfer tax is a “no brainer”. Ask any potential homeowner what they would choose!
If, after reading this, you find yourself among the millions of Pennsylvanians who are demanding some form of property tax elimination, it is imperative that you notify your elected officials and let them know that you will accept nothing less from them. Because only your overwhelming voice will steer them to pass such legislation and not allow them to pursue the disastrous course of token relief they seem to be heading toward! Your vote and your voice count in a free and democratic society – and it has never been more important for you to use both!
Elimination of school property taxes is a strong beginning…. let’s all work together to get this accomplished!
For more information -- daily updates and “de-bunking” – on issues surrounding this matter of such critical importance to all of us, visit our “blog” at
http://papropertytaxreform.blogspot.com/ or e-mail us with questions or comments at
nopropertytaxes@yahoo.com! If you don’t have a computer, get to a friend or relative who has one and keep informed and involved!
David and Helen Pool
Douglassville, PA
