SEE ALSO:

- Proposal holds renters accountable for education funding
- City residents stand to lose under tax bill
- Tax relief plan would shift burden to workers

A managing partner at Waterford Associates' 840-unit rental business, Mark Woolley said some of his tenants have "three and four" children enrolled in public schools but hardly contribute to the cost.

Though renters who pay an earned income tax do contribute some, the bulk of education is funded through property taxes.

While Waterford pays more than $645,000 in property taxes per year on parcels valued at more than $29 million, the renters directly pay no property taxes -- though some argue their rent includes their landlords' property taxes.

"I've owned property since 1978 and never understood why people who live in apartments contribute half the students and don't pay any school tax," Woolley said. "It's handing someone a meal. Is that fair and equitable?"

Under a tax relief bill authored by Rep. Seth Grove, R-Dover Township, renters would be asked to field more of the cost of public education as funding shifts from property taxes to earned or personal income taxes.


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Fair share: Some property owners have long bemoaned the lack of contribution to education funding from parents who rent, and York City School Board president Margie Orr said she likes the idea of renting parents sharing the cost of

education with property taxpayers like her, who haven't had a child in school "in umpteen years."

And though the 67-year-old would benefit from the shift because she doesn't pay earned income tax, she said shifting could create another type of inequity between renters and businesses under the existing proposal.

The existing version of Grove's tax reform legislation would allow school districts to extend property tax breaks of at least 30 percent to all properties, including commercial properties, by raising earned income tax rates.

Another high-profile tax reform bill, House Bill 1776, would also extend property tax breaks to commercial properties through a similar shift. That bill has been tabled in the House Finance Committee.

Under Grove's proposal, each average-income, single renter would pay an extra $376 to $1,112 per year, depending on the school district, according to an analysis by The York Dispatch.

Contributions from renters would go to fund, for example, about $200,000 in tax breaks per year for Waterford Associates.

Some renters balked at the idea of paying more, especially if funding tax breaks for their landlords.

Making changes: Grove has said he plans to change the measure, House Bill 2230, to remove businesses such as Waterford and focus the property tax relief on only owner-occupied properties.

If Grove changes the bill according to plan, the analysis shows the cost to an average-income renter would decrease slightly, to between $321 and $848.

While the change isn't substantial, it might be a relief to renters such as 26-year-old Coventry at Waterford resident Chris Feliciano.

He said he's skeptical about whether his landlord would lower his rent, even if he and other renters were funding a tax break for Waterford. It would be more fair if relief were focused to homeowners instead of businesses, he said.

Feliciano earns less than $40,000 per year as a warehouse worker and would, as the proposal stands, pay about $700 more per year in earned income taxes to Dallastown Area School District.

Though renters were skeptical, Woolley said Waterford might actually lower rents. Partners could also decide to make improvements on recreational amenities or buildings.

"(The tax break) certainly wouldn't go into the landlord's pocket," he said.

Cost of business: The Pennsylvania Residential Owners Association Inc. favors Grove's bill as it stands, said Rita Dallago, executive director.

She said renters "already" contribute to property taxes, because they're passed along through the cost of business for landlords. So tenants will save money when their landlords do, she said.

Dallago's group, which includes local landlord group York Real Estate Investors, believes in a "trickle-down effect," under which renters would see rent relief to correlate with the tax breaks, she said.

There's a cap the market in each area will bear, and landlords would be pressured to lower prices to compete with others who have lowered prices, she said.

"I'm not going to tell you that across the board every landlord is a responsible business person, but for the most part, yes," she said. "If our taxes decrease and the landlord in one building decreases the rent accordingly, if a landlord doesn't decrease, they're going to put themselves out of business. At the end of the lease, (the tenant) has the option to move."

-- Reach Christina Kauffman at 505-5436, ckauffman@yorkdis patch.com, or follow her on Twitter at @YDYork County.