York Suburban tax reform talk ends when public speaks up
Community members learned about school property tax reform Wednesday evening, but not as much as some would have liked, as a moderator ended the event when the audience tried to ask questions outside the agreed-on channels.
The meeting, which took place in the York Suburban High School auditorium, featured speakers Wayne McCullough, of the Pennsylvania Association of School Business Officials, and state Sen. Mike Folmer, R-York and Lebanon counties.
Both spoke at length about state legislation regarding property tax reform, specifically state Senate Bill 76, otherwise known as the Property Tax Independence Act. The bill aims to eliminate school property taxes while raising personal income taxes and increasing and expanding sales taxes to help offset public school funding.
State Sen. David Argall, R-Schuylkill, introduced the bill last session. It fell one vote short of passing the Senate — 25-24, with Lt. Gov. Mike Stack casting the tie-breaker, according to The Associated Press. The vote split both parties, and the Pennsylvania School Boards Association opposed it.
Argall has said he will reintroduce the bill in the current session.
No public comment: In York Suburban, property taxes accounted for 72.8 percent of the district’s overall funding in 2015-16.
The event was moderated by Spring Garden Township resident and attorney Neil Slenker and included no public comment section, but community members were allowed to write questions on index cards for the speakers.
McCullough spoke first, stating that if the bill passed, there would still be a property tax to pay for district debt, which is not exempted in the legislation. Based on PASBO’s analysis, approximately 98 percent of school districts across the state would continue to levy a property tax because of existing debt.
McCullough reiterated that there would be tax increases elsewhere, including a personal income tax increase from 3.07 percent to 4.95 percent as well as an increase of the sales tax from 6 percent to 7 percent and an expansion of taxable products, including diapers and clothing purchases of more than $50.
McCullough’s main argument concerned the distribution of revenue gained under SB 76.
“It’s a shift of responsibility for taxes, and much of that money gets shifted and sent to the southeast corner of the commonwealth,” he said.
McCullough ended his comments by mentioning that Gov. Tom Wolf’s budget proposal, introduced Tuesday, had no mention of property tax reform, nor did it address other school-funding matters, including state-mandated pensions, charter schools and collective bargaining.
Folmer: Folmer began his remarks by quoting Section 1 of the Pennsylvania Constitution, which states in part that all men have “certain inherent and indefeasible rights,” including “defending life and liberty, of acquiring, possessing and protecting property and reputation.”
“I supported and continue to support Senate Bill 76 to eliminate school property taxes because I believe no tax should have the power to leave you homeless,” Folmer said. The statement drew some applause from the audience. “I don’t know how you can acquire and possess your property and protect your property if you never really owned your property.”
Folmer reiterated many of McCullough’s statements about tax increases but pushed back when discussing distribution of funds.
“There’s no funding that can be rated and shifted and so forth. This money goes directly to the school districts, dollar for dollar,” Folmer said.
He noted that should a school district need to raise additional revenues, it can raise either the personal income tax or the sales tax in its region, but not both, and only after the measure is approved in a districtwide referendum.
A large portion of school property taxes, Folmer claimed, fall on a small group of taxpayers, and increasing and expanding income and sales taxes will “expand that base so it falls on more shoulders.”
Questions: After Folmer finished his remarks, Slenker asked several questions submitted by community members. One question pertained to the volatility of revenues through sales and income taxes.
“In an economic downturn, how will school districts pay their bills?” Slenker read out.
Folmer, after checking with his chief of staff, said that he and others in the Legislature are working on an economic “cushion” to be included in the final version of the legislation to assist school districts that do not meet their budget requirements.
Another question from the audience asked why businesses would be exempt from paying school property taxes under SB 76 when businesses benefit from an educated clientele and workforce.
“Businesses don’t pay taxes — they pass it through. They’ll pass it through the costs of goods and services,” Folmer said. “Technically, you could say that businesses are getting off. I’m saying that we’re turning the whole state into a KOZ (Keystone Opportunity) zone.” KOZs are designated locations around the state that receive specific tax benefits, including exemptions, usually to spur economic activity in rural and urban areas.
'We're done': The event ended after several community members tried to defend a member of the audience who asked a question verbally and was denied. Audience members were prohibited from asking questions beyond the written ones.
Some of the audience members who spoke out had signs that read “End School Property Taxes NOW!”
As the event was winding down, several people rose from their seats to oppose Slenker passing over the spoken question, and he ended the event.
“We’re done. We’re done,” he said.
Several York Suburban school board members were pleased with the event.
“I think some people came with preconceived ideas,” said board member Ellen Freireich. “But I think it provided good information.”
Superintendent Shelly Merkle said the event was held because of the strong interest York Suburban residents have in their school district.
“We think it’s important that they’re educated in important topics, and this is certainly pertinent to them and to the future of the district,” she said.