Upcoming ballot question puts focus on future of property taxes

LANCASTER, P.A. --- The state-wide election is fast approaching for next Tuesday, November 7.

The referendum question on the ballot is asking if you want to see legislators take potential action on property taxes in the future.

Here is how the question appears on the ballot:

PROPOSED CONSTITUTIONAL AMENDMENT
AMENDING THE HOMESTEAD PROPERTY
TAX ASSESSMENT EXCLUSION
"Shall the Pennsylvania Constitution be
amended to permit the General Assembly to
enact legislation authorizing local taxing
authorities to exclude from taxation up to 100
percent of the assessed value of each
homestead property within a local taxing
jurisdiction, rather than limit the exclusion to
one-half of the median assessed value of all
homestead property, which is the existing law?"

The current amendment, passed in 1997, puts a cap of 50 percent exemption based on the average property value in a taxing authority's jurisdiction.

The proposed amendment is asking if property owners want to allow taxing authorities including counties, municipalities and school districts the possibility of providing up to a full 100 percent property tax exemption.

"The proposed constitutional amendment does not require any of these taxing authorities to exclude 100 percent of the assessed value of the homestead. It simply allows for the option," said Sen. Ryan Aument.

In sum, a 'YES' vote gives the legislature the ability to pass a law allowing each taxing authority to determine the property tax valuation, including up to a full exclusion.

A 'NO' keeps the existing 50 percent cap.

Lawmakers on both sides of the aisle lament the current cost of property taxes, but some worry a 100 percent property tax exclusion will mean more taxes elsewhere, such as income tax or sales and use taxes

"That includes a lot more people who aren't paying it now. However, we have to ask ourselves, ‘are the people that are going to have to be paying for that in any better position to be able to afford it?’ and I say no," said Rep. Carol Hill-Evans.

When the 50 percent cap passed in 1997, the legislature passed 'Act 50' allowing districts to tax up to 1.5 percent on earned income to make up for the difference lost by reduced property taxes.

"The question becomes property taxes or all other taxes," said Rep. Hill-Evans.

Supporters, such as Sen. Aument, say it gives taxing authorities the option to change this property tax valuation, should they choose to do so.

"Full homestead exclusion may not be possible for any particular school district or taxing authority today, but this amendment provides flexibility to those same entities in the future," Sen. Aument said.

Should the referendum pass, it doesn't mean property taxes will be eliminated next year.

Rep. Hill-Evans said this amendment would only be a step-one of the process.

For Sen. Ryan Aument's opinion on the referendum, click here.

For Rep. Carol Hill-Evans' website, which includes a frequently asked questions page, click here.