OUR OPINION: Why property taxes stink
Maybe now is the time to give serious consideration to sales tax alternative.

Source: York Daily Record
Publication Date: July 28, 2005
Page: 06

And so the state Legislature has scurried off for a couple months of summer vacation without managing to reform the Act 74 tax reform system that didn't actually reform anything.

Since we've got some time before our hard-working, second-highest-paid-in-the-land lawmakers go back to Harrisburg - when they've promised to reform the reforms - maybe we should start exploring some other ideas for funding schools.

It's obvious that property taxes are not a fair method. You've no doubt heard the stories (perhaps somewhat exaggerated) of little old ladies on fixed incomes having to sell their homes because they can't afford the taxes. But property levies aren't really equitable to anyone, regardless of income.

Want proof? Consider this example, provided by Joel Sears, an "unrepentant number cruncher" who's been an outspoken critic of taxes in his school district, York Suburban.

Mr. Sears took three property transfers listed in last Sunday's Homesource section of the newspaper from each York County school district. Then he went to the county's property assessment database on the Internet (http://ycwebserver.york-county.org/ycreval/). He compared the recent sale price of the property to the 2005 tax assessment, as well as to the recent 2006 reassessment.

The results are quite interesting, suggesting the assessments bear little relation to market prices. While most properties in his sample were actually assessed well under market values, some were assessed over actual market value. Very few came within a even few percentage points of the recent sale price.

Here are some highlights (we've eliminate actual street addresses so as not to shine a light on individual property owners, but you could try this exercise at home with randomly selected property transfers):

A home in the Central school district was assessed at $242,820 in 2005. The 2006 reassessment put its value at $300,070, a 23.6 percent increase. It recently sold for $400,000, meaning it's underassessed by 25 percent.

A home in the Eastern district was assessed at $72,780 in 2005. It was reassessed for 2006 at $89,250, a 22.6 percent increase. It recently sold for $47,666, meaning it was over- assessed by 87.2 percent.

A home in the Southern district was assessed at $82,570 in 2005. In 2006, it's $205,020, a 148.3 percent increase. It recently sold for $164,900, meaning it was overassessed by 24.3 percent.

Finally, a home in the Dover district was assessed at $148,300 in 2005, and reassessed at $143,590 for 2006, a 3.2 percent decrease. It recently sold for $235,000, meaning it was underassessed by 38.9 percent.

It's hard for any reasonable person to look at these figures and say that property tax assessments are equitable. Is this any way to run a tax system? Would anyone put up with, say, an income tax system that seemed to randomly guess at how much a person actually earned?

Wouldn't it be better to base public school funding on income (including "unearned," or investment, income), which better reflects ability to pay?

Or, how about an idea that's been floating around in Harrisburg for a couple of years to lower the state sales tax and expand it to include food and clothing, using the new revenue to fund public schools?

It's an intriguing idea and has the benefit, as Mr. Sears notes, of taxing everyone at the same rate. The tax on a $1 can of beans would be the same nickel no matter what district you live in.

There are some questions and concerns about the sales tax proposal - particularly whether it would hurt very low-income people. Some also worry it wouldn't raise enough revenue to fund the schools - or could result in wild revenue swings as the economy heats and cools.

But it's at least worth debating. As it happens, state Rep. Keith Gillespie, R-Hellam, will speak about the proposal at a public meeting tonight in Dover.

It's not exactly must-see TV. And it would be amazing if our mostly do-nothing Legislature ever enacted such a radical proposal. But why not come out tonight and hear what he and others have to say?