Overheated rhetoric and false promises on issues like property taxes and the PA budget lay the groundwork for voter revolt here.
The Pennsylvania horse racing industry gets about a third of the proceeds from casino revenue promised to homeowners. So are your property taxes too high? Blame your state representative and senator — they’re giving a big chunk of your property tax abatement money to a horse.
Last week’s vote by the British to leave the European Union should serve as warning to politicians here in Pennsylvania, and across the U.S.
In Britain, reasonable and cool-headed economic arguments proved no match for the anger of voters who feel they are being ignored, lied to, trodden upon, threatened, and left behind by a fumbling and bumbling, detached and cynical political establishment.
The seeds of the same sort of political upheaval are evident in Pennsylvania, and you don’t have to look long or hard to see them.
Nowhere is this more apparent in Pennsylvania than in the school and property tax issue.
In 2004, the legislature and Gov. Ed Rendell sold casino gambling as a panacea to lower the average homeowner’s property taxes.
But a dozen years later, despite record taxation of the state’s gaming industry, the average Pennsylvania homeowner has been left high and dry, with a bad deal at the crap tables.
In 2015, Pennsylvania casinos took in $3.1 billion in gaming revenue, while the state collected $1.3 billion in tax.
But last year the average Pennsylvania homeowner saw less than $200 in property tax reduction, depending on the school district. And some homeowners saw reductions of only $50 — chump change. It should go without saying: delivering only $200 from a spigot of $3.1 billion involves quite a bit of skimming.
Some lawmakers say the problem is that Pennsylvania’s school districts suck in $13 billion in revenues, while taxes from the casino industry only produce $3 billion.
But that’s only part of the story.
Casino revenues have been hijacked by the state’s politicians for purposes other than property tax relief. Casino revenue has been sidetracked to community development and tourism; walking around money for local governments; and ridiculous subsidies for the horse racing industry.
The Pennsylvania horse racing industry in fact gets about a third of the proceeds that should be going to homeowners. So are your property taxes too high? Blame your state representative and senator — they’re giving a big chunk of your property tax abatement money to a horse.
Who’s getting the money? Property tax relief graph (source Commonwealth of PA)
What else is going on here?
Casinos and racetracks of course provide a rich stream of campaign donations to the politicians.
Homeowners were never meant to really benefit from casino gambling, and they haven’t.
Instead, the average homeowner has been snookered, hoodwinked, and sold a load of worthless goods.
And the deception and snookering of taxpayers continues, with no end in sight.
The growing school and property tax problem is only a small part of larger problems left unresolved from previous years’ budgets.
Pennsylvania’s legislature is almost certain to do little or nothing about these problems in this year’s budget.
In fact, the big political question this week in Pennsylvania concerns whether our legislature — the second highest paid in the country — will actually produce a timely and balanced state budget that the governor will sign by June 30, as demanded by the state constitution.
In other words, will our over-paid politicians simply do their jobs?
This week no one in the capital city seems willing to bet a fiver on whether there actually will be a timely budget inked in two days. This underscores the uncertainty and lack of seriousness in what should be a certain and serious public endeavor.
This much is certain: there may be a timely state budget signed on or around June 30, but it certainly won’t be responsible, and it certainly won’t be balanced. How do we know?
Just this week, as he has for months, Gov. Tom Wolf warns that the state is in fact running a $1.8 billion structural deficit. And Gov. Wolf further complains that the GOP budget plan doesn’t address this deficit, and isn’t balanced.
But will Gov. Wolf still sign off on it anyway, aiding do-nothing politicians who want to get reelected, further hoodwinking voters?
Two weeks ago the legislature managed to pass legislation supposedly aimed at addressing the state’s pension crisis when everyone, including the bill’s sponsors, acknowledged that the bill was toothless, and will do little or nothing to address the state’s tremendous unfunded pension liabilities.
How bad is the pension problem?
No one seems to agree on the amount of the state’s unfunded pension liabilities. Some say it’s $40 billion. Others say it’s more than $50 billion. It depends on who’s doing the counting — which is another big and growing problem in Harrisburg. Even the numbers and the magnitude of our fiscal problems have become politicized.
Like the $2 billion structural budget deficit, it should go without saying, the pension problem won’t be addressed in this year’s sham budget either.
Leaders of both political parties may simply decide to bury the hatchet until after this year’s general election.
That way they can focus on doing what they really want to do: get reelected, and keep their cushy jobs with their automatic pay increases.
Simply put, they want to keep the party rolling for themselves — while the average Pennsylvanian is struggling, and can’t get ahead, and is falling behind.
So what’ll the lawmakers probably do this year for a state budget? They’ll likely give an extra $200 million to education (restoring the K-to-12 budget to near-2011 levels), throw in more sin taxes, and call it a budget.
But it won’t be balanced, and it certainly won’t be responsible.
And the great financial problems, and political fights, will only return next year, after these gerrymandered and tone-deaf good time charlies get reelected.
So expect our schools to worsen, and your property taxes to grow.
And expect no action on other growing problems.
But it’s not only a financial mess that these irresponsible lawmakers are leaving behind.
Their other great public legacy, on top of the public debt, is an angry and empty-headed political rhetoric.
Nowhere is this more evident than in the school and property tax issue.
I’ve been writing and talking about ideas to reform school and property taxes for decades.
This debate historically has been about shared responsibilities and burdens, and balanced, sound public policy.
But in the last few years irresponsible lawmakers have floated dishonest and sham bills like HB/SB 76, which supposedly would eliminate property taxes as a funding vehicle for public schools.
Truth is, only a broad mix of taxes can begin to replace property tax revenues for schools.
And let’s be honest: property taxes have been around for centuries, and aren’t going away any time soon.
Even as these lawmakers have dishonestly promised to banish property taxes, they’ve also loudly attacked public schools, teachers, and teachers unions.
The result is that few issues seem to risk being commandeered by empty-headed hysterics like the school property tax issue.
But there’s plenty of blame to go around for a system that’s clearly not working, and is only getting worse.
Who else is to blame, aside from the politicians?
One of the supporters of SB 76, GOP Sen. Mike Folmer, writes on his blog:
“Many attempts have been made to reduce property taxes. In 1965, Act 511 was passed to ease the burdens of property taxes through a myriad of other taxes, which included taxes on: amusements, mercantile and gross receipts, taxes on businesses, Realty Transfer Tax, per capita taxes, personal property taxes, occupation and occupation privilege taxes, and local Earned Income Taxes. These taxes proved to be equally unpopular and were changed or repealed over the years.
“In 1987, then Governor Casey and the General Assembly developed and sent voters a bipartisan plan that included expanded wage taxes, optional personal property and sales taxes for counties, use of the Realty Transfer Tax by municipalities, municipal service fees, property tax millage restrictions, and payments for tax exempt properties. That plan was overwhelmingly rejected by voters statewide four to one.”
So, pinch yourself: the state’s voters and property owners are also responsible, with our lawmakers, for our current school funding disaster.
We can rest assured that these irresponsible lawmakers and self-interest groups won’t let facts, or rational behavior, get in the way of their hot-headed arguments and finger pointing.
As our unaddressed fiscal problems get worse, expect the angry rhetoric to only heat up.
As we saw in Britain this week, average voters can get so worked up on issues of their own survival — and can get so angered that they’re being ignored — that it’s hard for them to hear reason.
That’s why it’s important that we address concerns raised by struggling homeowners.
But we also need to address the declining quality of our public schools, and the education of our kids.
Expect to hear more foolish calls to eliminate all property taxes, close public schools, fire the teachers, and outlaw the teachers’ unions.
As in Britain last week, as conditions worsen for the ignored underclass, expect them to ignore all reasonable arguments.
Then, the day after we’ve destroyed our schools and our commonwealth, and our two dithering political parties have self-destructed, as we’re now seeing in London, expect a realization to dawn on the hung-over public:
A Democracy needs public schools. Teachers must teach those schools. Those teachers have a right to a pension, and to protect themselves through collective bargaining.
And the enterprise must be paid in part or whole for by property taxes.
Teachers I know tell me real school reform will only come when parents get involved in their children’s education, and schools are no longer seen as baby sitting services, or family surrogates.
Let’s have a calm and reasonable discussion about that.
