Follow the Property Tax Money: The Wolf Plan and HB 504 Compared

Michael Wood and Stephen Herzenberg |

Pennsylvania is highly reliant on local property taxes to fund its public schools, ranking near the bottom of all states (46th) for state share of education funding. This reality has two serious and longstanding consequences. First, Pennsylvania has the most inequitable funding system in the nation, spending 33% more per pupil in its wealthiest school districts than in its poorest school districts.2 Second, low state support puts more weight on local taxpayers to support education funding, a particular burden on seniors on fixed incomes, young families and lower‐income homeowners.

To address these dual problems, Gov. Tom Wolf proposed a major property tax relief plan as part of his overall 2015‐16 budget proposal released in March. The Pennsylvania House of Representatives passed its own property tax relief plan in May, HB 504.1 Both plans rely on similar sales and income tax increases to pay for property tax relief and distribute over $4 billion in total tax relief, including expansion of rent rebates ($4.9 billion in the House proposal and $4.23 billion in the Wolf proposal.

The overlap between these plans suggests that Pennsylvania has a once‐in‐a generation opportunity for bipartisan reform to reduce property taxes where families and seniors struggle to pay them and to shift more responsibility for funding education from the local to the state level, thus enabling low‐ and middle‐income districts to adequately fund their schools. This is a promising area of potential compromise in the budget debate.

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