What’s It to Be on Property Tax Relief, PA Lawmakers? Reverse Robin Hood or Relief for Renters and Middle-Class Homeowners

Stephen Herzenberg |

This is an appeal to legislators in rural parts of Pennsylvania and in high-property tax areas such as the Poconos: we think that the evidence shows clearly that your constituents would benefit more from distributing the property tax relief promised by the tentative budget framework in a fair way, including a rebate for renters. There is a danger, however, that this relief will be distributed in an unfair way, without a renter rebate and with much tax relief going to businesses and high-income homeowners.

So unless you enjoy playing reverse Robin Hood — taking from the poor to give to the rich — more than representing your constituents, you need to raise your voice with legislative leaders. It is especially critical that Republican lawmakers raise their voice: if they do, a bipartisan consensus for fair distributions of property tax relief should be an easy win.

Here’s the background to our appeal. Yesterday, in an analysis of the tentative state budget framework, the Pennsylvania Budget and Policy Center (PBPC) highlighted that this budget proposal would collect revenues for property tax relief from Pennsylvania’s most regressive tax — the sales tax. As a result, it is critical that distribution of tax relief be done in a fair way that offsets the impact of the sales tax.

Specifically, we called for a renter rebate as well as for property tax relief that targets moderate- and low-income homeowners, not businesses and affluent homeowners. Without a renter rebate, we explained, low-income renters could end up paying several hundred dollars in additional sales tax while getting nothing back in relief. If we combine revenue from an unfair tax with unfair distribution of tax relief, the net impact would be — ta da — unfair. That’s that reverse Robin Hood thing.

We also noted yesterday that many Republican legislative districts, including most of rural Pennsylvania, would benefit from fair distribution of property tax relief, including a renter rebate — more like the distribution proposed by Gov. Wolf’s original plan than like the Republican property tax relief plan that passed the House. We documented in a late July trio of briefs how a fair distribution of tax relief benefits rural areas and many high-property tax areas — in fact, most parts of the state except affluent suburbs (that, after all, aren’t clamoring for and don’t need tax relief).

After we laid out our arguments, we read today an Associated Press story quoting Gov. Wolf acknowledging the burden of the sales tax on lower-income people, including renters, and also highlighting, accurately, that the governor would have preferred that some of the revenue for property tax relief come from an income tax increase (which falls less heavily on lower-income Pennsylvanians). The better news in that story was a statement that “Wolf and Republican lawmakers are still battling over how that money would be distributed, a major point of contention in the ongoing negotiations.”

From our perspective, the governor and Republican lawmakers shouldn’t be battling because a fair distribution of relief, including a renter rebate, benefits the constituents of most legislative districts. So all we need is a bipartisan group from rural and high-property tax areas to step forward and say: “hey, that reverse Robin Hood thing is not working for me. I’d rather give hard-working families, my constituents, some relief.”

print