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as seen on phillyBurbs.com

Fast Eddie wants my wallet
Gov. Rendell's tax relief plan gives homeowners a break at the expense of renters.

One thing you have to say about Pennsylvania's new governor, he hasn't wasted time.

I can already feel Fast Eddie's hand groping in my back pocket.

If you haven't seen it yet, the Rendell administration has posted its budget request on the Web under the auspicious title "Gov. Rendell's plan for a new Pa."

Along with it, is a database that lets you calculate the effect his school property tax relief proposal would have on you.

That alone is quite an improvement over the dismal last attempt at tax reform by the Legislature. The homestead exemption act of 2001 was supposed to give the state's 501 public school systems power to decide how best to tax district residents and then allow homeowners to "apply" for some specific exemptions.

However, the size of the exemptions relied heavily upon a lengthy formula with numbers coming from the state. Its effect was incalculable at the local level until the final numbers were crunched. As a result, few school districts took advantage of it and few property owners caught a break.

This time, Rendell has applied the KISS (Keep it simple, stupid!) approach. But his idea of "tax relief" is really a misnomer, since the burden for paying is being shifted from property taxes to a personal income tax.

In terms even Rendell can understand: What one homeowner saves, many wage earners/renters have to pick up.

In my case - as a single, thirty-something, apartment dweller who can't afford to buy a home in Bucks County - that works out to paying $475 more a year in taxes or roughly another 1 percent of my total income.

Visions of H.G. Wells' "The Time Machine," in which mankind is finally divided into separate classes of haves and have-nots, suddenly spring to mind.

But that isn't why I'm against the Rendell plan.

Unlike a property tax reassessment or even the Homestead Act, Rendell's plan does not bar the state and school district from taxing me even harder in the first year of the change. In fact, Rendell is counting on it.

According to his Web site's calculator, my extra $475 would be spent like this:

  • $310 of the increase will be used to provide property tax relief and improve our schools.

  • $165 of the increase will be used to support economic development and other critical Commonwealth services and programs.

I've never counted economic development as being a "critical" state service, Ed, like say police protection or fixing potholes on the highways. I've always thought of it as corporate welfare to get businesses to stay here and a few to move here.

Rendell's plan does little to actually improve our school districts. Instead, it merely obfuscates the fact that he inherited a dysfunctional system run amok.

His plan sets no limit on what school districts can pay their politically powerful teachers' unions - the largest spiraling cost of any district - and no limit on how much school board can increase taxes in the future to pay for those contracts.

Under the current decades-old taxing structure, most municipalities are limited to 30 mills of property tax to pay for services like fire companies, snow plowing and road repair. (A mill is a $1 tax for every $1,000 of a property's assessed value.) If boroughs and townships want to tax above that ceiling, they have to go to a county judge every year and beg permission, a humiliating process.

For some reason - probably politics - school boards were never given a similar ceiling and continue to spend and tax unchecked.

That is, until fed up homeowners start showing up at school board and county commissioner meetings in droves complaining that they are being taxed to death. This explains the high number of school strikes in Pennsylvania.

And why Bucks County - home to some of the wealthiest teachers in the state - hasn't reassessed since 1972. Voluntarily agreeing to do so is considered political suicide by county commissioners because older homeowners - the people most likely to vote - inevitably end up paying more.

"I'd like to thank Dave for this first effort toward tax reform."

Rather than forcing the districts to live within their means, or even forcing counties like Bucks to reassess, Rendell's plan merely shifts the burden to a class of people who are less likely to show up to complain and even less likely to be heard.

Even if they do complain, the commissioners will be able to say their hands are tied by the Legislature while school districts can keep right on spending unimpeded.


If, like me, you don't like the governor's tax plan - or even if you love it - Ed wants to hear from you fast. To tell him what you think, click here.

Dave Ralis' Pave The Grass column appears on Mondays. You can send him an e-mail at . To read his previous columns, click here.

May 19, 2003