Learn About Pennsylvania’s Proposed Property Tax Constitutional Amendment

On Tuesday, November 7th, we’ll head to the polls to vote on a variety of offices including judicial races.  You’ll see a question on the ballot about a proposed amendment to the Pennsylvania Constitution.  It’s important to be aware of this ballot question and potential ramifications it would have on education funding.

First, a quick background. An amendment to the PA Constitution can happen when both chambers of the General Assembly vote affirmatively on the amendment in two consecutive sessions.  After that, the amendment is put to a vote of the electorate.  And, that’s where we are in the process.  The General Assembly has voted in the affirmative in the past two sessions and now you have the chance to have your say.

The proposed amendment would allow the state constitution to be amended to permit the General Assembly to enact legislation allowing local taxing authorities to exclude from taxation up to 100% of the assessed value of each homestead property within a taxing jurisdiction.

What that means is that by voting yes, you are allowing our legislature to pass legislation that would allow any local taxing authority, like a school district, to increase up to 100% of the assessed value of a home as excluded from paying taxes.  Currently, these local taxing authorities can reduce up to 50% of the assessed median value of a home from taxes.  It’s important to note the percent currently reduced by this law is different in every school district.

This amendment is an attempt to reform property taxes which are the main way our schools are funded.  If a majority of Pennsylvanians vote to approve this amendment, nothing changes on November 8th.  Voting yes allows the General Assembly to draft legislation that would then allow local taxing authorities to change the percentage of their local exclusions.

Here’s a very important point to know. Changes to the local exclusion rate can be provided only if enabling legislation is signed into law, and if the state can provide revenue to fund the increased homestead exclusion. It is important to be aware that, even if legislation is enacted, these homestead exclusions are only possible if there is some source of new revenue to fund them. And based on how we’ve seen budgets at the state and local levels play out this year, that’s not a simple task.

Many advocates for voting yes on this amendment see it as eliminating property taxes and thus lowering taxes.  That’s not likely given that any money lost from this legislation would have to be made up to continue education and other public services.  Eliminating property taxes without a way to replace that funding would create a new problem.  Some speculate that it’s possible funding would be made up from increases in broad based taxes like sales or wage tax.

There is a separate bill in Harrisburg already to completely eliminate property taxes and replace them with a sales and wage tax increase.  That bill is separate of this amendment as this amendment does not eliminate property taxes – rather it would allow for their reduction.

Learn More About Property Tax Reform

Text of the Proposed Constitutional Amendment

Text of SB76 to Eliminate Property Taxes