Because Pennsylvania farmers who own land are often left with large property tax obligations on an annual basis, some state lawmakers are leading the way to alleviate that recurring burden.
The Pennsylvania Farm Bureau (PFB) would rather see school districts fully funded through a combination of increases in the state sales tax and the personal income tax rather than through real estate property taxes.
Unfortunately, such a solution that was proposed in Senate Bill 76 narrowly failed to clear the state legislative body late last year, according to Mark O'Neill, the PFB's director of media and strategic communications.
“Farm families across Pennsylvania have long sought a more fair and equitable means of funding school districts across the commonwealth,” O'Neill told Crop Protection News. “It is disappointing that in a year where there appeared to be a large consensus of lawmakers interested in addressing property tax reform that nothing got done in 2015."
The Pennsylvania Senate last November was one vote shy of passing the long-running proposal contained in S.B. 76 to eliminate the school property tax and replace it with increases in state tax rates on sales and income. While the vote split among Republicans and Democrats with both party’s leaders and Gov. Tom Wolf opposing it, the legislation could re-emerge this year if there is more support for it.
Such state taxation change is critically important for farmers, according to the PFB.
“In order to run a viable business, most farmers require a large amount of land to raise their animals and grow crops, fruits and vegetables,” O’Neill said. “Since farmers own a lot of land, they face the burden of paying large school property tax bills.”
As schools face higher operating costs and pension commitments, school property taxes will continue to escalate, he told Crop Protection News.
“Unlike some businesses, farmers are 'price-takers' not 'price-makers,' meaning few farmers have the luxury of increasing the price of the food they produce to make up for higher property taxes,” O’Neill said.
S.B. 76, in fact, would have constrained the ability of school districts to raise taxes by requiring them to win voter approval to increase local income or wage taxes to spend above a proposed state allotment.
Going forward, the PFB will continue to have an open dialogue with members of the state's General Assembly and the Wolf administration to discuss the need for property tax reform and to work toward a reasonable solution.
“Throughout the year, farmers across Pennsylvania invite lawmakers to attend farm tours, county Farm Bureau meetings and other events to talk about key issues that impact agriculture,” O’Neill said, noting that property tax reform is one of the top priority issues for the bureau during 2016.