Picking up where the last column ended, this final column proposes a healthy, balanced diet of revenue nutrients -- local options and revenue tools for our smaller cities to stabilize property taxes, attract homeowners and investors, build quality infrastructures, maintain public safety levels, create viable neighborhoods, and improve their bond ratings. The following are aimed at stabilizing if not decreasing the onerous property tax burdens in our core communities.
(8) 1% county option sales tax for public safety. Exempting food and clothing, this tax would generate revenue specifically directed at stabilizing real estate tax at the municipal level, paying for public safety and shared municipal services. According to one version of the bill originally introduced and long supported by Lancaster Representative Mike Sturla, 40 percent of the additional revenue raised county-wide through the levy would go to municipalities throughout participating counties to stabilize property taxes and support public safety costs. Fifty percent would go to the participating county governments to be used broadly to stabilize property taxes. The additional ten percent would be used to study and implement shared multi-municipal services programs aimed at stabilizing or reducing property taxes. The Pennsylvania League of Cities and Municipalities (PLCM), Pennsylvania State Association of Township Supervisors (PSATS) and Pennsylvania State Association of Boroughs (PSAB) support this legislation. Why have 40 states approved such a levy to strengthen their local municipalities while Pennsylvania waits?
(9) Redistribution of Johnstown flood tax tevenues to municipalities with high concentrations of tax exempts or 1/3 fair share minimums from tax exempt charities and non-profits. Pennsylvania has a very liberal definition of charities, with hospitals and private colleges lumped together with county governments, non-profits, and public colleges. That’s right. For profit hospitals and private colleges are exempt from property taxes. Undeniably, these tax exempt entities provide valuable services. Their presences and expansions require, however, public services and infrastructure – unfunded mandates, in effect.
A staggering 49% of the value of all properties in the City of Harrisburg, 38% in York, and 33% in Lancaster are tax exempt. York’s 38%, accounting for $604 million in tax exempt real estate, is disturbingly up from 27.3% in 2003. As county and federal governments, courthouses, administrative buildings, colleges, hospitals, churches, and non-profits – all tax exempt under Pennsylvania law -- grow, through expansions and appetites for more parking, these percentages creep upward, taking larger chunks of a limited piece of pie.
At the same time, state law does not require that cities be compensated at all for the ongoing public duties that such expansions impose. The unintended, problematic consequence of the creeping concentration and expansion of tax-exempts is that about 50% of each city taxpayer’s bill is due to the high concentration of tax-exempt property.
Here are two proposals. First, the legislature could resurrect House Bill 1018, which the legislature failed to act on in 2009. This bill would have distributed the state’s revenues, estimated to be $240,000,000 annually, from the 1936 Johnstown Flood Tax, which is an 18% levy on the wholesale of wine and liquor, to those cities that have at least 15% of their properties that are tax exempt. Passage of this bill would mean that at least one million dollars would come to the City of York annually to help offset the burden of its tax exempt properties.
Second, the legislature could require tax exempt entities, with the exceptions of public school districts, in municipalities in which at least 15% of the value of its real estate is tax exempt, to pay at least 1/3 of what their property taxes would be if they were owned by private entities. If the 1/3 requirement was enacted into law, York would stand to generate about $3.1 million in 2010 dollars, a fairer amount that more adequately represents the cost of public services associated with the non-profits. This amount is much more than the $700,000 that the city begs for and receives through its Fair Share Program, whereby non-profits admirably make voluntary payments-in-lieu-of-taxes (“PILOTS”).
The 1/3 requirement would be more reflective of the true costs that the city bears over time for the disproportionate concentration of tax exempt properties within its narrow boundaries. To date, a bill proposing the 1/3 requirement or something similar thereto has not even been introduced for discussion in the legislature.
(10) 7% county option alcohol per drink tax for infrastructure, public parking, mass transit, rail corridors, waterways, and rail trails. Philadelphia has a 10% alcohol per drink tax and Allegheny County has a 7% alcohol per drink tax, and their downtowns and nightlife are flourishing. Yet, all other Metropolitan Statistical Areas in Pennsylvania do not have the ability to consider whether such a levy would make sense for them, based on their inequitable funding predicaments, as well as infrastructure, public safety, and other demands associated with downtowns being cultural and nightlife centers. Currently, such a bill has not even been introduced for discussion in the legislature.
Note that local option revenue tools would not put businesses in community cores at a disadvantage with neighboring municipalities or encourage a cannibalizing of private business because they would be local option measures that, upon approval by county governments, would be implemented county-wide. Revenues would be distributed to municipalities throughout participating counties based on an equitable funding formula, compensating communities based on the percentage of their properties that is tax exempt.
Some of these measures undoubtedly will be opposed by special interest groups, and passing these and similar measures will require considerable bi-partisan cooperation, political will, and legislative and executive leadership.
But desperate times demand dramatic, comprehensive action.
We cannot fiddle while our little Romes burn, enter distressed status, or contemplate or enter bankruptcy.
The stakes are too high and the people too important. Comprehensive, bold, bi-partisan action is needed.
The 1.3 million people who live in our small cities, the five million of people who live in their Metropolitan Statistical Areas, and the hundreds of thousands who live in hundreds of other struggling municipalities deserve justice, a better quality of life, and sound, proud county seats and core communities.
We need the right balance of the five “Cs”, Carrots (aggressive performance-based tax abatements and exemptions to incent private development), Curbs, containments, or cuts (pension consolidations, pension and health care reforms, and arbiration reforms for long-term cost savings), Catalysts (grants, low interest loans, tax credits and other programs seeded by the state), Capabilities (reasonable revenue options and flexibilities for developing distressed areas), and Commonsense (a shared acknowledgment that our core communities, representing five million people in their metropolitan areas, are too big to fail, and a shared commitment to make them succeed).
Empowered by the five Cs, our 53 cities in the “T” and beyond and their borough brethren, 958 statewide, can radiate enlightenment, opportunity, and productivity throughout the Commonwealth.
An urban development, strategic planning, and public relations consultant, Matthew Jackson is the author of The Crisis: A Plea From York Town To Save Our Cities And Towns.
(8) 1% county option sales tax for public safety. Exempting food and clothing, this tax would generate revenue specifically directed at stabilizing real estate tax at the municipal level, paying for public safety and shared municipal services. According to one version of the bill originally introduced and long supported by Lancaster Representative Mike Sturla, 40 percent of the additional revenue raised county-wide through the levy would go to municipalities throughout participating counties to stabilize property taxes and support public safety costs. Fifty percent would go to the participating county governments to be used broadly to stabilize property taxes. The additional ten percent would be used to study and implement shared multi-municipal services programs aimed at stabilizing or reducing property taxes. The Pennsylvania League of Cities and Municipalities (PLCM), Pennsylvania State Association of Township Supervisors (PSATS) and Pennsylvania State Association of Boroughs (PSAB) support this legislation. Why have 40 states approved such a levy to strengthen their local municipalities while Pennsylvania waits?
(9) Redistribution of Johnstown flood tax tevenues to municipalities with high concentrations of tax exempts or 1/3 fair share minimums from tax exempt charities and non-profits. Pennsylvania has a very liberal definition of charities, with hospitals and private colleges lumped together with county governments, non-profits, and public colleges. That’s right. For profit hospitals and private colleges are exempt from property taxes. Undeniably, these tax exempt entities provide valuable services. Their presences and expansions require, however, public services and infrastructure – unfunded mandates, in effect.
A staggering 49% of the value of all properties in the City of Harrisburg, 38% in York, and 33% in Lancaster are tax exempt. York’s 38%, accounting for $604 million in tax exempt real estate, is disturbingly up from 27.3% in 2003. As county and federal governments, courthouses, administrative buildings, colleges, hospitals, churches, and non-profits – all tax exempt under Pennsylvania law -- grow, through expansions and appetites for more parking, these percentages creep upward, taking larger chunks of a limited piece of pie.
At the same time, state law does not require that cities be compensated at all for the ongoing public duties that such expansions impose. The unintended, problematic consequence of the creeping concentration and expansion of tax-exempts is that about 50% of each city taxpayer’s bill is due to the high concentration of tax-exempt property.
Here are two proposals. First, the legislature could resurrect House Bill 1018, which the legislature failed to act on in 2009. This bill would have distributed the state’s revenues, estimated to be $240,000,000 annually, from the 1936 Johnstown Flood Tax, which is an 18% levy on the wholesale of wine and liquor, to those cities that have at least 15% of their properties that are tax exempt. Passage of this bill would mean that at least one million dollars would come to the City of York annually to help offset the burden of its tax exempt properties.
Second, the legislature could require tax exempt entities, with the exceptions of public school districts, in municipalities in which at least 15% of the value of its real estate is tax exempt, to pay at least 1/3 of what their property taxes would be if they were owned by private entities. If the 1/3 requirement was enacted into law, York would stand to generate about $3.1 million in 2010 dollars, a fairer amount that more adequately represents the cost of public services associated with the non-profits. This amount is much more than the $700,000 that the city begs for and receives through its Fair Share Program, whereby non-profits admirably make voluntary payments-in-lieu-of-taxes (“PILOTS”).
The 1/3 requirement would be more reflective of the true costs that the city bears over time for the disproportionate concentration of tax exempt properties within its narrow boundaries. To date, a bill proposing the 1/3 requirement or something similar thereto has not even been introduced for discussion in the legislature.
(10) 7% county option alcohol per drink tax for infrastructure, public parking, mass transit, rail corridors, waterways, and rail trails. Philadelphia has a 10% alcohol per drink tax and Allegheny County has a 7% alcohol per drink tax, and their downtowns and nightlife are flourishing. Yet, all other Metropolitan Statistical Areas in Pennsylvania do not have the ability to consider whether such a levy would make sense for them, based on their inequitable funding predicaments, as well as infrastructure, public safety, and other demands associated with downtowns being cultural and nightlife centers. Currently, such a bill has not even been introduced for discussion in the legislature.
Note that local option revenue tools would not put businesses in community cores at a disadvantage with neighboring municipalities or encourage a cannibalizing of private business because they would be local option measures that, upon approval by county governments, would be implemented county-wide. Revenues would be distributed to municipalities throughout participating counties based on an equitable funding formula, compensating communities based on the percentage of their properties that is tax exempt.
Some of these measures undoubtedly will be opposed by special interest groups, and passing these and similar measures will require considerable bi-partisan cooperation, political will, and legislative and executive leadership.
But desperate times demand dramatic, comprehensive action.
We cannot fiddle while our little Romes burn, enter distressed status, or contemplate or enter bankruptcy.
The stakes are too high and the people too important. Comprehensive, bold, bi-partisan action is needed.
The 1.3 million people who live in our small cities, the five million of people who live in their Metropolitan Statistical Areas, and the hundreds of thousands who live in hundreds of other struggling municipalities deserve justice, a better quality of life, and sound, proud county seats and core communities.
We need the right balance of the five “Cs”, Carrots (aggressive performance-based tax abatements and exemptions to incent private development), Curbs, containments, or cuts (pension consolidations, pension and health care reforms, and arbiration reforms for long-term cost savings), Catalysts (grants, low interest loans, tax credits and other programs seeded by the state), Capabilities (reasonable revenue options and flexibilities for developing distressed areas), and Commonsense (a shared acknowledgment that our core communities, representing five million people in their metropolitan areas, are too big to fail, and a shared commitment to make them succeed).
Empowered by the five Cs, our 53 cities in the “T” and beyond and their borough brethren, 958 statewide, can radiate enlightenment, opportunity, and productivity throughout the Commonwealth.
An urban development, strategic planning, and public relations consultant, Matthew Jackson is the author of The Crisis: A Plea From York Town To Save Our Cities And Towns.
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