Policy committee wrestles with tax burden and the local/state divide

From education to housing to economic growth, Republican legislators return to the local and state tax burden as the issue holding back progress.

The House Republican Policy Committee, meeting on Tuesday in Montgomery County, worried about the unintended consequences of more government spending and growth.

“If there was ever a time in our lives when we needed less government, the time is now,” Rep. Josh Kail, R-Beaver, said. “We need less taxes, we need people to have control over their own destiny, and we don't need more decisions coming out of Harrisburg dictating to you all in your local communities.”

Wary of anemic growth and losing workers to other states, the plan is reforming and shrinking the reach of the government.

“Our economy is stagnant due to burdensome regulations and an uncompetitive tax structure,” said Andrew Holman, policy analyst for the Commonwealth Foundation. "Tax cuts are the best way to jumpstart the economy.”

Holman argued that tax reform would make Pennsylvania more attractive to families and business owners.

But the focus, too, fell on education.

“Pennsylvania has a long history of using complicated formulas to fund its public schools,” said Frank Gallagher, superintendent of the Souderton Area School District. “The way Pennsylvania provides funding to its public schools needs to change.”

He argued in favor of proposed funding cuts to the state’s cyber charter schools — which has Democratic backing but is less popular among Republicans — as well as fewer state mandates.

“One of the challenges, quite frankly, is the PSSA testing,” Gallagher said. “It takes way too long, it’s not an accurate test of what school is — that costs a lot of money, that’s a big cost driver.”

Schools don’t use the test results much to shape their actions; instead, he said, they pay more attention to national standardized tests that are also required.

Instead, Gallagher wanted policymakers to “focus on the growth of the whole child,” which includes data on academics, mental health, behavior, and even school attendance.

As much of state education is funded locally, that money makes everything else seem irrelevant.

“The school tax is the largest burden for all our residents. It’s 4.3 times the amount of local and county taxes,” said Keith Freed, the tax collector for Franconia Township in Montgomery County.

Freed used himself as an example: his property has an appraised value of $367,000; his county township taxes were $2,700, but his school taxes were $11,600.

As in many legislative hearings, testifiers also brought up housing prices.

“Houses have gone extremely high in our area and people that work for us almost can't afford to live here because of the high prices,” Wendell Weaver of the Alderfer Glass Company said. “We need smart policies, we need to reduce costs wherever we can.”

Kail argued that the General Assembly has to balance property taxes so they don’t get too high while not relying on state funds to solve all problems.

“What’s going on in Harrisburg, you see regions getting left out,” he said. “You see winners and losers being picked. My concern is, even reforming aggressively, how do we reform the property tax system — but also not have a system where Harrisburg is picking winners and losers.”