Panel’s `dream’ Tax Legislation Not Entirely Pleasant
Sunday, September 05, 2004 Page: 3B
SEVERAL MEMBERS of the Finance Committee of the Pennsylvania House of
Representatives have been touring the state, meeting with constituents to
discuss their proposed “dream” legislation.
Last month they were in Monroe County, where it was indicated there are
three major parts to their plan: elimination of a major tax, reduction of
another tax, and a mandate for greater fiscal responsibility among educators.
On the surface these appeared ideal subjects for a time when every seat in
the House of Representatives is among the many at stake, along with that of
the president, in the November election.
A closer examination reveals substantial problems. The major tax to be
repealed by this proposal is what they call the “school” property tax that
currently amounts to an estimated $8 billion. The tax to be reduced is the
current 6 percent sales tax, which would be reduced to 4.5 percent; however,
simultaneous with reduction their bill would eliminate all of the exemptions
under the present sales tax. The exemptions, as most of us know, cover the
essentials: food, most clothing, medical expenses, etc.
While the exemptions apply to everyone, they are intended mainly to ensure
that the poorest among us will not be denied the essentials simply because of
a tax.
Asked about this, the members brush it aside, saying they favor flat taxes
for everyone. Their attitude reminds one of Marie Antoinette, who when told
about the plight of starving French peasants, is claimed to have said, “Let
’em eat cake.”
The members might remember that Marie Antoinette and her husband were both
guillotined during the French Revolution.
The proposed reduction in the sales tax also raises the question whether
all of the need now met by its substantial contribution to the state’s annual
budget can still be met – though there is the increased application of the tax
– and still produce the estimated $8 billion required to eliminate the
“school” property tax. The current state budget provides $7.8 billion for
basic education in the 501 school districts. That amounts to an estimated 35
percent of the total cost. The $8 billion from property taxes also amounts to
about 35 percent. Together, these total about 70 percent of the cost of public
education. The question then is: Where does the school district go for the
remaining 30 percent?
True, they have access to one other source – the 1 percent personal income
tax (PIT). But each district is required to levy its own tax and every
district has a different tax base than the others. One percent PIT in rural
counties like Elk, Forrest, Tioga, etc. is much less productive than one
percent in Montgomery County or Bucks County, for example.
Committee members say that the school districts only need to be more
careful about how they spend their money. But the cost of education, like that
of everything else of the past 35 years, has been soaring. The need to keep
abreast of today’s world requires constant reinvestment in such things as
textbooks, computers and other teaching tools. Also, the legislators need to
remember that teachers are professionals just like doctors, lawyers,
architects, etc., and, like them, need constant investment in re-education
just to keep ahead of the demand. Few, if any, have greater responsibility,
for the future depends on the quality of education afforded every child.
Against such factors, the proposed “dream” legislation by members of the
committee falls apart. They have failed to consider consequences and
invariably this tends to convert dreams into nightmares.
Tom Bigler is professor emeritus at Wilkes University and a Times Leader
columnist. His column is available online at www.timesleader.com.
