Eliminating Property Taxes Once and For All

By Russ Diamond

...transcript of an argument on why and how Pennsylvania should eliminate property taxes; originally presented at a public debate held on April 18, 2008

All men are born equally free and independent, and have certain inherent and indefeasible rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness.

I want to underscore that this is Article I, Section 1 of our state constitution. Not Article V. Not section 23. It's Article I Section 1. There's a distinct reason why our right to acquire, possess and protect property is one of the very first among many inherent rights listed in the Declaration of Rights. And let's be clear - these rights are declared. Nobody was asking permission for the right to acquire, possess and protect property. The framers declared these property rights, using this exact wording from the very beginning in 1776.

The reason that property rights are listed at the beginning of the Declaration of Rights is because the people who founded this commonwealth and created our frame of government clearly understood that private property is the cornerstone of a free society. Without property, there is no freedom. Without property, none of our other inherent rights make much of a difference.

But don't take my word for it. Section 124 of John Locke's Second Treatise of Government, written in 1690 and pre-dating the Pennsylvania Constitution by nearly a century, states:

The great and chief end... of men's uniting into commonwealths, and putting themselves under government, is the preservation of their property.

With the importance of our right to acquire, possess and protect property firmly in mind, let me read some highlights of a letter recently written by a deputy sheriff to David Baldinger of the Pennsylvania Taxpayers Cyber Coalition:

Imagine having someone knock on your door as late as 10:00 P.M. You answer the door and are faced with two or more Deputy Sheriffs in full uniform with a marked sheriff's car outside. The local police may also be on hand in the event of a problem. The neighbors may be watching. One of the deputies presents you with a court order stating that you are being evicted from your home due to unpaid property taxes.

You're advised that you have fifteen minutes to vacate the premises. Your wife starts crying, your kids are screaming and it gets ugly. Emotions are at their highest. You're followed through your home and allowed to pack a few bags before you're escorted off your property. Your vehicles may be seized as well, forcing you and your family to leave on foot. A latch and lock bolts are attached to the doors of your home and notices are posted that your property is now available for Sheriff's Sale.

This is a real life reenactment of what we do. It's dirty, disgusting and shameful.

Now if the chief reason for creating government is to preserve our property, how is it that agents of that very same government are assigned the task of taking our property from us? To me, this is an indication that somewhere along the line, the tables have turned. We are no longer treated as free individuals with inherent rights, but as subservient subjects begging for privileges.

This ultimate obliteration of our inherent right to acquire, possess and protect property is enough reason alone to eliminate property taxes in Pennsylvania. But if we need more ammunition, then all we need to do is examine the way that tax is assessed.

I don't believe there's a single person in this room who could argue with a straight face that property tax assessments in Pennsylvania are uniform or fair. Uniformity, it should be noted, is required for all methods of taxation by Article 8 Section 1 of the Pennsylvania Constitution.

Even when this unfairness is officially recognized, as it was by a Lebanon County judge who recently ordered the county to reassess all properties by 2012, the so-called solution guarantees no more uniformity or fairness than the problem. Ask anyone who knows - the result of any reassessment process is that one-third of the properties will be given a fair assessment, while the remaining two-thirds will be assessed either too high or too low. And don't forget the cost of assessing properties for the purpose of taxation. It's estimated that the upcoming process in Lebanon County will cost as much as 3 million dollars, or about 55 dollars for each parcel of property in the county. Is a final report that's 67 percent wrong really worth 3 million dollars of our hard-earned money? No other form of taxation carries such a high cost just to determine what the taxable base is.

But let's not place blame for this problem with those who aren't at fault. Although school directors, county commissioners, city council members and township officials have no incentive whatsoever to make sure that property taxes are uniform or fair, they are only trying to do the best they can with the tools they have. For the most part, these local officials are prohibited from using other methods of taxation to raise revenue.

The finger of blame should be pointed squarely at Harrisburg, as the property tax problem is a statewide problem and can only be addressed by statewide action.

For more than four decades, efforts have been made in Harrisburg to ease our property tax burden. Various revenue replacement and/or rebate schemes have been suggested and tried, but all have failed to satisfactorily solve the problem. Certainly, none have even come close to putting government in the position of unquestionably reestablishing our right to acquire, possess and protect property.

If we really want to eliminate property taxes once and for all in Pennsylvania, the only proper way to do it is with a constitutional amendment. If we choose instead to use statutory law, there is nothing to prevent the General Assembly from reversing that law and reinstating property taxes. And as we witnessed with the Supreme Court's ruling on the slots law in 2005, such a reversal could occur without any debate or notice whatsoever. A constitutional amendment, on the other hand, would require a vote of the people to overturn.

To be successful, such an amendment should include three key features.

First and foremost, a constitutional amendment to eliminate property taxes must not be dependent upon any particular revenue replacement scheme. Usually when I speak on this subject, the most common question I hear is 'how do you propose to replace the revenue?' The correct answer - and I don't mean to be flippant at all - is 'I don't care.'

No matter what revenue replacement scheme we end up with, it is sure to be more uniform, fair and less expensive than property taxes. But we cannot continue to allow various special interests to divide and conquer us based on the method of revenue replacement. In fact, doing so is like putting the cart before the horse.

For this reason, the second key feature of any constitutional amendment to eliminate property taxes is a set period of time - I propose up to five years - for the General Assembly to address the revenue issue. During this time, our well-compensated best and brightest in Harrisburg can engage in great debate with the understanding that they absolutely, positively must come up with an answer, because we the people have given them a firm deadline.

The third key feature of such an amendment is a protection against any taxing authority taking unfair advantage of taxpayers during the interim period.

With these things in mind, the wording for such a constitutional amendment could be relatively simple, as follows if one were adopted today:

Taxation, assessment or valuation of real property by any taxing authority or jurisdiction within the Commonwealth shall be prohibited after June 30, 2014. Until that time, no taxing authority or jurisdiction shall increase property tax rates, assessments or revenues by an amount greater than a localized combination of inflation and population growth.

To sum up my argument, property taxes must be eliminated in Pennsylvania in order to protect our inherent and declared right to acquire, possess and protect property, the cornerstone of a free society. It is imperative that we accomplish this with a constitutional amendment that is independent of any particular revenue replacement scheme and sets a firm deadline for the General Assembly to react.