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Editorial - Time to pay attention

November 06, 1997

Editorial - Time to pay attention

Just 25 percent of Pennsylvania's eligible voters went to the polls Tuesday, but those who did managed to approve an initiative that will eventually lead to lower property taxes for homeowners. To prevent any unpleasant surprises, we recommend citizens who haven't paid attention up until now start educating themselves on this issue.

Here's the short version of what's happening: State officials who wanted to give a tax break to homeowners, particularly senior citizens on fixed incomes, were prohibited from doing so by the state constitution. And so they designed an amendment to provide a so-called "homestead exemption" that would allow business property to be taxed at a higher rate than owner-occupied dwellings.

Even then, officials figured, there would be a revenue shortfall, since there are more residential buildings than commercial/industrial properties. To cover that revenue loss, the state legislature would give local governments the power to impose a sales or personal-income tax.

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When this idea first surfaced, we counseled caution, saying that a combination of taxes that suited senior citizens - low property taxes and high sales and income taxes, for example - might chase young wage-earners and business executives away.

That local-option legislation has yet to be passed, but it's not too soon for the municipalities to begin thinking about how this amendment could change their areas. Some may choose to pursue tax policies that would favor new industry and jobs, while others might decide that they want to be retirement communities, with taxes low enough to ensure senior citizens could stay in their homes.

The important thing to remember is that the state is turning over a major portion of its taxing powers to the localities. After the legislature passes the local-option part of this package, citizens won't be able to blame Harrisburg for their tax woes anymore. As we said at the outset, if you haven't been paying attention to this issue, it's time to start.

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