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Will voters buy tax switch?

April 08, 2003

When Gov. Ed Rendell proposed changing the way Pennsylvania funds its schools, we warned that some lawmakers would be wary of voting to raise the income tax, even if it were coupled with a decrease in the property tax.

Now state lawmakers are beginning to hear from single citizens who rent property and don't like the idea. Clearly there's a big sales job to be done before this will be anywhere close to being passed.

Before Rendell took office, the state's share of school funding had dropped from 50 percent in the early 1970s to 35 percent in 2001. As costs increased, local property taxes were increased to pay the bills, which state officials say put the squeeze on homeowners with fixed incomes.

As it is now, local property taxes have increased by an average of 55 percent in the last 10 years. To curb those kind of increases in the future, Rendell proposes raising the state income tax from 2.8 percent to 3.75 percent.

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Homeowners and the elderly vote in greater numbers than single citizens, so their interests would probably carry the day if not for another fact: It's easy to cast a vote to cut property taxes, but not so easy to vote to boost income taxes.

Incumbents know that such a vote would invite challengers to portray them as tax-and-spend liberals, even though the idea is to shift the burden from those who've paid taxes all their lives to those in their peak earning years.

We haven't heard any serious objections to the plan, which would equalize expenses across the state and direct more money to the neediest school districts for things like pre-school and all-day kindergarten programs. The plan can't be summed up in a slogan, but could easily be attacked by political challengers who won't bother sharing all the plan's details in their ads.

One of the strongest arguments in favor of the plan should be that it encourages property ownership. Those who own rather than rent are eligible for a variety of tax breaks. And when the property is paid off and the owner retired, it will be more affordable to stay in the house.

The current deadline for approving the state budget is June 30, which means that lawmakers have about three months to educate voters. We recommend that they not wait too long to start.

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