Fizzle of debate on property tax benefits Rendell Lynn Swann is pushing to overhaul the system, but analysts say the slots bill has defused the issue.

Posted: October 26, 2006

While the outcome of Pennsylvania's grand experiment in gambling remains uncertain, the early returns suggest that at least Gov. Rendell has hit a political jackpot.

Recall that lowering property taxes was a centerpiece of his 2002 campaign. After an epic struggle that consumed most of his first term, Rendell did get the legislature in June to agree on a modest tax cut.

Too modest, says his Republican challenger.

Lynn Swann is countering by proposing an ambitious overhaul of the property-tax system - one so radically different that the state constitution would have to be amended. But leaving aside the question of whether he could persuade the legislature to revisit the issue, Swann may have run into a more basic problem: No one seems to care.

Analysts say that since Rendell signed the slots bill designating a portion of gambling revenue for cuts in school levies, the tax debate has been muted - to Rendell's advantage.

"The slots bill is in no way true reform," said Thomas Baldino, a political-science professor at Wilkes University in Wilkes-Barre. But "I also think that voters are willing to give the governor a pass on the issue since he kept part of his pledge to help with property-tax relief."

Swann has argued that Rendell doesn't deserve a pass, that he failed to deliver on key promises made in the last campaign. Those include a pledge to cut property taxes by 30 percent and significantly increase the state's share of school funding.

The first round of the Rendell cuts will be closer to 15 percent - about $250 per homeowner in the Philadelphia suburbs - and will not arrive until at least 2008. (The Swanns, who pay about $30,000 in property tax annually on their six-bathroom Allegheny County house worth about $1.1 million, would get about $200 back.) As for the state's share of school funding, the percentage has increased only slightly.

The slots law expands relief for seniors, but working renters will not benefit. The exception is Philadelphia, where slots revenue will be used for wage-tax cuts. (Based on their government salaries of more than $330,000, Rendell and his wife, federal appeals court Judge Marjorie O. Rendell, could save about $900 in wage taxes.)

The law does not change the way property is assessed and taxed, but it allows school districts to increase income levies in exchange for lower property taxes if voters assent.

In a second term, Rendell would consider small increases in the state sales tax to further lower property taxes and add more state money to the education pot, said his policy analyst, Ian Rosenblum. Swann's plan could mean tax cuts in poorer school districts and increases in richer ones, though he has said no one would pay more.

"It's a substantial reform that would dramatically shift tax burden in the commonwealth," said Christopher Borick, a political-science professor at Muhlenberg College in Allentown.

Swann, however, has had trouble getting through to voters.

It might be too much for the electorate to wrap its mind around, said veteran analyst G. Terry Madonna, professor of public affairs at Franklin and Marshall College in Lancaster.

Swann is calling for an overhaul of a system that few understand anyway. He would replace the assessment method with one based on the sales price of a home, similar to California's system. In Pennsylvania, county appraisers assign an assessment to a property, and tax millages are applied to it. In most counties, the assessment is a fraction of the property's value. In Bucks County, for example, the assessment is supposed to represent 9.9 percent of market value; in Montgomery, 53.4 percent.

Swann would have the most recent sales price become the assessment until the house is resold. That means that new buyers would pay more taxes than longtime owners, a practice that is unconstitutional in Pennsylvania and would require an amendment. Swann would have everyone in a county pay the same tax rate - in most cases, 2 percent or less, or $2,000 per $100,000 of market value.

Contact staff writer Anthony R. Wood at 610-313-8210 or

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