Chester County District: Call for relief from property taxes

Voters will get a chance to shift their tax burden from a levy on property to one on their income.

Posted: May 02, 2007

Janet Puriefoy has lived in Coatesville for four years, but Puriefoy and her husband are moving out as soon as they can and heading south, possibly to North Carolina.

Her number one reason for hitting the road - property taxes.

"It's a lovely area, but it's ridiculous, these prices," said Puriefoy while she ate her lunch at the Exton Square Mall recently, referring to the nearly $6,000 per year she and her husband pay in property taxes, up more than $600 from when they bought their house.

Governor Rendell and the state legislature answered the call for property-tax reform last year with Act I, a law that requires a referendum vote on a proposed partial shift from property to income taxes in every school district in the state outside of Philadelphia, Pittsburgh and Scranton.

Every district must have a question on the May 15 primary ballot giving voters the option to shift a percentage of their school property tax to a new income tax or, by rejecting the proposal, leaving things as they are.

The jargon-filled explanations that those in the know (lawmakers, school-board members, etc.) give when asked about Act I can leave you more confused than before you asked.

What it all boils down to though is this: If these proposed taxes are approved, most residents won't see an across-the-board cut.

Instead, they may pay less in taxes on their homes and more in new earned-income taxes (salary only) or personal-income tax (salary, dividends and interest) to finance their schools.

While school boards can chose between an earned-income tax or a personal-income tax to put on the ballot, only two of the 14 school districts that fall in some part of the county - the West Chester Area and Twin Valley - have opted for the personal-income tax.

This may all be a moot point, however. If voter sentiment in the food court at the Exton Square Mall is indicative of feelings about Act I across the county, then the tax-shift referendums don't stand a chance.

"I'm going to vote against it," said Desiree Cresta, 27 of West Grove, who has lived in the Avon Grove School District for three years. "It's going to end up costing us more money."

Those who stand to benefit from Act I are low-income homeowners or retired seniors. Almost every other demographic group would pay more than they would save in property taxes. Especially hard hit would be renters, who would pay the tax but receive no property-tax relief.

The tax shift may also be doomed by sheer human nature. Every district's ballot question includes the words "impose" and "tax," words that generally trigger an automatic negative response in any person.

"My initial reaction is why the hell do they need more money?" said Dennis Ewing after reading Coatesville's ballot question. Dennis and Jennifer Ewing have three children in Coatesville schools. Being told that the referendum is not technically a tax raise but a shift had no effect on their opinions.

"Trust me, we live in Coatesville, our taxes will increase," said Jennifer Ewing, who said that her family would not benefit from the proposed tax shift.

Act I is not a partisan issue in the county. In Tredyffrin, for example, both Democrats and Republicans have come out in opposition. The Coatesville Taxpayers Alliance, a citizen organization started years ago to fight the spiraling tax rates, is staunchly opposed to Act I.

"The taxpayers alliance does not believe this represents tax reform," said Rick Ritter, former president and current member. Alliance members have posted signs, held community meetings, and appeared on local radio stations to spread the message to vote no on May 15.

"To take a chunk of income tax that high out of the city of Coatesville, that would kill revitalization efforts," said Ritter. What message does Ritter hope a defeat of Act I would send to the state legislature?

"To go back to work," he said.

Back at Exton Square, there were some who spoke in favor of the shift. Ed Rader, who lives in Honey Brook with his wife and three kids, studied the ballot question for Twin Valley before deciding that he would probably vote yes.

"I think I'll save a little bit of money," he said.

"I think I'd vote for it," said Evelyn Cole, who has lived in Downingtown for 40 years. Cole's friend Mary Jo Flaherty, a Coatesville resident for 48 years, agreed.

"Since I'm no longer working, I wouldn't have to pay it," said Flaherty of the income tax.

Seniors are Act I's greatest hope of survival. Though the tax shift would benefit most seniors, the AARP is asking its members to consider more than just their personal finances when voting.

"We are telling our members to look at it in terms of the makeup of their community," said Ray Landis, advocacy manager for AARP in the state. "Would this shift be most fair for most people in their communities?"

"I think we could have made a better version of this, that would seem fairer to a larger number people," said Douglas Doren, school-board president in Kennett Consolidated School District.

He applauded the legislature's intentions to lessen the burden for low-income earners, but cautioned, "It's more complicated than that, and the benefits to our taxpayers are not so clear."

Doren said that of the many people he has discussed Act I with in Kennett, including several seniors, he has not spoken to one person in favor of the tax shift. "I don't know if there is a single solution that will simultaneously meet the needs of schools so that the tax burden on some people isn't too large," he said.

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