Local professors weigh in on property tax issue

Kaley Egan’s two-run single give Lake-Lehman upset win over Tunkhannock in softball

WILKES-BARRE &#8212; Property taxes &#8212; everyone hates them. But is there a better alternative?That was the topic of discussion by a panel of local college professors &#8212; moderated by an expert on local government &#8212; at Wilkes University on Thursday night.Luzerne County Manager Robert Lawton welcomed the audience and explained how property taxes fit into the county&#8217;s revenue stream, comprising 85 percent of the $128 million general budget.He also opined that counties end up &#8220;net losers&#8221; when officials agree to Keystone Opportunity Zone (KOZ) and other tax break programs to attract businesses because, while they might spur economic development and certain tax revenue for municipalities, counties don&#8217;t see any during the course of the programs.Lawton introduced the moderator, Gerald Cross, executive director of the Pennsylvania Economy League, who provided a brief history of property taxes before introducing the panelists &#8212; Robert Seeley, associate professor of economics at Wilkes; Thomas Baldino, professor of political science at Wilkes; and David Sosar, associate professor of political science at King&#8217;s College.Seeley said economists look at three things when determining what makes a good tax: efficiency, equity/fairness, and low cost to administer and comply with it. If implementing a tax leads to a change in behavior &#8212; for instance, it deters people from buying certain foods because a tax was imposed &#8212; it&#8217;s not efficient.Property taxes, once thought to be regressive, are now thought to be progressive, Seeley said, as wealthier people tend to own more expensive homes and property and pay more. But, he also said administrative costs are high because of the need for regular reassessment.Baldino said most people have the mindset from a famous quote: &#8220;Don&#8217;t tax you, don&#8217;t tax me, tax that fellow behind the tree.&#8221; They want the tax that hurts them the least, regardless of the effect on society as a whole.He pointed to a 3-percent flat income tax, which is considered fair because everyone pays the same percentage. But, he asked, &#8220;Is that just? &#8230; Should a tax system provide &#8230; justice so that those who have a greater capacity to pay actually pay a little more than someone who has less ability to pay?&#8221;Sosar, who also spoke from the perspective of a Hazleton councilman, said he&#8217;s not ready to give up property taxes, but said they need to be adjusted so that they are just and fair. He said the very young and the elderly are unfairly affected by them more than everyone else.Several of the panelists referred to KOZ and LERTA (Local economic Revitalization Tax Assistance) programs as loopholes that are unfair and &#8220;a violation of equity.&#8221; Baldino said some companies open in whichever city or state &#8220;offers the best package,&#8221; but he also noted that the companies &#8220;tend not to produce&#8221; all of the economic advantages they promised.Panelists said that tax-exempt organizations, such as colleges, universities and hospitals, receive the same benefits as taxable entities, and it&#8217;s unfair to all other taxpayers that they don&#8217;t pay property taxes.When Lawton asked what can be done to foster economic development, panelists suggested consolidating local governments and regionalizing. A big complaint from business is that there are too many municipalities to deal with in Pennsylvania, they said.Seeley said counties and municipalities can implement split-rate property taxes, charging a higher rate for undeveloped property to encourage economic development.Cross noted that Lawton requested the panel discussion, given that &#8220;there&#8217;s not enough money to support what&#8217;s expected of the county.&#8221;