Pennsylvania’s longest-running tax dispute pertains to the heavy dependence on property taxes to fund public education. Persistent public antipathy and active litigation make property taxes for schools the all-consuming controversy. That does not mean other local tax systems are up to snuff and non-contentious.
County commissioners are laying out their 2020 legislative agenda. Due to elections, retirements, and occasional involuntary departures, prominent names among county leadership change. The priorities sound familiar, mostly because few big issues are finally and forever solved. Still, there are significant adds, mental health services being a big one.
As to commentary, standard observations include: what counties do is more extensive and consequential than most people realize; federal and state partially-funded mandates keep piling up and straining budgets; and constituents demand better service at lower price. That combination brings us to daunting reality – counties are tethered to an antiquated and constricting tax system. Hence the key question: Why does Pennsylvania treat counties like adults in assigning them chores, but like teenagers when holding back on giving them a checkbook?
The problem cannot simply be chalked up to fear of faulty governance. Nor are counties completely checkmated. Several larger counties have moved from the three commissioner arrangement into home rule. That puts more viewpoints at the table and offers limited possibilities for greater flexibility in making decisions, but no one is proclaiming the new setup equals problem solved.
While some officials find potential relief in the belief the feds and the state are obliged to fully fund their mandates, humans may be living on Mars before that happens. Even if that miracle would materialize, the restrictions tied to full funding would be absolutely suffocating to county autonomy.
A common option nowadays involves augmenting county services by fees. Judging by recent public hostility, that approach may be reaching the edge of utility. Opponents complain about being nickel-and-dimed to death. See vigorous disputes over stormwater fees in the Susquehanna River drainage basin. See uproar in certain counties over $5 transportation fees. And voters in smaller counties have defeated dedicated taxes for libraries, widening access and programming gaps.
Calls for reform go back decades. The sticking point? Those who run government and those who pay for government have wildly differing definitions of what might be acceptable. Mention a modern tax structure, and red flags flap all over the taxpayer landscape. With the current structure, people know very well what they dislike intensely, starting with property taxes. Of course, they are not all that fond of replacement taxes either. Which helps explain why state government constantly searches for taxes hitting relatively few entities as a way of paying for new or expanded programs.
As a new decade begins (at least as most people calculate these things), the word transformational is trendy in political speak. So this may be the juncture to take a serious look at transforming county taxation powers and cost-saving options. Not a nip here, and a tuck there. Design a structure where there is clear connection between level of responsibility and revenue generation ability. Avoid a monster mismatch such as schools being paid for largely by property taxes.
First off, this exercise requires suspending a pillar of Pennsylvania thinking: “We have always done it this way.” To tackle subjects such as tax authority and across-the-line service consolidation in a divisive and emotionally charged political climate cannot be done by a mysterious conclave of “experts” behind a curtain of secrecy. A broad-based task force including politicians and taxpayers, fiscal experts and tax technicians, employers and workers, profit and nonprofit institutions, big picture and detail types is the ticket. Public hearings in each region of the state, covering urban, suburban, and rural counties, are essential.
This needs to be about hammering out a fair and reliable structure for the future, not tilting the field by a taxation gerrymander. If it devolves into a cynical calculation of winners and losers, pitting generations against one another, the shelf-life will be negligible. This is very Government Administration 101. The plan has to work when plugged in and the numbers must add up over the long run. A lesser option could be to expand the home rule powers of counties, but that is likely to be too light in impact compared to tax restructuring.
No matter how intelligent the design, the plan will not prove of much value if the folks elected to operate the machinery summarily dismiss it. The task force product should be signed off by the counties through resolution before the General Assembly considers it. That removes from play those “heroes” tempted to demagogue by supporting the plan privately but opposing it publicly.
What about taxpayers suspicious whenever politicians “reform” taxes? An overhaul of county taxation powers is likely to require constitutional change. That gives voters the final say, just as they had in 1989 on the Casey local tax plan. While that plan was crushed, the dynamic here would be different. Voters would have a much more extensive period in which to review the full plan and weigh the contentions of advocates and opponents.
Admittedly, my perception is shaped by living in Dauphin County for forty-five years. The escalating responsibilities are by and large well-managed. The commissioners find ways to invest in items such as the park system that make the county more livable. Their overall effort impresses as efficient and effective, minus the showboating, sniping, and scandal that can plague other counties. Those who prove trustworthy with the current structure and its limitations should be equally trustworthy with a new financial apparatus that can be tailored to economic and family circumstances.
The fundamental question is whether we want to get off the treadmill of same problems, same agenda, same arguments, and same lack of solutions, year after year. If we give counties more discretion in how to carry out their manifold responsibilities, we repair federalism from the bottom up. That is consistent with Pennsylvania’s penchant and tradition for keeping matters as local as possible, with the advantages of familiarity and accountability that brings.
David A. Atkinson is an Associate with the Susquehanna Valley Center’s Edward H. Arnold Institute for Policy Studies.
Nothing contained here should be considered as an attempt or aid or hinder the passage of any legislation before the General Assembly.
The views expressed here are those of the author and not necessarily those of the Susquehanna Valley Center.