Urges Senate to Vote “No” on Proposed Constitutional Amendment that Restricts Municipalities’ Ability to Challenge Tax Exemptions
Today, County Controller Chelsa Wagner, a former State Representative, voiced her opposition to Senate Bill 4 and she urged the Legislature to allow decisions on property tax exemptions to be made by local governments. Tomorrow at 10:00am, the Senate Committee on Finance will hold its first vote on Senate Bill 4.
Under the Pennsylvania Constitution, “purely public charities” are exempt from the payment of property taxes to local municipalities. Recently, an April 2012 decision of the Pennsylvania Supreme Court enabled local taxing entities to more aggressively challenge tax exempt status. Senate Bill 4 seeks to reverse the decision of the Supreme Court, removing power from local governments to set their own tax rolls at the very time that many cash-strapped municipalities are facing diminished support from state government.
“Harrisburg has a mountain of reforms that it should tackle. Property taxes foremost among them. Senate Bill 4 should not even be on the radar,” said Controller Wagner. “This obscure bill tramples the autonomy of local governments. This would be the farthest reaching constitutional amendment in my lifetime with a negative impact on every taxpayer and local government in the Commonwealth.”
Controller Wagner has been a leading advocate for greater transparency and scrutiny of tax exemptions in Allegheny County. Wagner has consistently cited the spiraling number of properties coming off the tax rolls, especially in struggling urban municipalities. When these properties leave the tax rolls, Wagner has said, it erodes the tax base and shifts a greater burden of local services to tax-paying property owners. Nearly 25% of all property in both Pittsburgh and Philadelphia is now off the tax rolls.
“Property tax exemptions are a privilege and not a right. These exemptions are determined by local governments, and given to organizations that provide services to their communities,” Controller Wagner said. “There is no reason for Harrisburg politicians to meddle with local control of exemptions. Since local governments are responsible for collecting property taxes, they must have the discretion to grant, deny, and challenge exemptions.”
In the previous sessions, a variety of local officials and organizations (including the Pennsylvania League of Cities and Municipalities and the Pennsylvania State Associate of Township Commissioners) opposed a previous efforts to pass a constitutional amendment (then Senate Bill 161). Wagner said that it is “incredibly concerning” that an amendment was being “fast tracked” in Harrisburg with little input of the public or local governments, and in absence of any actual evidence that a change to the Constitution of this Commonwealth is needed.
“With important issues like transportation, education, jobs, and the state budget on their agenda, the State Legislature has a lot of important work to do in the next few weeks and months. This unnecessary constitutional amendment should not be a priority.” Wagner said, “Oversight of tax exemptions is best left to those granting them.”
Controller Wagner issued a report in June 2012 detailing the impact of tax exemptions in Allegheny County and the changes in the legal environment that allow for local taxing bodies to have greater controller over tax exemptions. Chelsa Wagner represented the 22nd State Legislative District from 2006 until 2012, when she was sworn-in as Allegheny County Controller.