Gov. Blames Lawmakers For Property Tax Troubles

Governor Rendell is blaming lawmakers for the lack of any property tax relief, in a WGAL Story (though his is losing the WGAL blame poll badly) . Rendell isn't attacking Act 1 (which was his proposal) or the referendum loopholes (which he touted), but lawmakers' 2001 vote to increase pensions for school (and state) employees. He is correct about the rising pension costs (which will dramatically increase in coming years), but has yet to propose pension reform (click here from some ideas).

But the Governor paints over how flawed Act 1 is. The Governor isn't concerned that the referendum exemptions are for tax increases above an index, which in most cases is higher than the rate of inflation (the indexes range from 3.4 to 5.5%, and is based on wage data, not inflation). A 5% increase in property taxes (the average index) would mean a $1 billion increase in the next two years. In other words, $1 billion in gambling money in a couple years would not lower property taxes from their current level.

Of course, the Governor does acknowledged Act 1 isn't good enough: "The governor said he's not entirely happy with the property tax bill and that's why he wants lawmakers to raise the sales tax and use part of the money for property tax relief."

Of course, last June he called Act 1 the largest property tax cut in Pennsylvania history and he "congratulated legislative leaders from both chambers for a successful special session on property tax relief," while noting, "this bill delivers exactly what I requested and so much more."

On the other hand, our assessment of Act 1 last June turned out to be a bit more accurate.