On November 7, 2017, Pennsylvania voters clicked “Yes” for the Homestead Exclusion Amendment. According to Commonwealth official election results, almost 54% percent voted for the referendum, which would allow local taxing authorities to exempt residents from paying property taxes on their homes.
The result will have no immediate impact on taxes until the state General Assembly passes legislation allowing up to 100 percent of a home’s assessed value to be exempted from property taxes. Indeed, if the intent of the referendum is realized in Harrisburg, counties, school districts, and municipalities are then bound to replace the funds collected from property taxes with other sources of revenue. However, Pennsylvania school districts hold millions in long-term debt that would need to be paid off. In fact, of the 500 school districts in Pennsylvania, nearly 90% have enough debt that taxpayers would continue paying property taxes in the future, regardless of legislation. Is 0% property tax realistic in the future for Pennsylvanians?
The PA Builders Association and many other groups think so. PBA encouraged a “Yes” vote on November 7. Continued pressure on the General Assembly to find new or expanded revenue streams coupled with this referendum could lead to a major tax overhaul. As Congress works on tax reform at the federal level with proposed changes to deductions, personal exemptions, and restructuring of overall tax rates, the proposed legislation’s effects will only heighten the issue for some time to come.