BALLOT 2017: Understanding the Property Tax Referendum

This Tuesday, November 7, Pennsylvania residents go to the voting both to cast their ballots regarding candidates and issues. One issue on the ballot will ask voters to decide the following property tax question:

Shall the PA Constitution be amended to permit the General Assembly to enact legislation authorizing local taxing authorities to exclude from taxation up to 100% of the assessed value of each homestead property within a local taxing jurisdiction, rather than limit the exclusion to one-half of the median assessed value of all homestead property, which is the existing law?

Written in typical legalese, voters may find the question difficult to answer. A “Yes” vote means that you support giving the PA legislature the ability to grant local tax authorities the power to exempt up to 100 percent of a homestead property’s value from property tax. A “No” vote means that you do not want to give the legislature that power.

Should the referendum fail, the current 50 percent limitation will continue to apply and nothing much else changes regarding property taxes.

In the event the measure passes, however, it does not mean local property taxes are eliminated. There is still a complex political process to navigate and understand. Passage would mean, however, that if the law changes at some point, local jurisdictions may decide to provide additional property tax relief. They would either need to reduce spending or find other sources of tax revenue to make up the difference.

Property taxes are a polarizing and complicated issue for many voters, which is why these types of referendums occasionally pop up. And while the politics of the issue is challenging enough for many voters, understanding the referendum question itself shouldn’t be.

For more information about the property tax referendum, please visit the Pennsylvania Institute of Certified Public Accountants (PICPA).