Pa. voters passed new rules for property taxes. So, now what?

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Homes like these on Spruce Street in University City have seen a rapid increase in rents and property taxes. (WHYY, file)

Homes like these on Spruce Street in University City have seen a rapid increase in rents and property taxes. (WHYY, file)

Pennsylvania voters Tuesday approved a ballot question that opens up the possibility of lowering or eliminating property taxes across the state.

The referendum frees state legislators to pass a law allow taxing authorities (counties, municipalities, and school districts) to exempt residents from paying any tax on their primary residences.

Previously, state law capped that exclusion at 50 percent of an area’s median home value.

Advocates have said that the longstanding reliance on property taxes, a primary source of school funding, hurts homeowners on fixed incomes.

But current revenue levels cannot be eliminated until municipalities first find a replacement. Income and sales taxes are the usual suggestions.

“However the revenue side of this shakes out, you are invariably going to be shifting taxes away from a homeowner and onto others,” said Ryan Briggs of City & State PA on Wednesday in an interview with NewsWorks Tonight’s Dave Heller. “Critics of the bill say there’s a regressive element to it, because you’re shifting the burden away from people who implicitly have a kind of wealth — their home — to people who don’t.”

Briggs says eager voters who approved the question on Tuesday will have to wait for relief, however. “It’s up to the General Assembly to actually do something with this new power they’ve been given through the constitutional amendment. If that happens, the municipalities would then have the option to act. It’s all optional.”

Clarification: This story has been updated with comments from reporter Ryan Briggs and to reflect the fact that municipalities must find a replacement for property tax revenue before they can eliminate it.

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