Progress To Date
Since its launch in April 2014, the Pennsylvania State Land Tax Fairness Coalition has made substantial progress. With a compelling case to present and widespread support across the state, we are determined to continue our mission to even the scales in the interest of fairness to all Pennsylvania taxpayers.
You’ll find below a review of the coalition’s progress to date and our immediate and long-term goals:
1 -- Our coalition grew with the addition of two more statewide partners. Following research and discussion with our leadership team, the Pennsylvania Landowners Association and the Pennsylvania Forest Products Association endorse the mission of our Pennsylvania State Land Tax Fairness Coalition. Each of these organizations is pursuing a series of changes in public policy governing the acquisition of land by the commonwealth and forest management practices. At the same time, the two associations have affirmed their support for an increase in the state’s in-lieu-of-taxes payments to school districts, counties and municipalities.
2 -- Deep divisions in Harrisburg over the 2015-16 fiscal year budget and elements of a 2016-17 spending plan that’s due no later than June 30 have preoccupied lawmakers’ time and attention. Our coalition leaders have used the time to cement our support among Senate and House members and seek their counsel for revisions to our strategies.
3 -- Coalition leaders conferred in Harrisburg just before Easter to discuss our next steps. We’ll soon be scheduling a conference call with invitations extended to coalition members, Senate and House members who support the cause, and representatives of our partner organizations: County Commissioners Assn. of Pa., Pa. State Assn. of Township Supervisors, Pa. School Boards Assn., Pa. Assn. for Rural and Small Schools, Pa. State Grange and others. Details will be announced in early April.
4 -- Our leadership team has discussed a proposal to launch a public education campaign. Its goal would be to increase public awareness of the extent to which school districts, municipalities and counties are being victimized by the inadequate per-acre payments-in-lieu-of-taxes for state land. Newspaper and internet editorials/columns, meetings with news editors and other options are being discussed.
5 -- Representatives from Mifflin and Huntingdon counties, both of which have high volumes of state-owned land, have expressed interest in becoming more involved in the coalition’s activities.
1 -- An impasse over Pennsylvania’s 2015-16 state budget prompted leaders of the Pa. State Land Tax Fairness Coalition to adjust course. Efforts over the past several weeks have been geared toward having the increase in payments-in-lieu-of-taxes (PILT) for state-owned land incorporated into negotiations on the Tax Code.
2 -- Coalition leaders decided to back off on a second plank of the organization’s platform. Bowing to political realities, the leaders concluded that House Bill 343 or similar measures to carve out a portion of gas/oil lease and timber sale revenue derived from state forest and park land for school districts, municipalities and counties had little support in the Pa. General Assembly. Pa. Dept. of Conservation and Natural Resources (DCNR) officials also oppose the carve-out, since they derive a portion of their annual operating revenue from gas/oil leases and timber sales, rather than full funding through legislative outlay.
3 -- Pennsylvania State Grange has adopted two resolutions that reflect the mission of the Pennsylvania State Land Tax Fairness Coalition. The state organization agreed to support an increase in the payment-in-lieu-of-taxes for state-owned land, and the sharing of timber sale and gas/oil lease revenue on state forest land with local governments.
4 -- State Senator Joe Scarnati (R- Brockway) urged his colleagues in the Pennsylvania General Assembly to approve a measure to increase the state’s payment-in-lieu-of taxes for state forest, game and park lands. Excerpts from his letter follow: “Local governments and local school districts have been forced to increase property taxes year after year to cover the soaring costs of education. A high school built today can easily cost $30 million, whereas that same school built 30 years ago might have cost $3 million. Yet the state's PILT revenue hasn't kept pace . . . It is clear that this amount should be increased. Before we consider new taxes, we need to fix existing revenues -- including the PILT, which negatively impacts hard-working rural Pennsylvanians because government owns much of our land.”
5 -- Pennsylvania Game Commission (PGC) officials confirmed that another parcel of privately owned real estate in McKean County was acquired by the agency and added to the state game lands system. The 290 acres came off the tax rolls of Smethport Area School District, Hamlin Township and McKean County. This was on top of the 184 adjacent acres acquired by the PGC in the same area two years ago. PGC also continues to lease out its property for shale gas development. PGC gave Seneca Resources rights to drill and harvest gas on 2,107 acres of State Game Lands 25 in Jones Township in Elk County. The agency will get a $2.8 million bonus payment as well as 15-percent royalties on gas produced.
6 -- Another 20,800 privately owned have been added to the state’s holdings, stripping it from the tax base of the affected school districts, counties and municipalities. “For as much work as we have put into our mission, it appears that the state itself is making the case for us,” said Potter County Commissioner Paul Heimel on behalf of the Pa. State Land Tax Fairness Coalition. On June 30, the Pennsylvania Game Commission bought 231 acres in Howard Township, Centre County, from a private owner for $325,000. Also, the agency purchased 63.5 acres from a private estate in Saville Township, Perry County, for $150,000. Earlier in the month, some 430 acres were acquired by DCNR in Clinton County, at a cost of $776,000. Additionally, DCNR has acquired the 3,053 acres near Mocanaqua in Luzerne County and added it to the Lackawanna State Forest. This all came on the heels of DCNR purchasing 17,000 acres in McKean County’s Norwich and Sergeant townships.
1 -- Leaders of the Pennsylvania State Land Tax Fairness Coalition were back in Harrisburg in early June, continuing a series of face-to-face meetings with members of the Senate and House of Representatives. Cameron County Commissioner Phil Jones and Potter County Commissioner Paul Heimel report that the results of their conversations were encouraging for an increase in the payments in lieu of taxes for state land. Support for the proposal to carve out a 20-percent share of oil/gas and timber sale revenue generated on state forest land for local governments was not as widespread.
2 -- Eight more members of the state legislature came out in support of the Pennsylvania State Land Tax Fairness Coalition’s mission. House Bill 1224, introduced on May 18 by Rep. Mike Hanna (D- Clinton/Centre), calls for a doubling of the state’s current $1.20 per acre payment in lieu of taxes for tax-exempt state forest, game and park lands.
3 -- While coalition leaders were pleading their case in Harrisburg, the state was gobbling up another 17,000 acres of forest land and stripping it from the tax base. The land is located in McKean County and was purchased by DCNR from a private owner. Western Pennsylvania Conservancy arranged for the sale. DCNR paid $7.2 million of the purchase price and allowed the private owner to retain timber rights for 35 years.
4 -- Leaders of the Pennsylvania State Land Tax Fairness Coalition returned home in early May with some encouraging news. Commissioners Pete Smeltz and Jeff Snyder from Clinton County, and Commissioner Paul Heimel from Potter County, reported that they were well-received and were assured by some of the key leaders in Harrisburg that their mission has support.
5 -- Coalition members took their case to the office of Governor Tom Wolf in April. In meetings with two of the governor’s staffers, coalition leaders stressed the importance of including a carve-out of state land gas/oil leasing revenue and higher payments-in-lieu-of-taxes on state land included in this year’s budget and tax policy debates.
6 -- The coalition has been chosen to receive a Special Achievement in GIS Award, to be presented at the annual Esri International User Conference in July 20-24. This is a tremendous compliment to the GIS professionals who have been with the coalition. Their work can be found under the website’s Maps/Charts/Data tab.
7 -- Leaders of the Pennsylvania State Land Tax Fairness Coalition added allies after a presentation to the Assessment and Taxation Committee of the County Commissioners Association of Pennsylvania (CCAP). Following the program, Committee Chairman Jim Hertzler of Cumberland County reaffirmed the committee’s strong support for HB 343 and HB 344.
1-- Website pastatelandtaxfairness.com is up and running, with an average daily hit count of 50-60. More county maps have been added to the Map Gallery, showing the proportion of tax-exempt state forest, game and park lands in each county, township and school district.
2-- Rep. Martin Causer introduced House Bills 343 and 344. Language is similar, but not identical, to the measures that stalled during the 2013-14 session. They’ve been referred to the House Environment Resources and Energy Committee. Representative Causer also made a push for the bills during a face-to-face meeting with Governor Tom Wolf.
3-- Our coalition’s Steering Committee has sent letters to every member of the House Environmental Resources and Energy Committee, asking them to back House Bills 343 and 344. They are: Republicans-- John Maher (chairman), Will Tallman, Tommy Sankey, Kathy Rapp, Jeff Pyle, David Parker, Mark Mustio, Carl Walker Metzgar, Jim Marshall, Tim Krieger, Matt Gabler, Garth Everett, Becky Corbin, Jim Christiana, Martin Causer and Stephen Bloom; Democrats-- Greg Vitali (chairman), Pam Snyder, Kevin Schreiber, Michael Schlossberg, Steven Santarsiero, Stephen McCarter, Jordan Harris, Mike Carroll, Tim Briggs and Bryan Barbin. HB 344 would increase the state’s payment in lieu of taxes (PILT) on state-owned forest and game lands from $3.60 per acre to $6.00 per acre. The PILT is divided equally among the municipalities, school districts and counties in which the land is located. It applies to lands under the control of the Department of Conservation and Natural Resources and the Pennsylvania Game Commission. HB 343 calls for 20 percent of total revenue collected from the sale of timber, oil and natural gas on most state-owned lands to be deposited into a restricted fund for disbursement to local governments across the Commonwealth, proportionally based on the number of acres of state land in each municipality, school district and county. This measure is similar to a federal law that provides revenue to local governments from the sale of timber on national forest land.
4-- Outreach continues to galvanize support from the County Commissioners Assn. of Pa. (CCAP), the Pa. State Association of Township Supervisors (PSATS), the Pa. State School Boards Association (PSBA) and other potential partners. Local affiliates of the Pennsylvania State Grange are the latest to come aboard in support of the coalition.
5-- Austin Area School Superintendent Jerry Sasala, Superintendent of the Austin Area School District, testified before the Pennsylvania Basic Education Funding Commission on the stiff challenges his district faces in generating revenue from a real estate tax base that is approximately 90 percent exempt due state forest land. Committee Chairman Sen. Pat Browne and Acting State Education Secretary Pedro Rivera were among those who took a particular interest in our mission. The committee is comprised of 12 Senators and Representatives, as well as the State Education Secretary, State Budget Secretary and State Deputy Secretary of Administration Nichole Duffy. "Our school district is severely stressed by the high proportion of real estate that is owned by the state and is thus tax-exempt,” Sasala told the commission. “By law, school districts, municipalities and county governments depend on the real estate tax for the bulk of their necessary operating revenue. The system is unfair, since property owners face a burden that is clearly disproportional and unfair.”
1-- Work continues on an effective website, pastatelandtaxfairness.com.
2-- Rep. Martin Causer has informed us that he will be introducing two bills that support our concerns. His previous bills, HB 444 and HB 2112, did not advance in the House during the 2013-14 session. A renewed push is planned for 2015 and Rep. Causer told us he appreciates our support.
3-- We’ll be reaching out to the County Commissioners Assn. of Pa. (CCAP), the Pa. State Association of Township Supervisors (PSATS), the Pa. State School Boards Association (PSBA) and other potential partners to shore up their support.
4-- The GIS Professionals Group’s maps will soon be accessible from our website. For details, contact Potter County GIS Director Will Hunt at 814-274-8290, extension 229; email@example.com.
1-- One of our coalition leaders, Jerry Sasala, Superintendent of the Austin Area School District, will be testifying in January 2015 before the Pennsylvania Basic Education Funding Commission on the stiff challenges his district faces in generating revenue from a real estate tax base that is approximately 90 percent exempt due state forest land. This is an excellent opportunity to draw attention to the inequities. The commission is comprised of 12 Senators and Representatives, as well as the State Education Secretary, State Budget Secretary and Deputy State Secretary of Administration.
2-- Rep. Martin Causer has solicited our coalition’s input as he reintroduces House Bills 444 and 2112 for the new legislative session. The state land tax fairness proposals might become part of the dialogue on other tax reform issues, including impact fees/severance tax options related to shale gas production.
3-- The GIS Professionals/Chief Assessors Group continues to work on production of maps that graphically depict the high proportion of state land and reduced-assessment real estate in each county, municipality and school district. These are being hosted by the CCAP AGOL Group. These maps will be accompanied by a user-friendly layer of data spelling out the financial impacts on each local government unit. The material will be readily available to county officials, state lawmakers and their staff, statewide lobbying organizations, the media, and anyone else with an interest in the topic. They will be designed to be used in House and Senate hearings, during meetings with lawmakers and others, or in news conferences or other public events.
Potter County hosted the first formal workshop for the Pa. State Land Tax Fairness Coalition. About 40 county commissioners and others with an interest in tax fairness from across Pennsylvania gathered for the strategy session.
As workshop host, Potter County was held up as an example. Of the county’s total acreage (691,985), some 291,128 acres, or 42 percent, is state-owned and thus tax-exempt. All told, when other government property, churches and other tax-exempts, as well as “Clean and Green” preferentially assessed properties, are added to the equation, just 15 percent of the total real estate in Potter County is subject to taxation at its market value. By law, school districts, municipalities and the county government depend on the real estate tax for the bulk of their necessary operating revenue. With such a relative few property owners having to carry the entire burden, the system is in a serious state of disrepair.
After two workshops and a roundtable discussion, the group reached consensus on a political strategy. Among the elements is the production of maps that graphically depict the high proportion of state land and reduced-assessment real estate in each county, municipality and school district. These maps will be accompanied by a user-friendly layer of data spelling out the financial impacts on each local government unit. The material will be designed to be used in House and Senate hearings, during meetings with lawmakers and others, or in news Conferences and other public events.
Members also agreed to reach out to CCAP, PSATS, PSBA and PSARSS in early 2015 to reaffirm their support. A lobbying effort that, in effect, speaks for every county, township/borough, and school district in Pennsylvania should be a force to reckon with.
1-- During the Aug. 3 meeting of the CCAP Assessment and Taxation Committee, members voted to direct CCAP staff to contact Rep. Ron Miller, chairman of the House Environmental Resources and Energy Committee, to reiterate the committee’s support for HB 444 and HB 2112 and to inquire as to the status of the bills. CCAP’s Lisa Schaefer (director of government relations) did hear back from Rep. Miller’s aide. The response cited dim prospects of any imminent movement due to the funding aspects of these bills and the short time window of the fall session.
2-- It’s time to move forward on building the coordinated databases/maps to make a comprehensive and professional approach to the legislators and emphasize our points in committee hearings. Some work has begun in Potter, Clinton, Centre, Cameron and Tioga counties through the drafting of maps that depict state-owned land.
1 -- During the recent CCAP Annual Conference in Lancaster, members voted 111-6 in favor of our resolution calling for a portion of oil/gas lease revenue from state forest and to be shared with counties, school districts (added) and municipalities. The 111-6 vote is significant, in that it encompasses a statewide sentiment in support of the measure as a matter of fairness, rather than as a jurisdictional/regional issue. We should be encouraged that elected commissioners from counties that would not benefit from this legislation still voted in favor of it.
2 -- In mid-June, we visited several lawmakers’ offices to hand-deliver letters in support of HB 2112 and HB 444. Because the 2014-15 budget, pension reform, education funding and other issues are on the front burner, we did not get as much face time as we had hoped for.
3 -- Coalition members appear to be unanimously in favor of changing the language of HB 444 concerning the revenue distribution. Rather than requiring that a portion of the revenue generated from timber sales and oil/gas royalties be distributed via a formula that benefits the HOST school districts, counties and municipalities, the amendment would call for that revenue to be pooled by the state and distributed on a per-acre basis to ALL taxing bodies adversely affected by the presence of state-owned land.
1 -- Maps depicting the high proportion of tax-exempt state land in Centre, Clinton, Potter and Cameron counties are proving to be extremely eye-opening to many.
2 -- The County Commissioners Assn. of Pa. hosted a conference call on the Pa. State Land Tax Fairness Coalition mission. Participants included: Paul Heimel (Potter), Pete Smeltz (Clinton), Tony Mussare (Lycoming), Kurt Hausammann (Lycoming planning), Susan Kefover (Potter), Doug Morley (Potter), Erick Coolidge (Tioga), Scott Zubek (Tioga GIS), Deb Crawford (Tioga assessment), Jim Martin (Adams), Barbara Walter (Adams assessment), Joan McMillen (Clearfield), Phil Jones (Cameron), John Vatavuk (Somerset), Pam Tokar-Ickes (Somerset), Jane Rizzo (Somerset assessment), June Sorg (Elk), Craig Lehman (Lancaster), Craig Cutchall (Fulton), John Eggleston (Warren), Melissa Border (Bedford assessment), Jeff Thomas (Huntingdon). CCAP Staff: Lisa Schaefer. Some highlights:
Overview: Pete Smeltz noted payments in lieu of taxes are extremely low in comparison to the land’s value as taxable real estate; therefore, school districts, counties and municipalities are being penalized. Tax bases are further gutted by large quantities of acreage enrolled for the Pa. Act 319 “Clean and Green” law. While state-owned land is now being used more for revenue generation by the state, private property owners in those areas are being forced to carry a disproportional tax burden.
Progress So Far: Paul Heimel said the goal is to elevate HB 444 and HB 2112 to the calendar of the House Environmental Resources and Energy Committee. Peripheral issues that will inevitably lead to amendments and revisions can then be aired. Current focus has been on “getting the horses at the gate,” including CCAP, PSATS, PSBA, PARSS and some individual supervisors, counties and school boards.
Harrisburg 101: Lisa Schaefer explained that the CCAP platform supports both bills. She said that with a projected shortfall of more than $1 billion likely, legislators are unlikely to be willing to give up any state dollars for FY 2014-2015.
--Erick Coolidge noted that timing is everything. He emphasized the need to keep building a compelling case. With the current focus in Harrisburg on the budget, this gives us time to have our mission “shovel-ready” for the 2015-2016 legislative year.
--Members agreed that maps which include a well-researched and effective financial element (i.e., the economic impact of so much land being tax-exempt or preferentially assessed) will be a powerful tool, especially if it is instantly accessible on the internet.
--Phil Jones asked if anyone on the call has insight into the future of the Pa. Act 13 “impact fee” on shale gas wells if the legislature ends up passing a severance tax. Lisa Schaefer responded that most of the legislative proposals she has seen recently have called for a dual impact fee and severance tax. Commissioners want to be sure the impact fee structure is not eliminated.
1-- A Pennsylvania State Land Tax Fairness Coalition is being formed to support HB 2112 and HB 444 in the Pa. House of Representatives (see explanation below). Initial feedback from legislators suggests that HB 444 has a better chance of passage than HB 2112, based on the argument that HB 2112 would require a source of new revenue, whereas HB 444 taps future revenue sources.
2-- Members concur that a personal appeal to members of the legislature, rather than a public lobbying campaign, is more appropriate as we build our case. A basic news release defining the mission will be circulated as follows:
FOR IMMEDIATE RELEASE: Rural counties rallying for tax fairness
A grassroots movement to bring tax relief to much of rural Pennsylvania is gaining support across the state. Commissioners from nine counties and strategic partners have formed a coalition to support two pieces of legislation now before the Pa. House of Representatives:
--HB 444 would carve out 20 percent of the revenue from timber sales and gas/oil leases on state forest land for school districts, counties and townships/boroughs.
--HB 2112 would increase the amount of annual “payments in lieu of taxes” for state-owned land by 50 percent, to $1.80 per-acre being paid to the school district, county and municipality.
As tax rates increase and the amount of taxable property continues to shrink, a small minority of property owners are carrying an even more disproportional burden. Passage of HB 444 and HB 2112 would provide some much-needed relief and would take a long-overdue step to correct the growing inequity that has gutted many local tax bases.
Following is a summary of tax-exempt state forest land in Pennsylvania counties (8,000 acres or more*): Clinton 294,489; Potter 268,176; Lycoming 202,466; Centre 158,873; Tioga 156,625; Cameron 136,004; Clearfield 109,761; Elk 80,114; Pike 73,961; Huntingdon 71,148; Union 67,173; Mifflin 58,733; Perry 44,171; Franklin 42,895; Sullivan 41,412; Cumberland 38,874; Somerset 33,616; Bedford 32,830; Fulton 30,457; Snyder 30,183; Adams 25,638; Fayette 19.630; Westmoreland, 18,085; Juniata 17,820; Lackawanna 17,151; Monroe 12,051; Luzerne 11,540; Jefferson 9,908; Cambria 9,513; McKean 8,841; Dauphin 8,373; Schuylkill 8,050.
*Several other counties have considerable state forest land acreage. The figures above do not include state game and park lands, which are also tax-exempt.