Where does Pa. rank on property taxes?
The state’s Independent Fiscal Office (IFO) just released “State and Local Taxes: A Comparison Across States” which utilizes data from the Census Bureau, Internal Revenue Service and Bureau of Economic Analysis to produce state rankings of various taxes-to-personal income, which the study defines as “tax burden.” Rankings are produced for income and sales taxes, corporate taxes, fuel taxes and so on.
The ranking of property tax burden places Pennsylvania 24th with a ratio of 2.94 percent. That is below the U.S. average (3.10 percent) and U.S. weighted average (3.20 percent) according to the study. The state-by-state tax burden ranks from a high of 5.55 percent in New Hampshire to a low of 1.46 percent in Alabama.
The Allegheny Institute produced a somewhat similar measurement of property taxes collected-to-dollar of personal income in 2007 for counties in Southwest Pennsylvania which showed variation from county to county, so there could be property tax burdens at the local level in Pennsylvania that are higher than the overall ratio in the more recent data. In the measurement from a decade ago the collections ranged from $0.54 cents (Washington County) to $0.97 cents (Westmoreland County).
In terms of property taxes collected, Pennsylvania, in fiscal year 2015-16, collected $18.8 billion. Six states (California, New York, Texas, New Jersey, Illinois and Florida) collected more in that fiscal year. But the tax burden was lower in California (2.81 percent, 28th overall) and Florida (2.69 percent, 31st overall). New Jersey, New York and Illinois ranked in the top 10.
In a recent Brief we wrote about a separate Tax Foundation analysis of the state’s tax system and that report produced an effective tax rate of property taxes paid as a percentage of owner-occupied housing value. In Pennsylvania the rate was 1.48 percent. The foundation’s report went much more in depth on the shortcomings of the state’s local tax system and made recommendations on assessments and collection methods whereas the IFO report does not.