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November/December 2010

Inside This Issue:

 

Property Reassessment and the Local Economy
On January 30, 1683, William Penn, Governor of Pennsylvania, and the 13 members of the Pennsylvania Provincial Council voted to enact what was essentially the first property tax in Pennsylvania. Two weeks after the enactment of that tax, the first complaint was filed regarding the assessment of property, and, within months, over 100 complaints were registered.

More than 325 years later, property taxes and countywide property reassessment continue to be thorny issues for Pennsylvania local and state government officials.

Over the years, studies have examined reassessments within a specific year or in one particular area, such as housing values, but none have examined the impact on local governments and the local economy across decades.

To determine the impact of countywide property reassessments on several variables and over a 21-year time span, Dr. Jeffrey A. Weber, Lauren Scott, Carol Andersen, Michele Dakouri, Mozella McClendon, and Nick Years of East Stroudsburg University of Pennsylvania conducted research in 2009. The research was sponsored by the Center for Rural Pennsylvania.

The study examined the relationships between the frequency of countywide reassessments and local tax revenues, tax equity, personal income, unemployment rates, and median home values. It also compared the results between rural and urban counties to determine if reassessment had different impacts on these types of counties.

Research findings
The research found that an increase in the years since the last countywide reassessment leads to a decrease in the amount of tax revenue generated per mill, which is the rate at which property taxes are determined, and that the decrease was greater for rural counties than for urban counties. Specifically for rural counties, each year since the last countywide reassessment, the amount of revenue generated per mill decreased by .9 percent. After five years without a reassessment, the revenue generating capability for these rural counties may decrease by 4.46 percent. 

Previous research findings were confirmed by this study in that a strong positive relationship was found between the years since a county conducted reassessment and the Coefficient of Dispersion, which is a measure of equity of the property tax system. This means that as the years since reassessment increase, the county property tax system becomes more inequitable and lacks uniformity across the taxing jurisdiction.

In terms of the local economy, the research found that as the years since reassessment increased, the county unemployment rate also increased. While this relationship was found in both rural and urban counties, the research showed it to be stronger in rural counties than in urban counties. Additionally, as the number of years since the last countywide reassessment increased, a county’s average personal income decreased. The relationship appeared to apply only to rural counties.

The research also showed a strong relationship between the years since reassessment and county median housing values, which indicated that reassessment is definitely one of the factors that influences housing values in a county. The relationship was further confirmed when assessing the difference in median housing values between counties that reassessed and those that did not during the 21-year period of the study.

Policy considerations
Based on the results of the study, the researchers suggest that the Pennsylvania General Assembly:
Pass legislation that repeals the six existing property assessment laws and replaces them with a single, consolidated property assessment law that establishes a statewide uniform standard for conducting property reassessment. A single statute would simplify the property assessment system, thereby easing its administration and lowering its cost. It also would bring the property assessment system into compliance with the uniformity clause of the state Constitution and make the property assessment system more understandable for businesses that operate across county lines. Currently, cross-county-line businesses have to contend with multiple assessment practices, which may add to business costs. 

Pass legislation that requires all counties to conduct countywide property reassessment a minimum of every 4 years. As this study indicates, regular countywide reassessments would ease the residential property tax burden; ensure a more equitable tax system across each county; and bring the property assessment system into compliance with the uniformity clause of the state Constitution.

Report available
For a copy of the report, Pennsylvania County Property Reassessment: Impact on Local Government Finances and the Local Economy, visit the Center for Rural Pennsylvania’s website at www.rural.palegislature.us/reports, call (717) 787-9555 or email info@rural.palegislature.us.

Year of Last Reassessment by County

Source: State Tax Equalization Board and county web sites

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Chairman's Message
If you’re ever in the mood for an honest-to-goodness debate, ask a handful of property owners and local government officials their opinion about property taxes and property tax reassessment.

If history is any indicator, you’re likely to get a variety of opinions on both the pros and cons of the tax and the reassessment process.

For more than 325 years, Pennsylvania has instituted some form of property tax on residents, and the tax and its assessment have produced an uninterrupted stream of complaints, criticisms, and legislative reform efforts.

Pennsylvania local government officials wrestle with the job of reassessment to effectively, efficiently and equitably administer the real property tax. It’s not an easy job.

In 2009, the Center for Rural Pennsylvania supported research to determine the impact of countywide property reassessment on local governments and their residents. The study examined the relationships between countywide reassessments and local tax revenues, tax equity, personal income, unemployment rates, and median home values.

The research also compared the results between rural and urban counties to learn if reassessment impacts these types of counties differently.

The results of the research, which was conducted by researchers at East Stroudsburg University, are featured on Pages 1 and 3 and offer food for thought and pertinent points for that honest-to-goodness debate.

In 2008, rural and urban residents provided their thoughts and opinions to Penn State University researchers as part of an attitudinal survey, which was sponsored by the Center. The survey was conducted to help increase public understanding of the views of rural Pennsylvanians about a wide range of issues facing their communities and the state.

The rural survey respondents identified a number of statewide issues of concern, but the most prominent were jobs, health care and energy resources. The identification of these issues probably isn’t a surprise since they dominate much of the news today and will probably continue to be the focus of our attention for some time to come.

The research also found that rural residents believe their communities are good places to raise children and to retire.

It found that rural respondents were more likely than urban respondents to participate in local organizations, to volunteer in the local community, and to serve on government commissions or boards. That’s good news for our rural communities, as volunteerism and service are so important to the vitality of local organizations.

The article on Page 4 provides more results from that survey. You can also call or email the Center for the more detailed research methods and results.

As 2010 comes to a close, on behalf of the Center’s Board of Directors and staff, I extend our thanks to everyone we have worked with this year and wish you the best in the New Year.

Senator John Gordner

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Rural Residents Give Thumbs Up to Communities, Thumbs Down to Availability of Jobs and Health Care
Rural residents like their communities and are more likely than urban residents to participate in local organizations, to volunteer in the local community, and to serve on government commissions or boards. These findings are from a study conducted by Pennsylvania State University researchers and sponsored by the Center for Rural Pennsylvania.

According to the research, rural residents saw their communities as good places to raise children and to retire, and they rated their communities highly in terms of the quality of the natural environment.

However, rural residents also were critical of the lack of local job opportunities, available health care, housing, and recreational facilities.

Research background
The attitudinal study of rural and urban Pennsylvanians was conducted in 2008 by Dr. Fern K. Willits, Dr. A.E. Luloff and Michael W-P Fortunato of Pennsylvania State University. The research determined the current attitudes and perceptions of rural and urban Pennsylvanians related to the economy, government, the environment, and other issues. It also assessed changes over time by comparing the 2008 survey results to rural population surveys conducted in 1999, 2000, and 2003.

The 2008 survey included the responses of more than 1,200 rural and 1,000 urban Pennsylvanians. 

Findings on local issues
Rural respondents felt their local communities were desirable places to live and were fairly safe, and that they would likely remain much the same in the foreseeable future. However, feelings of community desirability and safety declined across time, with 49 percent giving “very desirable” ratings in 2000 compared to 33 percent in 2008, and 74 percent giving “very safe” ratings in 1999 versus 39 percent in 2008.

Local issues of greatest concern focused on human service needs, including strengthening schools and attracting additional health care providers.

Findings on statewide issues
The research found that 56 percent of rural respondents were at least “more or less satisfied” with the way things were going in the state in 2008. In 1999, 88 percent indicated the same level of satisfaction. The percentage of respondents who indicated that “things would get worse in the next year or so” also increased from 18 percent in 1999 to 60 percent in 2008.

When compared with urban respondents, rural respondents were more likely to be dissatisfied with their current situation and more pessimistic about improvements in the state’s economy in 2008.
While there were many areas of concern among rural respondents, the top issues were jobs, health care, and energy resources.

Rural respondents (82 percent) were more likely than urban (72 percent) to feel job availability should be given higher priority in the future in terms of public policy. Among rural respondents, there was popular support for virtually all strategies for creating jobs, including promoting small businesses and providing incentives to attract, and develop new businesses. The single exception was the absence of support for lowering environmental standards to keep and/or attract business and industry.

Rural respondents also were more likely than urban to support traditional activities, such as manufacturing and oil, gas, or coal extraction, and less likely to see recreation, travel, e-commerce, and biotechnology as viable means for strengthening the state’s economy.

Rural and urban respondents did not differ in the importance they gave to energy issues and health care. More than 80 percent of all respondents felt the development of alternative energy resources needed greater priority and 78 percent felt health care needed greater priority.

Among rural respondents, concern for health care was greatest among those with lower education and income levels, but the high priority given to developing energy resources did not differ by the respondents’ gender, age, education, or income.

In 2008, more than half of the rural respondents expressed little or no confidence in the legislature or the governor. Local governments were seen as somewhat more trustworthy, but were not rated highly for competency in attending to citizen concerns, managing public funds, or planning for the future. 

Despite their overall distrust of the governor and legislature, rural respondents tended to see the state as having a major responsibility for meeting the critical need of increasing job opportunities, developing new energy sources, and enhancing overall well-being.

Report available
For a copy of the research results, 2008 Attitudinal Survey of Pennsylvania Rural Residents, visit the Center’s website at www.rural.palegislature.us/reports, call (717) 787-9555 or email info@rural.palegislature.us.

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Childhood Obesity Rates in Pennsylvania School Districts
More than 98,000 rural public school students were obese during the 2007-2008 school year, according to data from the Pennsylvania Department of Health.  That’s 19 percent of all rural public school students.
These students were considered obese because they had a body mass index in the 95th percentile or higher after adjusting for gender and age.

Among urban public school students, more than 213,300, or 16 percent, were obese. 

Nationally, the Centers for Disease Control and Prevention (CDC) estimated that 17 percent of all children from the ages of 2 to 19 years old were obese in 2008. However, from 2000 to 2008, the CDC found that childhood obesity rates remained relatively flat.

Comparing childhood overweight and obesity rates among all states, Pennsylvania rates fell in the middle of the scale. In 2007, the National Survey of Children’s Health found that Pennsylvania had the 20th highest rate of overweight and obese children in the nation. Arkansas, Georgia and Mississippi had the nation’s highest rates, while Minnesota, Oregon and Utah had the lowest.

Among rural Pennsylvania public schools, there was a strong correlation between the percentage of elementary students (kindergarten through 6th grade) and secondary students (7th through 12th grades) that were obese. That is, school districts with a high percentage of obese elementary students also had a high percentage of obese secondary students.

The percentage of rural school children who were obese varied from district to district. The higher obesity rates were generally found in rural school districts that had higher percentages of children eligible for the Free and Reduced School Lunch Program. Further analysis showed that rural obesity rates were negatively correlated with statewide testing scores, which means the higher the percent of obese students, the lower the test scores. Also, districts that had lower percentages of adults with a bachelor’s degree or higher had higher obesity rates.

There was no significant relationship between obesity rates and per student spending on school-sponsored student activities, such as sports, plays, choir, and clubs.  

According to the CDC, obese children and adolescents are more likely to have risk factors associated with high blood pressure, high cholesterol, and Type 2 diabetes than children and adolescents who are not obese. In addition, obese youth are more likely to become obese adults.

Pennsylvania School Districts Where One in Five Students is Obese, 2007-2008

Data source: Pennsylvania Department of Health

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Increase in the Number of Births Among Single Mothers
The number of births to single mothers in rural Pennsylvania is on the rise. According to data from the Pennsylvania Department of Health, from 1990 to 2008, the number of births to single mothers in rural counties increased 41 percent. In urban counties, there was an increase of 18 percent.

Along with the increase in the number of births to single mothers was the increase in the proportion of births to single mothers. In 1990, 23 percent of all rural births were to single mothers; in 2008, 38 percent of all rural births were to single mothers. A similar pattern was found in urban areas. In 1990, 31 percent of all urban births were to single mothers compared to 41 percent in 2008.

In 2008, 35 percent of the rural single mothers who gave birth were 25 years old and older. In urban areas, 41 percent of the single mothers were in this age group.

According to 2007 data from the Centers for Disease Control and Prevention (CDC), the national unmarried mother birth rate was 40 percent, and the Pennsylvania state rate was 41 percent. There were 14 rural counties that have single mother birth rates above the national average and 34 rural counties with rates below the national average.

Within Pennsylvania, the counties with the highest percentages of births to single mothers were Dauphin, Erie, Fayette, Philadelphia, and Luzerne, each with rates above 48 percent. Counties with the lowest rates were Centre, Chester, Montgomery, Pike and Union, each with rates below 25 percent.

The proportion of births to single mothers varies across states. According to the CDC, in 2007, the proportions were lowest in Utah, Colorado, and Idaho, with rates ranging from 20 to 26 percent. In the District of Columbia, Louisiana, Mississippi, and New Mexico, 50 percent or more of births were to single mothers.

Births to Single Mothers As a Percentage of Total Births in Pennsylvania Counties, 1990-2008

Data source: Pennsylvania Department of Health

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Just the Facts: Pennsylvania Historical Markers
Many historical events have occurred in rural Pennsylvania. From the battles at Gettysburg to the drilling of the first oil wells in Titusville, these and other events are commemorated by blue historic markers installed by the Pennsylvania Historical and Museum Commission (PHMC).

Since 1946, PHMC has administered a program to place these historical markers to celebrate the people, places, and events that have affected the lives of Pennsylvanians.

As of August 2010, there were 2,313 historical markers in Pennsylvania. There were 1,344 (58 percent) in urban counties and 969 (42 percent) in rural counties.

In rural counties, there are 233 markers about people, 615 about places, 109 about events and 12 that detail other historical facts.

Based on the primary subject categories of the markers assigned by PHMC, the top three topics of historical markers in rural counties include military and war, industry and commerce, and buildings and settlements. 

Historical markers are located in a variety of places. You can see them walking down the street, on a building or while driving down the road. Seventy-five percent of markers in rural counties are located along the roadside, compared to 55 percent in urban counties.

Of all 48 rural counties, Franklin has the most markers with 70. Washington County follows with 51 and Fayette County with 49. The counties with the fewest markers are Juniata, Montour and Elk, each with less than six markers.

Just over half of the historical markers in rural counties were installed before 1950. In urban counties, 31 percent were installed before 1950. The first historical markers in rural counties were primarily dedicated to military and war, and buildings and settlements.

In later years, more markers recognizing industry and commerce, and women and minorities were dedicated.

In 2010, three new markers were dedicated in rural counties. These new markers are located in Crawford, Lycoming and Monroe counties.

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