Recently, I watched a Pennsylvania television commercial featuring an 81-year-old man thanking his governor, Ben Shapiro, for helping reduce property taxes for hundreds of thousands of Pennsylvanians.
Read more Learn to listen, listen to learn
For a senior citizen living on a fixed income, property tax relief can be enormously important. A few hundred dollars can make a meaningful difference when paying for food, utilities, prescriptions, and the home someone worked a lifetime to own.
But as a CPA and former member of the Pennsylvania House of Representatives, I found myself asking a different question: Who really paid for this benefit?
What happened to the cost? The cost of government, it seems, never goes down, but it sure can shift.
Government can reduce one person’s tax bill without reducing the cost of government by a single dollar. It can collect the money from someone else. It can use another tax. It can redirect money from another program. It can borrow the money. It can spend reserves. Or it can postpone the payment until another year.
The taxpayer receiving the relief sees the benefit, but only through creative and deceptive governmental financing gimmicks, designed to provide a false sense of security while setting you up for failure.
The taxpayers receiving the bill to pay for the benefit may never recognize that the two are connected. Yet government finances are so large and complicated that essentially the same transactions can occur without taxpayers recognizing them. A state program provides property tax relief while, in the same budget, another program loses funding. In a budget, a municipality receives fewer state dollars, with the result that the municipality increases taxes or fees.
Each action appears on a different government ledger, perhaps in a different year. To taxpayers, they may appear unrelated, and the 81-year-old sees other costs of government and utilities skyrocket, but he is thankful for “property tax relief.” He misguidedly thanks the government for deceiving him and all the hundreds of thousands of seniors he mistakenly believes have been helped by a government program that he himself funds with transferred dollars. If a corporation did this, the FCC and DOJ would intervene immediately.
Consider what has actually happened with Pennsylvania school property taxes.
The Commonwealth can accurately tell homeowners that it has substantially increased property tax relief. State officials reported that average relief for eligible homeowners increased from approximately $225 to $386, while more than $1 billion became available for broad-based property tax relief. That is real relief to the people receiving it.
But something else was happening at exactly the same time. According to Pennsylvania’s Independent Fiscal Office, statewide school property tax collections increased from $16.644 billion in fiscal year 2022–23 to $17.135 billion in 2023–24 and $17.860 billion in 2024–25. Those were annual increases of 3.3 percent, 2.9 percent, and 4.2 percent.
Over those three years, statewide school property tax collections increased approximately 10.8 percent. Even excluding Philadelphia, where reassessment significantly affected the numbers, the Independent Fiscal Office reports a three-year increase of 8.5 percent.
The Commonwealth increased property tax relief. School property tax collections continued increasing. And both statements are true. Providing tax relief is not the same thing as reducing the underlying cost of government. One pocket received money while another pocket was asked for more.
The recently enacted Pennsylvania budget provides another example.
The Commonwealth approved a cost-of-living adjustment for certain longtime public school and state retirees. Rather than placing the entire new obligation into the normal pension contribution process, Pennsylvania will use gaming-related revenues to help finance it.
At first glance, that sounds almost painless, but it isn’t, because those dollars already had a purpose. Gaming-related revenues have supported programs administered through the Commonwealth Financing Authority and helped finance local infrastructure, public safety, economic development, and community projects. When money previously available for those purposes is redirected toward pension obligations, government hasn’t discovered a new source of funds. It has merely seen those funds redirected to be made up by other tax hikes or utility rate increases. Just look at the tolls on the PA Turnpike over the last few decades for a real-life example of bait and switch.
It has changed who stands in line for the money. I f a municipality consequently loses funding it expected for a sewer system, road, fire station, or other local project, the need for that project doesn’t necessarily disappear. The municipality may borrow the money. It may increase a fee. It may postpone maintenance. Or, eventually, it may increase local taxes.
There is evidence that local governments are already under considerable property tax pressure. The Independent Fiscal Office reported that in 2025 alone, 35 Pennsylvania counties increased their property tax millage rates, and 17 of them increased rates by more than 10 percent.
Read more The race they said was over may be just beginning
Government talk as though there are federal taxpayers, state taxpayers, county taxpayers, municipal taxpayers, and school district taxpayers. But there is only one taxpayer. The same family pays federal income taxes, Pennsylvania taxes, school property taxes, county taxes, municipal taxes, gasoline taxes, fees, and countless government-imposed costs ultimately incorporated into the prices of goods and services.
Government accounting must separate these entities. That is necessary for accountability. But the taxpayer’s checkbook does not.
This deceptive practice is how Governor Shapiro can assert that state taxes weren’t increased while a family pays more to support government, or a state program can truthfully claim to provide property tax relief while school property tax collections continue rising.
At the same time, a municipality can receive a state grant and call it outside funding. But where did the state get the money? Ultimately, someone paid it: the forgotten taxpayer.
Costs aren’t shifted only among taxpayers and levels of government. They can also be shifted between generations. Pennsylvania’s new budget provides another example.
The Commonwealth has delayed major medical assistance payments into subsequent fiscal periods. Moving a payment date can improve the appearance of a particular year’s budget, but the medical care did not become less expensive. The obligation still exists.
Similarly, when government creates a permanent benefit today without simultaneously establishing a sustainable way to pay for it, today’s elected officials receive the political benefit while tomorrow’s taxpayers inherit the financial obligation.
That is why the word “balanced” can sometimes confuse the public. Most families hear “balanced budget” and reasonably assume that recurring income is sufficient to pay recurring expenses. Government budgeting can produce a technically balanced result even when that isn’t true.
Pennsylvania’s Independent Fiscal Office estimates that the Commonwealth currently faces a structural deficit of approximately $5 billion. That is the number taxpayers should understand.
None of this means property tax relief is bad. It doesn’t mean the pension COLA is wrong. My concern is much simpler: Citizens deserve to know the complete cost of the decisions their government makes.
Government accounting tells us where money was received and where it was spent. Fiscal transparency must tell us something more: Who ultimately bears the cost?
Whenever government announces a tax reduction, new program, grant, rebate or benefit, taxpayers should ask three questions:
What does it cost?
Who ultimately pays for it?
What obligation are we leaving for tomorrow?
Imagine if every major fiscal proposal answered those three questions clearly. But we would make those decisions knowing their true costs rather than pretending that changing the source of payment somehow makes the cost disappear.
If citizens cannot follow the cost, then transparency is gone. The 81-year-old gentleman in that commercial deserves to know who paid for his property tax relief. Transparency is the real measure of fiscal honesty, and the commercial from the Shapiro campaign fails on all fronts.
Read more The Spendthrift State
Image via PickPik.