Continuing Efforts Aim to Drop Pennsylvania School Property Tax | New
Eliminating school property taxes in Pennsylvania will require raising more than $ 14.4 billion in other taxes, but a huge number has never deterred supporters of the idea.
In fact, they think they’re closer than ever to accomplishing what seemed impossible and ridiculous to most state lawmakers a decade ago.
They see a State Senate set to pass a bill to eliminate school property taxes for the first time in state history and increasing pressure on the House and Governor Tom Wolf to qu ‘they act.
State Senator David Argall (R-29) failed a vote before winning passage of his property tax independence law three November, but intends to try again soon. Argall still needs a voice, and Republican leaders have promised him a chance to make that point soon at a dedicated caucus meeting.
“This is easily the number one problem in the district I represent,” said Argall. “I can’t go to a Cub Scout meeting or have a flat tire fixed without someone asking me about it.”
The $ 14.4 billion is all the money the state’s 500 school districts will collect in property taxes this school year, according to the January estimate from the state’s Independent Office of Finance. The amount is equivalent to nearly half of the state’s current budget, more than three times the payroll of Major League Baseball players last year, and about the annual cost of treating Parkinson’s disease.
Supporters have seen their efforts to defeat school property taxes gain momentum since Gov. Ed Rendell and others rejected former Rep. Sam Rohrer’s original proposal in 2005. They say property taxes are forcing people to do so. senior citizens on fixed incomes to leave their homes, hurt businesses and expensive to collect. They are also difficult to calculate, as they are based on obscure factors like mileage and assessed property values.
“Basically I believe the current system is rotten to the core,” Argall said. “Maybe property taxes made sense in the 1600s and 1700s, but there has to be a better way to fund our public schools than how many acres do you own, when did you build your house, did you you fixed the hole in your roof, what kind of front door did you add? To me, this is just an archaic and old-fashioned thought.
Opponents say eliminating property taxes is like throwing an ax at a problem that requires a scalpel.
“We can focus property tax relief on the people who feel it the most, the worst, which is the elderly on fixed incomes because they want to stay in their homes,” said Senator John Blake (D -22). “Do I think there is a broken system? Yes. … Do I think we can solve it? Yes, but Senate Bill 76 (Argall’s Bill) is not the solution. “
Property tax reform has puzzled state leaders for at least three decades. Govs. Robert Casey and Ed Rendell, both Democrats, and Gov. Tom Ridge, a Republican, have all proposed reforms that either failed or did not achieve their desired intent.
As a result, the demand for reform has steadily increased.
Argall nearly got an earlier version of his bill in the Senate in November 2015.
The bill would have increased the state’s personal income tax from 3.07% to 4.95% and sales tax from 6% to 7%. The vote ended in a tie 24-24 with Lt. Gov. Mike Stack, a Democrat, who voted against. The bill had 19 Republicans and five Democrats in favor with 12 Republicans and 12 Democrats against.
Blake and Senator John Gordner (R-27) voted no. The senses. John Yudichak (D-14) and Lisa Baker (R-20) voted yes.
Argall is back with essentially the same bill. In addition to sales tax and income tax increases, the bill would for the first time subject a wide variety of products and services to sales tax. This includes tax on all foods except essential foods (milk, bread, fruit, cheese, eggs, and some grains), clothes or shoes that cost over $ 50, many medical services, cable TV, some attorney bills, child care costs and funeral services.
The bill allows school districts to keep enough property taxes in place to repay loans and bonds, which incur property taxes in payments. This tax disappears as the loan is repaid. About a dozen districts had no debt as of the 2014-2015 school year, according to the most recent data readily available. Only the Delaware Valley School District was debt-free among the districts in northeastern Pennsylvania.
Argall acknowledged that voters’ approval in November to allow local governments to exempt 100% of the assessed value of an owner-occupied home from property taxes could influence how the bill turns out. The vote amended the state’s constitution to allow for different treatment of family properties compared to rental, commercial and industrial properties. Eliminating property taxes just for owner-occupied homes would cost about $ 8.1 billion this year, according to the Independent Fiscal Office.
Blake thinks supporters have exaggerated the idea while ignoring the risks. The main one: In tough economic times, property taxes remain stable and predictable, but sales taxes and income taxes decrease or increase more slowly than necessary to properly fund schools, he said. . This is because people spend less and get fewer increases during downturns. Sudden changes could leave school districts strapped for cash to pay the bills.
“I mean who doesn’t want to eliminate property taxes, right?” Blake said. “But I think it was misleading for many advocates here who were stirring this pot not to be honest with the people of Pennsylvania what the obligations of this public policy suggestion really are.
The sales tax increase would hurt low- and middle-income citizens the most, said House of Commons Democratic Leader Frank Dermody (D-33).
“People don’t talk about this and they (tax elimination advocates) don’t explain it,” Dermody said. “From the cradle to the grave, we’ll tax your diapers, we’ll tax your coffins.”
Without the expanded sales tax base, the bill is less than billions of dollars, Dermody said. The higher and broader sales tax base would raise nearly $ 5 billion this school year, according to a 2013 Independent Fiscal Office analysis.
As low- and middle-income citizens pay more, wealthier owners of commercial and industrial properties would no longer pay $ 3 billion a year in property taxes, Blake said.
The higher income tax would also penalize small businesses. Most pay the personal income tax of 3.07% rather than the higher corporate tax of 9.99%, Blake said. Homeowners would get property tax breaks, but likely not reduce rents, he said.
With the state providing much more money, school districts would also cede power and financial control to Harrisburg, Blake said.
It favors the reimbursement of property taxes up to 100% with a ceiling of $ 1,990 and a rebate of $ 500 for tenants with a household income of $ 50,000 or less. About 3.2 million homeowners and about 800,000 will benefit.
This would alleviate the problem and allow the state to continue to meet its constitutional obligation to adequately fund public education, Blake said.
“I think people need to understand that… all land ownership carries some responsibility,” Blake said. – (AP)