Legislation proposed to eliminate school property taxes in Pa.

2013-03-12T19:00:00Z 2013-03-13T09:21:58Z Legislation proposed to eliminate school property taxes in Pa.Mark Shade, Capitol Bureau The Sentinel
March 12, 2013 7:00 pm  • 

HARRISBURG — School property taxes cost Pennsylvania homeowners billions of dollars each year, but lawmakers are hoping a simple copper penny will be enough to finally erase the controversial levy from the books.

Two dozen Republican and Democratic lawmakers unveiled legislation Tuesday to replace the $10.4 billion collected every year in school property taxes with new revenue generated by increases in the sales and personal income taxes.

Pennsylvania has been unsuccessfully waging the property tax debate for decades. If legislation being proposed in the House and Senate are approved, the sales tax would rise from 6 to 7 percent and the personal income tax would go from 3.07 to 4.34 percent.

To Rep. Jim Cox, R-129, that amounts to a one-penny increase on a $1 purchase, and a 1.27-cent increase for every $1 earned.

“I find it very difficult to believe that a penny ... will keep (Pennsylvanians) from having their legislators do what needs to be done to eliminate their school property taxes,” Cox, the chief sponsor of House Bill 76, said.

Sen. David Argall, R-29, is writing Senate Bill 76 for his chamber.

“This outmoded, archaic, unfair system has to be eliminated,” Argall said.

The legislation would use existing gambling revenues to help replace the $10.4 billion that is now generated by school property taxes. Additionally, things that are not now taxed — like candy and gum, newspapers, textbooks, personal care services, basic TV subscriptions, and theatre tickets — would be added to the sales tax levy.

If approved, lawmakers contend someone would have to spend $70,000 on the newly taxed items to equal the elimination of a $5,000 school property tax bill — and experience a tax increase.

Each legislator who spoke Tuesday during a news conference to unveil the legislation said property taxes is the one subject that constituents repeatedly complain about.

Rep. Tina Davis, D-141, who has been a realtor for 22 years, said eliminating the property tax is the biggest thing the state can do to help senior citizens remain in their homes.

“I’m just so proud to be a co-sponsor of this bill. I know it’s going to take a while ... but I’m committed to Rep. Cox. I’ve already offered to have a hearing in my district and you’ll see a lot of people coming out for that,” Davis said.

Soon after lawmakers unveiled the legislation, representatives from an advocacy group were delivering half apple and cherry pies to their offices to show how special attention to cutting business taxes has added to the financial pinch for schools, health care services and local communities.

“We have been cutting business taxes for 12 years and we are not farther ahead than we were when we started, and that’s a problem,” said Pennsylvania Budget and Policy Center Executive Director Sharon Ward.

“Refusing to adequately fund essential services in order to protect these big corporations is the ultimate false choice and that’s why we’re all here to say enough is enough. We’ve had it,” said Mike Brunelle, executive director of Service Employees International Union’s PA State Council.

Lawmakers who want to replace the school property tax with increases in the sales and personal income tax say they believe their plan will work because it’s based on an analysis conducted in 2012 by the state’s Independent Fiscal Office.

According to its October report on state and local tax comparisons, Pennsylvania has the 39th highest sales tax, as a percentage of income, of 2.05 percent while its property tax, at 3.03 percent, was 31st highest in the country. Pennsylvania’s personal income tax rate, at 2.63 percent, is 16th highest.

The legislative proposals already have the support of the Pennsylvania Coalition of Taxpayer Associations, which is a group representing 76 local taxpayer advocacy groups.

“(It) stabilizes school finances with a predictable revenue stream, continues to fund all school districts at their current levels, and does not interfere in any way with local spending decisions,” the association’s David Baldinger said.

Baldinger said another reason he likes the proposal is because it would limit school budget increases to the rate of inflation.

While it is a bit of deja vu in Harrisburg, Sen. Argall said he hopes a penny is all it takes to finally enact school property tax reform.

“Hopefully, this is the year we put the stake through the heart of the beast,” Argall said.

Copyright 2014 The Sentinel. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(16) Comments

  1. JustinSteve
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    JustinSteve - March 19, 2014 9:53 am
    I agree with your views and thoughts also I think it is good to eliminate the school property taxes so that they can provide the best education with lower rates to their students. I always love to see these types of news that promote the schools to provide the best education to their students.
  2. MarcelinoHeffelbower
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    MarcelinoHeffelbower - March 14, 2014 2:19 am
    I think in the schools there will be no taxes in the whole state so that it can improve the education standard by spending more on new development and research work, Infinite wealth financial services is most helpful in providing the best advice for the people who want to have the best ways to invest.
  3. 8catlady
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    8catlady - June 16, 2013 6:38 pm
    sokrates, the sales tax paid on the wholesale price is deducted from what the business owner owes when filing their taxes. In other words, it's a deductible business expense, at least my accountant did it that way years ago when I had a shop. The sales tax on the actual retail price is what is reported; that way the state isn't double dipping, collecting on both the retail side and wholesale side for the same item, which would be an overpayment of the tax.
  4. Gospel-preacher
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    Gospel-preacher - March 20, 2013 10:54 am
    In the Sentinel today on A8 under "Contract talks..." sub-heading "Support for teachers" reads "If teachers are pre-occupied worrying about the health of family members because the issue of insurance is in question, it would take away their ability to provide instructional and emotional support to children". If that's not holding our kids hostage...Good teachers don't take their personal lives into the classroom and benefits should never cause them to be any less effective or responsible.
  5. nbostp
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    nbostp - March 19, 2013 7:43 pm
    I agree with the sentiment of trying to lessen the tax burden on property owners. However without actually addressing the real issue of state workers and teachers unsustainable pensions this raise in sales tax is simply nothing more than another shell game being performed by our government. This allows them to keep their outrageous benefits without having the do with the real elephant in the room. Just keep kicking the can down the road is their motto.
  6. Sokrates
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    Sokrates - March 17, 2013 9:16 pm
    You are correct to point out that this kind of thing is very complex. We need to know at what levels the taxes apply. Do PA sales taxes apply at the wholesale level? If so you can expect retailers to increase their prices to cover the tax they had to pay *plus* the extra tax they will charge you, meaning the net increase will be more than 1% at the register. Multiply that by the number of times a product gets sold before reaching the shelf and it adds up fast.
  7. vince phillips
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    vince phillips - March 16, 2013 7:31 am
    If the sales tax is increased and traditional exemptions on things like professional services are eliminated, then the end cost to taxpayers and businesses would be a net negative. Ending those traditional exemptions simply increases the cost and passes it along to the end consumer/business user of the good or service. For example, if I pay a fee now to a financial advisor or a health benefits broker and you add a sales tax, it just makes an insurance product less obtainable.
  8. BH67
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    BH67 - March 15, 2013 10:51 am
    Real Estate & School Taxes needs to be abolished and reverted to INCREA$E the $ALE$ Tax so "everyone" pays these taxes. Homeowners paying the Real Estate & School taxes are unconstitutional and "unequal levy" among taxes. I've said this when I moved to Chambersburg, PA (2o1o). Get with the program PA !
  9. michael
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    michael - March 14, 2013 12:41 pm
    Because you wouldn't be able to heat your house in 2 years, after they were done getting all the costs and candy packed into it that they want.
    LOL!!!
  10. CarlisleGirl
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    CarlisleGirl - March 14, 2013 9:35 am
    Wow -- bipartisan support! I think this is going to happen. And a 1% increase in sales tax will hardly be felt. I would also like to see serious consideration of a small tax increase for the purpose of improving transportation.
  11. Carl Lyle
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    Carl Lyle - March 14, 2013 8:07 am
    Take all the money from the Pa Lottery that is currently (supposedly) going to senior citizens and put it in education. Let the seniors pay for their own Viagra.
  12. pystil
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    pystil - March 13, 2013 8:45 pm
    Vino you talk nonsense "teachers holding kids hostage'. The teachers have NO Power except to change the school calendar. Most schools end the first or second week of June. Teachers can make the last day of school June 30 and that is all they can do by state law. Ooooo scary! The kids still get 180 school days. You are just a chicken little the sky is not falling. What has devastated education is parents who do not parent their children. I am guessing you are one of them.
  13. pystil
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    pystil - March 13, 2013 8:39 pm
    Where is Steve Bloom on this. The Republicans control everything there is no excuse for not getting this done, especially now there are some Democrats also on board. Increase sales tax. Have sales tax on clothing, increase income tax.
  14. ridgerunne
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    ridgerunne - March 13, 2013 11:44 am
    why not put a well-head tax on the shale gas being taken from under the ground here in the State of Pennsylvania and apply it 100% to education?
  15. vinoman1953
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    vinoman1953 - March 13, 2013 9:22 am
    Good idea, but we need to consider the deeper problem - need for laws that prohibit teacher unions from holding our kids as hostages thru their annual strike threats. Take away the union power and we can fix most of this cost containment problem. The PA teacher union has devastated education in PA and it is time for it to go. Pass right to work legislation and it will die a natural death. And the taxpayers will be free of its stranglehold.
  16. jbase88
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    jbase88 - March 12, 2013 9:40 pm
    Good start, but here's a novel idea..raise the sales tax by 2 cents and eliminate the state income tax as well! No loopholes, no exceptions, everyone pays....BTW, when we were duped into accepting the casinos, I don't recall anybody saying that any other taxes would be raised to replace the property taxes. Only that the revenues from the casinos would accomplish this.....seems that our elected and appointed officials have found ways to spend that money on other things...how typical...
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