A TAXING SITUATION
PA. POLS ROLL OUT 5 POSSIBLE PLANS TO ATTACK SOARING PROPERTY TAXES
It’s a battle that has been fought many, many times before.
Members of the state Legislature have been on a mission to provide residents with relief from school property taxes. They have said the taxes are unfair and burdensome. It is a plea they have heard again and again from Delaware County residents. And they have said the taxes need to be replaced.
Proposals have been introduced, and votes have been tallied.
But still the fight rages on. Now that fight has entered a new phase.
Members of a bipartisan group of lawmakers from the House and Senate unveiled five possible pathways to fund public schools that they believe will alleviate the hardship felt by homeowners. The proposals, made public Friday, are the result of months of discussions behind closed doors with administration officials.
Sen. David Argall, a Republican who represents parts of Schuylkill and Berks counties, directed those discussions as leader of the School Property Tax Work Group. He has put a decade of effort into trying to find a solution to this perplexing problem. And, he said, the time for action is now.
“As leaders in this commonwealth, let us work together on this serious issue that has plagued the state for over 20 years,” he wrote in a letter to party leaders Thursday. “We request that each of these plans is reviewed by all of the members of each caucus as soon as possible ... so that we can determine which plan can move forward in the legislative process in 2020.”
These are the five plans outlined in the letter:
· Plan 1: This proposal would reduce school property taxes by
$8.62 billion by raising the personal income tax 1 percentage point from the current 3.07% to
4.07%; increase the sales tax by 1 percentage point to 7% from 6% to generate additional cash for homestead exclusions; require school districts to levy a minimum local earned income of 1% to create new revenue; expand the Property Tax and Rent Rebate Program; and expand the senior safety net through the Deferred Property Tax Program.
• Plan 2: This proposal would reduce school property taxes by
$6.44 billion by raising the personal income tax by 1.55 percentage points from 3.07% to 4.62%. Other funding sources could also be considered.
• Plan 3: This proposal would cap the rebate for homestead properties at $2,340. It is projected this change would cost the state about $5.2 billion that would be paid in part by raising the personal income tax by 1.25 percentage points from 3.07% to 4.32%. It is expected more than 2 million homeowners would see their property taxes eliminated.
• Plan 4: This proposal would cap the rebate for homestead properties at $5,000. It is projected this change would cost the state about $6.9 billion that would paid in part by raising the personal income tax by 1.65 percentage points from 3.07% to 4.72%. It is expected that more than 3.1 million homeowners would see their property taxes eliminated.
• Plan 5: This proposal would eliminate school property taxes by raising $8.5 billion through
“As leaders in this commonwealth, let us work together on this serious issue that has plagued the state for over 20 years. We request that each of these plans is reviewed by all of the members of each caucus as soon as possible ... so that we can determine which plan can move forward in the legislative process in 2020.”
— Sen. David Argall, a Republican who represents parts of Schuylkill and Berks counties
increasing the personal income tax by 1.75 percentage points from 3.07% to 4.82% and increasing the sales tax by 1% to 7% from 6%.
Argall said that while he personally favors the plan that would completely eliminate the school property tax, the other four plans reflect the political reality surrounding the complicated issue. He stressed that the goal of the working group was to craft a proposal that could get the 102 votes needed in the House, the 26 votes needed in the Senate and the signature of Gov. Tom Wolf.
“We had members from each of the four caucuses, we had rural members, we had urban members, we had Republicans, we had Democrats, and so, yeah, we had to compromise,” he said during an interview Friday. “But the closer we get to complete elimination the happier the people I represent in Berks County will be.”
Sen. Judy Schwank agreed.
The Ruscombmanor Township Democrat, who represents parts of Berks County and served on the 12-member working group, said providing a reprieve to those most in need is her top priority.
“I think all of us who sat in that room have felt the pressure to get something done and have a sincere desire to provide school property tax relief or elimination to our constituents,” she said. “So I think it is a kind of political reckoning. And I think
this gives us a lot of options and a lot of opportunities.”
Schwank said the proposals represent a step in the right direction.
“It was the first time we had most of the important players in the room,” she said. “We had honest conversations. It was actually refreshing to participate in this because I have been so frustrated for so long trying to get something done.”
But, she warned, there will still be plenty of debate ahead. She noted that many legislators will be hesitant to get behind the proposals for two big reasons: School property taxes are not a problem in their district, or more importantly, the fear of the unknown prevents them from scrapping the existing system.
“We know that it’s critical that we provide an education for the children of Pennsylvania, and we’ve got to have the funding to be able to do that,” she said. “So I think much of reluctance in the past was knowing there would be winners and losers in each plan, but not knowing specifically who would suffer the most.”
Argall said the proposals will provide answers to those questions.
He said now party leaders will need to conduct a thorough count to see which of those proposals has the best shot of moving forward. And, he added, he hopes that will happen soon after lawmakers return to Harrisburg after the holidays.