Ar­gall makes another push for tax swap PROP­ERTY TAXES

The Southern Berks News - - FRONT PAGE - By Michael Car­roll From Watch­dog.org

Many Penn­syl­va­nia home­own­ers and state law­mak­ers are now sound­ing the drum­beat to elim­i­nate the school prop­erty tax, which they say is over­bur­den­ing se­nior cit­i­zens and has been ris­ing pre­cip­i­tously in re­cent years.

Sen. David G. Ar­gall, a Repub­li­can from Schuylkill County, has again pro­posed Se­nate Bill 76, which would elim­i­nate the school prop­erty tax and make up the fund­ing dif­fer­ence through a 1 per­cent in­crease in the sales tax and a hike in the per­sonal in­come tax from 3.07 per­cent to 4.95 per­cent.

“Prop­erty own­ers would no longer rent their homes from school dis­tricts,” Ar­gall’s spokesman, Jon Hopcraft, told Watch­dog.org in an email. “The school prop­erty tax is the fastest grow­ing tax in the state and not at all based on one’s abil­ity to pay.”

Leg­is­la­tion to kill the school prop­erty tax nar­rowly went down to de­feat two years ago when Demo­cratic Lt. Gov. Mike Stack broke a 24-24 vote in the state Se­nate by vot­ing against the plan.

“No one an­tic­i­pated we would be that close,” Hopcraft said, “but that shows how much the peo­ple of Penn­syl­va­nia hate the school prop­erty tax.”

The leg­is­la­ture has at­tempted to tweak the tax over the past 20 years or so, but calls for its elim­i­na­tion con­tinue to grow, he said. In 2011, Ar­gall heard from res­i­dents who wanted to elim­i­nate the tax and put in place a re­form

plan that had the sup­port of more than 80 tax­payer groups from around the state, ac­cord­ing to Hopcraft.

“It is truly the only tax that has the power to leave one home­less,” he said.

Ar­gall and rep­re­sen­ta­tives of the Penn­syl­va­nia In­de­pen­dent Fis­cal Of­fice, which an­a­lyzes pro­pos­als but does not make pol­icy rec­om­men­da­tions, have been giv­ing pre­sen­ta­tions about the po­ten­tial ef­fects of such a tax shift.

Among the groups spon­sor­ing their pre­sen­ta­tions is the Penn­syl­va­nia Econ­omy League, a non­par­ti­san pub­lic pol­icy think tank. League spokes­woman Lynn Shed­lock said the or­ga­ni­za­tion has not ad­vo­cated a po­si­tion on the tax pro­posal but is mak­ing sure peo­ple are in­formed about it.

“Our role is more to ed­u­cate peo­ple on th­ese pol­icy ob­jec­tives,” Shed­lock told Watch­dog.org.

The In­de­pen­dent Fis­cal Of­fice has crunched the num­bers re­lat­ing to the pos­si­ble tax shift and is pre­sent­ing them to au­di­ences in dif­fer­ent parts of Penn­syl­va­nia.

“There have been ef­forts to do this over the last 15 years or so,” Matthew Knit­tel, di­rec­tor of the In­de­pen­dent Fis­cal Of­fice, said.

An over­view of pos­si­ble school district prop­erty tax re­form pro­pos­als cre­ated by Knit­tel’s agency in­di­cates that de­mo­graphic changes in the state are cre­at­ing chal­lenges for pol­i­cy­mak­ers. Some se­niors are out­liv­ing their sav­ings ac­counts as life spans in­crease, the re­port said, and the over65 pop­u­la­tion in Penn­syl­va­nia will rise 31 per­cent through 2025.

In turn, some se­niors have strug­gled to pay their prop­erty tax bills as they have aged, Knit­tel said. Re­duc­ing or elim­i­nat­ing the school prop­erty tax would re­duce their bur­den, though the tax bur­den on renters would likely go up, he said.

“For home­own­ers, we think for most of them, in par­tic­u­lar for those who are re­tired, it would be a sig­nif­i­cant tax cut,” Knit­tel said.

But he stressed that’s it’s un­clear if such a tax re­form would pass the leg­is­la­ture this year, since law­mak­ers are also work­ing to close a $1 bil­lion short­fall in the state bud­get.

“For the next few months, what will dom­i­nate the time for the Gen­eral As­sem­bly is prob­a­bly bud­get is­sues,” Knit­tel said.

And just how dif­fer­ent seg­ments of the pop­u­la­tion would be af­fected by such a tax will de­pend on hous­ing mar­kets, in­come lev­els and school en­roll­ment fluc­tu­a­tions, he said.

“Across the state, the con­di­tions are go­ing to vary greatly,” Knit­tel said.

Some busi­ness groups have ex­pressed con­cerns about the con­cept of elim­i­nat­ing the school prop­erty tax. The Penn­syl­va­nia Cham­ber of Com­merce has re­leased po­si­tion state­ments op­pos­ing SB 76 over the last few years, ar­gu­ing that some busi­ness own­ers who lease their prop­erty could face ris­ing tax bur­dens as the re­sult of such a shift.

A sales tax in­crease would also boost the cost of prod­ucts over­all, po­ten­tially hurt­ing small busi­nesses’ profit mar­gins, ac­cord­ing to the cham­ber. And sales tax rev­enues might not be a de­pend­able re­place­ment for the prop­erty tax be­cause they can fluc­tu­ate sig­nif­i­cantly rel­a­tive to the strength of the state econ­omy, the cham­ber said.

But Sen. Ar­gall and oth­ers con­tinue to press for a change.

“I think this is­sue has gained more trac­tion in the last few years than ever in its his­tory,” Hopcraft said. “It used to be a re­gional is­sue, but any pub­lic sur­vey of the en­tire state shows the prop­erty tax as one of the top is­sues for Penn­syl­va­ni­ans.”

DIG­I­TAL FIRST ME­DIA FILE PHOTO

State Sen. David Ar­gall ad­dresses the crowd at a rally in Har­ris­burg for the elim­i­na­tion of school prop­erty taxes.

DIG­I­TAL FIRST ME­DIA FILE PHO­TOS

Penn­syl­va­nia res­i­dents have held ral­lies in Har­ris­burg in sup­port of prop­erty tax elim­i­na­tion.

State Sen. David Ar­gall, R-29th Dist., which in­cludes parts of Berks County, ad­dresses a tax­payer rally in the Capi­tol Ro­tunda. Ar­gall is the prime spon­sor of the Se­nate bill to elim­i­nate school prop­erty taxes.

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