Lawmaker: Tax retirees to eliminate property tax
HARRISBURG >> The long saga over axing school property taxes in Pennsylvania has taken a new turn, but some area lawmakers say the new path is a dead end.
State Rep. Frank Ryan, a Lebanon County Republican, has said he plans to introduce a new school property tax bill. One of the ways he proposes replacing the more than $14 billion they raise annually for local school districts is to create a new tax — on retirement income.
Ryan said his plan will tax retirement income, which is currently not taxed in Pennsylvania, at 4.92 percent. Social Security would be exempt from the tax.
Along with the new retirement
tax, Ryan’s plan would also increase the state sales tax from 6 percent to 8 percent, and add a new 1.85 percent local personal income tax. Those three combined, Ryan believes, will generate enough revenue to do away with school property taxes.
State Rep. Thomas R. Caltagirone, D-Berks, didn’t mince words when asked about Ryan’s retirement tax idea.
“That’s out of the question. That will go nowhere, I can tell you that,” the Reading Democrat said.
Caltagirone said it’s “fair” not to put the extra burden of a retirement income tax on a group of people likely living on fixed incomes. He added that many retirees move to Pennsylvania from nearby states like Ohio, New Jersey and New York specifically because of the lack of such a tax.
Caltagirone said he doesn’t believe there is any way a Republican-led Legislature will give Ryan’s plan the time of day.
“That’s a non-starter. I don’t know what he’s thinking,” he said. “That’s preposterous, that’s absolutely a non-starter. DOA, dead on arrival.”
The school property tax elimination movement was born in Berks County, pushed by former state Rep. Samuel E. Rohrer, a Robeson Township Republican, in the mid-1990s.
It remains a hot issue in the tri-county region, and nearly every local state lawmaker has thrown his or her support behind the concept.
But that doesn’t mean they’ll get behind just any property tax elimination effort.
State Rep. Mark Gillen, a Robeson Township Republican, said he has long been an ardent supporter of getting rid of school property taxes.
“I have always supported the 100-percent elimination of the onerous property tax, instead favoring funding streams that do not include new taxes on retirement income,” he said.
But a tax on retirement income, he said, is not the way to accomplish that.
“Retirees have left states with heavy property tax and retirement tax burdens and the same would occur in Pennsylvania if this new tax were adopted.,” he said. “Our seniors, including my 93-year-old mom, should be secure in their homes. And while I support 100-percent
elimination of the property tax, I will not support a new tax on the nest eggs of retirees.”
State Sen. Judy Schwank, D-Berks, likewise said she couldn’t get behind Ryan’s idea, adding that she and her fellow lawmakers have yet to see any actual legislation.
“It’s not something I support out of hand,” she said.
Schwank, a Ruscombmanor Township Democrat, said that a retirement income tax would simply be moving the problem around, like “squeezing a bag of Jell-O.” Seniors who are most impacted by school property taxes would still face a burden, just in a different form.
While she doesn’t think Ryan’s plan is the right one, Schwank said the simple fact that new ideas are coming forth in the fight to end school property taxes is a positive step.
“There is new energy, both in the House and Senate,” she said.
Schwank said she will take part in a bipartisan workshop organized by state Sen. David G. Argall, R-Schuylkill-Berks, aimed at looking at the property tax issue from every possible angle.
“The idea is let’s review everything,” she said. “We really have to look at every possible option.”
The workshop was approved by Senate leadership, Schwank said, which is a good sign there is growing support to get something done.