WILKES-BARRE — Dave Baldinger has pushed this cart up the hill for the last decade, at his own time and expense, because, he says, he believes so deeply in it: Eliminate school district property taxes.
This year, Baldinger said, could be the tipping point.
The administrator of the Pennsylvania Coalition of Taxpayer Associations, Baldinger will discuss the latest effort at this epic change — embodied in state House and Senate bills both numbered 76 — during a public conference Thursday at King’s College. Admission is free; his talk will last about 40 minutes and be followed by a question-and-answer session.
“I helped write this bill on behalf of 78 groups in the coalition,” Baldinger said in a telephone interview Tuesday. “This is the people’s legislation; we offered input and approved every part of it. This is our bill.”
As written, the bills would freeze school property taxes the first year after being signed into law, then almost eliminate them except for a small percentage in most districts to pay that district’s existing debt. Once the debt was paid off, that last remnant of property tax would disappear.
That provision was designed to make sure taxpayers in frugal districts where debt was low or nonexistent do not have to pay for debt accrued by other districts, Baldinger said.
To make up for the money lost in school property taxes, the state would increase personal income tax from 3.07 percent to to 4.34 percent, increase the state sales tax from 6 to 7 percent, and broaden the items subject to the sales tax, adding things such as candy, gum, newspapers, magazines, dry cleaning, laundry service, haircuts and food items not covered by the federal Women, Infants and Children food supplement program for pregnant and new mothers.
Any increase in money to districts thereafter would be tied to the Consumer Price Index. If districts wanted more money than the annual increase, they would have to convince voters to approve a referendum raising the money through a local earned income tax or personal income tax. The bill bars re-instituting a property tax, while companion legislation calls for an amendment to the state Constitution making such a ban irrevocable.
Baldinger and other proponents believe this effort has a better chance than past incarnations of the tax-shifting idea for two big reasons. First, it’s revenue neutral, raising enough money to replace every dollar districts will lose by eliminating property taxes, they say.
Second, it deals only with where the money comes from without changing how it’s doled out or trying to tackle thorny side issues such as growing teacher pension fund costs or special-education costs.
In fact, Baldinger said, the proposed tax shift could force the state to address such long-sidestepped issues of equitable funding among districts.
The change could also prompt a boom in house sales, as those people who rent might more readily afford a home when they don’t get a tax bill along with the mortgage, Baldinger said. And it could lower rents if landlords find themselves in steeper competition for tenants.
The bills have drawn bipartisan support in the Senate and House, with Republican David Argall, Mahanoy City, as lead sponsor in the Senate. Locally, Republican Lisa Baker, Lehman Township, and Democrat John Yudichak, Plymouth Township, are co-sponsors in the Senate.
Area representatives co-sponsoring the House version include Karen Boback, R-Harveys Lake, Tarah Toohil, R-Hazleton, and Gerald Mullery, D-Newport Township.
Boback: Seniors hurt
In a written statement citing how property taxes continue indefinitely even when mortgages are paid off — often hurting seniors on fixed income the most — Boback said she co-sponsored the bill “because I realize it’s time to relieve the burden that escalating property taxes have on the most vulnerable residents in our district as well as across the entire commonwealth.”
Mullery has been a proponent of eliminating school property taxes since he won a seat in the House in 2011. He said the Republican co-sponsorship proves “the voices of the people are being heard now more then ever.”
The Republican majority seems to have stalled every similar bill in committee. But each time that happens, more people complain, Mullery said. “I believe it gains more support from the general population,” Mullery said, “and the controlling Republican Party will have to bring this to a committee vote or they will no longer be the controlling party.”
Baldinger particularly praised Yudichak’s efforts in the Senate. Yudichak said he has some concerns about the proposal but wants to see it move forward because “we need to have a conversation about property taxes.”
“I think what we’ve seen is that property taxes may have made sense 150 years ago, but it doesn’t make a lot of sense today,” he said. “It makes it very difficult, particularly on seniors.”
The new version of the bill “addressed concerns” that helped kill previous iterations, Yudichak said, including a green light on the financial viability by the Pennsylvania Independent Fiscal Office. But Yudichak doubts the bill will get much attention until the fall.
“There are so many big pieces of legislation on the agenda,” he said, citing proposals for privatization of liquor sales, funding for transportation repairs, and passing a budget by the end of July.