HARRISBURG — For years, talk of property tax reform in Pennsylvania seemingly has been nothing more than failed bills and some slot machine cash. But some state legislators believe two bills they say will end rising real estate taxes are gaining traction.
Whether they’ll pick up enough steam this session to come up for a vote is yet to be seen, but the bipartisan sponsorship lists on both the House and Senate versions are viewed by some as reason for hope.
Among the area legislators who have signed on as co-sponsors of the House version of the bill are: Tarah Toohil, R-Butler Township, Karen Boback, R-Harveys Lake, Sid Michaels Kavulich, D-Taylor, and Jerry Mullery, D-Newport Township. On the Senate side, co-sponsors include John Yudichak, D-Plymouth Township, and Lisa Baker, R-Lehman Township.
Since the bills were first introduced this session, in March, they’ve gained additional co-sponsors. In the House, the bill was introduced with 62 co-sponsors and has climbed to 85, in the 203-member chamber. In the Senate, the bill was introduced with 17 co-sponsors and now boasts 22, in the 50-member chamber.
‘Picked up momentum’
Yudichak said there’s no doubt the issue “has picked up momentum,” and he said the reasons are a combination of a more vocal taxpayers and the governor taking the ax to state education funding three years ago.
“Citizen advocates are doing a much better job organizing themselves and communicating their message,” Yudichak said. He added that when Gov. Tom Corbett, a Republican, chopped $1 billion in education funding, residents began calling for property tax reform.
He said that putting 20,000 public school employees into the unemployment line and causing 70 percent of school districts to raise taxes have helped to gain supporters of the bills from urban and rural legislators, Democrats and Republicans.
“That crystallized their position and made them realize we need to change how we fund public schools,” Yudichak added, calling the current taxation system “antiquated.”
The so-called “Property Tax Independence Act” would replace revenues currently collected through school district property taxes with alternative, statewide funding sources.The proposal would:
• Raise the state sales tax from 6 percent to 7 percent.
• Raise the personal income tax from 3.07 percent to 4.34 percent.
• Close some special interest loopholes in the sales and use tax.
Together with some existing gaming revenues, these dollars would be enough to fully replace school district property taxes, some of the key co-sponsors argue.
The lawmakers say they know the plan will work because they based the calculations on a thorough analysis that was conducted last session by the Independent Fiscal Office.
“That study was the piece of the puzzle that had been missing in the past,” said state Sen. David G. Argall, R-Rush Township. “We always had a general concept of what it would take to replace school district property taxes. The independent analysis gave us the detailed information we needed to ensure the plan will work.”
Yudichak agreed the IFO analysis was able to bring additional legislators on board.
But it isn’t enough to persuade state Rep. Eddie Day Pashinski to sign on.
While he supports property tax reform, he said, the way these bills would go about it are not the way to go.
Pashinski said he has concerns over what happens if sales or personal income tax collections dip and there’s no reserve to help offset the shortfall promised to school districts. He also has concerns about how the money generated by casinos that are earmarked to property tax reduction would be used.
His idea is to cut property taxes in half and use increased sales and personal income taxes to help pay for education. He does agree that having continued public discussion about the issue is a good thing.
Among the Democrats not on that list is state Sen. John Blake, D-Archbald.
Like Pashinski, Blake has concerns about making such a change without having safety nets in place.
“I have concerns about complete reliance on sales and income taxes to fund public education. Future economic recessions could undermine revenue collections and thus erode essential support for public education. I don’t want — nor should anyone want — a decision on such a momentous tax shift to be based on anything but sound fiscal analyses and progressive and fair tax policy principles,” Blake said.
As Democratic chair of the Senate Finance Committee, he also has enlisted the IFO for an analysis of the financial impacts of the Senate version of the bill.
“I anxiously await the findings of the IFO report, and I will reserve my judgment about co-sponsorship of SB 76 until after I’ve reviewed that report and other studies of this proposal,” Blake said.