House weighs tax bill
This is a big week for homeowners in Pennsylvania who want something done about their tax bills.
The state House is expected to take up legislation from state Rep. Stan Saylor, R-York, which, he says, would reduce school property tax bills by 40 percent to 60 percent in most districts.If it fails, lawmakers are willing to listen to other ideas, including Gov. Tom Wolf'spackage, which includes another version of relief, said House Majority Leader Dave Reed, R-Indiana."It will be what it will be," said Reed, who expects it will take both Republicans and Democrats to reach the 102-vote threshold to changethe antiquated school funding system.As many as three or more proposals could be considered, and the debate could have a ripple effect on a much larger piece of policy.Property tax relief is considered a cornerstone to budget negotiations between the Republican-controlled Legislature and Wolf, a Democrat in his first year as governor.Wolf said his plan would cut the average property tax bill in half. His press secretary, Jeff Sheridan, said it would allow more than 300 school districts to max out an existing property tax discount; leftover money would be used to reduce local millage rates.But Saylor said it drives out the relief in a way that could eliminate the tax for homeowners in some districts especially those in cities but leaves others with as small as a 15 percent reduction, Saylor said. The lawmaker said his plan, which goes after millage rate reductions immediately, wouldprovide more equitable relief across the state."We have to help everybody, not just people who live in cities," Saylor said. "Senior citizens live in every community, and poor people live in every community."Unlike Saylor's plan, Wolf's proposal includes additional revenue streams for Philadelphia and would give a $500 rebate torenters making $50,000 or less. Saylor plans to add a provision increasing the property tax rent rebate for seniors, he said.Talks between the governor and lawmakers are ongoing, Sheridan said, indicating the hope is to reach a compromise.Premature?"I think it's premature to put the bill up for a vote at this time when the conversations are still ongoing and should continue on, he said.Saylor and Wolf would raise the personal income and sales taxes to moveeducation funding away from property taxes.Both would hike the income tax from 3.07 percent to 3.70 percent.Wolf would raise the 6 percent sales tax to 6.6 percent and apply it to more items; Saylor's legislation would keep its reach the same but raise it to 7 percent.Both plans would keep in place back-end referendums by allowing residents to vote on proposed increases that exceed a state-imposed cap, but that hasn't been much of a shield.To protect against future rate increase, Saylor said, millage rates would be lowered more as a growing economy brings in more personal income tax revenue.Still, in times of a recession, districts might hike property taxes, Saylor acknowledged.Wolf's plan would bar districts from raising property taxes if they have fund balances above 4 percent of the school's budgets. The governor has stood behind his plan but has been involved in talks with House lawmakers about property taxes.The fiercest debate this week might be whether either Saylor's or Wolf's plan is enough. Several lawmakers want to kill the tax outright nobody should lose their home because they cannot pay a tax, they say and their efforts have been bolstered by a grassroots taxpayer group calling for the same.The elimination plan, which also shifts education costs to sales and personal income taxes, might be the biggest long-shot. State representatives voted it down last year.Tax eliminationDavid Baldinger, administrator for the Pennsylvania Taxpayers Cyber Coalition, favors total elimination and has said Wolf's plan would doom proposals getting rid of the unpopular tax. For now, the PTCC is remaining neutral on Saylor's legislation, Baldinger said."A lot can happen in the legislative process," he said. "We would rather wait and see where it goes before making any kind of decision on it."Reed prefers elimination but, he said, Saylor's legislation could be a steppingstone toward it. In the short-term, lawmakers also need to see if they can include property tax relief in the budget process, Reed said."The Holy Grail may be property tax elimination, but we're not willing to wait around for the next 40 or 50 years just to hold out in case it might happen," Reed said.State Rep. Seth Grove, R-York, appears poised to float his own property tax reform plan, which passed the House this past legislative session. It would allow school districts to replace property taxes with an elimination tax consisting of a cocktail of other revenue streams.Grove did not respond to a message seeking comment, but state Rep. Eli Evankovich, R-Westmoreland, said he thinks Grove's plan has the best shot to pass, considering its past success. He voted for it in 2013.Evankovich opposes Saylor's legislation. If it passes, he said he would propose an amendment that would aim to keep revenue in the school districts in which it originated. Evankovich said he has a "major problem" funneling more money to Harrisburg."When did we all start trusting governors and lawmakers in Harrisburg so much that we're willing to give them $13 billion more to spend?" he said.