HARRISBURG -- Butler County Commissioner Jim Kennedy is leading the charge to give 65 counties the power to enact a 1 percent sales tax as a way of lowering their property taxes.
The "county optional sales tax" would be levied in the same way and contain the same exceptions as the state's 6 percent sales tax. The proposal wouldn't apply to Allegheny and Philadelphia counties, because they already have a 1 percent county sales tax.
The extra tax is favored by the County Commissioners Association of Pennsylvania, which Mr. Kennedy is president of this year, plus the State Association of Township Supervisors, the League of Cities and Municipalilties and other groups of governing officials.
"Municipalities rely predominantly, and counties rely almost exclusively, on the real property tax to generate our local revenue," said Lycoming Commissioner Rebeca Burke today at a news conference touting the proposal. "We need a tax base that allows us to reduce our reliance on the property tax."
They want the Legislature to approve "authorizing legislation." Whether a particular county actually gets an additional 1 percent sales tax would be up to its commissioners.
Under the plan, 50 percent of the proceeds from the 1 percent sales tax would go to the affected county, with 40 percent going to municipalities in that county and the final 10 percent of the money used for "collaborative municipal efforts," such as buying equipment, setting up joint purchasing efforts or even forming regional police departments.
A county with a 1 percent sales tax would have to use at least 60 percent of the money to reduce existing property taxes and to make up for tax-exempt property. No more than 40 percent of the additional money could be used for operational costs.
This idea is similar to one proposed by Gov. Ed Rendell in his budget message in early February. He proposed authorizing legislation for a 1 percent county sales tax, but didn't specify what the money would be used for.
Harisburg Bureau Chief Tom Barnes can be reached at 717-787-4254.