HARRISBURG -- A special state House committee faced three options Monday on what to do about the burden on homeowners from school property taxes.
The just-named 13-member panel could recommend a complete elimination of school property taxes. But that would cost the state at least $11 billion and require serious increases in both the state income tax rate and the sales tax rate to fund public schools, something that legislators, for years, have been unwilling to do.
Or the panel, which includes two lawmakers from Allegheny County and one from Westmoreland County, could take a more moderate approach, pushing for a bill that would give counties the power to raise the sales tax in their county by 1 percentage point and use that revenue to partially reduce property taxes.
Of course, the panel also could do nothing to change the reliance on property taxes, which is what the Legislature has been doing for the last 30 years.
"It's a tough row to hoe to pass anything to reduce property taxes," said Rep. Nicholas Micozzie, R-Delaware, who has been trying for years. But some action is needed, he said, "because I have senior citizens who must decide whether to pay their property taxes or put food on the table."
Monday was the first meeting of the panel, which is headed by two legislators from Montgomery County, Reps. Tom Quigley, a Republican, and Tim Briggs, a Democrat. Montgomery County, just outside Philadelphia, has the highest property tax burden in Pennsylvania, according to the Department of Education.
Of the $11.2 billion now produced statewide by property taxes, $1.3 billion comes from Montgomery, with Allegheny County in second at $1.2 billion. All eight of the other top 10 counties are from southeastern and eastern Pennsylvania, which is from where the pressure for property tax reform is coming.
Sen. David Argall, R-Schuylkill, spoke to the panel about his bill, Senate Bill 1400, which would totally eliminate school property taxes by increasing the state personal income tax rate to 4 percent from the current 3.07 percent, and raise the statewide sales tax to 7 percent (8 percent in Allegheny County).
That bill is identical to House Bill 1776 by Rep. Jim Cox, R-Berks, which is before the House Appropriations Committee. Some critics don't think that proposed increases in sales taxes and income taxes will be enough to replace the lost property tax revenue and fear a voter backlash if higher tax increases are enacted.
Also present Monday was Rep. Seth Grove, R-York, who has a more modest proposal. He wants to enable counties, through voter referendums, to increase their county sales tax by 1 percentage point -- 7 percent in most counties but 8 percent in Allegheny County. Philadelphia would be exempt under his bill because it already has an 8 percent sales tax.
He also would let counties raise income taxes as a second way to get more revenue to use in lowering property taxes. He thinks his approach would be more likely to pass the Legislature since it isn't as economically drastic as the Argall and Cox bills. The Grove bill is now awaiting a House vote.
The special committee includes Democrats Bill Kortz of Dravosburg and Jake Wheatley of the Hill District, along with Republican Tim Krieger of Westmoreland. It must give the House its recommendation by Sept. 30, but it seems unlikely the full House will vote on any of the bills before the current session ends Nov. 30.
However, given continued pressure to lower property taxes, especially from senior citizens, the issue almost certainly will arise when the new session begins in January.state
Tom Barnes: email@example.com or 1-717-623-1238.