HARRISBURG -- Less than 24 hours after former Republican House Speaker John Perzel threw them a curveball on the issue of property taxes, House Democrats called off today's legislative session and went home for the rest of the week.
Mr. Perzel, who was speaker from 2003 to 2006, when Democrats wrested control of the chamber by a bare majority of 102-101, caught Democrats off-guard Tuesday night by successfully pushing a major tax break for senior citizens by using state slot machine revenue.
Instead of granting modest school property tax relief for all Pennsylvania homeowners, Mr. Perzel wants to focus on helping the state's 630,000 senior citizens, especially those of low to moderate income.
He would devote the entire amount of slots revenue -- $600 million this year but at least $1 billion by 2009 or 2010 -- to completely eliminating property taxes for homeowners 65 and older who have no more than $40,000 a year in income.
Mr. Perzel offered his surprise amendment to House Bill 1600, sponsored by Rep. David Levdansky, D-Forward. Mr. Levdansky wanted to raise the sales tax by 0.5 percentage points and raise the personal income tax to 3.29 percent (from the current 3.07 percent). He would use the $1.5 billion that would be generated to reduce school property taxes by several hundred dollars a year for all homeowners, not just seniors.
The Perzel amendment was approved 159-36, garnering many Democratic votes as well as Republican because of the importance of senior citizens as a voting bloc. The House, however, still must take a final vote on the Perzel amendment, possibly on Monday, before the measure can move over to the Senate.
The Perzel amendment was starting to get traction in the Republican-controlled Senate yesterday. Majority Leader Dominic Pileggi, R-Chester, said he wants more details on Mr. Perzel's initiative but likes the idea of helping seniors.
People who are 65 and older with $40,000 a year in income "are out of their peak earning years. Most of them don't have children in the public schools. They've been living in their homes for a number of years and don't want to lose them because of rising property taxes," Mr. Pileggi said.
On the issue of property taxes, he hears the most from senior citizens in his district.
"They are the ones who are impacted most by increases in the taxes," he said. "I think the general intent and thrust of the [Perzel] bill is sound."
In separate news conferences yesterday, Republican and Democratic leaders sounded off about the House's inability to pass a bill on property taxes this week, defending their own positions.
"We want to provide broad property tax relief for all homeowners. The amendment [Tuesday] night derailed that effort," said Mr. Levdansky.
"The property tax train needs two rails -- it needs to provide assistance to seniors and it needs to provide assistance to everyone else. This [Perzel] train needs to be taken off the track and put in the maintenance shed for repairs."
House Democratic Whip Keith McCall of Carbon County said the Perzel amendment violates promises the Legislature made in 2004 when it agreed to license 14 casinos and use the revenue to offset property taxes in general.
"We made a commitment a number of years ago that this property tax relief would go to all Pennsylvanians," he said. "Now we're pitting one generation against another generation. What about the middle-class guy with three kids who is working to make ends meet, trying to pay his mortgage and can't afford his property taxes?"
House Appropriations Chairman Dwight Evans, D-Philadelphia, had similar concerns. "We promised broad-based tax relief, and this [Perzel] effort was very, very narrow," he said.
Gov. Ed Rendell agreed, according to his spokesman, Chuck Ardo. "Property tax reductions should be broad-based rather than targeted to any single group, even one as deserving as older Pennsylvanians," Mr. Ardo said.
Republican leaders, though, said it's more important to provide significant relief to those who need it most, rather than just a small amount of help to everyone. Seniors are being forced out of their homes because property taxes are increasing as they are entering retirement and living off reduced incomes, they said.
"The difference is between saving a lot of people a couple hundred dollars [a year] or actually saving people from losing their homes," said GOP caucus spokesman Steve Miskin. "John Perzel is very serious about taking care of seniors and low-income people, people who truly need help."
Rep. John Maher, R-Upper St. Clair, urged final approval of the Perzel measure.
"We finally have a plan that is straightforward, simple, clean and can be delivered immediately," he said. "This makes it crystal clear who gets relief."
The battle over who gets property tax relief is expected to continue when legislators return on Monday.
