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New battle brewing on property taxes
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HARRISBURG -- With a state proposal that would allow counties to halt their court-ordered property reassessments halfway to the governor's desk, there's now a pack of bills following in its wake aiming to reduce or eliminate the property tax entirely.
Those varying approaches all would look to other options -- such as boosting the sales tax or income tax -- to make up for lost property tax revenues.
"I believe that property taxes on our homes is immoral," said state Rep. Rick Saccone, a Republican from Elizabeth Township, at a recent news conference to unveil one proposal for axing that levy. "It hurts seniors in their most vulnerable moment, when they're on a fixed income."
Mr. Saccone, whose reassessment moratorium bill unanimously passed the House earlier this month, said eliminating the property tax is necessary to protect homeowners.
"The cavalry is on the way," he said. "We're coming."
That message isn't a new one in the state Capitol. There have been similar efforts put forward for decades -- perhaps most prominently from former GOP state representative Sam Rohrer of Berks County, who pointed to the sales tax and later to gas drilling royalties as replacement funds for school districts.
Despite their prevalence, previous efforts targeting the tax failed to garner broad-based support. But some lawmakers say they believe the Allegheny County reassessment saga, as well as property value increases in other regions of the state that have grown dramatically, has created more urgency for tax reform.
"The constituents are starting to see the real impact on their property tax bills," said state Sen. John Pippy, R-Moon.
The reassessment process here has prompted Sen. Wayne Fontana, D-Brookline, to introduce a plan that would allow only Allegheny County to replace the property tax by either a vote of county council or by residents.
"My plan is about asking the citizens, 'Do we want to have property taxes to fund schools and county services or don't you?' " Mr. Fontana said. "If they say no, then we go back to, 'How do we make it as fair as possible?' "
In addition to Mr. Fontana's plan, another proposal from Sen. David Argall and Rep. Jim Cox focuses on the broader tax elimination attempted in the past. Mr. Cox served as chief of staff to Mr. Rohrer, and helped write the lawmaker's plans for reversing the tax.
Under their plan, the state personal income and sales taxes would be increased and broadened to generate funds for replacing school property taxes.
The income levy would be raised to 4 percent from the current 3.07 percent. The sales tax would hiked one percentage point and assessed on items like candy, newspapers and certain services that are currently exempt.
Another proposal in the state House, from Rep. Seth Grove, R-York, would allow county voters to decide whether to enact a local sales or income levy to reduce the need for property tax revenues. That bill passed a House panel earlier this month.
Despite the resurgence in proposals and interest in the issue, the likelihood of any dramatic changes to how schools and local governments are funded remains murky, with other large policy issues -- and this year's legislative elections -- looming.
"There are a variety of proposals that are being presented," said House Majority Leader Mike Turzai recently, declining to back any particular tax elimination plan until House Republicans discuss them in detail. "We're going to be taking them seriously."
Meanwhile, a short-term solution for property owners still could see a final vote while debate over systemic reform continues. The House-approved reassessment moratorium from Mr. Saccone awaits Senate consideration when lawmakers return next week.
That bill is similar to one that was vetoed last fall after it was amended in the Senate so that it would halt only Washington County's reassessment process.
The legislation now would allow counties to opt out of a court-ordered reassessment, though that provision would expire if either the General Assembly passes reform legislation or at the end of next year.
Mr. Pippy said he is supportive of the House measure, and hopes that the proposal will be approved by the Senate before lawmakers take their summer break in July.
First Published April 23, 2012 3:56 pm
