A more palatable tax-relief proposal?
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HARRISBURG -- In the wake of Tuesday's resounding rejection of proposals to raise income taxes and lower property taxes, state House Majority Leader Bill DeWeese has come up with an alternate approach to property tax relief that he hopes will be more palatable to legislators and homeowners.
Mr. DeWeese, D-Waynesburg, announced yesterday he will introduce a bill that would increase the state sales tax by 0.5 of a percentage point, and would devote the entire additional $712 million to trim property taxes in each school district.
His measure, which still has a long way to go in the tax-shy Legislature, would raise the sales tax to 6.5 percent in most counties, but to 7.5 percent in Allegheny and Philadelphia counties.
Unlike the Act 1 tax-shifting referendum that was defeated in almost every school district around the state Tuesday, Mr. DeWeese's legislation would require approval only from the Legislature.
Mr. DeWeese said his plan might not be perfect -- it would achieve only modest cuts in property taxes -- but claimed it's reasonable and doable.
"I have watched for 30 years as we sacrificed the possible while waiting for the perfect," he said. "I hope this simple, straightforward bill will be the beginning of a real debate on what is possible in our effort to cut property taxes."
Mr. DeWeese's bill is similar to a proposal already made by Democratic Gov. Ed Rendell. He wants to increase the sales tax by 1 percentage point statewide and use about half of the additional $1.4 billion to reduce property taxes for all homeowners and provide additional rent rebates and property tax relief for lower-income senior citizens.
And in yet another move, state Sen. Sean Logan, D-Monroeville, said he has an even loftier goal -- totally eliminating residential property taxes. He is reintroducing a bill from the last session to generate nearly $8 billion through a combination of a new, graduated state income tax and a 1 percent increase in the sales tax.
Mr. Logan is working with a group of ardent property-tax opponents from the Pittsburgh area called Stop Taxing Our Properties, led by former KDKA radio talk show host Bob Logue.
"The voters spoke loud and clear on Tuesday," Mr. Logan, a former mayor of Monroeville, said yesterday. "They don't want partial property tax relief or complex tax shifts. They want property taxes eliminated.''
His tax-elimination proposal, which wasn't acted on the last time, faces very steep odds in the Legislature. It has preferred a flat income tax rate for all wage-earners rather than a graduated tax, which is harder on those with higher incomes.
Mr. Logan would keep the income tax rate at the current 3.07 percent for people making less than $100,000 a year. It would go to 4.07 percent for those making between $100,000 and $150,000 a year; 4.32 percent for people earning up to $200,000; 4.67 percent for income up to $250,000; 5.07 percent for up to $300,000; 5.82 percent for up to $350,000; 6.57 for up to $400,000; and a rate of 7.07 percent for people earning more than $400,000.
Mr. Logan got general support yesterday from a surprising source -- two Republican colleagues, Sens. Jane Orie of McCandless and Jeffrey Piccola of Dauphin. They didn't endorse his specific money-raising formula but did agree with doing away with all property taxes, which they called arbitrary and regressive.
"Rather than continue down the failed path of minor tax shifts ... it is evident that this Commonwealth needs to explore proposals that totally eliminate school property taxes," they said.
But other Republican officials said that raising any kind of taxes is going in the wrong direction.
"The message from Tuesday's election was 'No more tax increases! No more tax shifting! Cut government spending and cut our taxes!" said Republican state Chairman Robert Gleason.
House GOP leader Sam Smith of Punxsutawney also said voters want school boards to do a better job of controlling expenses so property taxes aren't continually being raised.
"People don't want taxes increased -- period," he said. "Whether it's a sales, income or property tax, people have clearly said that 'government has enough money.'"
He said House Republicans "intend to focus attention on factors that are driving (school) costs rather than just shifting taxes.''
First Published May 17, 2007 11:18 pm