Progress in tax reform reported
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HARRISBURG -- A House-Senate conference committee says it hopes to have a new compromise bill on property tax reform worked out by tomorrow.
But don't bet the ranch on it.
Two conference panel members, Rep. David Steil, R-Bucks, and Sen. David Brightbill, R-Lebanon, say they're guardedly optimistic they can come up with a tax relief bill by tomorrow, for their next meeting.
Rendell pushes tax relief action (04/08/06)
If approved by the panel, the measure would go to the full House and Senate for action and then would have to be signed by Gov. Ed Rendell, who has long been pushing the Legislature to ease the tax burden on homeowners.
Considerable progress on a tax relief bill has been made since last week, Mr. Steil and Mr. Brightbill said yesterday, though stumbling blocks, mainly financial, remain.
One is pinpointing the exact cost of property tax relief, especially for senior citizens of modest incomes who own houses with high assessments in school districts with high millage rates.
Once the cost is figured out, the issue becomes "show me the money." Initially, the panel is looking at state lottery funds to pay for tax relief. The lottery has been doing well lately because of the popularity of Powerball and other games. In a couple of years -- once the state starts receiving revenue from slot machines -- the cost of tax relief will shift to the gaming fund.
As of yesterday, the outline of the bill looked like this:
Increasing the annual income level to $30,000, from the current $15,000, for senior citizens to qualify for rent or property tax rebates from the state. The size of the rebates may also increase slightly. The cost for this expansion was still being determined.
Providing extra tax relief for those seniors whose property tax bills exceed 10 percent -- or perhaps 12 percent or 15 percent -- of their annual income. The exact percentage is still up for debate. The idea is to prevent a low-income senior who faces a large tax bill on a house in a school district with a high tax rate from losing his home.
The tax panel also needs to figure out how much state revenue would be needed to provide this additional tax relief.
Allowing 498 school districts -- all except Pittsburgh, Philadelphia and Scranton -- to tax shift, meaning to increase the local earned income tax rate by up to 1 percent and use that money to cut homeowners' property taxes. The three cities are being excluded from the tax-shifting procedure because their earned income tax rates are already high.
Requiring all school districts to permit a back-end referendum, meaning voters would get to vote on any school budget that exceeds an annual inflation rate. If, however, school spending is unusually high for certain reasons, like building construction, health care or special education students, those costs wouldn't have to be included when calculating the overall budget increase.
Increasing the 6 percent state sales tax -- to either 6.3 percent or 6.5 percent -- is no longer under consideration.
The joint conference committee consists of two Republicans and one Democrat from the House and from the Senate.
The panel has gone for several weeks without coming up with a compromise tax relief bill. Some Democrats think the GOP-controlled panel has been stalling so that the Democratic governor can't take credit for giving tax relief during his upcoming re-election campaign. Mr. Rendell has made property tax relief one of his administration's main goals.
But Mr. Steil said such a partisan political charge is nonsense because all legislators want to offer their constituents tax relief as soon as possible.
"I have campaigned on the basis of dealing with this issue and it has nothing to do with what the governor needs or doesn't need," said Mr. Steil, who also is seeking re-election this year.
First Published April 18, 2006 12:00 am
