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Most York County school districts would get more for property tax cuts under House plan than under Wolf's plan

Written by Ed Mahon, York Daily Record | May 26, 2015 4:00 PM
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(Harrisburg) -- Gov. Tom Wolf and the state House have different plans for reducing school property taxes. One of the big differences is how much money they would send to each district.

Here is a by-the-numbers look at the issue.

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school district in York County would get more money for property tax reduction under Wolf's plan than the House plan.

Wolf's plan would send $29.11 million to York City School District through millage rate reduction and the direct homeowner benefit known as homestead and farmstead exclusions, according to Department of Education estimates.

The House plan would send $15.97 million for the same things to the district, according to House Republican Caucus estimates.

Both those estimates include $2.9 million that district homeowners currently get from gaming revenue.

Wolf's plan targets a greater share of money for communities with high taxes and high poverty rates.

Wolf's chief of staff, Katie McGinty, said the governor doesn't think the House plan would stimulate the economy and help homeowners as much Wolf's would. State Rep. Stan Saylor, R-Windsor Township, the leading backer of the House plan, has said Wolf's plan would take too much money from taxpayers in some districts to send to people in city districts.

McGinty said the governor's plan would help both urban and rural areas.

"Those hollowed out communities where they've seen businesses flee and many families leave, those down-on-their-luck communities are scattered across the commonwealth," she said during a York Daily Record/Sunday News editorial board session Thursday.

She said whether those communities are urban or rural, they usually were established in an area for a reason -- whether it's because they're close to a river or an academic institution.

"Those are bones that we should build on," she said.

McGinty said lawmakers have done "backflips" over the years, trying to help communities with special tax programs. She said the governor's plan would be a more systemic approach.

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school districts in York County would get more under the House plan than under Wolf's plan.

For example, West Shore would get $7.32 million under Wolf's plan and $16.26 million under the House plan. Dallastown Area would get $13.16 million under Wolf's plan and $20.27 million under the House plan.

Saylor said the governor's distribution plan doesn't have enough support in the House, even among Democrats. Saylor said "you'd be lucky to get" about half the Democrats in the House to support it.

"They can't walk home and say, 'Well, I gave Philadelphia more money, I gave Pittsburgh more money, York City more money, but I didn't bring you anything really home,'" Saylor said.

State Rep. Seth Grove, R-Dover Township, said that York City School District homeowners would still get more relief as a percentage of what they pay in taxes than people in other York County districts.

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York County school districts would get millage rate reduction under Wolf's plan: York City, Dover Area, Northeastern and Hanover Public.

Wolf's plans would reduce property taxes directly for homeowners by increasing the homestead and farmstead exclusions benefit. If the property tax reduction reaches a certain constitutional limit for homeowners in a district, then whatever money is left over would be used to reduce property taxes for business owners and others by reducing the millage rate.

The House plan reduces millage rates and provides direct homeowner relief for all districts.

20 percent to 29 percent

is the range for millage rate reduction for York County school districts under the House plan, based on House Republican Caucus estimates. That information is based on 2012-13 data, so tax increases since then and changes in real estate value would affect the estimates.

As an example, in the Dallastown Area, which has the same school property tax rate as it did in 2012-13, if school property taxes went down by 20 percent, the tax bill for a person owning a home assessed at $150,000 would go from $3,339 to $2,671, not counting any direct homeowner tax benefit.

The House also estimates that the direct benefit for homeowners in Dallastown Area, the amount deducted from their tax bill, would increase from $131 to $755.

The House Republican Caucus estimates the House plan would send $8.79 million -- or 29 percent of total property taxes for the district in 2012-13 -- to York City for millage rate reduction. The reduction rate would be 29 percent for Hanover Public, too.

York City would get even more of a millage rate reduction than the initial House estimates, because under the House plan, the direct homeowner benefit for York City would exceed the current constitutional limit in the district.

It's possible that some other school districts could get a larger millage rate reduction than the initial House estimates, because of a circular effect: As millage rates decrease, that changes the calculation for the maximum limit for direct homeowner relief, which can lead to larger millage rate reductions.

During an editorial board session, Saylor said if revenue grows faster than inflation, school districts will have to cut more from their property tax rates.

37 percent to 75 percent

is the range for total residential relief for York County school districts under the House plan, based on House GOP estimates. That counts all of the ways the property tax burden would be reduced for homeowners and renters, such as through the millage rate reductions and homestead and farmstead exclusions.

That estimate is based on the total amount of residential property taxes paid in a district, not what an individual pays. Dallastown Area and York Suburban would each get 37 percent residential relief, while York City would get 75 percent, according to the House Republican estimates.

$3.8 billion

is how much tax relief Wolf has promised in his plan. That includes more than $600 million in existing gaming revenue used for property tax reduction and about $450 million that would be used for various non-property tax relief in Philadelphia, including for suburban and resident wage tax relief.

That $3.8 billion figure does not include an estimated $426 million Wolf is proposing for renter rebates.

Wolf's plan would use new revenue for things other than statewide property tax relief and Philadelphia tax relief.

$4.9 billion

is how much tax relief the House plan is promising. That is made up of $2.71 billion for millage rate reduction from raising the personal income tax rate; nearly $1.45 billion for homestead and farmstead exclusions from raising the state sales tax rate; $125 million for expanding the Property Tax/Rent Rebate Program from the sales tax increase; and $616 million in existing property tax reduction money from gaming revenue.

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was the final vote for the House plan on May 13.

Grove said there is room to tweak the proposal in negotiations, but he doesn't think there is room for major changes without losing too many votes.

Saylor said the property tax issue doesn't break down along party lines. He said there were conservatives and liberals who voted for the plan and conservatives and liberals who voted against it.

34 Democrats voted for the final bill. Another 45 Democrats voted against.

McGinty noted that the the bill wouldn't have passed without Democratic votes.

"The governor was some of the glue in that conversation," she said.

Grove said if Wolf had objected to the plan and told Democrats not to support it, it wouldn't have passed.

71 Republicans voted for the final bill. Another 41 Republicans voted against it.

3.07 percent

is the state's current personal income tax rate.

3.7 percent

is what the state's personal income tax rate would be under both the Wolf and House plan.

6 percent

is the state's current sales and use tax rate.

6.6 percent

is what the state sales tax rate would be under Wolf's plan. He also wants to remove exemptions for child care, nursing homes, candy, gum and many other goods and services.

7 percent

is what the House wants to raise the state sales and use tax to. Unlike Wolf's plan, the House would not expand what is covered by Pennsylvania's sales and use tax.

Contact Ed Mahon at 717-771-2089.

How much would districts get?

Viewing this on a mobile device? Click here to see a chart of how funding for York County districts compares under different plans.

District by district breakdown

A look at how much each York County school district would get for property tax reduction under the House plan and under Gov. Tom Wolf's plan.

CENTRAL YORK >> $15.89 million under House plan; $11.56 million under Wolf plan

DALLASTOWN AREA >> $20.27 million (House); $13.16 million (Wolf)

DOVER AREA >> $11.22 million (House); $10.67 million (Wolf)

EASTERN >> $8.3 million (House); $5.13 million (Wolf)

HANOVER PUBLIC >> $7.52 million (House); $4.27 million (Wolf)

NORTHEASTERN >> $11.45 million (House); $10.97 million (Wolf)

NORTHERN >> $7.5 million (House); $4.51 million (Wolf)

RED LION AREA >> $16.87 million (House); $15.65 million (Wolf)

SOUTH EASTERN >> $9.6 million (House); $7.59 million (Wolf)

SOUTH WESTERN >> $10.9 million (House); $6.8 million (Wolf)

SOUTHERN >> $9.49 million (House); $6.15 million (Wolf)

SPRING GROVE AREA >> $11.01 million (House); $7.49 million (Wolf)

WEST SHORE >> $16.26 million (House); $7.32 million (Wolf)

WEST YORK >> $10.19 million (House); $7.87 million (Wolf)

YORK CITY >> $15.97 million (House); $29.11 million (Wolf)

YORK SUBURBAN >> $11.20 million (House); $5.53 million (Wolf)

Amounts above are based on estimates from the House Republican Caucus and the Pennsylvania Department of Education. They include money for millage rate reduction and the direct homeowner benefit known as homestead and farmstead exclusions.

Both the House and Wolf estimates include existing property tax reduction money from gaming revenue.

Figures do not include an estimated $125 million statewide to expand the Property Tax/Rent Rebate Program under the House plan. They also do not include an estimated $426 million statewide for rent rebates under the Wolf plan.

What's next?

The legislation has moved to the state Senate. State Rep. Stan Saylor, R-Windsor Township, said senators should come up with their own property tax reduction plan or pass the House one.

Also of interest

House passes plan to reduce school property taxes by raising personal income, sales taxes
Recap: Reps. Stan Saylor and Seth Grove discuss property tax reform
Wolf chief of staff says governor 'more than flexible' on sales tax expansion plan
Gov. Tom Wolf's sales tax expansion would cover child care, nursing homes and more.
Gov. Tom Wolf backs off campaign tax plan.
Wolf Tracker.
Would Wolf's plan save you money? Or cost more? Try our interactive tax calculator for York County residents to get an idea.


This article comes to us through a partnership between the York Daily Record and WITF. 

Published in News, York

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