State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Property tax linked to other thorny issues

Written by Mary Wilson, Capitol Bureau Chief | Oct 16, 2013 10:42 AM

As state senators consider how to address problems with a plan to eliminate school property taxes, some say the issue is too vast to be addressed by the Legislature this fall.

A proposal before the Senate Finance Committee would replace most school districts' property tax revenue by increasing the personal income tax and expanding and boosting the state sales tax. At a hearing Tuesday, the head of the state's Independent Fiscal Office went over a study of the proposal. The analysis found that the proposed tax shift would generate enough money for school districts in the plan's first year of implementation.

"The question that seems to be popping up however is that, you know, what about the out years, what about this -- sometimes it's called a deficit, sometimes it's called a shortfall," said Sen. Dave Argall (R-Schuylkill), the bill's prime sponsor.

The IFO analysis found the tax shift would not generate as much for school districts in later years of implementation as school property taxes -assuming they continue to increase at historic rates.

Both Republican and Democratic state senators have said they're not sure if an effort to get rid of school property taxes can get off the ground without a simultaneous overhaul of the school funding formula, or public employee pensions, which lawmakers and the governor tried and failed to advance earlier this year.

"We can go through a list of probably the top four," said Sen. Anthony Williams (D-Philadelphia), referring to issues intertwined with school property tax, "and all this stuff is going to revolve around this."

There's still much debate over how to ease property tax increases for Pennsylvanians. The same plan to eliminate such levies was rejected by the state House.

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