By Melissa Daniels | PA Independent
HARRISBURG — Rep. Seth Grove, R-York, admits his most recent proposal confronts an issue a long line of Pennsylvania politicians were unable to reconcile.
“We’ve been dealing with property taxes in this state longer than I’ve been alive,” he said.
This fall, lawmakers may deal with it some more.
Grove’s House Bill 1189 would allow school districts to levy other types of taxes to eventually replace property taxes at the local level. And it would be left up to the school district whether they want to change its system or keep the status quo.
Unlike statewide options that have failed to get out of a committee, Grove’s proposal doesn’t force school districts to abandon property taxes in favor of other taxes. Nor does it change school districts’ funding formula, an issue Grove said he supports but often gets tangled up with property taxes.
Grove said the flexibility of a tax shift will make his proposal appealing to lawmakers as they return in September.
“Those that want to move away from property taxes because it hasn’t been an appropriate method of taxation, this gives those school districts the ability to do that,” Grove said. “For those who want to reduce reliance, it has those options as well.”
The replacement taxes could include taxes on wages and taxes on business receipts.
Collectively, those new taxes would be called an “elimination tax,” which would offset the property tax millage rate, and lower property owners’ tax bills. Once that property tax millage rate is offset, elimination tax increases could not be raised above limits already outlined in state law.
Property tax reform is the big, white elephant of Pennsylvania state policy. Some lawmakers have districts with growing school populations where property taxes may not be an issue. For others, it’s pressing, especially for those areas with older residents on a fixed income.
Last year, plans to swap property taxes with sales tax and personal income tax increases failed to gain steam over concerns the numbers would not even out. But that proposal, House Bill 76, still has wide support among taxpayer advocates.
According to figures from the Tax Foundation, Pennsylvania property tax burden equals about $1,261 per person, which ranks 24th lowest nationally.
But that’s just an average. The property tax rates in Pennsylvania vary widely. For example, a home valued at $100,000 in the York City School District, would see a $3,374 property tax bill from the district. That same home in nearby Northern York County School District would have a $1,776 tax bill, according to most recent millage rates.
“People have seen the failure of statewide plans over and over again,” he said. “For me to come up with a plan that fits all of York County would be completely tough. Multiply that by 500 across the state.”
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