Property Tax Reform Measure Fails in the Senate

HARRISBURG – A legislative measure that would have shifted $13 billion away from school property taxes by increasing the state sales tax and personal income tax failed in the Senate yesterday by a vote of 24-24, according to Sen. Gene Yaw (R-23).

The amendment to House Bill 683 contained the language included in Senate Bill 76, commonly known as the Property Tax Independence Act, which would have increased the sales tax 16 percent, from 6 to 7 percent, increased the personal income tax over 60 percent, from 3.07 to 4.95 percent, hiked the Hotel Occupancy Tax from 6 to 7 percent, and continued to use existing revenue generated by slots gaming to shift away from school property taxes.

“The Senate Bill 76 measure sounds great on the surface, but it leaves many unanswered questions, too many in my opinion to be viable now,” Yaw said.     “Under the proposal, businesses like US Steel, McDonalds, Lowes, Walmart, DuPont, would get away scot-free and pay nothing in property taxes; however, the workers in those companies would pay significantly higher taxes.  I am not voting for any bill which raises taxes in this magnitude where the sponsors of the bill repeatedly have said the bill is “not perfect” and have said that we should vote for the bill just  to “move the process” forward.   We are talking about a $13 billion decision based on a bill that is still a work in progress and admittedly flawed.”

In addition to increasing the personal income tax and raising the sales tax, the proposal would have expanded the sales tax to include a number of new items including nursing care facilities, substance abuse facilities, retirement homes, non-tuition and non-housing-related charges imposed by junior colleges, colleges, universities, and professional schools and more.

“The proposal looks to tax a number of new items,” Yaw added.  “It’s very important to note that despite all these increases and expansions under the Senate Bill 76 amendment, not all school taxes would be eliminated.  Taxes for long term debt service would still remain, in some cases this could be 20 years or more.   Moreover, SB 76 would be the end of local school boards for all practical purposes.  Funding would come from the state and be controlled entirely by the state.  I’m not sure this is a wise decision.”


Rita Zielonis, Chief of Staff

(717) 787-3280

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