New Funding Bill Could Eliminate School Property Taxes in PA

A state sales tax increase was supposed to underwrite the school property tax rebate. Many more items & services at present exempt from the state sales tax additionally would have been taxed, together with daycare, movie tickets & trash pickup.

If the preliminary vote on Monday is successful, another vote would be required for Senate passage.

The Taxpayer Relief Act would completely eliminate $14 billion in school property taxes.

Gov. Tom Wolf says a proposed agreement to end a five-month budget standoff is in deep peril despite the framework he announced with top Republican lawmakers earlier this month.

On the other hand, is it worth the aggravation of enacting Senate Bill/House Bill 76 to allow older, low-income and disabled people to stay in their homes after they are paid off?

“Unfortunately, that work looks like it’s in peril, deep peril”, said Wolf on Monday. State sales and use tax would go from 6 percent to 7 percent.

During more than an hour of debate, proponents promoted the move as modernizing the tax code and public school funding by ridding the state of a tax that doesn’t reflect one’s ability to pay and puts the fixed-income elderly at risk of being forced out of their homes.

Update: This post has been edited to reflect that Republicans and the Wolf administration differ on the reasons for the faltering budget framework. The state’s allotment would get an inflationary increase every year, and districts wanting to spend above that would have had to win voter approval to increase local income or wage taxes.

In addition to the school property tax rebates, the money would provide an increase of $350 million, or 6 percent, for public school operations and instruction. Representative Tom Quigley, in his co-sponsorship memo stated, “Pennsylvania now has one of the narrowest sales tax bases in the nation and broadening of the base is a powerful key to adequate revenue generation….unlike the property tax that has no relationship to family income, both the sales tax and the personal income tax are directly tied to a person’s ability to pay”.

The lieutenant governor “had concerns over taxing food, leaving schools with a funding deficit and taking focus off budget talks…Stack did say that the issue of property tax reform has to be revisited”, PA Independent tweeted.