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Pennsylvania Property Tax Elimination Bill Stalls

by Tom Branham, Washington D.C., May 2014

 

Legislation to replace Pennsylvania school property taxes with higher personal income and sales tax levies appears to be stalled in the Senate. Meanwhile, more groups are lining up against the proposal.

 

Senate Bill 76

 

SB 76 was sent to the Finance Committee last year and has not yet been scheduled for a vote by the full Senate. A similar bill was defeated by the Pennsylvania House last fall.

 

SB 76 would alter funding sources for education by replacing local school property taxes with new sales taxes that would be expanded to include groceries, clothing and a long list of services that are currently tax exempt. It would also increase the personal income tax from 3.08% to more than 4%.

 

Opposition Mounts

 

More than 40 professional and community groups have come out in opposition of SB 76. They issued a letter warning of serious negative consequences if the measure becomes law.

 

“We are united today in our concern about this legislation, particularly that it does more harm than good and should not be enacted,” said Sharon Ward, executive director of the Pennsylvania Budget and Policy Center.

 

There are worries that sales and income taxes won't be as reliable as property taxes for funding schools. Sam Denisco, Pennsylvania Chamber of Business and Industry Vice President of Government Affairs told NPR Radio, "Sales tax isn't a stable form of revenue coming into the general fund. That goes up and down with the economy, same thing with income taxes too. So that's a concern to us - it's too volatile."