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Pennsylvania Details Plans for Property Tax Relief

by Tom Branham, Washington D.C., December 2019

 

Pennsylvania lawmakers have talked about reducing or even eliminating property taxes for public schools for more than two decades.

 

This month, a bipartisan group of Legislators from the House and Senate released details of five possible options to lower property taxes and adequately fund public education.

 

Plans Under Consideration

 

1.

 

Reduce school property taxes by $8.62 billion by raising the personal income tax 4.07%; increase the sales tax to 7%; require school districts to levy a minimum local earned income of 1% to create new revenue; expand the Property Tax and Rent Rebate Program; and expand the senior safety net through the Deferred Property Tax Program.

 

2.

 

Lower school property taxes by $6.44 billion by raising the personal income tax to 4.62%. Other funding sources could also be considered.

 

3.

 

Limit the homestead tax rebate to $2,340. It is projected this change would cost the state about $5.2 billion that would be paid in part by raising the personal income tax to 4.32%. It is expected more than 2 million homeowners would see their property taxes eliminated.

 

4.

 

Cap the rebate for homestead properties at $5,000. It is projected this change would cost the state about $6.9 billion that would paid in part by raising the personal income tax to 4.72%. It is expected that more than 3.1 million homeowners would see their property taxes eliminated.

 

5.

 

Completely eliminate school property taxes by raising $8.5 billion through increasing the personal income tax to 4.82% and increasing the sales tax to 7%.

 

More Work Ahead

 

The five proposals are the result of months of discussions behind closed doors with administration officials. Sen. David Argall, leader of the School Property Tax Work Group, said the time for action is now. Argall said party leaders will need to conduct a thorough count to see which of those proposals has the best shot of moving forward. And, he added, he hopes that will happen soon after lawmakers return to Harrisburg after the holidays.