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Pennsylvania House of Representatives
04/20/2024 08:49 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=26580
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: December 3, 2018 11:42 AM
From: Representative Francis X. Ryan
To: All House members
Subject: LEGISLATION: PROPERTY TAX ELIMINATION
 
In the very near future, I intend to introduce a property tax elimination bill that calls for a full elimination of the school property tax within the Commonwealth within two years.

The program is unique in that it breaks the elimination into two bills:
  1. Property tax elimination bill which calls for full elimination of the school property tax and the creation of a commission to develop the replacement taxes subject to very strict criteria within 12 months.
  2. Replacement tax bill which would be the result of the commission’s work.

The details of the elimination bill are as follows:

1. The property tax elimination would be a total school tax elimination.
a. The elimination would take place in the September of two years after enactment
b. A lending facility for schools would be established to provide for emergency funding for schools facing a catastrophic local event interrupting tax collections.$250 Million would be set up initially in the fund and it would be administered by the Department of Education subject to specific emergency constraint measures and as verified by the Auditor General.

2. For the replacement revenue, the bill will call for the creation of a “Commission for Replacement Taxes” The Commission must report within 12 months of bill passage the replacement tax package to replace the school property taxes.

3. The Commission will be bound by the following constraints:
a. Replacement taxes cannot exceed the school property tax replaced and must come from any or all of the following sources.
  1. Personal income tax/Earned Income Tax
  2. Sales and use tax
  3. Tax on unearned income, with exclusion only for return of capital of funds taxes initially (deferred compensation, etc)
  4. Property tax rebate programs to be eliminated
  5. Social Security would NOT be taxable – this is put in the bill to prevent misunderstanding
b. Other constraints:

  1. Landlords would be required to separate rents as to rent and tax portion of the rent 12 months prior to property tax elimination. On the date of full school property tax elimination, the tax portion of the rent would be eliminated.
  2. Trust fund must be established to hold all new taxes with payments to schools to only source of repayment if collected by the state and payments from the trust funds must be permissible to in the event of a budget impasse
  3. Any report from the committee would be presented to the Legislature, Senate and House for full consideration to fund the replacement taxes.
Please join me in co-sponsoring this important legislation to better serve our Commonwealth residents.