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House of Representatives
Session of 2019 - 2020 Regular Session


Posted: March 5, 2019 12:23 PM
From: Representative Jim Cox
To: All House members
Subject: Property Tax Independence Act - HB 76
Pennsylvanians have spoken loud and clear – from town hall meetings to the ballot box – the school property tax is the most-hated and egregious tax. While the school property tax may have made sense when it was first enacted in the 1830s, it is time to shift to a fairer way to fund our public schools.

On behalf of 80+ grassroots taxpayer advocacy groups across the Commonwealth, I will re-introduce the bipartisan Property Tax Independence Act. This legislation will be similar to House Bill 76 of 2017-18.

The legislation would eliminate school property taxes and shift to an increased Personal Income Tax (PIT) and an increased and expanded Sales and Use Tax (SUT). Last session, those rates included:
  • Increasing the SUT from the current six percent to seven percent; and
  • Increasing the PIT from the current 3.07 percent to 4.95 percent.
The new revenue sources would replace dollar-for-dollar the revenues lost by the school property tax elimination.

School districts would continue to collect the property tax until June 30, 2019. Each year thereafter, districts would receive their reimbursement from the State Treasury on a quarterly basis with a cost of living adjustment.

A portion of the school property tax would remain only to pay off debt service that is on the books as of December 31, 2018. Once the district's debt is paid off, the school district would no longer have the authority to collect any school property tax.

Under this proposal, any school district seeking to spend above the allotment from the state would have to ask the voters for their support in a referendum. School districts may locally increase the PIT or Earned Income Tax if approved by the voters in that district. The greatest form of local control is allowing the voters to decide the merits of spending increases.

I understand that this draft of HB 76 may not be the final version and I am open to any and all suggestions on how to move this issue forward during this session. Please do not hesitate to contact me with your suggestions.

Introduced as HB76