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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: January 22, 2013 02:43 PM
From: Senator David G. Argall and Sen. Mike Folmer, Sen. Judith L. Schwank, Sen. John T. Yudichak
To: All Senate members
Subject: Property Tax Independence Act
In the near future, on behalf of over 70 grassroots taxpayer groups, we will introduce bipartisan legislation to establish the Property Tax Independence Act.

The proposal would eliminate all school property taxes across the Commonwealth and would replace those taxes with a combination of funding from the Personal Income Tax and the Sales and Use Tax.

The revenue replacement mechanism in this act will broaden the base of the state sales tax to include more services and products as well as increase the state sales tax from 6 percent to 7 percent. Necessities and business-to-business transactions will continue to be exempt from the sales tax.

According to an analysis compiled by the Independent Fiscal Office, the sales tax changes would generate almost two-thirds of the revenue needed. The remainder of the funding necessary for our public schools would be generated by an increase in the state’s personal income tax from 3.07 percent to 4.34 percent.

Transition to this new system would take place via a two year phase-in period. The first year, school property taxes would be frozen at their current level and in the second year they would be completely eliminated except for a small portion that will be retained in each school district to retire the individual district’s outstanding long-term debt.

The Property Tax Independence Act would fully fund Pennsylvania schools at their current levels. All local school property taxes that are eliminated will be replaced dollar-for-dollar. In addition, this act completely eliminates the taxing ability of local school boards with the only exception being a possible local earned income tax or local personal income tax to fund major projects such as a new school. Use of this exception will be subject to a taxpayer referendum.

Many of our constituents have stated that this is a most-hated, egregious and archaic tax. Perhaps the school district property tax made sense in the 1830s, but it is time to shift to a fairer way to fund our public schools.

Please join our bipartisan fight drive a stake through the heart of the school district property tax beast once and for all.

Please contact Jon Hopcraft at 787-2637 or at jhopcraft@pasen.gov with any questions.

Introduced as SB76