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Property tax relief fails

The Pennsylvania House of Representatives on Tuesday killed a proposed amendment that would have gradually replaced school property taxes with higher state income and sales levies.

The amendment died by a 138-59 vote.Local lawmakers all voted in favor of the amendment: state Reps. Doyle Heffley, R-Carbon; Mario Scavello, R-Monroe; Rosemary Brown, R-Monroe/Pike; Jerry Knowles, R-Schuylkill; Mike Tobash, R-Schuylkill/Berks; Neal P. Goodman, D-Schuylkill; and Julie Harhart, R-Lehigh/Northampton.The amendment, sponsored by state Rep. Jim Cox, R-Berks, was attached to HB 1189, which would give school boards more wiggle room to wean districts from property taxes.School property taxes currently raise about $13 billion in revenue to fund basic education. The amendment sponsored by Cox would phase out the property tax levy, replacing it by increasing the personal income tax by about 41 percent, from the current 3.07 percent to 4.34 percent. It would also increase the state sales tax from 6 cents per dollar to 7 cents per dollar, and extended the levy to include some currently exempt items.Heffley supports the amendment, and said early Wednesday that he was disappointed that it failed.The widely-split vote, he said, "just shows the divide across the state on property taxes. It's disappointing that it failed, but I will continue to work on other solutions to bring property tax relief to the citizens of Carbon County."Fundamentally, we need to get away from funding schools through property taxes. The property tax isn't a statewide issue many areas don't have the high taxes that we have. I'm going to look at every other option, and look at mandates, which are cost-drivers," he said.Heffley said he'll also be looking hard at ways to address the looming pension crisis."There are a lot of moving parts. I'm certainly not going to give up," Heffley said. "We need an educational system that works, but we also need one that we can afford."Heffley also supports Senate Bill 76, property tax reform legislation proposed by state Sen. David G. Argall, R-Schuylkill/Berks/Lehigh/Northampton/Monroe."We're disappointed, but we're not giving up. The issue is just too important," Argall said.The proposed legislation to which Cox's bill was attached, HB 1189, is sponsored by Rep. Seth Grove, R-Dover. That bill would allow school boards to increase local income and business privilege taxes in order to move away from property taxes."This legislative proposal has been drafted to provide school districts with more options to reduce property taxes," Grove wrote in a March 18 memo to House members. "This legislation will allow a school district to implement an additional earned income tax, mercantile tax or business privilege tax with the additional revenues used solely for the reduction or elimination of school district property taxes. Revenues generated will be used on a dollar-for-dollar basis to reduce the school district millage rate. If revenues are generated to eliminate the property tax (reduce the millage rate to zero), all tax/new tax rates that are implemented under this proposal to reach full elimination will be subject to the Act 1 index."The proposal will be known as the Optional Property Tax Elimination Act. The proposal maintains the paramount goals that should be included in any property tax reform proposal: (1) local control, (2) all monies remain with the school district, and (3) allows for the complete elimination of the school district property tax through local choice.This can all be accomplished by the local school board creating the correct array of taxing options within the school district which best suits the needs of the residents of the school district. No voter referendum is required," he wrote.