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Politics tangling tax reform

Based on some of the political rhetoric pouring from the Capitol, it's easy to think an expanse the size of Lake Erie separates Democrats and Republicans when it comes to property tax reform.

There's Democratic Gov. Tom Wolf using his campaign Facebook page to warn the good people of Chambersburg that their school taxes could rise 3.5 percent because tsk tsk "some Republicans are happy with the status quo" and won't cozy up to his budget proposal, which includes $3.8 billion in property tax relief.Then you've got Steve Miskin, the top spokesman for state House Republicans, shaming Democrats on Twitter for supporting Wolf's plan to overhaul the sales tax to help pay for reduced property taxes."So, the Wolf #TaxYouMore plan is really a #Burden4PA, diapers, day care and mime shows are taxable so much for @PADems being pro-family," Miskin wrote.The political jousting within a divided government is expected, but it has clouded discussion over property tax relief, which actually suffers more from a geographical split than a divide between the figurative donkeys and elephants.Figuring it outUnlike liquor privatization and public pension reform, reducing the burden on homeowners is actually one of Harrisburg's greatest bipartisan desires. But it's trapped in a partisan budget debate."I don't think it's an issue that lots of lawmakers don't want property tax reform. It's trying to figure how to do that," said G. Terry Madonna, a political-science professor at Franklin and Marshall College in Lancaster who covered property tax reform in a recent column.Wolf and Republican legislators are actually closer on the issue than the budget rhetoric suggests.Wolf said he can halve the average homeowner's property tax bill, in part by raising the personal income tax from 3.07 percent to 3.70 percent on July 15 and the sales tax from 6 percent to 6.6 percent in 2016. The sales tax would also apply to more goods and services.That aspect of the plan has drawn derision from conservative groups and the GOP see Miskin's tweet. Truth is, plenty Republicans would happily tax the same things at a higher rate.Wolf's plan is remarkably similar to Senate Bill 76, supported by many within the Republican ranks and would increase the personal income tax to 4.34 percent. The legislation also broadens the sales tax and raises it to 7 percent.In the futureThe key distinction, Miskin said, is that it comes with total elimination. That would ensure school districts don't raise rates in the future, leaving residents with higher property, sales and income taxes.That's the fear of David Baldinger, spokesman for the Pennsylvania Coalition of Taxpayers Associations. He favors totals elimination, and he said Wolf's plan "bastardizes" SB76 and would doom the legislation, if approved.At the same time, Baldinger acknowledged a governor talking about property tax relief is progress, and it has opened the door for comparisons to SB76."In a way, we're kind of grateful for what he did," Baldinger said. "He just can't get what he wants, as far as we're concerned."The bipartisan nature of property tax relief has often buoyed Baldinger's hopes for elimination.Thirteen Republican state senators joined 13 Democrats this past session to co-sponsor SB76. Twenty-six votes would be enough to squeak a bill out of the Senate, but co-sponsorships don't guarantee a yea vote on the floor. A vote hasn't occurred in the upper chamber, but the state House has left behind some bread crumbs to follow.On Oct. 1, 2013, 47 Republican state representatives and 12 Democrats voted to eliminate property taxes altogether. That measure failed, but the House passed legislation allowing school districts to replace property taxes with an elimination tax made up of several possible revenue streams.It died in the Senate, but 84 House Republicans three-quarters of the caucus at the time supported the measure. That, coupled with the elimination vote, makes Wolf's suggestion that Republicans favor the status quo somewhat misleading. In a bit of irony, Chambersburg's state Sen. Rich Alloway supports property tax elimination.What Republicans generally don't favor is Wolf's budget proposal, which Alloway has called a "joke." It includes a severance tax on the natural gas industry, a hike in the minimum wage and higher tobacco taxes, while at the same time increasing the state's total operating budget by $6 billion.'Spending plan'State Sen. Ryan Aument, a Lancaster County Republican who voted for elimination when he was a state representative, said Wolf is trying to "wrap the cloak of property tax reform" around a massive spending plan."My concern is, and just frankly speaking, is that the real intent of the governor's budget is to drive up spending by 16.1 percent, to increase the overall tax burden on Pennsylvania residents in order to pay for more government," Aument said.Wolf's budget secretary, Randy Albright, has said the budget proposal and its moving parts must be considered comprehensively.That might not bode well for the governor's property tax relief plan; Republicans control the Legislature and probably won't pass his budget as it is. But Albright at least kept the door open for a bipartisan deal when state Sen. David Argall, R-Schuylkill, asked whether the governor would sign an elimination bill if it made it to his desk.Any budget agreement would hinge upon fixing the state's structural deficit, adequately funding schools, helping the middle class and improving the state's business climate, Albright said."If we can do more to provide more property tax relief, more tax relief from the burden that school districts currently place on their constituents, that's a conversation we're happy to have," he said.Perhaps it's just more budget-season posturing, or maybe it shows the divide between the administration and the Legislature might be more of the Susquehanna River proportion than that of one of the Great Lakes."That wasn't exactly a yes," Argall replied to Albright, "but it was a lot better than a hell no."

Screenshot taken from Gov. Tom Wolf's campaign Facebook page