Argall calls for tax relief
A group of state lawmakers led by Sen. Dave Argall of Schuylkill County recently released its top five property tax relief options, urging legislative action in 2020.
Argall chaired the “school property tax work group,” which has held numerous meetings on the issue since August.
“The time for legislative action is now; especially since there is a lawsuit pending against the commonwealth regarding school funding and school property taxes, speaking to the severity of this issue and concern,” Argall wrote in a letter to floor leaders. “As leaders in this commonwealth, let us work together on this serious issue that has plagued the state for over twenty years.”
The plans include:
• An $8.62 billion reduction through a 1% personal income tax increase, a 1% sales tax increase for homestead/farmstead exclusion, requiring school districts, if they don’t already, to levy a minimum local earned income tax of 1%, expanding the property tax/rent rebate program, and expanding the Senior Safety Net Deferred Property Tax Program.
• An $6.437 billion reduction through a personal income tax increase of 1.55%, from the current 3.07% to approximately 4.62%. If the sales and use tax is included, the personal income tax rate would then be decreased accordingly. Other funding sources could also be considered.
• A rebate for homesteads capped at $2,340. There are 3.4 million properties in the state that qualify as homestead properties. The statewide average school property tax paid by eligible homeowners is $2,340. This plan would provide a rebate to homestead properties that would be capped at $2,340. A personal income tax increase of 1.25% would fund this change. If the sales and use tax is included, the personal income tax rate would then be decreased accordingly. Other funding sources could also be considered. Approximately 2.09 million homestead properties would see their school property taxes eliminated.
• A rebate for homesteads capped at $5,000. A personal income tax increase of 1.65% would fund this change. If the sales and use tax is included, the personal income tax rate would then be decreased accordingly. Other funding sources could also be considered. Approximately 3.11 million homestead properties would see their school property taxes eliminated.
• An $8.5 billion elimination in homestead school property taxes. Every single homestead property in Pennsylvania would see their school property taxes eliminated. The personal income tax would rise from the current 3.07% to 4.82%. According to Appropriations Committee staff, the baseline personal income tax rate would only need to rise to 4.65%, but 4.82% was decided because the rate was deemed sufficient to weather an economic recession. There would also be a 1% sales tax increase.
The fifth option is the only one that would result in a complete elimination of property taxes, which Argall said he favors. Four other plans, he added, were pitched in an effort to compromise with fellow lawmakers.
“The goal was to seek a consensus that could garner the necessary 102 votes in the House of Representatives, 26 votes in the Senate, and the signature of our Governor,” he said.
The lawmakers in the work group requested “that each of these plans is reviewed by all of the members of each caucus as soon as possible and that the caucus whips conduct a thorough count so that we can determine which plan(s) can move forward in the legislative process in 2020.”