Some State Lawmakers To Continue Pushing For Property Tax Reform

York Daily Record

Some state lawmakers plan to continue pushing for property tax reform, despite recent comments from Gov. Tom Corbett that he doesn’t think it’s a priority for this year.

“…(J)ust because he said property taxes are off the table this year doesn’t mean they are for the General Assembly,” state Rep. Seth Grove, R-Dover Township, said in an email.

Grove also praised Corbett for focusing on rising pension costs, calling it “the largest problem statewide.” The state’s total contributions for pensions — which includes more than money from the general fund — is expected to increase by about $700 million for the 2013-14 budget, according to a report by the state Office of the Budget, and then continue rising at high levels for several years.

Grove and state Rep. Jim Cox, R-Berks County, introduced separate bills targeting property taxes last legislative session.

Cox had a similar reaction to Corbett’s comments. Cox said the governor and the General Assembly agree that pensions and transportation funding are priorities, but he said there is flexibility on what other issues will get attention.

“We’ve been able to convince the governor of the importance of some … issues,” Cox said. “Things that weren’t necessarily on his priority list ended up being passed into law.”

During a meeting last week with Digital First Media editors and reporters, including the York Daily Record/Sunday News, Corbett was asked about trying to move away from property taxes to fund education.

“Not this year,” Corbett replied. “Not this year.”

Corbett said they have to deal with the pension issue first.

The State Employees’ Retirement System and Public School Employees’ Retirement System have an unfunded liability of $41.2 billion, according to Budget Secretary Charles Zogby.

“It’s going to continue to eat in to all of the other programs that we’re trying to do,” Corbett said.

David Baldinger, administrator for the Pennsylvania Taxpayers Cyber Coalition and a spokesman for the Pennsylvania Coalition of Taxpayer Associations, said he was disappointed with the governor’s comments.

“I was hoping the governor would make it (property tax reform) a priority this year, because the situation has gone beyond urgent to critical,” said Baldinger, from Berks County.

Baldinger said he agrees that the state pension systems need reform.

“I don’t understand why the two issues couldn’t be taken care of concurrently,” Baldinger said.

Bob Kefauver, chairman of the York County Democratic Party, said Pennsylvania’s size and diversity make the property tax issue a tough one to tackle.

“It’s a very complex problem, but one that truly does need attention,” Kefauver said. “And the sooner that attention is given to it the better. I think the governor is making a mistake by not making it a priority this year.”

Neither Grove’s nor Cox’s property tax reform legislation made it out of the House last session.

Both plan to tackle the issue again this year, although Grove is planning some substantial changes to his legislation. Cox said he’d like to see his plan get a full vote in the House “and have the legislators put their money where their mouth is.”

A look at two property tax reform plans, then and now

State Rep. Seth Grove, R-Dover Township

Last time: The legislation Grove introduced last session had different parts, and it would have given authority to local voters and governing entities to swap property taxes for other ones.

It would have allowed voters to choose a 1 percent county-level sales tax through a referendum. The proceeds would have been used to reduce school property tax rates.

Grove’s proposal also would have allowed counties, municipalities and school districts to levy either a personal income or earned income tax. The new revenue would have required a one-to-one offset of property taxes, ranging from a 30 percent reduction to complete property tax elimination.

This time: Grove is planning some key changes to his proposal, including that it would apply only to York County, not statewide.

Grove said other lawmakers could add their counties to the legislation.

“To me, it provides the most flexible method for getting property tax reform,” Grove said in a phone interview.

Another change is that his planned legislation would provide tax relief through homestead exclusions to the maximum rate allowed by the state constitution, and then reduce millage rates.

Grove plans to introduce that legislation as part of a broader education funding reform package that he says would provide additional revenue for schools based on student population, provide greater flexibility for school boards through block grants and reinstate a program that allowed districts to receive waivers for certain state mandates, such as for alternative education programs, teacher certifications and construction.

“Every school district will see an increase from it,” Grove said, adding that growing school districts, like those in York County, would receive bigger increases.

What’s next: He hasn’t sent out co-sponsorship memos for those bills yet, but he plans to introduce them later this month. And he hopes they’ll be considered along with the state budget, which is supposed to be passed by the end of June.

State Rep. Jim Cox, R-Berks County

Last time: Cox’s legislation from last session would have increased the state personal income tax from 3.07 percent to 4 percent and increased the state sales and use tax from 6 percent to 7 percent.

Cox’s website listed about 40 categories of sales tax exemptions that would have been eliminated, including for airline catering, coin-operated food and beverage vending machines and funeral parlors.

Under the plan, school property taxes would have been phased out. Districts would still have needed to use some local property tax money to pay for outstanding long-term debt.

This time: The plan is largely the same. The state personal income tax would increase from 3.07 percent to 4.34 percent (instead of to 4 percent). Cox said that change is based on an analysis by the state’s Independent Fiscal Office on what’s needed to make the plan financially viable.

The Pennsylvania Coalition of Taxpayer Associations worked with Cox to draft the legislation. David Baldinger, spokesman for the association, called other property tax reform proposals “distractions” that “don’t solve the problem.”

What’s next: Cox sent out a co-sponsorship memo for the legislation on Friday. He said he plans to introduce it later this month and hopes to have it considered with the state budget.

“I don’t know that I can say it has a better chance of passing,” Cox said. “I do think there’s a growing group of taxpayers out there that … are needing property tax relief. And it’s still the number one issue I hear about in my district.”

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