Property tax reform has for years been a primary issue of concern for York County residents and politicians.
But with other areas of the state benefiting under a system so dreaded in York, statewide legislation seemed elusive.
That barrier is apparently removed through a bill authored by Rep. Seth Grove, R-Dover Township, which is gaining support and being touted by optimistic lawmakers as a viable solution because it gives voters in each county a say -- through referendum -- in how they want to be taxed.
Grove said the bill, if enacted, could reduce property tax bills by at least 30 percent by giving counties and municipalities the option to swap property taxes for a sales and use and personal income or earned income tax.
Businesses and home owners: The initial "swap" over to a smaller tax would apply to all property owners -- including businesses, property investors who don't live at a property they own and homeowners, Grove said.
After the initial transfer, under which there would be an estimated
minimum 30 percent decrease in property taxes, municipalities would have the option to target only homesteads or farmsteads -- owner-occupied homes and farms -- with extra property tax relief through the establishment of an earned income tax or personal income tax, he said.
An earned income tax includes wages earned, including profits from a business, while personal income tax includes all items except Social Security and pensions, which are not taxable in Pennsylvania, Grove said.
He said it's nearly impossible to cite specific examples of how the bill would affect the tax bill of an individual or a business, because it all depends on factors such as earnings, property value and millage rates of each municipality.
Part of the appeal of the plan is that there is such flexibility, he said. An area such as York City, where there's a high percentage of renters and lower-income wage earners, might make different decisions about its taxing than would another district with higher property values and high incomes, he said.
"York City might be different than West York," he said. "We're so diverse, a one-size-fits-all will not work."
Chronister optimistic: President County Commissioner Steve Chronister, one of numerous area politicians who have been banging the tax-reform drum for years, said he's optimistic the plan will help seniors who are being forced from their homes by escalating property taxes.
The options in the bill would spread the cost of education across a larger group, he said, potentially increasing home ownership and correcting unfair tax burdens in poor areas such as York City.
Property values could increase because a monthly mortgage payment of $1,000 that includes taxes could be reduced to $850 with lower taxes, making it easier for people to buy a home, "and it may be enough of a break to keep somebody in their home."
"It's all linked together," he said. "What if (the market) would open up and now we can start selling homes and making the economy move forward?"
He said he needs to carefully review the bill to make sure it would help a majority of residents, but he'd vote for it if it would.
Hated tax: The legislation might get some support from across the aisle. State Rep. Eugene DePasquale, D-York City, said there's "no secret" the property tax is York's most hated.
He said he would like to see an analysis of the numbers and it's too early to tell whether he could support the bill, but he's glad Grove has "at least gotten the discussion going."
DePasquale said it's possible the bill could address some of the poverty-related issues in his district, but he would have to discuss the proposal with York City officials to make sure the plan would work.
The process: A hearing on the bill is expected in the House Finance Committee Monday, but no vote has been set, Grove said.
After a vote in finance, the bill would move to the Appropriations Committee as a matter of procedure before heading to the full House for a vote.
Grove said he and other supporters of the bill would like a vote in the House before June.
He said it has taken him more than a year of analysis, six drafts of bills and exploration of between 20 and 30 concepts to arrive at the bill, which he thinks is politically tenable.
The Pennsylvania School Boards Association is "generally supportive" of the bill, which would broaden the tax base for school districts, but as in any legislation, the devil is always in the details, said Dave Davare, director of research services.
The PSBA will testify in the hearing Monday that it's supportive of broadening the tax base but has concerns about how it will work in conjunction with existing property tax relief legislation, as well as details regarding the distribution of money and when districts will get notice of how much sales tax money is available.
It is also concerned about a cap on millage rate for districts that enter into the provisions set forth under the bill, given the rising cost of teachers' pensions and other academic needs.
-- Reach Christina Kauffman at 505-5436, ckauffman@yorkdispatch.com, or follow her on Twitter at @YDYorkCounty.



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