Ireally do not like taxes. I can't think of a single person who likes paying any tax, whatever it may be. In York County, the most reviled tax is the property tax.
For one thing, property taxes are regressive, meaning not based on a person's ability to pay. People resent the perception that renters do not directly pay property taxes. Homeowners wonder how such a subjective tax can still be in use. Finally, it is a tax that seems to increase almost every year.
After discussions with my colleagues from across the state, I have come to recognize why statewide property tax reform is so difficult.
There are counties in Pennsylvania that have not reassessed property values in more than 50 years. There are also regions where the property tax is the only option to fund public education and local government services.
Additionally, our state education funding formula rewards areas with decreasing student enrollment, which means any statewide tax shift could result in a tax increase for these residents. Members from these areas have no motivation to adopt sweeping statewide elimination of property taxes in favor of a shift to another method, and these members make up the majority of the Legislature.
However, many members would be willing to support a plan providing local tax options, which is the intent of my House Bill 2230. Along with allowing all school districts and all municipalities to move away from property taxes by shifting to income-based taxes and the sales tax, this legislation does the one thing each previous local tax reform measure failed to do -- it will prohibit local taxing authorities from increasing property tax millage rates.
This is a fundamental step in moving away from taxing perceived wealth and instead basing taxes on an individual's ability to pay. The property tax system is broken beyond repair, thus we must take the first steps in dismantling it. House Bill 2230 will allow voters, through referendum, to implement a 1 percent county sales tax to reduce school property tax millage rates. The revenue from this sales tax would be strictly used to reduce property taxes. If school districts eliminate property taxes, then the revenue could only be used for other tax reductions.
House Bill 2230 would allow school districts, counties and municipalities to levy a Personal Income Tax or Earned Income Tax, but they must reduce millage rates by a minimum of 30 percent to a maximum of elimination. If these local taxing authorities opt to reduce, but not eliminate property taxes, then the property tax millage rates would be frozen at the newly reduced levels.
This landmark legislation would give school districts, counties, and local municipalities the ability to completely eliminate property taxes by offering other options. Prohibiting local taxing authorities from raising millage rates will be the first nail in the coffin for property taxes. This legislation will diversify Pennsylvania's local tax structure and finally bring substantial property tax relief. It is time we shift away from the archaic property tax and base local taxes on a citizen's ability to pay.
House Bill 2230 was voted from the House Finance Committee in early April and is now awaiting a vote on the House floor.
More information about my plan is available at RepGrove.com. I also post legislative information at Facebook.com/RepSethGrove.
-- State Rep. Seth Grove, R-Dover, represents the 196th District.