GOP lawmakers pitch property tax elimination in York County
A Pennsylvania state senator went old school on colleagues and educators attending a committee meeting on property tax reform Tuesday in York.
"Rome is burning and Nero is fiddling," state Sen. Mario Scavello said at the Senate Majority Policy Committee meeting at Penn State York.
If lawmakers don’t pass school property tax reform, Pennsylvanians, particularly senior citizens, will suffer, the Mount Pocono Republican warned.
Numerous bills are being discussed by lawmakers, including a few seeking total elimination of local property taxes. Others have exemptions for targeted groups, such as seniors. One includes a tax on retirement income. Generally, the proposals would boost state revenue streams, such as sales tax, to make up the difference, proponents say.
Eight Republican state senators were joined Tuesday at Penn State York by a panel of nine representatives from local school districts and the business community.
An audience of about 100 people showed strong support for total elimination but resistance toward the retirement income tax plan.
Scavello shared a story of a constituent who, he said, is making decisions between buying food, clothing and paying school property taxes, adding she told him, "I'm guilty of living too long."
Wrightsville Borough Council members Eric J. White and Dan Bair support total elimination of property taxes. The borough has a significant population of seniors, and the lion's share of local property taxes go toward funding the local school district, White said.
"We're paying the king to stay on his land," Bair said.
Ray Landis, advocacy manager for AARP Pennsylvania, said the state might not have the demographic balance to replace property taxes with income taxes, particularly as the number of seniors living in the state is expected to increase to about 25% of the population by 2030.
To have such a huge older demographic with "no skin in the game" is hard to imagine, he said, and lower income areas could end up the losers.
"We really need to look at the elephant in the room," said Sam Denisco, vice president of government affairs for the Pennsylvania Chamber of Business and Industry, about the prospect of taxing retirement income.
Pennsylvania is among a handful of states that does not tax retirement income.
Taxes are the No. 1 reason people don't want to buy homes, because they are often more than monthly mortgage, said Kim Moyer, chairman of the political affairs committee for the Realtors Association of York & Adams Counties.
Pennsylvania ranks 34th in property tax burden, according to The Tax Foundation, a Washington, D.C.-based think tank.
Several bills pose raising the sales tax and personal income tax in exchange for eliminating property taxes.
The personal income tax rate has been raised only once in the past 27 years. Sales tax has been flat since 1968, but state budgets grown dramatically, said conservative Pennsylvania Liberty Alliance president Ron Boltz.
But Denisco was concerned about the effect raising the state’s competitive low sales tax would have on small businesses and the impact on bigger businesses, which are already taxed at some of the highest rates in the country.
Some instead felt the focus should be on reforming the state’s regressive tax system and cutting back on crushing mandates such as charter school and pension costs, prevailing wage and school security.
Tim Shrom, of the Pennsylvania Association of School Business Officials, said total elimination is not sustainable.
For the state to increase its share of mandated costs, something else in the budget would have to give, said Scavello, who added that many of those costs trickle down from the federal government.
But state Sen. Doug Mastriano, R-Franklin, challenged districts to find their own cost cuts, such as reducing the number of high-salary administrators.
Connie and Jim Koontz — who said they pay 10% of their income in school property taxes — agree that costs are inflated. The Spring Garden Township couple said the number of administrators could be reduced, as could school structures if districts would consolidate.
The panel and legislators were in agreement that a property tax elimination bill must be chosen, whether or not it satisfies everyone's needs.
"It's the No. 1 issue our constituents are concerned about," said Sen. Kristin Phillips-Hill, R-York Township.