Mary Katherine Evans Mountaintop Eagle Intern
The Mountaintop on the Move civic organization is endorsing Pennsylvania Senate Bill 76, the Property Tax Independence Act. President Gene Haverlak credits another member, John Hoovler, for introducing Senate Bill 76 to the rest of the group in October 2013.
Pennsylvania Senate Bill 76 and House Bill 76 would put an end to property tax for school districts. Bill 76 would increase the state sales tax from six percent to seven percent, and the Pennsylvania personal income tax from 3.07% to 4.34%, an increase of 40%.
The additional revenue generated from the act will replace local school property taxes over a two-year phase in schedule. In the first year, all school property tax rates will be frozen at their current level. In the second year, school property tax will be eliminated except for a small portion that will be retained by the school district to pay off its outstanding long-term debt, which is about ten percent of the original school tax bill. The proposed bill does not affect local property tax paid to Luzerne County or local municipalities.
The Property Tax Independence Act also eliminates the taxing ability of local school boards. If a school district needs more funds for projects such as construction, they must present a no-exception referendum to the voters in their district to raise additional revenue by either increasing earned income tax or with a local personal income tax. Property tax cannot be reinstated to raise additional funds in a school district.
The bill also adds new items that will be subject to the increased sales tax. Among these items are: candy, gum, newspapers, magazines, laundry services, haircuts, spectator sports admissions, food items not included on the WIC (Women, Infants, and Children) list, as well as clothing and shoes over $50.
Exemptions to the sales tax include fresh meats, produce, dairy, and many packaged and canned foods in their natural form without additional sugar or other additives. Food stamp purchases, all utilities, home heating fuels, health, hospital, and dental services, prescription drugs, home health care, tuition, day-care, charitable organizations, and business-to-business transactions will continue to be exempt from sales taxes.
Under the current system of Property Taxes, the average property owner pays between $1,000 and $5,000 in local property tax. In Luzerne County two-thirds of collection is school tax. The remaining third is paid to the county and local municipality.
According to Gene, people pay more in property taxes than they pay for their mortgages. For seniors, paying property taxes could become a hardship. “People find themselves in a bad situation after 40 or 60 years of paying property taxes, and they could get thrown out of their home!” says Gene.
Gene emphasizes the fairness of the new system. “Since the money for school funding will come from a sales tax, it will be solely based on how many things people purchase. If seniors are on a fixed income, they spend less so they will be paying
See Property Tax page 4