FOR IMMEDIATE
RELEASE
November 17, 2005
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Plan to Provide Largest
Property Tax Reduction in PA History Approved by
Committee
Would give voters power to begin reducing
property taxes July 1, 2006.
Harrisburg – A proposal that would provide the
largest property tax reduction in Pennsylvania
history was approved yesterday by a special Senate
committee.
The Senate Committee on Legislation, part of the
General Assembly's Special Session on Property Tax
Reform, overwhelmingly approved Senate Bill 30,
setting up a possible vote by the full Senate next
week.
Senate Bill 30, sponsored by Senator Ted Erickson
(R-26), Senator Joe Conti (R-10) and Senator David
J. Brightbill (R-48), would allow voters to decide
in a March 14, 2006, referendum whether to shift
school funding dollar-for-dollar from property taxes
to sales and income taxes.
"Unlike Act 72, which asked voters to wait until
some undetermined date for gaming revenues and
property tax relief, this plan will bring property
tax relief to taxpayers starting on July 1, 2006,"
said Brightbill.
Voters will decide whether they want to increase
the state sales tax by 1 percent to a total of 7
percent (8 percent in Philadelphia and Allegheny
counties) and increase the Personal Income Tax by
0.43 percent to a total of 3.5 percent. The
resulting $2.6 billion in annual revenue would be
dedicated to the Property Tax Reduction and Senior
Citizen Tax Assistance Fund.
The fund would be used to reduce school property
taxes for all homeowners, freeze property taxes for
certain senior citizens, and expand the existing
Property Tax and Rent Rebate Program for senior
citizens and disabled persons.
When gaming revenue begins coming into the
Commonwealth, a portion will be used to lower the
new sales and income tax rates.
"This achieves two important goals," said
Erickson. "First, it replaces the regressive real
estate property tax as the primary source of funds
for the school districts. Second, it allows voters
in each school district to decide if they agree with
the first goal. The taxpayers themselves will decide
if this is the tax formula they want to adopt."
"This is a balanced initiative – balanced in the
sense that the public participates in two tax
question referendums and will continue to have the
ability to vote on school budgets like the
referendum in Act 72," Senator Conti said. "It is
further balanced by offering a mix of a sales tax,
personal income tax and local earned income tax to
shift away from property taxes."
If approved by voters, $1.8 billion of the new
tax revenues would be sent to school districts to be
used to reduce school property taxes for
homeowners.
Remaining funds would be used to cover the costs
of two other bills approved by the Committee. Senate
Bill 16, sponsored by Senator Stewart Greenleaf,
would expand the state's Senior Citizen Rebate and
Assistance Act income eligibility from $15,000 to
$30,000 per household, and increase the maximum
rebate from $500 to $1,200.
Senate Bill 15, also sponsored by Greenleaf,
would freeze school property taxes for eligible
seniors and compensate the school district for the
cost of the freeze. This would provide additional
relief while other provisions of the plan are
considered and put to public referendum.
All school districts, regardless of the outcome
of the 2006 referendum, would have to live under tax
cost controls, commonly called backend referendum.
CONTACT: Tom Golden, 610-853-4100
