Pennsylvania Taxpayers Associations Denounce Passage of Special Session HB 39

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Pennsylvania Legislators had a golden opportunity to pass real property tax reform but instead pandered to special interest groups, including but not limited to the PSBA, abandoning representation of the citizens they were elected to represent.

Taxpayer groups unanimously denounce the passage of Special Session HB 39 and call for its immediate repeal.

Pennsylvania Legislators had a golden opportunity to pass real property tax reform but instead pandered to special interest groups, including but not limited to the PSBA, abandoning representation of the citizens they were elected to represent.

The goal, property tax reform, was somehow discarded as the debate progressed. We cite the following major issues that exacerbate inequities in public school funding and are likely to contribute to the continued rapid escalation in property taxes:

1.    The shift to a higher local earned income tax under SSHB 39 in exchange for an offsetting reduction in property tax is not tax reform and does nothing to solve inequitable funding across all school districts.

2.    Stressed school districts that have insufficient assessed value to support education also lack a sufficient earned income base, rendering the shift to local earned income tax useless in solving funding inequities.

3.    Small rebates that may become available from slots revenue do not impact property tax reduction equally. In fact, the highest gambling subsidies are provided to school districts where the tax burden is low and the lowest subsidies are provided to districts where the tax burden is the greatest. SSHB 39 also exacerbates funding inequities with widely disparate EIT rates in order to fund a basic Pennsylvania Constitutional requirement, violating the tax uniformity clause.

4.    The threshold permitted before a school district must seek voter referendum is not based on the cost of living index as many legislators have led us to believe. In fact, it varies by school district and is currently between 3.9% and 6.5%, with the higher limits in areas where property tax is already the most burdensome. Fearful school boards will likely reach for the limit whether needed or not, further contributing to out-of-control property taxes.

5.    The exemptions to the backend referendum are so generous that they render it useless in the vast majority of districts. To illustrate, of the 110 districts which opted in to Act 72, only 1 required voter referendum, even though many districts proposed budget increases in excess of their district’s index. Further, budgeting is not exact and creative school boards will rearrange line items, creating the appearance that large increases fall within the exemptions. True reform will end school boards’ powers to tax and fund public education with state revenues.

The pay raise was a bad idea and was repealed. SSHB 39 is even worse and must be immediately repealed. True property tax reform would have returned real ownership of homes to ALL homeowners by eliminating property taxes and controlling costs through economies of scale, thereby solving funding inequities across all school districts and stimulating the economy. However, it received no support from Speaker John Perzel, who informed members of the House that he did not care about this issue.

The pay raise debacle opened one eye of a sleeping giant. SSHB 39 has opened the other. Taxpayer groups from all over the Commonwealth are networking and now plan a joint meeting to denounce SSHB 39 and any legislator who voted in favor of it. Before November, legislators must do the right thing – repeal it!

Additional Information:

The following taxpayer associations across Pennsylvania have united against SSHB 39: Coatesville Taxpayers Alliance, Daniel Boone Taxpayers Association, Stop Taxing Our Properties, Elverson Taxpayers Forum, Bradford County Concerned Citizens, Stop Teacher Strikes.org, Taxpayers of Brandywine Heights Area School District,    Delaware County Consortium, York County Taxpayers Council, Central Bucks Taxpayers Association, Pennridge Community Taxpayers Association, The Patriot’s Voice. More information can be found regarding these organizations by visiting http://www.dbta.org/pataxpayergroups.html

To arrange an interview with any of these organizations or for any additional information, please contact Cheryl Zaleski, Director of Communications at 610-380-0743 or via email at czaleski @ casdtaxpayeralliance.com.

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Jackie Blumenstock

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