Property Tax Reform Hits Another Roadblock in Pennsylvania

By Andrew Staub | PA Independent

Proponents of eliminating school property taxes cheered a win last week, but it might have been a hollow victory.

State Senate Majority Leader Dominic Pileggi, R-Chester, recently told a Delaware County business group Senate Bill 76, which would eliminate the unpopular tax, “will not become law” even though it cleared a key committee vote, according to a Chadds Ford Live report from over the weekend.

While not a direct quote, the website reported Pileggi said the legislation was the “subject of intense interest that lacks traction.” It’s a strong sign the much ballyhooed legislation might have reached its apex as the end of the legislative session draws closer.

Pileggi’s statement left David Baldinger, an adamant supporter of property tax elimination, with just one word: “Wow.”

“It most certainly does have traction. There’s no question in my mind,” said Baldinger, spokesman for the Pennsylvania Coalition of Taxpayers Association and coordinator of Pennsylvania Taxpayers Cyber Coalition. “The public outcry for it is tremendous.”

While Senate Bill 76 hit a potentially fatal roadblock, state Rep. Seth Grove, R-York, continued to push for his own version of property tax reform. It would give school districts the power to phase out or reduce property taxes through an elimination tax, which could include a combination of an earned income tax, business privilege tax and mercantile tax.

“It’s something that legitimately, actually can get done,” Grove said.

The state House passed the bill last fall, but it has stalled in the state Senate. Now, House lawmakers are trying a procedural end-around to prod the upper chamber into action.

The House Finance Committee amended Grove’s property tax reform proposal, House Bill 1189, into a separate piece of legislation that has already passed the Senate. That could help bypass some of the normal legislative red tape, Grove said, indicating the House could approve the legislation, then the Senate could concur and send it to Gov. Tom Corbett’s desk.

The intent is to “force the issue a little bit,” Grove said.

It’s the opposite of what Baldinger hoped would happen. He envisioned the pressure would be on the House after the Senate voted to eliminate property taxes entirely. Given Pileggi’s comments, that might not happen.

That could dampen the enthusiasm from last week, when the legislation finally emerged from the Senate Finance Committee — a surprise given that many thought the bill might be stuck there.

For now, state Sen. David Argall, R-Schuylkill, the main sponsor of Senate Bill 76, said his goal remains the same — to get the full Senate to vote on property tax elimination and send it to the House for consideration.

Argall believes he still has the votes he needs and said he would meet with Pileggi about the legislation.

“The only way we’ll know that for sure is to bring it up for a vote in the full Senate,” Argall said.

But even if the state Senate did approve Senate Bill 76, the House has already rejected property tax elimination once before, leading Grove to believe the legislation couldn’t be considered again under the chamber’s rules.

“I don’t think it had a shot,” Grove said.

Much of the concern over Senate Bill 76 centered upon the fact it would be a $12 billion tax shift that would make winners and losers of different constituencies. The legislation would replace property taxes with a higher personal income tax and a higher and expanded sales tax.

Relief wouldn’t be instantaneous, either. School districts could still charge a reduced property tax to pay down construction debt.

Still, Baldinger would rather see property taxes struck down versus giving districts more taxing power, like Grove’s bill would do.

“It’s a piece of trash bill that’s designed for only one reason, and that’s to kill 76,” Baldinger said.

Baldinger vowed to keep fighting for property tax reform when a new legislative session begins in January. In the meantime, he still thinks Senate Bill 76 could pass the chamber — if it’s just allowed to go to a vote.

“Run the damn bill and let’s see what happens,” Baldinger said. “We’ll live with the outcome, whatever it is.”

Andrew Staub is a reporter for PA Independent and can be reached at Andrew@PAIndependent.com.  Follow @PAIndependent on Twitter for more.