HARRISBURG – It might be a wake-up call to anyone expecting a smooth path to a final state budget.

Senate Republicans plan to vote next week on a proposal to eliminate property taxes as a source of school revenue and replace them with hikes in the sales and personal income taxes. And the bill’s key sponsor says he has support from both parties.

“You don’t reform property taxes,” Sen. David Argall (R., Berks) said Wednesday. “The only solution is to eliminate them.”

Even if his measure fails, its emergence could signal cracks in the tentative $30 billion budget deal Gov. Wolf and Republican legislative leaders touted last week. Neither side has offered details, but both said the plan they hope to finalize by early next month will include a 1.25 percent increase in the state sales tax, changes to the liquor and pension systems, and a reduction in property taxes.

But all that does nothing, Argall and others say, to stop school boards from raising taxes in future years.

For him and his 21 cosponsors, including seven Democrats, the issue is not so much about passing a budget, but permanently changing how Pennsylvania funds its schools. They say the current system, based on sometimes outdated and illogical assessments, is a relic.

“It’s based on, how big is your house? When did you buy it? How big is your lot? Did you remember to paint your door last year? I mean, that’s crazy,” Argall said.

Wolf’s office declined to comment on the bill, saying only that it was not part of the framework agreed upon with Republican leaders.

Property taxes generate about $12 billion for public schools statewide each a year. The bill would generate the same funding, supporters say, by increasing the sales tax from 6 percent to 7 percent, expanding the number of taxable items, and hiking the income tax from 3.07 percent to 4.34 percent.

Underscoring the bipartisan nature of the bill is Sen. Lisa Boscola (D., Northampton), who believes the current dependence on property taxes places the school-funding burden on too few people.

“When you go to a sales tax [funding stream], you get more people paying into the system,” she said.

Senate Majority Leader Jake Corman (R., Centre) has not said how he may vote, in part because he doesn’t want to sway undecided legislators, spokeswoman Jennifer Kocher said.

She said a vote before Thanksgiving was expected, partly because GOP caucus members “have been asking for it for some time.”

Donna Cooper, executive director of Pennsylvanians for Children and Youth, an advocacy group, called the bill an “extraordinary windfall” for businesses, which would be spared from paying property taxes. As an example, she cited the King of Prussia Mall, which she said pays hefty taxes but would no longer have to contribute to area schools.

“Shame on the legislators who vote on this who cement the disparity in school spending across the state, who give businesses a blank check,” said Cooper, a former top aide on education matters to Gov. Ed Rendell.

A memo sent to legislators by a coalition of groups – including the Pennsylvania Chamber of Business and Industry, the Pennsylvania Business Council, the Pennsylvania Bankers Association, and the National Federation of Independent Business – voiced strident opposition, citing “uncertainties and significant risks” of a measure with such a steep hike in income taxes.

Sen. Thomas McGarrigle (R., Delaware) had been a sponsor of the bill, but last week withdrew his support.

“There’s not one-size-fits-all and each district, I believe, can operate better with local control,” he said Wednesday. McGarrigle said local school boards were better suited to address districts’ needs than “Harrisburg and the Harrisburg bureaucracy.”

Bill Patton, a spokesman for House Democrats, predicted it would not pass in that chamber, where it would head if it is approved by the Senate. A nearly identical bill was soundly defeated in the House in October 2013, he said.

“The support is bipartisan, and the opposition is bipartisan,” Patton said.

Wythe Keever, a spokesman for the Pennsylvania State Education Association, the state’s largest teachers’ union, called the bill “a fundamentally flawed piece of legislation” that shouldn’t pass.

Boscola was quick to acknowledge the obstacles to passage, but remained optimistic. “We want to eliminate an archaic tax system,” she said. “It’s a heavy, heavy lift.”

The Philadelphia Inquirer – November 19, 2015 – Read article online