President’s Report

by John Donches

 

We had another very informative presentation to over 30 attendees on the state of “Property Tax Elimination” in Pennsylvania at our January 20th C.E.P.T.A. event. The presenter, Mr. David Baldinger, is a well-known and regarded citizen specialist on this legislation. He has been totally involved with this since the days of Sam Rohr’s introducing it in the legislature in 2009. Mr. Baldinger reported and that there seems to be enough bipartisan backing this new legislative session to pass the bill this year and that we are now at the threshold to getting the State government to be singly responsible to fully funding our school districts as it is supposed to do according to our PA Constitution:

B. EDUCATION

SS 14. Public school system.

The General Assembly shall provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.

(May 16, 1967, P.L.1037, J.R.3)

And therein lies the problem stated as “Shall Provide” and as the State legislatures see it that means passing on bundles of educational cost from the State down to the local level, especially through unfunded mandates from the PA Department of Education.

Here’s an interesting history of public schools in PA:

http://www.phmc.state.pa.us/bah/dam/rg/rg22ahr.htm

If passed this legislation, better known as “HB/SB 76 would eliminate the property tax. It would raise personal income tax from 3.07% to 4.34% and increase sales tax from 6% to 7%, also the number of things that are taxable would expand to help make property tax elimination feasible; however there are many good tax exceptions. Link to bill and exceptions:

https://www.documentcloud.org/documents/799686-hb-76-property-tax-bill.html

Mr. Baldinger mentions the positive effects being that eliminating the expense/cost of property taxes would be a dramatic boost to the economy as it puts your property tax dollars back into your pocket to spend on the things you want and need and would be a real boost to home sales as the property tax money can now be used to help purchase the home.

How much money would you have to spend to equal the amount you pay in property tax?

Let’s see if the sales tax goes up from 6% to 7% that means for every dollar you spend on taxable items and services $.07 goes to tax. So for every $10,000.00 spent you’ll pay $700.00 in tax, conversely every $1000.00 in property tax paid you’ll need to spend $14,285.00 on taxable items. Link to average property taxes paid by county in PA:

http://www.tax-rates.org/pennsylvania/property-tax

In Lehigh County, with an average property tax of $3004.00 one must spend almost $43,000.00 on taxable items and services per year to make up the property taxes paid. This is especially important to those on a fixed income as they tend to spend a lot less on stuff in their later years and the beauty of this legislation is it prevents anyone from losing their home due to taxes. It is a fairer consumption based tax vs. a government based value tax. You can determine your tax burden based on what and when, even if, you’ll buy something vs a fixed amount of tax regardless of if you can afford it or not.

 

 

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