House Finance Committee Holds Hearing, Schedules Vote on Property Tax Independence Act
HARRISBURG – The House Finance Committee today held a hearing and scheduled a vote on the Property Tax Independence Act (House Bill 1776) sponsored by Rep. Jim Cox (R-Berks). The bill, which is the only legislation currently before the House that would completely replace school district property taxes, gained the support at today’s hearing of two groups representing agriculture, which is Pennsylvania’s No. 1 economic sector.

“Farmers today joined homeowners and the growing list of taxpayers who support the Property Tax Independence Act,” Cox said.

The Property Tax Independence Act would replace school property tax funding for schools across the Commonwealth with new state revenues. The bill would provide the same level of funding for schools across Pennsylvania as they currently receive through school property taxes.

The legislation would use an increased state Personal Income Tax and an enhanced and expanded state sales tax to replace school district property tax revenues. The income tax would rise from approximately 3 percent to 4 percent. The sales tax would be enhanced from 6 percent to 7 percent. Several special interest loopholes in the sales tax also would be closed.

“Switching to income and sales taxes for school funding provides the obvious benefits of spreading the burden of public education to all who benefit from the investment, not just landowners,” said Joel Rotz, director of state governmental relations with the Pennsylvania Farm Bureau, in his prepared testimony before the committee. “It also better reflects [the] ability to pay based upon income and the sale of items consumers choose to purchase.”

“The Pennsylvania State Grange has supported elimination of the property tax for many years,” said Betsy Huber, who serves as legislative liaison for the organization, in prepared testimony delivered to the committee. “The Grange supports taxation for our public schools based on an income tax and/or sales tax that are based on ability to pay.”

Not all testifiers supported the proposal. The Pennsylvania Budget and Policy Center, a liberal think tank based in Harrisburg, came out in opposition to the Property Tax Independence Act. Michael Wood, the center’s research director, testified before the committee that, because the school district property tax only forces approximately 10,000 Pennsylvanians out of their homes each year, replacing it was unjustifiable. He did not indicate how many additional thousands of Pennsylvanians would need to lose their homes each year before the organization would support property tax independence.

Wood went on to suggest that a better alternative to true home ownership might be to create a “property tax deferral program.” Under the proposal, senior citizens would be allowed to stay in their homes until they die, at which point the home would be sold and the government would collect deferred property taxes.

“What they refer to as a property tax deferral program is little more than a delayed sheriff’s sale,” Cox said. “Instead of pushing old folks out of their homes while they’re alive, the government would be chomping at the bit to get its hands on their money once they die. Every year senior citizens stay alive would increase the amount they owe to the government. This would make it impossible for a parent to pass along the family home to a son or daughter. Instead, the government would essentially inherit grandma’s and grandpa’s home.”

At the end of today’s hearing, House Finance Committee Chairman Kerry Benninghoff (R-Centre/Mifflin) announced the Property Tax Independence Act is scheduled for a committee vote on Monday, June 11. If approved by the committee, it would then be eligible for consideration by the full House.

For additional information about the Property Tax Independence Act, including a complete list of items that would be subject to the expanded state sales tax, constituents should visit and click on the “Property Tax Independence Act” banner at the top of the page.

State Representative Jim Cox
129th District, Pennsylvania House of Representatives

Contact: Dan Massing
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