The “Property Tax Independence Act,” which is state House Bill 1776 and Senate Bill 1400, is ill conceived and fiscally irresponsible. Proponents say it will eliminate school property taxes and replace them by raising the personal income tax by 1 percent to 4.07 percent and increasing the sales and use tax rate to 7 percent. The plan also expands the goods and services that are subject to the tax.
What proponents fail to mention is that the plan will NOT eliminate all school property taxes. The bill specifically calls for retaining property tax to pay for a school’s debt service. Additionally, according to the Pennsylvania Department of Revenue, the plan will create at least a $3 billion funding gap between what it will actually raise and what school districts need to eliminate property taxes.
There are no quick fixes, silver bullets, or miracle cures in this debate. Hopefully lawmakers won’t fall prey to this political charade.
Robert C. Jazwinski, CPA
Pennsylvania Institute of Certified Public Accountants