Property taxes are not a new issue in Pennsylvania. For nearly three decades, state legislators have considered a variety of proposals to reform the property tax system and, consequently, the system for funding public education.
One proposal that continues to garner legislative attention is the Property Tax Independence Act (Senate Bill 76 and House Bill 76). The plan calls for the complete elimination of all school property taxes – about $12 billion annually – and replacing with tax increases and a mix of new taxes, including a sales tax on accounting and auditing services.
In November 2015, Senate Bill 76 was narrowly defeated by a vote of 24-25. The proposal would have increased the sales tax from 6 percent to 7 percent, increased the personal income tax from 3.07 percent to 4.95 percent, hiked the hotel occupancy tax from 6 percent to 7 percent, and continued to use existing revenue generated by slots gaming to shift away from school property taxes. See how your senator voted
Further, the legislation, which was introduced in the General Assembly for the 2018-2019 session, actually concedes that it won’t immediately eliminate property taxes. Taxpayers will continue to receive property tax bills for the foreseeable future to cover a school district’s debt obligation. According to the Pennsylvania Department of Education, most school districts have debt
, meaning most Pennsylvania taxpayers will still pay some property taxes.
The PICPA strongly opposes legislation that would replace a reliable revenue stream with more volatile measures that would have devastating impacts on the state's education system and its citizens. We also oppose a sales and use tax on accounting, auditing, tax, and related professional services because it would have a direct negative impact on Pennsylvania taxpayers.