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The Republican property tax relief proposal would likely give bigger tax breaks to more people than Gov. Tom Wolf’s proposal, but “school districts with less income and wealth would fare better” under Wolf’s proposal, a new study contends.

Six of 11 school districts in Luzerne county would see a higher median homestead tax break under the GOP plan than under Wolf’s plan, data included in the report shows. But the Wolf plan puts more tax relief in the districts with lower-income residents.

“It’s a complex, weedy issue,” economist and report co-author Stephen Herzenberg said in a media teleconference announcing the reports Tuesday. “Our releases are trying to fill an information gap.”

The three-part report from the Pennsylvania Budget and Policy Center notes both plans increase state income tax from 3.07 percent to 3.7 percent, and that Wolf wants to raise sales tax to 6.6 percent as well as broaden it while the GOP plan increases it to 7 percent without any other changes.

Herzenberg, executive director of the Keystone Research Center, said a key difference is that Wolf wants to use some of the money raised through the tax hikes to fix the state’s structural deficit, while the GOP proposal, spelled out in House Bill 504, uses all the money for property tax relief.

A second big difference is that the GOP plan gives a greater share of total tax relief to commercial and industrial property owners, he added.

The report’s comparison of the two plans at a school district level should “give fresh life to the compromise effort” as the Democratic governor and Republican-controlled legislature continue working on an overdue state budget, Herzenberg said.

“Fundamentally the Wolf plan helps middle- and low-income homeowners more than the House plan,” Herzenberg said, but at the school district level “the Wolf proposal looks surprisingly good in many Republican parts of the state.”

Contending that Wolf’s initial proposal and response to the Republican plan spelled out in House Bill 504 have both shown a willingness to compromise, Herzenberg said the data in the report could help both sides in the legislature overcome partisan tendencies.

“To walk away from best chance for compromise in a generation because your opponent is in another party is like cutting your nose off to spite your face,” he said.

“This report is meant to bring light, not heat. We want it to reinforce a fact-based discussion and try to shift the mood back towards problem solving that would be divided government at its best. We don’t need divided government at its worst.”

https://www.timesleader.com/wp-content/uploads/2015/07/property-tax-compare-7-29-2015.pdf

By Mark Guydish

mguydish@www.timesleader.com

Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish