Recently in Wilkes-Barre, my legislative colleagues and I hosted the House Democratic Policy Committee for a hearing on tax fairness in Pennsylvania. During this hearing, the testifiers noted their concerns and offered new sources of income to help reduce tax pressure on property owners. We fully understand the struggle many Pennsylvanians have with taxation levels across the state and this hearing presented viable solutions to many of our concerns.
The Keystone Research Center offered several new sources of funding that could be available to help balance our present tax structure. Hundreds of millions of new dollars can be generated by closing corporate loopholes, initiating a fair tax on Marcellus Shale gas extraction or selecting a variety of high-end luxury items such as gold bullion or professional entertainment to be added to the sales tax. All of which would seriously help to reduce other taxes and balance out our current tax structure.
The hearing then focused on H.B. 76, whose proponents have taken an all or nothing approach to property tax elimination. This has further harmed Pennsylvania homeowners by leaving us with nothing. House Bill 76 has languished in committee for more than a decade, never even getting past the first step of the legislative process because of consistent errors in the language and severe multi-billion-dollar deficits needed to be made up by taxpayers. Even the legislation’s author admitted the bill was flawed, but still pushed for passage of a plan that simply didn’t work.
The Pennsylvania Coalition of Taxpayer Associations agreed at my hearing that previous versions of H.B. 76 were simply not ready to become law. Each session, a new H.B. 76 is introduced with changes from the previous bill in an attempt to correct the flaws in the language and provide enough funding for our education system. To move forward with such a significant tax shift without clearly knowing the outcome would be an incredibly irresponsible move by the legislature.
Since this would be a colossal restructuring of the tax system, countless questions will be raised in trying to understand this massive tax shift. Can my constituents afford a 7 percent sales tax on assisted living for your elderly family members, which would average out to over $2,500 per year? What about a 7 percent sales tax on daycare, which would average out to nearly $750 or more per child per year? Add in cable television, over-the-counter drugs, doctor and dental visits, numerous food items, clothing and many, many more new items that will be taxed under H.B. 76.
House Bill 76 also would increase your Personal Income Tax from 3.07 to 4.95 percent, the overall Sales and Use Tax from 6 to 7 percent while still taxing your property on your school district’s remaining debt. Of the 500 school districts in Pennsylvania, 488 have debt, much of which will not be paid off for 20 to 30 years. This is why a November 2017 report from the Independent Fiscal Office indicated a considerable number of families in Luzerne County could see H.B. 76 as a net tax increase.
As I said at the hearing, the key word is balance. When trying to balance these tax shifts, we must ensure that a shift doesn’t overburden any segment of our population. I have demonstrated time and again my willingness, as well as the willingness of a majority of my colleagues, to significantly reduce property taxes. In 2015, I co-sponsored Gov. Tom Wolf’s plan that would’ve provided $1,000 in relief to the average homeowner while entirely eliminating the school property tax for 270,000 seniors. I also voted for H.B. 504 in 2015, which passed the House 109-86 and would’ve provided nearly $5 billion for property tax relief and expanded the Property Tax/Rent Rebate Program. In my district, property owners would’ve received as much as a $952 reduction per year.
The expert testimony provided proof that a fairer tax structure can be achieved to ensure all Pennsylvanians receive a reduction in property taxes now and provide us time to work toward elimination. Meanwhile, I’ll continue to work with my colleagues to balance our tax structure and ensure all Pennsylvanians are taxed in a fair and balanced way.
State Rep. Eddie Day Pashinski represents the 121st Legislative District