Harrisburg, November 13, 2007 — Saying Pennsylvania can “do better, much better” on the issue of property tax reform, Senator Michael A. O’Pake (D-Berks) today formally introduced a three-bill package (SBs 1163, 1164; 1165) to totally abolish the most burdensome of the property taxes — the homeowner school property tax — via a graduated state income tax on incomes over $100,000.
Backed by more than 75 percent of respondents to a recent 11th District constituent survey, O’Pake
— in Senate floor remarks introducing his bills — said “the beauty of this plan is that more than 90 percent of of those who pay state income tax would not pay a dime more in income tax but would have their homeowner school property tax eliminated.” Even “most of those who would pay more in state income tax,” he added, “would still pay less in total taxes once their homeowner school property tax bill was completely wiped out.”
No one earning less than $100,000 would pay a higher state income tax. For incomes over $100,000, there would be a gradual ½ percent increase in the state income tax rate per every $50,000 in additional income with a maximum rate of 6.57% for incomes over $400,000.
By transforming the state’s income tax to finally “lift the burden of school property taxes from the backs of homeowners,” O’Pake noted that Pennsylvania “would also be joining the vast majority of states in America that impose a graduated state income tax.”
O’Pake’s proposal would require a constitutional amendment, but one of the Senator’s bills proposes an “emergency amendment” that — if approved by a two-thirds majority of the General Assembly — could reach the voters for a final decision in short order. He said a constitutional change was needed, in any event, to forever prohibit homeowner school property taxes from being re-imposed once they’ve been eliminated.
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The following is the full text of Senator O’Pake’s Senate floor remarks, coinciding with the introduction of his legislation:
Thank you, Madame President.
I am convinced we cannot afford to drop this ball. I am convinced we need to keep this ball on the field, inbounds and in play.
I’m referring, Madame President, to the long-festering, difficult and elusive struggle to reform our system of school finance in Pennsylvania generally and, more specifically, to lift the school property tax burden from the backs of homeowners.
As we all know, there have been many efforts — over many years — to deal with this issue. Act 1 was the most recent effort, and the first to set the stage for as much as $1 billion in relief — with senior citizen homeowners the first beneficiaries to the tune of some $200 million in property tax cuts.
And while I’m encouraged by the fact that many more seniors — more than 7,000 more in Berks County alone — are receiving (or have received) property tax rebate checks this year than last year via our historic expansion of the Property Tax and Rent Rebate Program, my Berks constituents have told me loud and clear (and I suspect the same holds true for many of my colleagues) that Act 1 did not go nearly far enough.
The fact is, Madame President, there is rarely a day or week that goes by that my office isn’t flooded with calls, letters or emails — urging an absolute end to Pennsylvania’s archaic and inequitable property tax system — and describing, many times in frustrating and worrisome detail, how the crushing burden of property taxes is threatening the ability of our hard-working families and fixed-income seniors to hold onto their homes.
We have some folks who are paying their property taxes by racking up huge additional charges on credit cards. And we have others who have just given up, selling their homes and moving back into a rental property…or, worse, moving to another state where they’ve heard things might be better.
That’s why, Madame President, I am convinced that we need to go further — much further, I hope — in addressing this issue.
And that’s why, Madame President, I am today introducing a new proposal that’s aimed at finally ridding Pennsylvanians of the most burdensome of the property taxes — the homeowner school property tax — by shifting the burden to those with the greatest ability to pay.
Similar to the Stop Taxing Our Properties proposal introduced by my colleague, Senator Logan — which I and others have co-sponsored — this alternative is aimed at trying to find common ground — to at least move forward with a plan, or a combination of plans, to finally extinguish the homeowner school property tax once and for all.
The legislation I’m introducing today is supported by over 75 percent of respondents to a recent constituent survey in my district.
While the survey was unscientific, the 1,785 constituents who took the time to respond have told me — in no uncertain terms — that they want us to pick up this ball again and, this time, attack this problem with finality — and in a comprehensive fashion.
The legislative concept that I’m formally introducing today — and which over three-quarters of 11th District survey respondents said they favored — would totally eliminate the homeowner school property tax by shifting the burden to a graduated state income tax on those with the greatest ability to shoulder the burden.
No one earning less than $100,000 would pay more in state income tax.
And most of those who would pay more in state income tax would still pay less in total taxes once their homeowner school property tax bill was completely wiped out.
Combined with the anticipated $1 billion from slots gaming, we can raise the $5.3 billion needed to totally lift the school property tax from the backs of Pennsylvania’s homeowners by imposing a gradual ½ percent increase in the state income tax rate — per every $50,000 in income OVER $100,000 — to a maximum rate of 6.57 percent on income over $400,000.
By converting to a graduated state income tax to eliminate the homeowner school property tax, Pennsylvania would also be joining the vast majority of states in America that impose a graduated state income tax.
And the maximum 6.57 percent rate on the wealthiest Pennsylvanians suggested in this legislation would still be below the maximum income tax rates in the bordering states of New Jersey (8.97%) and New York (6.85%) and not too far from the maximum rates imposed in Ohio, Delaware, and Maryland.
Of course, the beauty of this plan is that more than 90 percent of those who pay state income tax — more than 5.2 million low-to-moderate-to-higher-middle-income families (those who earn less than $100,000 a year) — would not pay a dime more in income tax but would have their homeowner school property tax eliminated.
And, as I said before, the majority of the remaining 10 percent who would pay somewhat more in state income tax would still pay less in total taxes once the homeowner property tax from their school district was a thing of the past.
My plan does require a constitutional amendment. But, one of the bills I’m introducing in the package today is an “emergency amendment” to our state constitution that — if approved by a two-thirds majority of the General Assembly — could reach the voters for a final decision in short order…and without the customary two-session time frame for consideration of a constitutional change.
The fact remains, in my view, that people being taxed out of their homes constitutes an emergency and I hope there are enough of my colleagues who would agree that this warrants such a determination and our urgent deliberation and action.
Equally important, the constitutional change is needed to forever prohibit the reinstitution of the homeowner school property tax once it’s been eliminated.
As I indicated, this plan received the most support — 75 percent of survey respondents — to my recent newsletter questionnaire. 15% were opposed and 9.5 percent had no opinion.
I also asked my constituents what they thought of the still-being-developed, House-initiated Commonwealth Caucus/Plan for Pennsylvania’s Future that hinges — in large measure — on an expansion of the sales tax base. It’s similar to the Senate measure introduced by Senator Piccola and which I have co-sponsored. That received a favorable response by 48.1% percent of respondents, with 38.4% opposed and 13.5% with no opinion.
Some 67.4% of respondents favored Senator Logan’s STOP plan, which also calls for a graduated state income tax but also adds an increase in the sales tax to eliminate all homeowner property taxes (school, municipal and county). 20.9% were opposed to the STOP plan and 11.7% had no opinion.
In the many accompanying comments to the response to the survey, Madame President, my constituents also made very clear that they want all of us to work together on this issue…to find the bipartisan common ground necessary to finally get this job done… and, last but not least, to address this issue in a comprehensive fashion that not only reforms the way we pay for our schools, but also embraces a concerted effort to control and reduce school costs wherever possible.
Greater efficiency and cost control must be a part of this effort, along with adequacy and equity in school funding — a subject we’re expecting to hear a lot more about after tomorrow, when the education costing-out study is expected to be released.
The bottom line, Madame President, our constitutional obligation is to provide for both a “thorough” and “efficient” system of public education in Pennsylvania and, I believe, we can do a much better job on both counts…just as we MUST find a more equitable way to pay.
As Sen. Rhoades indicated at a news conference about a month ago when he offered another solution to this difficult issue, we’ve “got to keep this dialogue going.”
I agree.
But, we’ve also got to stop talking and start doing.
As I said at the outset, we’ve got to keep this ball on the field, inbounds and in play.
Our people are demanding and deserve a more permanent solution.
No more fumbles. No more fouls.
And — all sports analogies aside — Madame President, this is serious business…and a serious proposal that I advance today.
For any Senator who has not yet signed onto my legislation and, who would like to, I’ll leave the bills at the desk.
We can do better….Madame President. Much better.
Thank you.
