A tax increase by any other name?

A bill centered on eliminating property tax and shifting control of school funding to the state is set to come up during this year’s legislative session.

Senate Bill 76 (SB 76), named the Property Tax Independence Act by its proponents, promises to eliminate school property taxes. On the surface, it’s an appealing bill, if it weren’t for the tradeoff of increases in both sales tax and personal income tax. Not only would those taxes go up, they would rise and fall with the economy, unlike property taxes, which are more stable.

The bill aims at taking the burden of funding local schools off property owners. Homeowners in danger of losing their homes due to their inability to pay their property taxes could expect to see relief as a result of the shift, although currently, nothing prevents school districts from mitigating the effects of rising property taxes on elderly residents who are on fixed incomes and must pay other taxes.

Increasing the sales tax from 6 to 7 percent, and even 8 percent in some areas, would significantly impact low- and middle-income residents. Proponents say sales tax is a personal choice, meaning if you can’t afford the sales tax, don’t buy the item. However, many foods and other necessities would be taxed under the bill. Sales taxes are consumption based and have proved to disproportionately affect lower-income citizens.

An increase in the state personal income tax rate, from 3.07 to a proposed 4.95 percent, would affect not only low- and middle-income individuals but also small businesses, which pay taxes at that rate. This would be a windfall for large corporations, with everyone else making up the difference.

Without local control of school taxes, school boards throughout the state will lose their ability to effectively assess the educational needs of their communities. Flexibility to make changes as community and educational needs change would be curtailed by having control vested in Harrisburg.

The Pennsylvania legislature has a strong history of being unable to resolve the state budget in a timely fashion. Families of school-age children would certainly be handicapped by school closings in response to non-passage of the state budget.

With local control of school funding, the school boards across the state carry out their obligation to advertise and conduct public hearings about annual budgets and specific projects that require the use of tax money. The accountability and transparency that lie with the school boards would be lost.

We support a thoughtful analysis of any proposed tax reform in Pennsylvania with scrutiny of the secondary unintentional effects of reform. Taking local control away from school funding removes communities’ freedom to resolve local issues.

Details of SB 76, both pro and con, cannot be addressed within this limited space. The AAUW State College Branch invites you to attend an informational panel discussion to learn more about the proposed legislation on April 29 at the Central Pennsylvania Convention and Visitors Bureau, 800 E. Park Ave., State College. Refreshments, 9 a.m.; panel discussion, 9:30 a.m.

This story was originally published April 16, 2017 at 9:35 PM with the headline "A tax increase by any other name?."