Bill on School Property Taxes Wins Pa. House OK

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    Pennsylvania's House of Representatives sent the Senate a bill Wednesday that would authorize local school boards to reduce or eliminate school property taxes and shift the revenue source to new levies on residents and businesses.

    The bill, clearly an effort to reassure constituents concerned about rising property taxes that lawmakers hear them, was approved without debate on a bipartisan 149-46 vote.

    The measure would allow school boards to impose an ``elimination tax'' made up of taxes on businesses or on the income of local residents, or both. The revenue would be earmarked to reduce or eliminate property taxes.

    School boards would have to adopt a resolution stating their intent to create such a tax and hold at least one public hearing, but the bill would not require voter approval.

    Previously, the boards "haven't had direct options that allow them just to do it themselves,'' said Rep. Seth Grove, R-York, the sponsor of the bill, one of several pending measures dealing with property taxes.

    House Majority Leader Mike Turzai said it would be up to school districts to decide how much of their tax revenue they want to shift to other taxes, or whether to shift at all.

    "In the end, that's a local decision. They know their taxes,'' said Turzai, R-Allegheny.

    In 2011-12, all 500 Pennsylvania school districts imposed a property tax and they collected about $12 billion, more than 80 percent of their combined local revenue, according to state Department of Education figures circulated by the House GOP majority. Earned-income tax produced about 9 percent and business taxes accounted for less than 1 percent.

    Rep. Joe Markosek, the ranking Democrat on the House Appropriations Committee, was among the majority of Democrats who voted for the bill.

    It's "something that most people can accept,'' he said.

    Erik Arneson, spokesman for Senate Majority Leader Dominic Pileggi, R-Delaware, said that GOP senators have not caucused on Grove's bill and that he was not aware of any similar bill in the Senate.

    "We will review it and consider it as part of the overall effort to reduce the burden of property taxes on Pennsylvanians,'' Arneson said.

    Kevin Shivers, a lobbyist for the National Federation of Independent Business, said the legislation would exacerbate existing problems with Pennsylvania's local tax collection system.

    "It's complex. It's confusing and it's costly,'' he said.

    Steve Robinson, a spokesman for the Pennsylvania School Boards Association, said the bill does nothing to ease state underfunding of public schools, but provides additional options without sacrificing flexibility for school boards.

    "4A lot remains to be seen,'' he said.