HARRISBURG – When supporters of legislation aimed at eliminating school property taxes stepped onto their Harrisburg-bound buses early Tuesday morning, they believed they were three senators away from achieving a majority.
Before lunchtime, state Sen. Andrew Dinniman, D-19th Dist., told The Mercury he was ready to sign on by the end of the week.
‘My key thing is I wanted to understand whether things were revenue neutral,’ Dinniman said. ‘And it appears they can be.’
Following information Dinniman received Monday in the Democratic Caucus, he believes the revenue formula proposed in House Bill/Senate Bill 76 could provide the same amount of funding to schools as the current property tax-dependent formula.
The bills call for doing away with property taxes in favor of a combination of higher earned income and sales taxes as well as a hotel occupancy tax. Some loopholes and exceptions in the current sales tax would also be closed so more items and services would be subject to the tax.
As it stands right now, the bills are parked in their respective finance committees.
With the pending addition of Dinniman to the sponsors for S.B. 76, only two more senators are needed to secure a 26-vote majority for a bill to pass.
‘That was the purpose’ of Tuesday’s rallying and lobbying, said David Baldinger, one of the leaders of the Pennsylvania property tax elimination movement. Baldinger helped ‘craft’ the bills and coordinated Tuesday’s efforts by the Pennsylvania Coalition of Taxpayer Associations.
‘It’s tremendously significant that (Dinniman) sponsors this and he’s on the (Senate) Education Committee,’ Baldinger said. ‘That lends a lot of support to this.’
Dinniman is optimistic about the chances for property tax relief.
‘There seems to be a very strong consensus that property tax (reform) is not only needed but we need to focus in on (SB) 76 because it has a great chance of succeeding,’ Dinniman said Tuesday.
Although Dinniman said he has recognized a need for property tax reform, he had concerns about the system of funding HB/SB 76 is proposing.
When he started out, Dinniman said, school districts from areas with traditionally poorer demographics were having difficulty funding their schools. Now, with businesses seeking reassessments, Dinniman said even wealthier school districts, such as Spring-Ford Area School District, need help.
‘I wanted to make sure this was revenue neutral and not hurt the public schools that are already struggling,’ Dinniman said.
After seeing additional information, Dinniman believes that funding can be maintained and plans to add his name as a co-sponsor to the bill.
Dinniman said he gave careful consideration to the proposed property tax elimination bills.
‘You want to see if this is feasible. You don’t want to raise hopes,’ Dinniman said. ‘That has been done for 30 years if, fiscally, it wasn’t feasible because the schools still have to operate.’
Still, both Dinniman and his colleague, state Sen. John Rafferty, R-44th Dist., both know that having sponsors on a bill doesn’t directly translate to votes.
‘People signed on, which is great, but a lot of the interest groups haven’t weighed in yet,’ Rafferty said. ‘We’ll have to see how that pans out.’
Rafferty is currently trying to get support for his own bill, SB 1, a transportation plan for the state, and has found it tough going. He indicated HB/SB 76 might face the same adversity.
‘I won’t say I’m confident, but I’m watching the stagnation of transportation and some of the other issues,’ Rafferty said. ‘But I think it’s a vitally important issue.’
The leadership of both chambers must call the bills up for a vote, and the bills must garner 102 votes in the House and 26 in the Senate. Then Gov. Tom Corbett must sign off on the bill.
‘The math is 102 (representatives) plus 26 (senators) plus one (governor). The numbers have to add up.’ Dinniman said. ‘If any of those numbers don’t add up, it will fail.’
Eliminating property taxes would level the academic playing field, according to Dinniman, and also make other activities hit hard by taxes, such as farming, possible again.
‘It allows us to take care of some of the needs of the less affluent areas,’ he said.
Dinniman also said he’d be surprised if the bills came through exactly as they are now.
Years ago, Dinniman said he proposed a greater tax on Marcellus Shale gas in the effort to knock out some property taxes. That idea could resurface again to help alleviate property taxing, he said.
‘If it results in eliminating or significantly reducing property tax, we all win,’ Dinniman said.
When asked if he thought something would be done within the year, Dinniman again said it depended on the legislative leaders and the governor, but he also said there seemed to be a strong movement among the rank and file legislators which could force their leaders to do something.
That makes him think some sort of reduction in property tax is coming, if it isn’t eliminated altogether.
‘It seems to me that we have a moral imperative to finally take care of it,’ Dinniman said. ‘The American Dream is to own your own house and it’s very cruel to end that dream so abruptly when one retires and can’t afford the taxes.’
