Explaining SB 76

I’m proud to stand with Senator Argall in supporting his Senate Bill 76 to eliminate school property taxes because I believe no tax should have the power to leave you homeless.

SB 76 is the only plan to totally eliminate school property taxes – not partial reduction, not elimination for some but not all taxpayers, and not a new program to lessen tax burdens.  SB 76 eliminates school property taxes.

Total elimination of school property taxes requires approximately $14 Billion in other revenues and there are just four basic replacement options:  Personal Income Tax, Earned Income Tax, Sales Tax, or some other – new – tax.

SB 76 eliminates school property taxes by expanding the PIT and the Sales Tax to replace existing school property taxes dollar-for-dollar while giving schools the ability to raise additional revenues through either a local PIT or EIT – after voter approval.

Opponents say this plan is complicated.  It isn’t.  Well over half its provisions involve the expanded Sales Tax while most replacement moneys would come from the PIT as each 0.1% increase generates about $400 Million in replacement revenues and going from the current 3.07% to 4.95% would generate about $8 Billion.

A 1% Sales Tax increase (including the Hotel Tax) from 6% to 7% (7% to 8% in Allegheny County and 8% to 9% in Philadelphia) would generate approximately $1.7 Billion in replacement revenues.  Expanding the base generates about $4.6 Billion but is admittedly what causes much opposition.  However, rather than offering alternatives, critics oppose the entire bill.

The proposed expansion would not include food items on the WIC list – things like:  fruits and vegetables, milk, cheese, and yogurt, juices for women and children, infant food, whole wheat breads and grains, breakfast cereals, peanut butter, and eggs.  However, expansion would include foods with little nutritional value:  sodas, fruit and sports drinks, cheese spreads, and foods with added sugars, fats, salt, or oils.

Expansion to clothing would generate about $460 Million in replacement revenues.  However, clothing under $50 would be exempt, impacting lower incomes less.

Combined, the PIT and Sales Tax changes account for most of the needed revenues to totally eliminate school property taxes with the remainder coming from current gaming moneys.

Once you get through the proposed Sales tax changes, the remaining provisions are less controversial.  Yet, some critics focus on another proposal to protect schools:  retaining some property taxation to repay outstanding debt.  Such claims are misleading as once debts are repaid, all school property taxes are eliminated under SB 76.

If you don’t like the proposed mixture of taxes to eliminate school property taxes, offer an alternative.  If you don’t like the proposed Sales Tax expansion, offer an alternative.  If you don’t like allowing schools to continue to levy a property tax to cover debts, offer an alternative.

If you’re not going to offer alternatives, please, don’t offer plans that don’t provide for the complete elimination of school property taxes.

It’s only a matter of time before the current system will be unable to fund schools as school property taxes increase about half a billion dollars a year:  $426 Million from last year to this year ($13.868 Billion to $14.294 Billion), with projected increases of $488 Million next year, $537 Million the year after that, $558 Million the following year, and $578 Million from 2020–2021 to 2021–2022.

The clock is ticking:  property taxes continue to rise and taxpayers continue to bear the burdens.  There’s just one plan to completely eliminate school property taxes:  Senate Bill 76, which I support because no tax should have the power to leave you homeless.