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LEHIGH VALLEY WEATHER

Senate, House bills would eliminate property taxes

Republican Marc Grammes, candidate for the House seat in the 183rd District, said he was running because he can make a difference.

According to Grammes, when he was knocking on doors and talking to area residents he discovered their biggest concern was property taxes.

As a result, he scheduled two meetings at the Vigilant Fire Company, Slatington, with David Bald-inger, spokesperson for the Pennsylvania Coalition of Taxpayer Associations.

Baldinger said the Pennsylvania General Assembly refuses to deal with pension plans and, for schools, that is a major problem because it gets dumped back to the locality. He showed Reading Eagle newspaper pages of sheriff sales of property for nonpayment of school taxes. There have been 10,000 foreclosures in the state, and that affects the local economy.

Property taxes began in the European Middle Ages and were brought to Pennsylvania in the early 1800s, Baldinger said, adding it was a tax on the wealthy because serfs did not have anything to tax.

"Houses do not generate value," Baldinger said. "It is arbitrary and unfair when cookie cutter houses in a development are assessed differently. "The only gauge of a property value is a willing seller and a willing buyer.

In one county, taxes went up 146 percent, wages 80 percent and inflation 59 percent. The supposed decrease in school taxes due to gambling money drew laughter from the audience. One man with more than a $4,000 tax bill said his decrease due to gambling was approximately $150.

Baldinger said relief, reform or reduction in property taxes are doomed to failure.

"The tax must be done away with," he said. "Yet many lawmakers say there is discontent in only a few districts. Replace the school property tax with a more broad-based equitable tax."

Baldinger said House and Senate bills 76, known as The Property Tax Elimination Act, were developed by members of the Legislature and 83 taxpayer groups that have been working to draft the bill since 2010.

The Act would eliminate the school property tax over a two-year period with specific exceptions such as to cover long-term debt dating to 2013 or earlier. Debt service on average takes 10 percent of a school's budget and 28 districts have no long-term debt.

"There must be realistic limits on increases in kindergarten through grade 12 spending, Baldinger said, adding the replacement tax would be tax-revenue neutral.

The sales tax would be increased to 7 percent and cover most items and services and personal income tax would be set at 4.34 percent. Excluded from the sales tax would be anything on the WIC list and items of clothing under $50 in value.

For the person paying $3,500 in property tax it would require sales taxable purchases of $50,000 to reach the same amount.

The Education Stabilization Fund would be in a lockbox to ensure the new taxes are not added to the General Fund. Accrued fund balance should not exceed 6 percent. Anything above that should go into the ESF, which will guarantee the revenue neutral status.

Basic Education Subsidies will not be changed.

The Pennsylvania Coalition of Taxpayer Associations is working on an amendment to forever abolish property taxes.

"People say the numbers don't work but the Independent Fiscal Office analysis said it will increase disposable income and home values will increase by 10 percent because every time the property tax goes up houses are worth less," Baldinger said. "It will increase the attractiveness of the commonwealth for businesses.

"Keystone Opportunity Zones bring businesses, but it is the politicians that get to choose who gets them. Make the whole state a KOZ."

Bill 76 has 87 cosponsors in the House and 25 in the Senate and there is bipartisan support.

"I've never been as optimistic as I am now. This is a clean bill," he said. "The single most important thing you can do is spread the word."For information go to ptcc.us.

PRESS PHOTO BY ELSA KERSCHNER David Baldinger and Marc Grammes, candidate for the 183rd Legislative District, talk following a meeting about abolishing school property taxes.