For Immediate Release
June 16, 2006
Back

House Passes Bipartisan Property Tax Reform

Senate Passed Measure Last Month

HARRISBURG -- The House of Representatives has passed a bipartisan property tax reform measure that will lower school property taxes for all Pennsylvanians and provide additional relief to senior citizens on fixed incomes, according to Senator Tommy Tomlinson (R-6).

Special Session House Bill 39, know as the Pennsylvania Taxpayer Relief Act, was approved by the Senate in early May and now goes to the governor for his signature.

The measure would give school districts the option to increase their Earned Income Tax (EIT) rate or levy a Personal Income Tax in exchange for a reduction in their property taxes. School districts may only levy a Personal Income Tax after state regulations governing local collections have been approved.

The size of the popular Property Tax and Rent Rebate Program would be more than doubled under the legislation, with payments increasing by $200 million and more than 422,000 senior citizens being added to the program.

The plan would bolster the Commonwealth's existing Property Tax and Rent Rebate Program to provide relief to more than 761,000 Pennsylvanians who are on the lowest end of the income scale.

The Pennsylvania Taxpayer Relief Act has major benefits to taxpayers:

• It would increase income eligibility requirements for the Property Tax Rent Rebate Program from 15,000 to $35,000 -- enabling more than 761,000 seniors to take advantage of the program.
• It would implement the backend referendum -- voter controls on future property tax increases -- in every district across the state.  The mandatory "backend referendum" requirement is crucial to holding the line on school spending because it would give taxpayers the power to reject tax increases that they can't afford or think are excessive.
• It would offer homeowners a property tax reduction of at least 50 percent of the maximum homestead exclusion, and gives communities the final say in local taxing decisions.

By determining a school district's mix of local taxes at the ballot box rather than in Harrisburg, the Taxpayer Relief Act empowers taxpayers to make informed, involved decisions about how their school districts raise revenues.  The measure would give local taxpayers and officials the flexibility to reduce the reliance on property taxes in favor of a system based upon ability to pay -- a system that would benefit retirees and others on fixed incomes.

CONTACT:

Fran Cleaver
(717) 787-5072