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Home » News » Opinion » Columnists » Brad Bumsted

Thursday, November 17, 2005

Expect nothing from this bunch

 

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By Brad Bumsted
STATE CAPITOL REPORTER
Sunday, October 9, 2005

HARRISBURG -- Pennsylvania taxpayers expect nothing.

That piece of wisdom comes from my colleague, Philadelphia Daily News columnist John Baer, who made the remark at a public forum this year.

It describes so well the cynicism of Pennsylvania voters. For three decades they have been told that the General Assembly will find a way to drastically reduce or eliminate property taxes.

History of failure


In the end, nothing happens and property taxes keep soaring.

Meanwhile, Pennsylvania lawmakers line their own pockets. Legislators raised their own salaries from 16 percent to 54 percent last July and jacked up the pay of top state officials and judges.

So it comes as no surprise that public expectations are pretty low about the General Assembly producing results in a special session under way on property tax reform.

Just the opposite is the case at the state Capitol where there are high expectations among lawmakers and legislative staff about finally approving a major tax-shifting plan.

Really.

Some of it is a response to the taxpayers' pay raise revolt. Some of it is frustration from the inability to resolve the property tax dilemma.

Meager property tax relief under Act 72, which uses potential gaming revenue, is still the most likely outcome of the special session. That's the law that a majority of school districts rejected for a variety of reasons last spring. Some didn't like the notion of using ill-gotten gains from slot machines. Many objected to a provision limiting future tax hikes without voter approval. Some hated the 0.1 percent local income tax that school districts had to add to get property tax relief.

Now Gov. Ed Rendell, a Democrat facing re-election in 2006, is trying to pick up the pieces of Act 72 after having the door slammed in his face by school districts.

But the chance of something bigger winning approval is surprisingly being viewed as a 50-50 proposition by top House and Senate staffers.

Here, that's high.

Many lawmakers know that property tax relief of $200 to $300 per year under Act 72 won't cut it with most constituents.

The problem is that property tax cuts can't be accomplished on a large scale without an increase in sales tax revenue and/or higher state income taxes.

Rendell's proposal to merge gambling revenue with money from a higher state income tax fell flat in 2003, his first year in office.

Some options

A plan by the Commonwealth Caucus to potentially eliminate school property taxes by extending the sales tax to a host of items, including food and clothing, may get a vote in the House. But in the final analysis, imposing the sales tax on food and clothing is a non-starter.

So, in all likelihood, is Rendell's new proposal to mandate that districts participate in Act 72.

Increasing the state's 6 percent sales tax solely for property tax relief is an option for some lawmakers.

One of the latest ideas making the rounds is a hybrid of the Commonwealth Caucus plan. The idea would be to extend the sales tax to numerous items, including professional services - but not food and clothing. The problem there is that each professional group, whether it's accountants or lawyers, will cherry pick the bill with a blitz by high-priced lobbyists.

So there are problems on all fronts in enacting a major tax increase and donating all the proceeds to property tax cuts so soon before a general election.

That must be weighed against the risk of doing nothing.

Brad Bumsted is a state Capitol reporter for the Trib.


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