Property Tax Elimination Legislation

Every year, more than $10 billion is collected in school property taxes in Pennsylvania.  However, the state has been unsuccessful in waging the property tax debate for decades.  One thing most people can agree on is that something needs to be done to eliminate the current outdated, archaic and unfair system that Commonwealth uses. 

Last year, over 117,000 reassessment appeals were filed by property owners in Allegheny County which overloaded the appeals system and created a backlog.  Although the appeals filed in 2013 have been nowhere near the numbers of last year, citizens continue to demand a change.  In addition, a court ordered reassessment has revealed that the current process is subjective, confusing, and amounts to a very costly mandate. 

Allegheny County’s government is a unique institution because we have what is known as a “Home Rule Charter.”  This was established through a May 1998 referendum that grants the voters of Allegheny County the ability to control the structure and operations of the county government through the voting process.  After years of debating the various options, I have determined that the best option for the assessment situation is to apply the Home Rule Charter if our local government cannot determine a long-term solution.  

I have once again introduced Senate Bill 418 (SB 418) which would authorize Allegheny County Council to eliminate property assessments through an ordinance.  An ordinance of this manner will prohibit Allegheny County as well as any political subdivision, like municipalities or schools districts, within the county from imposing a property tax.  If County Council does not adopt the ordinance because they do not want to cast a vote or because they lack a majority vote, the County Council, or the voters of Allegheny County, will have the ability to propose the ordinance through a public referendum. 

If Allegheny County Council or a voter referendum elects to eliminate a property tax, revenue for the county, municipality and school services received under a property tax must be funded through others means.  SB 418 addresses this issue through granting the county, and each municipality and school district the ability to collect an earned income tax, personal income tax, sales tax, fee per square foot on real property or any other tax authorized under the Local Tax Enabling Act, or combination of to make up this lost revenue. 

I have put mechanisms in my legislation to prevent the municipalities from implementing drastic tax increases for these services rendered.  The governing bodies of the municipalities will be prohibited from increasing the tax to raise no more than the amount of revenue collected from the property taxes in the year in which the prohibition was imposed.  In the future, increases in the rate of any tax or fee would require a majority vote by the governing body. 

Many bills have been introduced in Harrisburg that would eliminate property taxes through various means and I am a co-sponsor to several of these pieces of legislation.  However, the residents of Allegheny County, myself included, are growing impatient with the lack of movement of real property tax reform. 

I represent the people of Allegheny County and I believe in the Home Rule Charter. SB 418 gives residents the opportunity to allow their voices to be heard through a referendum.  This measure will also provide the vehicle necessary to grant each municipality a say in how they are governed and the flexibility needed for the local government and school districts to work together to find a solution to address the seriousness of the property tax issue within the County until other legislation can pass statewide.