County officials demand tax options
HARRISBURG – County commissioners pleaded with state lawmakers on Monday to be given the power to levy a sales tax, income tax or wage tax on residents so they can pay for ever-expanding government services. More than two-dozen commissioners rallied at the Capitol to say that paying for county government through property taxes is antiquated and relies too heavily on home and business owners. As a result, shoppers, commuters from outside a county and even renters don’t share the burden of paying for things like parks, recreation and planning.
Instead, commissioners want counties to have a menu of options so they can choose a tax that works best for their area: sales and use, income or wage.
And to make the idea more palatable, the “tax fairness” bill being introduced later this legislative session mandates there be a dollar reduction in property taxes for every dollar raised through a newly implemented tax. The bill also says that any new tax levied on residents must first get voter approval in a general election.
Newly appointed Bucks County Commissioner Jim Cawley said the reliance on property taxes stems from the old idea that people who owned land have a lot of money. One only has to look at a place like Levittown, where residents live in fear of the June 30 school tax bill, to know that isn’t true anymore, said Cawley.
“Implementing one of these taxes would be optional for each county,” he said. “What I like about this plan is that Pennsylvania is a diverse state, and a tax that may be best for Bucks County may not be best for Union or Lycoming counties.”
Cawley was not prepared to say which of three proposed taxes he thinks would work best for Bucks residents.
But Fayette County Commissioner Vincent Vicites said he favors the sales and use tax.
“It’s time to take a hard look at this and do something with the county tax,” he said. “People in Fayette County are really strapped, and we need to shift and broaden the taxes.”
Commissioners on Monday took great pains to say their plan is not a tax increase but a tax shift, one that would end county governments’ having to get 94 percent of their revenue from property taxes.
Under the proposal, counties could propose and then voters would need to approve one of the following:
– County sales tax of up to 1 percent, like that now being charged in Philadelphia and Pittsburgh. The income from this would be shared by the county and all the boroughs and townships within that county.
– County income tax of up to one-half of 1 percent. This taxes both earned and unearned income, such as investments. Pensions would be exempt from the tax
– Earned income tax of up to one-half of 1 percent of workers’ wages. This tax would not extend to investments.
“Sharp cuts in state and federal funding in recent years have squeezed county budgets and forced local tax increases,” said Washington County Commissioner J. Bracken Burns. “We need a common-sense menu of alternatives to make local taxation fairer.”
The author of the bill to allow this taxing power, state Rep. Carole Rubley (R-Chester), said a county conceivably could enact both a personal income tax and an earned income tax. However, such a step would be highly unlikely, she said.
As for reducing property taxes, she said her bill mandates that a county first eliminate all nuisance taxes, such as a per capita or occupation taxes. The remaining money raised by the new tax, say $100 million, must then be used to cut property taxes by that $100 million.
Rubley said she’s more optimistic about her bill’s chances than she was when she first introduced it a couple of years ago. Back then, it didn’t have the active backing of the County Commissioners Association of Pennsylvania. Now it does.
Also at that time, lawmakers were more concerned with reducing the much more expensive school property taxes, which they laid the groundwork for when they legalized slot machines last year.
Still, when the bill goes before the House Finance Committee, it will be met by lawmakers like Rep. Dave Steil (R-Bucks), who said he has never been a fan of giving anyone a menu of taxes from which to chose.
“I feel that every government unit needs a stable revenue source,” he said. “But I’m more aligned with identifying the needs of a county and then identifying a tax to fund those needs.”
For example, Steil said if a county runs a recreation program, it should be allowed to impose, say, 5 mills to pay for it. But while he said he’s inclined to keep funding county services through property taxes, Steil thinks counties should be able to increase the mills they’re allowed to charge.
As for Rubley’s bill making it through the House Finance Committee, Steil is not nearly as optimistic as his colleague.
“There is an uphill discussion that has to take place to convince members of the need to increase taxes in a broad way,” he said.
Rick Martinez can be reached at 717-705-6330 or rmartinez@calkins-media.com.