Expectations high for tax-reform session
HARRISBURG – Expectations are high that this week’s start of a special legislative session on property tax reform will bring about a solution, but the issue’s complexity and no emerging consensus going in could mire the debate. Joined by legislative leaders, Gov. Ed Rendell called for the special session as a way to figure out how to get an estimated $1 billion in expected gambling revenues into the hands of property owners after the state’s previous plan involving the cooperation of school districts failed.
But what’s emerging from the opened debate over Act 72, the school district plan, is a collection of dissonant proposals that can’t be easily cobbled together. Some lawmakers are asking for a property tax elimination through an expanded sales tax, while others are focused on shifting to income taxes.
Rendell’s wish is to make Act 72 mandatory for all school districts, and sweeten the deal by dropping the requirement for a 1/10 of 1 percent earned income tax to help augment school budgets. Democrats are backing him.
Further dousing hope is the fact that special sessions, historically, have had mixed outcomes. In the past 40 years, seven special sessions have been convened. Gov. Tom Ridge’s special session on crime resulted in the enactment of 37 statutes, and was considered a success. But the two on tax reform – in 2002 under Gov. Mark Schweiker and in 1987 under Gov. Bob Casey – resulted in 70 or more bills introduced in each case with not a single enactment.
“No one knows for sure what a special session will generate. Some have not generated much and some a lot,” said G. Terry Madonna, director of the Keystone Poll at Franklin & Marshall College. “The bottom line here is there is no 100 percent guarantee that this will get done.”
Still, Madonna and other political observers see a greater potential this time around than in the past because political pressure is mounting. Not only will gambling money need disbursement to property owners, but the public fiasco over the Legislative pay raise has lit a fire under lawmakers to get something done as they go into next year’s election cycle.
Where Republican leaders might have let Rendell stew in his own failure to bring property tax relief well into his re-election campaign, they are now officially on board to get something done this fall.
“It looks more like they’re trying to change the subject and get people to stop thinking about the pay raise,” said Tim Potts, co-founder of Democracy Rising PA, and the former spokesman for House Minority Leader H. William DeWeese, D-Waynesburg. “We’ll know in the first two weeks of special session whether they’ll get anything together.”
A special session is a forum for debate on an issue that’s carved out of the normal legislative process. Bills must be separately drafted and introduced into the special session, and go through committees and then onto the floor debate during time set aside for a special session.
Wednesday will be governor and legislative leaders’ invocations to start the process, and the rest of the session this fall will run parallel to the normal legislative session. Legislative leaders must end the special session by the end of the term, which is December 2006.
Rendell spokeswoman Kate Philips said property tax reform has a better chance of succeeding under a special session because of the focus it affords.
“It narrows the field of discussion, which is important,” Philips said. “It’s important to the governor that we look at property tax relief not in the context of other bills and agenda items out there but as it is.”
Philips said that while Rendell is open to a full debate on all the proposals, he’s also saying he won’t sign legislation that expands the sales tax to include food, clothing, and pharmaceuticals, as some House Republicans are proposing.
Having Act 72 as a starting point, four caucuses on board, and a revenue stream from gambling to fund property tax relief means there’s a more concrete framework to work with than in past special session attempts, she said.
But it’s not at all clear that Republicans will be taking Rendell’s lead, though they’ve said they’d like to see something finished this fall.
“The next senator who tells me they like the governor’s plan is going to be the first senator who tells me they liked the governor’s plan,” said Erik Arneson, spokesman for
Senate Majority Leader David Brightbill, R-Lebanon. “We are not starting at the same place the governor is. That is as close as our caucus has gone at this point.”
Arneson said the Legislature and governor could accomplish property tax reform without a special session: “I’m not sure it benefits us in a tangible way.”
Also joining the debate are education advocates who worry that all the focus on property tax reform may leave the issue of quality education in the dust. They’ve been pushing for a full debate on equitable school funding.
“Property taxes do not exist in a vacuum,” said Janis Risch, the acting executive director for Good Schools Pennsylvania. “They’re a critical component of school funding. If you want to do it, you have to do it systemically, if you’re not trying to offer a Band-aid that’s going to get you into the next election.”
Alison Hawkes can be reached at 717-705-6330 or ahawkes@calkins-media.com