Unthinkable?
Sales tax hike could be a good thing No one likes to pay more in taxes but a recent proposal to raise the sales tax might actually result in an overall reduction of taxes for Pennsylvania residents.
House Bill 1858, referred to as the County and Municipal Property Tax Relief Act, would raise the sales tax in Pennsylvania while reducing property taxes, a move that officials estimate would bring about $11 million to Fayette County.
Despite the inherent unpopularity of a tax increase, this bill has serious merit. As Perry Township Supervisor A.J. Boni, who also serves on the executive board of the Pennsylvania State Association of Township Supervisors, said in a Herald-Standard article last week, such a move would be far more fair than the current property tax system, where landowners pay different amounts for the same services based on what their property is valued.
“In my municipality, we have people who only pay $20 to the township in property taxes and others who pay $300. How is that fair?” he said.
It’s not, which is why we believe that House Bill 1858 deserves serious attention from the legislature. Boni said while he supports the proposed change, he’s not confident House Bill 1858 will be enacted because no elected officials want to support a tax increase of any sort. Still, voters sent the state senators and representatives to Harrisburg to make tough decisions, and they need to explore all angles – even the unpopular ones.
Of course, the bill, introduced by state Rep. P. Michael Sturla, a Lancaster County Democrat, was designed to give legislators ample cover – by passing the buck to the counties and municipalities.
The legislation would not raise taxes, but instead give individual counties the authority to levy an optional 1 percent sales tax on the same goods and services subject to the state sales tax.
Not everyone is pleased with the blame-dodging. Fayette County Commission Chairman Vince Zapotosky, for one, feels such a move should fall to the state legislature.
“If they feel that property taxes are something that is unfair, then they should address it legislatively and not just say, ‘Hey, counties, you make the decision,'” he said.
Regardless of who enacts the additional levy, it would clearly be a more fair way to fund local government. While not everyone owns property – or has a fair or up-to-date assessment on that property – everyone who purchases something in the state would pay their fair share.
Of course, if the proposed legislation were to become reality, some sort of safeguards would have to be put in place to prevent the reduced property taxes from going back up at a later date.
As the proposed legislation is written, the 1 percent sales tax would generate $11,237,132 for Fayette County and would reduce municipal property taxes across the county alone by $1.4 million. Of the estimated $11 million, school districts would receive a combined $5.6 million for property tax reduction, the county would receive $2.8 million and all municipalities combined would receive $2.8 million.
The House has yet to vote on the proposed legislation, which was removed from the table April 21 and has not been reintroduced for discussion. While no one wants to raise taxes, we strongly urge the legislature to investigate and pursue the best option possible. It could be that a raise in the sales tax might pay dividends for all residents of the Commonwealth.