May 4, 2018

Lawmakers introduce 100 percent tax exclusion program

HARRISBURG – In an effort to enable school districts to exclude up to 100 percent of a homeowner’s school property tax bill, state Reps. Rosemary M. Brown (R-Monroe/Pike) and Marcia Hahn (R-Northampton) have introduced a bill to establish a property tax reform program. 

“The school tax system is not working for the people of Pennsylvania,” Brown said. “House Bill 2329 is geared toward achieving school tax elimination for primary homeowners who have repeatedly asked for relief. A slight increase to the Personal Income Tax (PIT) in exchange for this elimination offers stability in funding our schools, while offering an extreme benefit to our homeowners. This type of legislation is critical and absolutely necessary.” 

“Both of our district offices are regularly bombarded with questions about the need for property tax legislation,” Hahn added. “The bill we’ve authored would relieve the burden on our homeowners and in turn promote home ownership. While property tax relief is not exclusively a Republican or Democrat issue, we’re pleased to see the legislation gaining support from both sides of the aisle and hope to have House Bill 2329 voted in committee in the near future.” 

On Nov. 7, 2017, an amendment to the Pennsylvania Constitution was approved by voters to further expand the property tax relief program known as the Homestead Exclusion. The amendment increased the allowable homestead and farmstead exclusion to 100 percent of the assessed value of all homesteads and farmsteads. If fully funded, this change would allow school districts to eliminate the collection of property taxes within each school district. 

Since the passage of the constitutional amendment, there have been many discussions regarding the best way for the General Assembly to craft enabling legislation that would provide for the elimination of owner-occupied residential school property taxes via the homestead and farmstead exclusion. House Bill 2329 would provide this funding by increasing the state PIT by 1.72 percent to cover the amount needed to offset owner-occupied residential school property taxes. 

“While there have been many tax shifts and replacement proposals to reduce or eliminate property taxes, we believe implementing a small increase to the PIT is the best approach to relieving the current property tax burden on homeowners,” Brown said. “The PIT represents one of the most stable taxes levied in the Commonwealth and would provide assurance to school districts concerned with the fluctuations that many other funding experience as economic conditions change.”

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