Monday, May 4, 2009

Rep. Rohrer offers new-and-improved tax elimination plan

Give state Rep. Sam Rohrer credit for tenacity.

The veteran Berks County lawmaker, who has earned a statewide reputation for his efforts to eliminate the much-hated property tax, is going to give it another try.

Rohrer has introduced a new version of the the School Property Tax Elimination Act in the state House of Representatives, where the Republican lawmaker is now the minority chairman of the Finance Committee.

Earlier versions of the plan failed to win enough support to pass in the Democratic-controlled House, but Rohrer has a new argument in pushing the bill.

The elimination of property taxes would jumpstart Pennsylvania's economy by allowing homeowners to keep billions of dollars they are now forced to pay for public education.

"Compared to the federal stimulus of $18 billion over three years, the SPTEA would infuse approximately $7 billion annually into the economy, as homeowners are freed from their onerous property tax bills," Rohrer said in a written statement. "The magnitude of the plan simply dwarfs any other options, without using government spending or subsidies, and puts billions into the hands of our citizens to pay their bills, invest in the economy or support local businesses.

"No tax should have the power to leave you homeless," Rohrer continued. "Seniors citizens, retired couples, young families, recently laid-off workers—through no fault of their own, all these people are standing on the precipice of losing their homes, as their pensions have plummeted and incomes have been reduced or even eliminated. For families struggling to make mortgage payments, this plan offers the only true hope of remaining in their homes and securing their home ownership."

Instead of relying on local school property taxes, school districts would receive their primary source of funding from an expanded state sales tax. The sales tax rate would remain at 6 percent, but would be expanded to include some currently tax-exempt items. Food, clothing, prescription medications and other essential items and services would not be taxed under Rohrer's plan. The tax elimination bill also would use new rent and royalty payments generated through expanded natural gas harvesting activities on state forest lands to fund Pennsylvania schools.

Rohrer is quick to point out his play is much different than those offered by House Democrats, which would reduce, but not eliminate, property taxes.

"Partial reduction is not the answer," Rohrer stated. "Taxes continue to rise unabated, and the governor's so-called 'Property Tax Relief Fund' barely makes a dent in what most taxpayers have to pay. It's a political response, designed to alleviate the problem and never solve it, and it has distracted from the real issue. The only solution is complete and total elimination."

Under Rohrer's plan, funds from the expanded state sales tax and the revenues from Marcellus Shale natural gas development would be deposited into a newly created Education Operating Fund. The money in the fund would be used to implement a four-year phase out of school district property taxes. The phase-out would ensure a smooth transition into the new system without disrupting normal operations of either schools or businesses.

"When we first introduced the idea of school property tax elimination, our proposal ran parallel with Gov. Rendell's proposal to use gambling proceeds to relieve—never solve—the property tax burden," Rohrer said. "Here we are, seven years later, and homeowners have received just one payment, and a pittance at that, to help with their taxes. Had we enacted the SPTEA back then, we would have already passed through the four-year phase out. Homeowners would not only be free from paying any school property taxes, but the state would have had the time to build up the excess revenue in order to weather this current economic storm."

The School Property Tax Elimination Act will be introduced as House Bill 1275, the same number it had in the last legislative session, when Democrats scuttled the bill.

For more information about the proposal, visit Rohrer's Web site at SamRohrer.com

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