WEB Exclusive – UPDATE!
30 January 2008
Because the bill supported by the PTCC and PCTA, HB 1275, the School Property Tax Elimination Act (SPTEA), was not allowed out of the House Appropriations Committee by the majority leadership for a fair hearing, it was attached as an amendment to HB 1600 to ensure it would be debated.
Unfortunately, the amendment was defeated on Tuesday (1/29) mostly because the legislators bent to the will of the special interests and marched in lockstep with their caucus leaders. We are currently assessing the situation and will issue a new PTCC update shortly.
If you want to see how your representative voted on the HB 1275 amendment, the complete voting list is here.
Some of the excuses from those who opposed HB 1275 (and my response):
- Rep. Mario Scavello (R-Monroe): If property taxes are eliminated there will be a mass migration to Pennsylvania and our infrastructure will be overwhelmed. (Nonsense. There is NO evidence of any kind that this will occur.)
- Rep. Bryan Cutler (R-Lancaster): We shouldn’t have to pay tax on attorney’s fees and argued against the four year phase-in. (The PA Bar Association lobbied hard against HB 1275 and Rep. Cutler is an attorney. Draw your own conclusions. The four year phase-in was necessary because you can’t just replace $8 billion in property taxes at the drop of a hat. There would have been no money available to do this.)
- Rep. Scott Boyd (R-Lancaster): People will be crossing the border to find an attorney so they can avoid the sales tax. (Impossible. Are Maryland or Delaware or New York or New Jersey lawyers licensed to practice PA law?)
- Rep. Michael Sturla (D-Lancaster) and a lot of others: NO reduction of property taxes for business, even at 50%. (In the recent PTCC survey where many of you voiced your opinion, 92% of you said you didn’t care if school property taxes were reduced by 50% for business if your property taxes were ELIMINATED. The reduction of business property taxes was a major theme for the democrats.)
- Rep. Jess Stairs (R-Fayette/Westmoreland): The people of Pennsylvania will start a revolution because of the new taxes! (Ridiculous. Let’s see… If my school property taxes are totally eliminated I’m going to have to pay $300-$500 in other taxes. What’s infuriating about that?)
David Levdansky (D-Allegheny/Washington): It taxes funerals! (And your point is? If the average funeral costs $10,000 there would be an additional $600 tax. But until the day you die you’d pay NO school property tax. I’ll take that trade, too.)
In short, the opponents’ arguments were nothing but lame excuses for not having the courage to oppose the special interests and to do what is right for Pennsylvania homeowners. They have betrayed their constituents and sold them out for their own self-interest. These lawmakers do not deserve our support and should have their jobs eliminated in this year’s elections so we can find representatives who will truly represent their constituents.
You are strongly encouraged to show your disapproval with a call, e-mail, or letter to your representative if they voted against HB 1275. Let them know that their job is HISTORY at the end of this year! Contact information for your representative is here: http://www.legis.state.pa.us/cfdocs/legis/home/find.cfm
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One other note: One of the bills that the PTCC and PCTA oppose, HB 1600, is DEAD. A gut-and-replace amendment by Rep. John Perzel (R-Philadelphia) that would take ALL gambling proceeds and give them to senior citizens earning less than $40,000 passed Tuesday night (1/29). It totally replaced the original language in HB 1600, effectively killing the bill.
If this bill get through final passage in the House and is passed by the senate and signed by the governor, and since this bill uses ALL of the gambling proceeds, any property tax “relief” from gaming money that you’ve been expecting for two years will be eliminated if you’re less than 65 years of age. This is good news for low-income seniors who are having problems just staying in their homes and we think that this goes a long way towards helping the most vulnerable group in our society. However, the flip side is that the House has reneged on its promise of property tax relief for ALL homeowners that it made to the taxpayers of Pennsylvania two years ago with Act 1. This is ironic since they could have given elimination to ALL homeowners through HB 1275 but refused to do so.
What really irritates me about the Perzel amendment is that it is more of the same "divide and conquer" strategy. I'm sure that these lawmakers feel that with the passage of this bill the seniors (the biggest voting bloc) will be satisfied and they won't have to deal with the issue any more. If this is true, we’ll just have to prove to them that this strategy won’t work.
If you want to see how much “relief” you will receive from the gambling revenue in your school district this year, click here and look under the $400 million column. Be sure to take your blood pressure medicine first!
This debate still has a long way to go and many more votes will have to be taken, so we’ll just have to wait to see how all of this plays out.
Just please remember that we are far from finished! There are many avenues still available to us to achieve our goal of total school property tax elimination and we WILL continue the fight. I hope that you will likewise continue your support.
Please feel free to post your comments and please write to me with any questions or concerns.
David Baldinger
PTCC Administrator
pataxpayers@gmail.com
http://www.ptcc.us/
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11 comments:
I don't think that 48 for and 147 against is all because of special interests. This amendment contained massive holes that would have allowed open interpretation by the enforcer of the tax plan The Department of Revenue.
I will point out just two examples of what I am saying. Rep. Cutler--was against taxing lawyers because at that point the names of their clients would have to be revealed for tax documentation. This would appear to be a direct violation of attorney/client privilege and Federal Law. During the 4 year phase in residents of Pennsylvania would actually pay double taxes--an increased sales tax and property tax which is why Cutler was against it.
On Boyd's part he is correct. Many lawyers especially ones who are located near another state are licensed to practice in more than one state. In larger firms some lawyers are licensed to practice in whole sections of the country. This amendment needs tightening.
You also failed to mention that a number of the people you bashed are looking at a plan today that will fully eliminate property tax without all the strings. This thing is far from over.
I’ll try to respond to your comments.
It was not only the special interests that killed HB 1275. Although I do not know this personally, I was told by a pretty reliable source that there was a group within the republican caucus that was actively working against the bill in retaliation for a certain vote in January 2006. You seem politically connected, so you must know to what I refer.
Also, many representatives who would have added amendments to 1275 to tweak the bill and make it more palatable were unable to do so because it ran as an amendment rather than free-standing legislation. More than a few voted against 1275 because of this inability to craft the bill to their liking.
The final major issue was the 50% elimination of property taxes for business, which the democrats opposed vigorously.
There were many issues unrelated to the content of the bill that caused its demise.
Rep. Cutler may or may not have been correct with his assertion about attorney/client privilege. If he is, then I agree that this is a hole that must be corrected. But his complaint about double taxation during the first year after enactment, while true, is baseless. If you would care to experiment with the HB 1275 calculator at http://mysite.verizon.net/drbsr/PTCCWeb/pfpfcalc.htm you’ll find that the amount of additional tax during the first year before reduction is very small for most people and is hardly an unbearable burden to eventually achieve total elimination. I believe that Rep. Cutler overstated this issue.
If what you say about Rep. Boyd’s argument is true, will it REALLY mean that much lost business to border state attorneys? Again, if this is a legitimate problem it must be corrected.
Finally, when you say that a plan for elimination will run today I’m not sure to which plan you are referring. If it is the Dermody amendment (A00556) to HB 1600, I’ve only recently become acquainted with this and am not fully aware of the details. I’ll investigate further, but all I know so far is that it eliminates school property tax by 2010 but has no mechanism for doing so. I cannot find it posted on-line; when I receive more information I’ll post it.
If you are referring to the Yewcic constitutional amendment that was supposedly reported out of the Finance Committee on Monday (although I cannot find this information on-line either), the bill is not on today’s calendar. This is the companion legislation to HB 1275 that calls for elimination of school property taxes on homesteads/farmstead and leaves 100% of business property taxes in place. It has no mechanism for doing so; that was the purpose of HB 1275.
Please feel free to post again if you have further comments.
The Attorney-client priviledge issue is a joke in this case. Obliviously attornies pay income tax on the same income without without revealing their client information and they could do the same with a sales tax.
Yes, I sure that some unintended effect would happen and would have to be dealt with., but some of those effects could turn out to be good in the long run. It would have been interesting to see what the inpact on property values would have been. I believe sizable increases could have happen. As more people could afford the payments without taxes included and less property may have been on the market as the cost to hold property in an estate for an example would have been greatly reduced. AOO556 would force the the state to actually do something to replace the school funding, it will go no where.
I also disagree about attorney/client privilege. I have a very small business and do collect sales tax. I do not identify any of my customers. I don't even know who they are. The form used to pay the sales tax (online at e-tides) asks for the total revenue, it calculates the tax and I submit payment. Very simple. I doubt the Dept. of Revenue has time or a desire to sit and read which client paid what. Who cares as long as the amount submitted is correct?
The difference with attorney fees as opposed to small business is that these are SERVICES provided to a specific individual. That is where the reporting becomes different. This is not the same as taking tax in a store for instance. Telling who consults a particular attorney could be an indication of things that are going on in their life that they may want to keep private. Yes they pay business and income taxes but a sales tax on SERVICES would not be the same.
Yes I am very familiar with all this. This whole bill/amendment actually started life over 4 years ago as the Plan for Pennsylvania's Future. That plan initially intended to tax everything from hospital stays, to prescription drugs, doctors visits, all clothes, all food and on and on.
The Plan was reworked several times but it essentially remained a SIT plan (shift in tax) and never gained enough momentum. It eventually was again reworked and after several shifts eventually became HB1275 which of course then became an amendment to HB1600.
I don't know how many people here have read the bill--I have several times--and have been following it since its inception. Additionally, I have spoken to the author on more than one occasion.
I also don't know how many of you saw the actual debate about this amendment but it was really something. A lot of issues were brought up that the author could not even begin to answer which is really why this thing crashed & burned.
I know what you are talking about with the January 2006 vote but that would only hold water if all those legislators were still there. Most of them are long gone.
HB1275 is a bad amendment period. It is too full of holes. This isn't about tweaking, it is about making sure that this is done in an effective and productive manner that won't come back to bite everyone. Plus remember it is back in committee it is not really dead.
Yes, I've read the bill several times myself and probably know it better than most of the lawmakers on the floor who were screaming "Wal-Mart! Shopping malls! Pharmaceutical companies!"
Regarding the vote that caused the rancor: My mistake. I meant to write January 2007, not 2006, and I'm talking about the speaker's election. Everyone who supported the Speaker Emeritus is still there and many are still holding a grudge. I have no doubt whatsoever that the vote was colored by that incident.
As you have pointed out, there may be some legitimate reasons for opposing 1275. But the politics, the posturing, the differences in ideology, and the outright dishonesty displayed during the debate each played more than their fair share in 1275's defeat.
Top 10 Reasons for being a Happy Penna. Property Tax Payer
#10 YOU won't have to pay taxes on YOUR Funeral.
# 9 You won't Be enriching Attorneys in N.J, Delaware and Maryland
# 8 You won't be worrying about millions of out-of-staters buying homes in your area and keeping housing prices from falling further.
# 7 Keeping Taxes as high as possible for business, so more Jobs move out of the Pa.
# 6 Keeping Pa.'s infrastructure from being over burdened. (Dah it's been overburdened for years, your legislators just don’nt care-How 'Bout our roads)
# 5 Admiring the new school buses you helped purchase.
# 4 Having your hard earned money Stolen by uncontrolled SCHOOL BOARDS.
# 3 Coming home from summer vacation and looking forward to opening your School Property Tax Bill
# 2 Voting for a State politicians owned by Special Interests.
AND THE # 1 REASON TO BE A HAPPY PENNA. PROPERTY TAX PAYER:
Punxsutawnery Bill Da Weasel coming out his hole on Ground Hog's Day and seeing his Shadow-Another 6 years of Paying School Property Taxes. Yeppieeeeeee
Well I guess we can agree to disagree. I really want property tax reform but not at the expense of shifted taxes. As far as the speaker's election I didn't think that was what you meant. If you look at how the legislators voted for the amendment, speakers votes don't seem to prove anything.
Our taxes here are actually not high as compared to other states ie New Jersey. Still the only good tax is one I don't have to pay.
Just wanted to add a few comments:
Yes, many attorneys are licensed to practice in multiple states, especially those who live near a border. But engaging an attorney is not like buying a large-screen TV. The attorney will know that you live in PA and thus will be obligated to collect tax, as PA's tax is a sales and USE tax. Are people truly suggesting that attorneys would ignore the law in this case?
I saw some of the emails from the PA Bar Association, and they were concerned about their clients paying the tax, not privacy. If they didn't think privacy was an issue, I don't see how it could be!
I see someone said they don't want a tax shift. I have news for you! If you want the state to provide more than the current 29% they contribute towards local education expenses, the only way it is going to happen is via additional taxes. Better to have other taxes reduced in exchange -- a tax shift -- than have new taxes only.
Until the state moves out of 47th place in the USA for contributions towards education funding and into the top 25, it will not have met its constitutional obligation for a quality public education available to all children.
The property tax is the most regressive of all taxes, because it has no relationship to the taxee's ability to pay. Taxing income or spending allows the tax burden to be spread over a much larger group, reducing the individual burden on each taxpayer, while providing a mechanism for reducing their taxes (buy untaxed items, spend less).
I read the bill and I watched the debates. Some of the arguments were completely irrational.
Deb, Manchester
I personally would not care if the sales tax was extended to all goods & services. I am now taxed at a rate so high I would have to spend $20,000 more a year than my husband & I make gross to reach the amount my school board robbers claim I can pay on my house. At least I could control what I buy within my means.....what a novel idea!!!
I'm always amused by by people who want properties taxes reduced and then complain that it's a tax shift. Obivously, if property taxes are reduced, the money to replace the reduction has to come from another tax. It like quiting your job because you don't like it and then complaining because you don't have a paycheck. Except for building projects most school boards can only control about 10% of their budget as many things in the budget are mandated by the state and federal government (without funds to pay for them). If you think that school board members that vote to raise their own property taxes at the same as they raise your and have to face their neighbors and friends after the vote are a problem, wait until the school district are run from Harrisburg and see where your school spending goes. I know of no one who runs for school board that plans on raising taxes when elected, but once they're elect they often have little choice (many run with the idea of lower taxes). I am not now or never have been on a school board, but I have attended enough meeting to feel some boards frustations over the budget process. The same policitians who complain about the school boards spending are the ones who votes for these mandates knowing they won't be blame for the tax increases.
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