The Tribune Democrat, Johnstown, PA

Editorials

March 19, 2014

Push for tax reform | Urge legislators to back Senate Bill 76

JOHNSTOWN — Founding Father and statesman Benjamin Franklin said: “The only things certain in life are death and taxes.”

Many people combine the two and complain that they are being taxed to death. Along with real estate taxes, most Pennsylvanians pay per capita taxes, federal and state withholding taxes on their earnings, gas taxes and sales tax on certain items. And people lucky enough to work in Johnstown but who live outside the city limits also get to pay a commuter tax.

Taxes, we might say, are a necessary evil.

That’s why Senate Bill 76, a proposal that would eliminate property taxes but increase the state’s sales tax, has been gaining lots of attention.

In a story last week, Tribune-Democrat reporter David Hurst said the proposal would still ensure that school districts will be fully funded.

“Property taxes levied by school districts would be eliminated,” Chuck Liedike, state Association of Realtors’ Senate Bill 76 campaign manager, told Hurst. “But schools would still be provided the money they would have collected, dollar for dollar, plus inflation.”

The plan calls for the state sales tax to increase to 7 percent from 6 percent. Also, the personal income tax for Pennsylvanians will jump to 4.34 percent from its current 3.07 percent. That money then would be divided among the school districts in lieu of property taxes.

The bill has received bipartisan support in the state Legislature. State Sens. John Wozniak, D-Westmont, and Richard Kasunic, D-Dunbar, are advocates.

Early research has shown the plan has merit because the taxes will be incurred by “everyone.”

“Those who spend more and those who earn more” will be affected, Liedike said.

Disposable income among residents would rise, Liedike explained, because they would not be saddled with school property taxes, some costing thousands of dollars per year. Thus, they would have more income to help stimulate the economy.

Westmont Hilltop school board Treasurer Jeff Masterson was taking a cautious approach to the proposal, saying that he would like to see “safeguards” written into the bill guaranteeing that schools would be funded as advertised.

“The idea is worth looking into,” he told Hurst.

State Rep. Bryan Barbin, D-Johnstown, also has a few reservations, such as whether the plan would make up for the fact that commercial businesses would no longer pay property taxes.

“I support the bill’s concept,” Barbin said. “But there needs to be a guarantee everything that they are saying will go into it actually does.”

Senate Bill 76 is the closest measure to true real estate tax reform to come down the pike in decades. We encourage all taxpayers to contact their state legislators and urge them to back the proposal. After all, the only thing we have to lose are our taxes.

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