The recent introduction of the Optional County Tax Reform Bill offers new flexibility for county commissioners as they attempt to deal with the increasing demands for expanded services. The bill, in turn, responds to the County Commissioners Association of Pennsylvania's report "The Blue Print for Local Tax Reform," which identifies tax reform as an important county priority. The County Commissioners Association has expressed strong support for the legislation.
County governments in Pennsylvania now draw 94 percent of their revenue from the property tax. Although county taxes have far less impact than school taxes on the individual taxpayer, increasing costs are driving these tax bills higher across the state. Inevitably, this tax is most painful for homeowners who live on fixed incomes.
More than 10 years ago, the Chester County commissioners recognized the growing discomfort with the property tax and appointed a bipartisan Task Force on Tax Reform. With members representing school boards, municipalities, senior citizens, farmers, the League of Women Voters, legislators, businesses, county officials, nonprofits, and individual taxpayers, the task force - chaired by Nancy Mohr of Newlin Township - stayed the course for a rather remarkable six years and never totally disbanded.
Throughout the process, State Rep. David Steil (R., Bucks) and I continued to plead the cause of tax reform in the General Assembly. Our bill is the byproduct of the original work by the task force and provides a fully flexible menu of options, including:
A sales and use tax up to a maximum of 1 percent.
A personal income tax up to 0.5 percent.
An earned-income tax up to 0.5 percent.
In every case, any tax would first have to be approved through a referendum. And the options respect the special needs and situations of each county. For instance, Chester and Delaware Counties would most likely not choose the option of imposing a 1 percent sales tax because of their proximity to sales-tax-less Delaware.
If a county chose to impose the sales and use tax, the revenues would be shared with the local municipalities and school districts. Revenues generated from an income tax would go to the county alone, with elimination of certain nuisance taxes such as per capita, occupation, or intangible personal property taxes. Revenue in excess of that previously produced by the nuisance taxes would reduce property taxes through an exemption of a portion of the property taxes charged on owner-occupied homes.
The county could appoint a local tax study commission to assess existing taxes and recommend changes. Its report would be nonbinding on the commissioners.
As property taxes continue to increase countywide, this tax-reform bill allows real estate tax relief without the complications that seem to surround each attempt at reforming education funding across the state. It also offers an option of a personal income tax that is sensitive to fluctuations in individual income and neither forces senior citizens from their homes nor prevents young families from realizing their dreams of home ownership.
Tax reform is probably the most talked about and least acted upon subject on the table today. As additional unfunded mandates are imposed by the federal government on the states and then trickle down to the counties and municipalities, it is critical to address and revise our antiquated tax structure. Let's work together to make paying taxes a little less painful.
State Rep. Carole Rubley represents the 157th District, which comprises Phoenixville Borough and Schuylkill and Tredyffrin Townships.
