House Finance Committee Advances Tax Reform Proposals to House Floor, Including Grove’s Property Tax Elimination Measure
4/2/2012
HARRISBURG –Rep. Seth Grove’s (R-Dover) House Bill 2230 cleared its first legislative hurdle today when the House Finance Committee approved the legislation, voting to send it before the full House for debate and consideration.

“I am very pleased the members of the House Finance Committee voted to continue the dialogue on the important issue of property tax reform,” said Grove. “The people of Pennsylvania have been waiting for far too long for a solution to this vexing problem, but I am hopeful my legislation will offer a tangible resolution to those citizens whose right to homeownership is imperiled by property taxes.”



Grove’s House Bill 2230 would allow for local tax diversification to fund public education and local government services. It would allow every county in Pennsylvania to hold a voter referendum about enacting a 1 percent county-level sales tax to reduce the county’s school property tax millage rate based on population. This aspect of the legislation offers citizens a voice in their school district funding options.

To further reduce dependence on property taxes, House Bill 2230 would allow local taxing authorities to levy a local income tax based either on the Personal Income Tax (PIT) or Earned Income Tax (EIT). Revenue collected from these sources would offset a reduction in property taxes by at least 30 percent or up to complete property tax elimination. Taxing authorities opting for the tax shift would see property tax millage rates permanently frozen at the reduced level.

“Shifting to a combination sales tax-based and income tax-based system is beneficial because these revenue sources increase with inflation, while property taxes remain stagnant,” said Grove. “Expenses for school districts and local governments are bound to see increases nearly every year, but revenue remains stationary in a property-based revenue system. Diversifying taxes will allow our schools and local governments to cope with inflation without having to raise taxes on citizens.”

The local taxing authorities would be permitted to raise the new income tax rates, but only to an index based on inflation.

Along with House Bill 2230, the committee also approved House Bill 2150, which would close the “Delaware Loophole,” to even the playing field for all companies doing business in Pennsylvania and gradually lower one of the highest corporate tax rates in the nation.

The committee also approved House Bill 2300, which would amend the Pennsylvania Constitution to completely exclude homesteads from school property taxes. Current law allows for the exclusion of up to 50 percent of the median assessed value of homestead properties.

“House Republicans are working hard for tax reform, and I applaud my colleagues for their efforts to protect Pennsylvania’s taxpayers,” said Grove, who is a co-sponsor of both measures.

More information about Grove and his legislative priorities is available at RepGrove.com and Facebook.com/RepSethGrove.

State Representative Seth Grove
196th District, Pennsylvania House of Representatives
Media Contact: Nicole Wamsley
nwamsley@pahousegop.com
717.783.8063
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