School Property Tax Reform Package Provides Effective and Achievable Options

By Rep. Seth Grove (R-Dover)

On Sept. 23 the House Finance Committee passed a four-bill package aimed at providing school districts with multiple options to deal with their property taxes and builds on a package of three bills already passed by the full House.  The package provides two tracks of reform: millage rate track and homestead exclusion track.

The millage rate track will allow school districts to eliminate or reduce their millage rates through an Elimination Tax provided for in House Bill 1189 or the Optional Property tax Elimination Act (OPTEA).  The elimination tax consists of a combination of Earned Income Tax (EIT), Mercantile Tax, and Business Privilege Tax, all three of which are already used by local governments and provide a stable tax base to replace the stable tax base of property taxes.  OPTEA mandates that every dollar raised through the elimination tax shall go to reduce property taxes dollar for dollar.

Another part of the millage rate track and the homestead track is House Bill 1685.  This piece of legislation will allow school districts to keep their property tax reduction allocation from slot machines for general operations, thus giving school districts a $523 million increase in funding, BUT they must eliminate their property taxes first.  This provides a huge financial windfall for school districts to incentivize them to eliminate their property taxes.  House Bill 1685 also allows school districts to raise their EIT rate to provide homestead exclusions without going to voter referendum.  A homestead is defined as an owner-occupied home, in other words, the home in which you live. 

House Bill 125 is a critical constitutional change for the homestead track.  Currently our Constitution allows homestead exclusions up to 50 percent of the median assessed value of a local government.  This does not allow a full exclusion which would remove property taxes for homeowners.  House Bill 125 would make a constitutional change to provide for full homestead exclusion.  House Bill 1677, the final bill in this package, makes a change to Title 53 to ensure the statutory definition of homestead will always be what is provided for in the Pennsylvania Constitution.

Combined, these four bills provide an array of tools for school districts to adequately deal with their property taxes.  School districts will be able to eliminate property taxes all together, reduce millage rates, provide a complete homestead exclusion so homeowners will not have to pay property taxes, or provide increased homestead exclusions over the $523 million of homestead exclusion the state already provides from gaming revenues.

More information on my property tax plan is available at, and

Representative Seth Grove
196th  District
Pennsylvania House of Representatives
Media Contact:  Mike Straub
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