Property Tax Reform

  • Pennsylvania's state senate is gearing up to introduce The Property Tax Independence Act in the coming weeks. The assumed proposal will systemically change how the Commonwealth of Pennsylvania's public schools are funded. This section of the website is designed to share information about the proposal as well as how it will affect our schools and community. Some facts about Pennsylvania school funding:

    • Pennsylvania ranks 46 out of 50 states in state support of public schools.
    • Pennsylvania's property tax rates are below the national average.
    • Pennsylvania Constitution says the Commonwealth has an obligation to maintain a “thorough and efficient system of public education.”

     

    Key Concepts of The Property Tax Independence Act---

    • Proposal would be designed to reduce and ultimately eliminate property taxes to fund public education.
      • Percent of property taxes would remain to pay debt service for outstanding debt at state-established effective date.
      • Would require a referendum for new construction and new debt after state-established effective date.

     

    • Proposal would call for an increase in both the state sales tax and state personal income tax to replace revenue generated by real estate taxes.
      • Personal Income Tax: 3.07% to 4.95%
      • Sales Tax: 6% to 7% and be applied to a wide array of items currently excluded.
      • Percent of real estate taxes would remain until existing debt service is paid off.

     

    • Proposal would establish a new “fund” utilizing revenue generated from increases to sales and personal income taxes to fund schools.
      • School districts would receive an amount equal to their property tax collections in the prior year as their initial baseline allocation.
      • A single state-wide cost of living increase would be added each year to the distribution from the previous year’s allocation.
      • Cost of Living increase would not factor in growth in student population, increased special education costs due to student needs, program expansion, and collective bargaining agreements that vary from district to district.

     

    Resource: