Potential Changes For Property Taxes Statewide

Sep 10, 2012

One state House member sees an opening for his proposal to switch local governments reliance from property taxes to levies on purchases and income.

Representative Seth Grove (R-York)  is calling for giving local governments the power to choose to freeze property taxes in favor of a levy on income taxes.

He says his legislation would give voters the option of allowing their counties to levy a one percent sales tax that would gradually wean its local governments off of property taxes. 

“Dollar for dollar.  Any new revenue coming in as sales tax goes directly to reduce property taxes,” Grove said.”

Another portion of Grove’s bill would allow local governments to shift to an income tax – with a minimum of a 30 percent reduction of the property tax.  They would be able to eliminate 30 to 100 percent of the property tax, and in its place, levy a personal income tax or an earned income tax.  But once property tax is reduced, it must be frozen at that level.  Grove acknowledges that local taxing authorities might be loath to make a permanent cut to any revenue stream. 

“That’s the catch.  They like the property taxes.  It doesn’t lock them out from gaining revenue, and it’s a local decision.  School boards need to enact it.  Local governments need to enact it,” Grove said.

Grove’s proposal would also allow counties to institute a sales tax and put the revenue toward reducing property levies, if voters approved it through a referendum.  But he acknowledges it’s still possible the status quo would be maintained.

“If people want the change, they obviously can run for school board and initiate it themselves as well,” Grove said.  “So it provides that local discussion of, what do we want our local taxes to look like?  Do we still want it on the basis of property taxes, or do we want to change it over to income tax?”

The legislature has just eight scheduled voting days in the current session.

He’s hoping his suggestions win the support of a special committee expected to deliver several reform-minded recommendations to the House at the end of November.