Opponents of a state bill that would replace school property taxes with a sales tax have voiced their concerns for small businesses and the poor should the bill be passed. According to an analysis by the PA Independent Fiscal Office, this bill would cause $2.6 billion in cuts to funding for school districts in the next five years.
According to PA Education Law Center Executive Director Rhonda Brownstein, the possible effects of this bill would be devastating to school districts across the state.
Advocates including the Pennsylvania Budget and Policy Center, PA Chamber of Business and Industry, PA Education Law Center, and Lutheran Advocacy Ministry in PA have written to the Senate Finance Committee in opposition of SB 76.
The bill would alter funding sources for education by replacing local school property taxes with new sales taxes that would be expanded to include groceries, clothing, and footwear.
Brownstein says she has seen the effects of similar legislation while living in Alabama.
“with such a volatile funding source that that schools were constantly in a crisis, so I saw what the impact was first hand in Alabama and even in my child’s public school,” said Brownstein.
The bill’s primary sponsor is Sen. David Argall (R-Schuylkill) who says that the legislation is meant to remove the burden from property taxes that “continue to cripple homeowners across the commonwealth.”
According to PA Chamber of Business and Industry Vice President of Government Affairs Sam Denisco, many of the bill’s opponents are concerned with the reliability of using a sales tax as funding.
“What I mean is the sales tax isn’t a stable form of revenue coming into the general fund. That goes up and down with the economy, same thing with income taxes too. So that’s also a concern to us - its volatile,” said Denisco.
According to Denisco, the bill would also increase the personal income tax from 3.08% to more than 4%. This increase would hurt small businesses, which Denisco says, are already getting by with extremely narrow margins.
According to Lutheran Advocacy Ministry in PA Director Amy Reumann, the tax on groceries will also be detrimental to individuals dependent on food stamp programs. These individuals often aren’t able to pay for their entire food budget using the program alone and will be under greater stress if groceries become taxed higher.
