Over the years property tax reform proposals have ranged from senior freezes to elimination, and opinions have ranged from keeping the status quo to complete elimination. After three decades and much hardship, this issue needs to be resolved.
This is why I developed House Bill 1189 or the Optional Property Tax Elimination Act (OPTEA), which bypasses the setbacks to every single property tax reform concept which has come before the General Assembly and builds on the legislation I authored last session.
OPTEA is a simple concept. It allows school districts to swap out their property taxes for an Elimination Tax consisting of an Earned Income Tax, Business Privilege Tax, and/or a Mercantile Tax. The latter two taxes are gross receipts taxes and work similarly to a sales tax. It mandates every dollar raised through the elimination tax be used directly to eliminate or reduce property taxes. This allows local communities to develop their tax base in a manner which best reflects their individual economy and provide a stable revenue source for school districts.
OPTEA does not bring more dollars to Harrisburg. Let's face it. Where there is a pool of money for politicians to dip into for other purposes, there will be dipping. It has happened in the past and it will continue to happen. Just look at the Social Security Trust Fund, the Commonwealth's tobacco settlement money, or even gaming revenue. Bigger government is never the answer, and in the long term, a statewide solution will open the door to grow the welfare rolls at the expense of education funding and taxpayers. When this happens, we will be back to square one — property taxes for education funding, higher state taxes and bigger government.
After three decades of failed attempts, this plan is achievable and flexible enough to work in all the Commonwealth's school districts. I look forward to working with my colleagues this fall in resolving this issue with legislation which can actually pass and provide the relief homeowners have been craving for.
n Seth Grove is a Repulican State Representative who represents the 196th District.