Representative Frank Ryan (R-Lebanon) held a press conference in the Capitol Rotunda to unveil his plan for School Property Tax Elimination, House Bill 13.
Representative Ryan began the press conference by emphasizing that school property tax is Pennsylvania’s biggest issue. He described his plan, House Bill 13, which replaces school property tax with expanded and new taxes in order to spread around the funding of Pennsylvania’s education system and reduce the burden on homeowners.
The plan includes:
- 1.85% increase to the Personal Income Tax (PIT), paid directly to the school district. Overall, PIT would rise from 3.07% to 4.92%.
- 2.0% increase to the Sales and Use Tax (SUT) raising it to 8.0% statewide on existing taxable items and added a 2.0% SUT to food and clothing, items not currently taxed.
- Retirement income would be taxed at 4.92% with 1.85% to the school district and 3.07% to the state.
- Representative Ryan clarified that the tax is on retirement income and not on principle.
- Social Security would not be taxed.
Representative Ryan explained that he had worked with over 200 interested groups in drafting the legislation and understands that seniors are concerned with the new tax on retirement. He was joined by Jim Rodkey of the Pennsylvania Property Rights Association, Al Ciardi, a partner of Philadelphia-based Ciardi, Ciardi & Austin specializing in bankruptcy, and Blake Ringenberg, a counselor specializing in the psychological impact of home-loss on children.
Jim Rodkey described the current system of school property tax in Pennsylvania as morally reprehensible and unfair. He warned that the burden to fund schools will continue to rise exponentially and that solving the property tax issue can no longer be “kicked down the road.” Further, he explained that the burden is not accurately reflected, as over 64% of properties in the Commonwealth are over-assessed. Rodkey closed by explaining that a home does not create revenue and does not pay the property tax. Instead, homeowners are already using their earnings and retirement to pay the property tax and the full elimination proposed by House Bill 13 is the only solution that will fix the onerous and unfair system of school property taxes.
Al Ciardi and Blake Ringenberg both stated the importance of homeownership to both financial and mental wellbeing. The risk of losing a home due to the tax burden, Ciardi said, can ruin a family’s financial security. Further, Ringenberg explained that the lack of homeownership due to burdensome taxes extends adolescence as young people are unable to attain homeownership.
Representative Ryan took several questions from the media:
Representative, what happens to debt that school districts might retain?
Representative Ryan: The School Property Tax Elimination Act takes into account school debt. Should a school continue to struggle, it will be placed into a receivership with the Department of Education as we currently have in the Harrisburg School District.
Do school groups support the proposal?
Representative Ryan: The Pennsylvania Association of School Business Officials has come out in opposition to the proposal. Other groups remain neutral as they want to see language for the proposal.
Representative Ryan closed with remarks in regard to schools losing their funding from the proposal should they attempt to levy a new property tax. He anticipated that if this were to occur, a school would need to be placed into receivership with the Department of Education and ultimately be forced to merge with another school. He emphasized this attempt is to make school funding equitable so that citizens see real relief from the property tax burden.