Some relief, no tax reform

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June 20, 2006

Anonymous The Tribune-Democrat Tue Jun 20, 2006, 01:18 PM EDT

We’re getting tax relief and all is right with the world, right?

Not so fast.

You might get a rebate. But you won’t get much relief.

And none of us is getting anything resembling tax reform – which is what we were promised by Gov. Ed Rendell and the leaders in the General Assembly.

As reported in The Tribune-Democrat, reaction among our local legislators has been downright chilly.

“It’s not a good bill,” said Gary Haluska, D-Patton.

“It’s really unfair,” said Tom Yewcic, D-Jackson Township.

“It’s basically a zero for Somerset County,” said Bob Bastian, R-Somerset.

Let’s break down this tax plan, which Rendell hailed as “a tremendous step in the right direction”:

n What happens now:

You are eligible for a tax rebate of up to $500, depending on your income, if you occupy a home you have purchased or rent and make $15,000 or less a year. In addition, you must be 65 or older, or a widow or widower 50 or older, or be permanently disabled and 18 or older.

n What the new plan does:

Your maximum income eligibility would rise to $35,000, and you would be eligible for up to $650, depending on your income. If you own your home, earn $30,000 or less, and spend at least 15 percent of your income on property taxes, you would get an extra 50 percent rebate. Things would be even better if you lived in Philadelphia, Scranton or Pittsburgh, which none of us does. Folks in those cities would get the lower salary benefit without having to qualify based on percentage of income spent on taxes.

n How we’ll pay for it:

Rebates for the 2006 tax year, to be paid in 2007, will be covered by surplus lottery funds. After 2008, the rebates are to be paid with revenue from slot-machine gambling.

Clearly, there will be nice rebates through this plan for some of us – namely seniors on low, fixed incomes, especially those who live in a home they own. That’s good.

What’s not good is that this rebate plan does nothing to bring property taxes under control – which was the initial goal of this entire movement four years ago. And the plan does not address inequities in funding or create a steady funding source for school districts, which was the impetus for legalized slot-machine gambling in Pennsylvania.

“It doesn’t address the core issue of shifting the school-funding burden off the backs of property owners,” Haluska said.

Rep. Ed Wojnaroski, D-Johnstown, voted for the rebate plan. He said 25 percent of the people in his district will be eligible for rebates.

“They say this isn’t enough,” he said, “but I can’t imagine any homeowner in the state is opposed to any kind of rebate.”

We can. How about the homeowner whose property taxes are climbing year by year, and who has been promised by his or her state government that reform was on the way?

House Majority Leader Sam Smith, a Jefferson County Republican, told The Associated Press: “I’m a little bit disappointed that we weren’t able to achieve something more and better over the last several weeks.”

So are we.

The one thing the Legislature got right was defeating an amendment that would have cut property taxes by increasing the sales tax.

Trading one tax for another is not the answer.

Otherwise, this plan is nothing to celebrate.

“We have repaired our compact with the citizens,” Rendell said, “and delivered on our promise to use gaming money to cut their property taxes by $1 billion annually.”

No, Governor. You really haven’t.

This is one small step in what needs to be a tax overhaul.

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Some relief, no tax reform

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