A bill proposed Monday by state Rep. Eddie Day Pashinski would give Pennsylvania homeowners an $800 school property tax rebate regardless of how much their property is worth.
The $2.8 billion rebate would be paid for by an increase to the personal income tax from 3.07% to 3.49% and a sales tax increase on certain luxury items.
Every wage earner who makes $190,000
or less and pays school property taxes would benefit under the plan, said Pashinski, D-121, Wilkes-Barre.
The Universal Property Tax Relief Rebate is a “practical and balanced” way to help senior citizens and the middle class stay in their homes and is more realistic than calls to eliminate school taxes altogether, Pashinski said. Total elimination would cost $14 billion per year, he said.
“It’s reasonable and it does not negatively impact any segment of the population. It does help seniors the most, the working class next,” Pashinski said Monday of his bill.
The average homeowner in Northeast Pennsylvania pays about $1,500 in school taxes per year, so the $800 rebate proposal amounts to a more than 50% cut, Pashinski said. Around the state, the average taxes are between $2,000 to $2,200 per year, so the proposal still would be a 33% reduction, Pashinski said.
Since most seniors don’t work and won’t pay the personal income tax increase, they would get the full $800 benefit, Pashinski said.
A homeowner with a $30,000 income would see a $674 net gain, while someone making $190,000 would essentially break even by netting $2, according to a chart provided by Pashinski.
“We wanted to show how this will affect your personal situation,” Pashinski said.
The bill has 18 co-sponsors, including state Rep. Gerald Mullery, D-119, Newport Twp. The proposal will now be considered by the finance committee.
The approximately $2.8 billion in replacement revenues to pay for the plan would come from an estimated $2.05 billion in additional PIT revenue and $765 million from the expansion of the current sales and use tax to things such as professional sports tickets, non-health related personal care services and cosmetic services to buildings and dwellings.
Personal care services are defined as hair cutting, styling, shampooing, coloring, waving hair, shaving, beard trimming, providing facials, hair removal services, applying makeup, nail care services, massage, non-medical diet and weight reduction services.
Building services are defined as various maintenance and landscaping jobs.
Pashinski’s proposal comes days after lawmakers unveiled a monthslong study about property tax relief including five plans, one that eliminates school property taxes all together.
Pashinski called his bill “a step in the right direction.”
“I believe this is the most balanced and fair plan put forth that provides real relief to property tax payers without penalizing the very people we are trying to help ... ” Pashinski said. “... Should this program be successfully implemented, it could point us in the right direction for how to provide additional property tax relief in the future.”
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A proposed school tax rebate plan unveiled Monday would provide $800 to every homeowner in Pennsylvania. The plan, which includes an increase to the personal income tax for workers, would be a net gain for all households making $190,000 or less, according to state Rep. Eddie Day Pashinski, D-121, Wilkes-Barre.
Income: Current PIT Proposed PIT Net benefit
3.07% 3.49%
$30,000 $921 $1,047 $674
$50,000 $1,535 $1,745 $590
$100,000 $3,070 $3,490 $380
$150,000 $4,605 $5,235 $170
$190,000 $5,833 $6,631 $2
In addition to a proposed increase to the personal income tax, there is a proposed tax increase on professional sports tickets, non-health related personal care services and professional services to buildings.
Personal care services (non-health related): hair cutting, styling, shampooing, coloring, waving hair, shaving, beard trimming, providing facials, hair removal services, applying makeup, nail care services, massage, non-medical diet and weight reduction services, day spas, saunas, ear piercing, steam baths, non-medical hair replacement, hair weaving, tanning and tattoo services.
Services to buildings: janitorial, custodial, housekeeping/cleaning/maid, cleaning, building exteriors, window cleaning, landscaping, arborist, lawn fertilizing, garden maintenance, lawn mowing, mulching, seeding, plant and shrub maintenance in buildings, tree and shrub pruning, trimming and removal, weed control (except crop), turf installation, landscape design, installation of walkways, retaining walls, decks, fences and ponds, snow plowing/removal, carpet and upholstery cleaning, exterminating and pest control, swimming pool cleaning, chimney cleaning, ventilation duct cleaning, drain or gutter cleaning, driveway cleaning.
SOURCE: STATE REP. EDDIE DAY PASHINSKI, D-121, WILKES-BARRE