Why the School Property Tax Elimination Act (SPTEA)?
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(Please
note: The SPTEA was introduced during the 2007-2008 legislative
session as HB 1275. Since all pending legislation expired with the end
of the session on November 30, 2008, the SPTEA will be re-introduced in
2009, possibly with a new bill number. Details will be published on the
PTCC website when available.)
Comprehensive School Finance Reform
- House Bill 1275, The School Property Tax Elimination Act (SPTEA) eliminates
the need for school property taxes and all other local nuisance taxes
generated for K-12 education, while funding public education through a
broader sales tax.
- The SPTEA will stabilize Pennsylvania’s crumbling and obsolete
K-12 school funding system by replacing an inadequate revenue source (school
property and nuisance taxes) with a broad based, modernized and sufficient
revenue system (sales and use tax).
- The SPTEA maximizes school equity by creating a dedicated Educational
Operating Fund separate from the Commonwealth General Fund into which
all sales tax revenues will be deposited and from which schools will be
fairly and adequately funded. The SPTEA also establishes equity adjustments
and provides for an Education Trust Reserve.
- The sound and predictable revenue stream generated by the SPTEA will
allow schools to focus on education and student performance – not
fundraising.
Fair and Flexible Taxpaying
- The streamlined and modernized sales tax system implemented through
HB 1275, the School Property Tax Elimination Act, will restore a critical
element of choice and promote greater flexibility in taxpaying.
- Replacing a mandatory property tax with a broader sales tax allows Pennsylvanians,
regardless of income level or home ownership status, to largely control
what they actually pay out in taxes. In other words, those who have the
ability to spend more through voluntary consumer purchases will foot the
brunt of the bill for K-12 education.
- In addition, this legislation provides sales tax exemptions for such
things as food, clothing, residential utilities, home heating fuels, doctor's
bills and prescription drugs, and essential business-to-business services
such as accounting, engineering, research, computer and legal services.
The 100% Elimination of School Property Taxes is a Win-Win Situation
for all Pennsylvanians
- Homeowners will benefit from the restoration of true property ownership
and unprecedented financial freedom without the economic oppression of
rising school property taxes.
- Farmers will not have to sell family properties that have been handed
down through generations.
- Senior citizens will no longer be forced to sell their homes or be evicted
from their homes due to school property tax bills they can no longer afford
to pay.
- More young couples and renters will benefit from the prospect of qualifying
for home ownership because of no school tax escrow and, thus, lower monthly
housing payments.
The Success of the School Property Tax Elimination Act is not
Dependent on the Existence of Gambling Revenue
- The School Property Tax Elimination Act of 2007 is designed to implement any existing gambling revenue into its school funding formula. However, its success is not dependent slot machines like other so-called property tax reform proposals. If gaming revenue actually materializes, reductions in sales tax rates and distributions to poor school districts will occur faster.
Of all Property Tax Elimination Proposals HB 1275, the School
Property Tax Elimination Act, Can Be Implemented the Fastest
- Although there have been numerous property tax elimination proposals
introduced over the past 20 years, the School Property Tax Elimination
Act presents the most viable, far-reaching and expedient option the Legislature
has to finally do something to help both individuals and businesses in
an area where it is literally needed most: Their own backyards. Upon enactment,
the SPTEA will immediately freeze school property taxes at current levels
and will begin a significant reduction in school property tax bills beginning
with the first tax bill following enactment.
A list of Frequently Asked Questions (FAQs) about
HB 1275, the School Property Tax Elimination Act, is available
here.
NEW! Calculate your taxes under the School Property
Tax Elimination Act. Click here.
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Act and suggestions for what you can do to help achieve its enactment.
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