Now, it is the House Republicans turn to solve the Rubik's Cube of property tax reform.
GOP House members last month rejected a proposed compromise worked out between Gov. Rendell and the state Senate.
Word is that the House is mulling (I love it when they mull) a proposal that would increase the state sales tax from 6% to 6.5% to raise about $650 million that, in combination with slots revenues, would go towards lowering property taxes. The Patriot News has a piece on it today.
Is there any reason to think this plan will succeed where others have failed? You got me.
After the primary, I sent my crystal ball into the shop for some much-needed repairs.
Two quick notes, though:
1) If the plan calls for an increase in state taxes (in this case, a 12% increase in the sales tax) it's not the best timing, this being an election year with so many incumbents jittery over voter anger.
2) How can Harrisburg justify increasing taxes when the state has a huge surplus, which currently amounts to $722 million?
FYI: Rendell has a plan to spend some of that surplus (a mix of tax cuts, new spending and socking some of it away in the state' Rainy Day Fund.)
At its base, I think there's a disconnect between policymakers' and regular folks' understanding of what constitutes "property tax reform."
The policymakers see it as tax redistribution -- lower property taxes but keep the size of the pie the same or even make it bigger by raising some other tax (sales tax, local income tax?) or finding new revenue (from slots, etc.)
Voters tend to see it -- simply and plainly -- as tax reduction. They are happy to have their taxes property taxes cut, but what makes anyone think they like the idea of having other taxes raised to make up for the lost money?