For Immediate Release
September 26, 2007
Contact: David Broderic
717-787-2637
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Rhoades Unveils the Property Tax Elimination Act

HARRISBURG – Encouraging his colleagues in the General Assembly to "let the people decide," Senator James J. Rhoades (R-29) today unveiled his proposed Property Tax Elimination Act, a plan that would eliminate $9 billion in school property taxes if it is approved by the voters.

Rhoades held a press conference on the plan at the Capitol building.

"For years, we have been tinkering around the edges of property tax reform, never fully solving the problem," said Rhoades. "My legislation will let the people decide whether to virtually eliminate school property taxes in Pennsylvania.

"It is a $9 billion solution to a $9 billion problem."

According to Rhoades, the Property Tax Elimination Act will require that a state-wide referendum question appear on the November 4, 2008 ballot. If Pennsylvanians vote "yes" on the referendum question, the state personal income tax and the state sales tax will increase and school property taxes will be reduced dollar for dollar, totaling $9 billion in total relief, an amount equal to 96% of all school property taxes.

"The way to make the best decision about whether to replace school property taxes with state taxes is to leave it up to the people," Rhoades said. "The decision should be up to them, so let's allow them to make it."

If the state-wide referendum question is approved, the state sales tax would increase from its current rate of 6% to a new rate of 9.19% and the personal income tax would increase from its current rate of 3.07% to a new rate of 4.36%.

"If the people vote "yes" on the referendum question, every single nickel will go to reduce or eliminate property taxes on all property taxpayers: residences, businesses, farms, everyone," noted Rhoades.  "This could be the last property tax reform plan that the General Assembly ever has to pass."

Rhoades went on to say that the funds would be directed to school districts by providing each school district with at least $5,000 for each student enrolled or an amount equal to 100% of their property tax revenues. School districts would be required to use these funds to reduce or eliminate property taxes on all property taxpayers across the board.

"This is a bill that requires difficult choices, choices about taxes and what kinds of taxes are most fair for the people who have to pay them," Rhoades said. "The decision should be up to the people. So, let's allow them to make it."                               

Editor's note: For full audio and video of the press conference, go to www.senatorrhoades.com