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FOR IMMEDIATE RELEASE |
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State
Rep. Tom Houghton |
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Houghton announces plan to address budget impasse, property tax relief
HARRISBURG, Sept. 8 – State Rep. Tom Houghton, D-Chester, and Rep. Tim Seip, D-Berks/Schuylkill, today announced joint legislation that would address the state budget impasse and provide property tax relief on primary homes.
The plan would modernize the state sales and use tax to cover some items and services not currently included, keeping the rate at 6 percent. Several existing exemptions, including those for food, clothing, prescription and nonprescription medications, and health-related services would remain intact in the new structure.
"While negotiations on a state budget have stalled, I have spent a lot of time this summer working with Representative Seip on this plan," Houghton said. "Since many of my constituents are struggling mightily, I believe now is the time to unveil this plan. I am well aware of the property tax burden on homeowners in my district who are already overburdened by the nationwide recession. It makes sense to tackle these two pressing issues at the same time."
At a news conference held at the state Capitol today, Houghton and Seip said the plan to modernize the sales tax would achieve three main objectives:
• Put $1 billion into the state General Fund in the current fiscal year to break the budget deadlock and fund vital services for the state's most vulnerable seniors, people with disabilities, children, veterans, education, and workforce and economic development. Seip said the budget negotiators' positions are much less than $1 billion apart and this would be more than enough to resolve the differences.
• Provide $3 billion per year in additional school property tax relief on primary homes until a state constitutional amendment is adopted that eliminates the school tax on those properties, which could be accomplished as soon as 2013. Until the amendment is adopted, the plan would fund school property tax relief for homeowners at the maximum allowed amount in the Pennsylvania Constitution.
· Solve the Philadelphia pension issue that threatens to force deep cuts in police and other city services, and possibly aid in Pittsburgh's pension-driven budget issues. In the first three years, the plan would provide about $175 million a year to Philadelphia, avoiding the competitive disadvantage to Pennsylvania's economy of the state's largest city imposing an 8 percent sales tax.
Houghton noted that his legislation (H.B. 1966) calls for the constitutional amendment required to eliminate school property taxes.
Houghton added, "We need to modernize the sales tax anyway -- it hasn't really changed since the 1970s, even though the U.S. economy has changed dramatically to become much more service-based. Our plan addresses major issues and provides an economic stimulus by taking the property tax burden off homeowners so they can put those dollars into the economy."
More information is available by contacting Houghton's office at 610-593-6565, or by visiting his Web site: http://www.pahouse.com/houghton.
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