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FOR IMMEDIATE RELEASE |
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State
Rep. Bob Freeman |
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Freeman bill approved by House Local Government Committee
Measure would compensate municipalities for high levels of tax-exempt property
HARRISBURG, April 9 – The state House Local Government Committee this week approved a measure sponsored by state Rep. Bob Freeman, D-Northampton, that would provide state funding to municipalities to compensate them for high levels of tax-exempt property.
House Bill 2018, known as the Tax Exempt Property Municipal Assistance Fund, would be funded by dedicating revenue generated by the 18 percent Johnstown Flood Tax. Under the amended proposal, any Pennsylvania municipality that imposes property taxes and has 15 percent or more of the total market value of properties within its borders labeled tax-exempt would qualify for compensation. The Johnstown Flood Tax, enacted by the state legislature in 1936 to provide financial relief to victims of flooding in Johnstown, is levied on the sale of wine and liquors. It was intended to be temporary, but now provides the state with approximately $240 million in annual revenue.
"These municipalities are at a fiscal disadvantage, which makes them unable to sustain essential services within their communities," Freeman said. "Municipalities with a high percentage of tax-exempt properties are operating on an eroding tax base, and this measure would help these municipalities create some fiscal stability, taking some pressure off of existing taxpayers in the community who are currently carrying a large portion of that burden."
The legislation would require that each county annually provide the state with information regarding the market value of tax-exempt properties. The funding formula within the legislation is based on the market value of those properties if they were taxable. No single municipality would receive more than 10 percent of the total revenue in the fund or more than $100 per person per capita, based on the last census. Property owned by the municipality itself would not be eligible.
Freeman said Easton could potentially qualify for $1.8 million in the first year. Twenty-seven percent of Easton’s property is tax exempt.
"With my legislation, we can create some stability in hundreds of needy communities across Pennsylvania and bring back to life some beautiful towns that were once the center of commerce and culture for many residents," Freeman said.
The measure now goes to the full House for consideration.
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