HARRISBURG - A precedent is being set as a school property tax elimination bill undergoes an in-depth analysis by the newly created state independent fiscal office.
The office is studying a bill that would end the long-standing reliance on property taxes for education funding at the request of its sponsor, state Sen. David Argall, R-29.
The Senate Finance Committee held a hearing Thursday on the measure, which would replace nearly $13 billion in annual property tax revenue with revenues collected from the expansion of two other taxes.
Under the bill, more goods would be subject to the state sales tax. The sales tax rate would increase from 6 percent to 7 percent and the state personal income tax rate would increase from 3.07 percent to 4 percent.
This is the first time the fiscal office has studied a specific piece of legislation, said director Matthew Knittel.
The analysis will be ready by September and cover the bill's projected tax revenue estimates, economic impact and impact on individual school districts if it were to be enacted, he added.
This analysis will help ensure the bill's revenue estimates are accurate, Argall told the Senate committee.
Set up in 2011, the fiscal office had an impact on the recent state budget debate by offering tax revenue forecasts for the first time for both the end of the 2011-12 fiscal year and fiscal 2012-13.