Tuesday, July 28, 2009

Proposed County Sales Tax Option Explained.

Sales tax, which has a disproportionate impact on people with lower incomes, is certainly a regressive tax, one of the most ridiculous things to consider during a recession. But that's exactly what's happening in the land of midnight payraises, where a 1% sales tax increase is being considered as a county option.

Here's how the County Comm'rs Ass'n of Pa (CCAP), a sales tax promoter, describes this optional plan. "Under the proposal, 50% of the sales tax proceeds would be returned to the participating county, 40% would be distributed to qualifying municipalities, and 10% would be allocated to a Municipal Collaborative Efforts Fund. The county would be required to use at least 60% of its share for property tax relief and to eliminate nuisance taxes. Municipalities would have to use at least 60% of their share for property tax relief and/or to offset revenue losses from tax-exempt property." CCAP's talking points are here.

Sixty percent of the revenue would be used to reduce property tax, but the rest could be used to enhance revenue. If the real concern is reducing property tax, then why not dedicate the entire sum to property tax reduction?

Basically, this is a tax increase that covers more spending.

17 comments:

Anonymous said...

this is enabling legislation bernie. it allows counties to enact a tax and it allows them to split the tax 60% for property tax reduction and the rest for other spending. It doesn't mandate it and my guess is that very few county commissioners would actually take advantage of it. Some might, but most would likely scorn the idea of more taxes.

PA is one of the only states that doesn't enable counties to implement a sales tax. in other states, the counties don't always use the tax, but they can if they choose.

Give local gov't a tool. if they want to use it, fine. if not, they don't use it. It's worth noting the philly and allegehny county already are allow to levy a sales tax. not so in any other county.

lighthouse said...

"40% would be distributed to qualifying municipalities" oh no, we'll need another Commission to work out who are the "qualifying municipalies", and how they will qualify! (and how can one who doesn't "qualify" the first year, try to "qualify" the second?)...great, another way to pit the Rte 22 corridor municipalites against the northern tier.

And, reading the linked "talking points" only the "first year" is it required to be based on a lowered property taxes. After that? Well, "there has been no abuse of that system, and so the county option sales tax proposal takes the same approach – requiring a firstyear
reduction and then relying on the normal budget process in subsequent years". I forgot, there is "no abuse" of the power to tax. Property taxes will never creep back up (while still paying the higher sales tax). Right.

I smell just another creative way to raise taxes to add to the multiple layers: income, cable franchise, school per capita, property, general sales, specific sales, etc. etc. and multiply that by all the state taxes/"fees" and national...if you build in enough layers, no one will be able to understand it, but pay a little here and a little there $$$.

Bernie O'Hare said...

Philly and Allegheny County have increased sales tax bc the legislature adopted bills giving them the right to increase it. And I suspect that's exactly what will happen if the state legislature enables the other counties to do so, too. I do not trust government to avoid using this tool.

As far as counties in other states
counties in other states is concerned, there are 15 states that have no sales tax at all. Of the 35 states that do have sales tax, most allow local governments to add to the sales taxc, as you correctly note. And it looks like they all take advantage of it if given the chance.

Anonymous said...

4:57 -

I've got a tool for 'em.

No. No. No. NO!

Anonymous said...

but in a democracy, i think the decision on taxation is best left to the gov't closest to the people... local gov't. if you really want to think about this in different terms, for every dollar this reduces property taxes, it helps a senior stay in their home.

PA's biggest problem is that local gov't have so many mandates from state and federal gov't but are handcuffed on the tools they can use. If a county opts to impose a sales tax, then the commissioners who voted to impose it will have to answer to the voters. In no way shape or form is the state going to hold a gun to the head of counties to actually impose this tax. That will be a local decision, as it should be.

Anonymous said...

"And it looks like they all take advantage of it if given the chance."

I guess to have an honest conversation, we should also ask if the communities have a sales tax tax have lower property taxes.

I think the only way this should be enacted is if there is a mandate to lower property taxes dollar for dollar if the sales tax is enacted.

Bernie O'Hare said...

"but in a democracy, i think the decision on taxation is best left to the gov't closest to the people... local gov't."

That's certainly true, and I'd have no objection to a salees tax approved by inititative and referendum. I doubt our legislators would approve that. Might be too close, eh?

Bernie O'Hare said...

"I think the only way this should be enacted is if there is a mandate to lower property taxes dollar for dollar if the sales tax is enacted."

Another great suggestion. But once again, I doubt legislators will go along with that.

Lady Rep said...

Please tell me of any tax reduction program that has actually reduced taxes, especially with rising costs and more "programs" that always "need" to be enacted. Please tell me why my money has to be cycled through the government (fairy dust gets sprinkled on it, or what?)to give it back to me. There is no logical reason for it. Government doesn't need any more money with their grimy fingerprints on it.

Anonymous said...

If you want to see the results of raising sales tax go to Myrtle Beach S.C. which raised sales tax to Drive Away Harley Davidson Bike Week.Yes the tax is paying the lawyers to defend the City of Myrtle Beach from numerous suits re: helmut laws,loitering and curfew arrests.Horry County raised the sales tax 1% to reduce property taxes.It is being used to fund a new basketball arena and indoor baseball facility at Coastal Carolina University. Yes that Coastal Carolina that played at Happy Valley last year.Fight this sales tax because it will never stop. Southern Man

Anonymous said...

This is how the game is played. Remember the Regional health Department. The enabling legislation stated it could be created by the local County legislatures or by referendum.

The supporters wanted no part of a referendum and got the papers to not play that part up.

Doesn't matter what happens we in Northampton Couty are in big trouble.

The Human Services Department is pumping huge amounts of County money into Children and Mental Health services, over and above the state needed amount. The new prison and the nice union contracts will be budget killers.

We will be paying throught the nose.

Anonymous said...

If every dollar of sales tax collected isn't offset by a one dollar reduction in property tax then all this is just a fancy way to increase the taxes we all pay.

I may be incorrect, but wouldn't this be a large tax increase on renters? Again at the risk of being incorrect, I would think a lot of people rent because their economic circumstances dictate that they do.

Renters certainly pay higher rents to help their landlords cover property tax costs.

One thing I am certain of is this: Rents won't go down because of this proposal. So it's really a double whammy on renters.

Anonymous said...

"Renters have no say in government, only property owners." - Charles Dertinger.

Bernie O'Hare said...

Thank God for Charles Dertinger.

Anonymous said...

Thank God for Joe Long, Charles Dertinger, Steve Barron and Lamont McClure.

Anonymous said...

"and may He sanctify the people of Northampton County that they might behold the face of Ann McHale."

Anonymous said...

Not even a sales tax can save us from the massive deficit in Northampton County.

Please County Council do your job and investigate where all the money is going.