After much debate and discussion on Monday in the Senate caucus, Senator Dave Argall later on the Senate floor offered an amendment to House Bill 683 that contained language that was similar to the language in Senate Bill 76.
The amendment was voted on by the full Senate – the vote was 24 – yes votes ( 18 Republicans – 6 Democrats ) and 24 – no votes ( 12 Republicans – 12 Democrats) – Lt. Governor Stack cast the tie breaking vote of no – so the amendment failed.
While the no vote might be viewed as a defeat – I see progress – # 1 – the issue of school tax elimination made its way to the Senate floor for a vote – I personally, along with other Republican Senators, had many unanswered questions but I voted yes to get the ball on the field – I give our Senate Majority Leader Jake Corman credit for allowing the amendment to the Senate floor for a vote – # 2 – I am reaching out to many of the Republican Senators who voted no to ask what their concerns and reasons for voting no were.
The reasons for the no votes by some of my Republican colleagues are understandable and deserve a chance to be addressed.
Some of the reasons I heard from my colleagues who voted no on the bill were as follows:
– No cost containment is taking place in the schools – increasing wages and benefits, not tied to CPI Index
– Cannot support raising the sales tax to 7% when their Senate district borders Delaware where there is zero sales tax
– Issues with how the funds controlled by the state would flow to their school districts
Another large issue is the current “Hold Harmless” agreements– this means no school district would receive less funding next year than they received the previous year – some school districts are receiving $8-10,000 per student and some districts receive $20-25,000 per student – we need to completely rework the funding formula.
I am fully aware of the school property tax burden on many working families – I am also a private sector business owner.
When I received the tax rates proposed in the amendment on Monday I did a back of the napkin calculation of what the increased personal income tax and sales tax would cost my company and me – the result would be a minimum of $200,000 per year (personal income tax and sales tax) – I am watchful of how the new taxes that are intended to eliminate school taxes on real estate would also impact businesses.
My calculation for the increased taxes my company and I would pay are the gross taxes that would apply – we would see eliminated school taxes of approximately $60,000 on our various properties, which I would deduct from the additional taxes, but at the end of the day the increased tax impact would be in the $140,000 per year range – I am also aware that any additional sales tax that my business would pay would be deducted as a business expense and would reduce our federal tax liability.
For readers who understand different tax categories, my company is a Sub-S Corporation so pass through income would be taxed at the higher rate.
I can assure you of this point – the “Property Tax Ball” is out on the field and is not going away – until it gets resolved.
This past April I circulated a memo proposing a piece of legislation called the “Taxpayer Fairness in Compensation Act” asking for co-sponsors.