With local retailers scraping through a down economy, and area hoteliers incurring losses from the countywide hotel room sales tax, it may not seem like such a good idea for Mayor Rick Gray to now promote State legislation that would allow Counties to impose a 1% sales tax. Mayor Gray told NewsLanc this week that, although such a tax would not be desirable, it is entirely necessary.
“In these economic times,” Gray said, “No tax increase is a ‘good idea.’ On the other hand, people come up and say, ‘don’t cut the police, don’t cut the fire, don’t raise our [property] taxes.’ Well, at some point, things have to give. You have to pay for what you get.”
“So no tax increase is appropriate at this time,” Gray continued, “That said, you’ve got to play the hand you’re dealt. We’re cutting staff, we’re cutting expenses…, we’re raising taxes, and we’re still taking money from the reserves. None of those are sustainable….We’ve just hit the wall with property taxes.”
Gray has lately been working to rally Pennsylvania Mayors for a ‘march on Harrisburg’ in favor of legislation that could open a new source of revenue for municipalities like Lancaster City. The particular bill that has received the most attention is House Bill 1682, which would allow Counties to impose a 1% sales tax to be split between the County and its municipalities for property tax relief and a fresh stream of municipal revenue.
But HB 1682 currently sits in the House Local Government Committee with little chance of forward motion, according to Eric Mock, an analyst for the House Majority Policy Committee. However, Mock noted, a similar piece of legislation—HB 1858—has already made its way to the House floor.
HB 1858, as currently amended, would distribute proceeds from a 1% sales tax for school district property tax relief (50%), county government (25%), and municipalities (25%). According to Mock, the school property tax component will keep the focus on property tax relief and will help the bill gain more political traction. The House is expected to take further action on this bill at some point in January.
HB 1858 is already supported by the PA AFL-CIO, PA Fraternal Order of Police, PA Firefighters, AFSCME, 10,000 Friends, PA School Boards Association, and the PA League of Cities and Municipalities.
Meanwhile, the currently stalled HB 1682, with its larger allocation for struggling municipalities, is not yet dead and cannot be entirely ruled out, Mock noted.
“It’s still an option,” Mayor Gray said of HB 1682. Gray asserted, however, that he doubts the General Assembly would have the courage to pass a reform as bold as this one.
