A bill supported by Pennsylvania Farm Bureau (PFB) that would reduce real estate property taxes while increasing personal income and sales taxes to fund school districts has been approved by the state House of Representatives.

“The legislation is a fair and equitable way to finance Pennsylvania’s public schools, because every dollar raised by increases in personal income taxes and the state sales tax would be used to provide property tax relief for landowners,” said PFB President Rick Ebert.

Under House Bill 504, revenues generated by increasing the personal income tax will be applied to a reduction in the millage rate of all land in the local school district, while new sales tax revenues will be used to reduce homestead and farmstead exemption rates in the local school district. In addition, school districts would be required to reduce property tax rates equal to the revenues received through the Millage Rate Reduction Fund and Homestead/Farmstead Relief Fund established in the bill.

“The tax shift element of the bill is critically important to farmers, who face significant property tax bills because owning large amounts of land is necessary to having a viable farm operation, even though land ownership does not reflect wealth,” added Ebert.

HB 504 also includes a Farm Bureau supported provision to provide commercial timbering businesses a similar exemption from state sales tax as provided to commercial farming operations on purchases of needed supplies and equipment.

Meanwhile, Pennsylvania Farm Bureau praised the state Senate for passing legislation that would reform Pennsylvania’s public pension system, which has amassed an unfunded liability of more than $53 billion.

“Action needs to be taken quickly to stop the ballooning state pension deficit from growing further out of control,” said Ebert. “We support Senate Bill 1, because it includes provisions to address both short-term and long-term problems associated with the pension programs.”

Farm Bureau notes that all Pennsylvanians bear the brunt of the pension liability, through reduced services and increased property taxes. “Without significant changes, schools districts will have no choice but to raise property taxes to support the pension system.