Pension, property tax reform move in Harrisburg

HARRISBURG - Two measures dealing with issues that are key to any state budget deal - property taxes and pensions - began moving through the legislature Tuesday, with lawmakers pushing for swift action on both.

The House began debate on a multibillion-dollar property-tax relief measure whose prospects are uncertain, while the Senate is poised to vote on a Republican-backed proposal to rein in the cost of public-employee pensions.

Both bills are up for final passage Wednesday, after which legislators will break until June, when budget talks with Gov. Wolf will begin in earnest.

How the GOP-controlled chambers vote this week will provide a glimpse into how contentious those negotiations could be. Wolf, a Democrat in his first year in office, has his own ideas for property-tax relief and pension reform.

He's been unequivocal in his opposition to the Senate's pension measure. On the House's property-tax relief plan, Wolf told reporters Tuesday he would take a wait-and-see approach.

The GOP-backed plan calls for raising the sales tax from 6 percent to 7 percent and increasing the state's personal-income tax rate from 3.07 percent to 3.7 percent, and using that money to reduce property taxes statewide.

The House gave it preliminary approval - with some Democrats supporting it - calling it an opportunity to jump-start conversation on a topic that has been kicking around Capitol halls for decades.

"It's time to put our money where our mouth is," said Rep. Gene DiGirolamo (R., Bucks). "Let's tell the people of Pennsylvania that we are serious about moving forward on this issue."

Not all Republicans were supportive.

Rep. Kate Harper (R., Montgomery) called it "a massive tax increase" that will benefit "companies and malls," advocating instead for expanding a property-tax and rent rebate program so more people become eligible and can receive larger rebates.

"Let's target the relief to those who need it," she said.

The Senate is scheduled to vote Wednesday on a Republican-drafted pension proposal that would place all new employees into a 401(k)-style plan and make changes to the future earnings of current employees. An actuarial analysis of the bill Tuesday said it would save $18 billion on more than $180 billion in projected payments over 30 years.

Wolf has instead proposed borrowing $3 billion to help pay down the state's pension debt, and use proceeds from modernizing the state's wine and liquor stores to help pay it off. Republicans reject that idea.