“Balanced Options-Local Decisions Act”

~Requires dollar-for-dollar property tax reductions and revenue neutrality~

 June 4, 2009 – Today, Senator John H. Eichelberger, Jr. (R-Blair) announced his intention to introduce an alternative to the local sales tax plan proposed by the Governor.  Under his proposed “Balanced Options-Local Decisions” Act, the voters could also select a new local tax structure which could include a sales or income tax at the county level.  However, in the Eichelberger plan, all revenues would have to be used to reduce nuisance and property taxes, not just the 60% in the Governor’s plan.

In order to transition from reliance on property tax, the issue would first be studied in detail by a non-partisan commission comprised of local residents  that will look at the overall fiscal structure within the county and its political subdivisions to maximize the benefits of the act to the taxpayer.  After the study, any proposal to transition tax structures would have to be put before the voters at referendum.

The referendum process will require that voters be fully informed of the impact on their tax burden of the proposal on the ballot. The county and municipalities would have to first use the revenue to replace revenues lost from elimination of nuisance taxes.  The remainder must be used for a dollar-for-dollar reduction in property taxes.

The plan provides several alternatives by which property taxes can be reduced. The proposal may consist of a combination of several options, to include: a reduction in millage rates; the homestead exemption; a universal exemption; a flat tax per parcel; and establishment of tax freeze or deferral programs.  Also notable is that all current senior or low-income exemptions and programs would stay in place.   

According to Eichelberger, “This plan will provide statutory options to local governments to replace existing taxes with better alternatives which are tailored to the local situation, while keeping the overall tax burden substantially the same.”

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