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Proposed Homestead Amendment draws mixed review

October 12, 1997

By RICHARD F. BELISLE

Staff Writer

CHAMBERSBURG, Pa. - Steve Minnich is the county treasurer for Franklin County and he wants Pennsylvanians to vote in favor of the Homestead Amendment on Nov. 4.

Minnich said the amendment is the first step toward simplifying what he calls the "dinosaur of local tax laws." He points to his own local tax bills as an example of why reform is needed.

Minnich owns an average-price house in Waynesboro.

His annual taxes include:

* Waynesboro Area School District tax: $612.14;

* per capita head tax, $12.50 each for Minnich and his wife;

* occupation tax: $90 for Minnich and $60 for his wife;

* occupational privilege tax: $10 each for Minnich and his wife collected by the borough of Chambersburg because they both work there;

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* Pennsylvania state income tax, 28 percent of the couple's gross income;

* 1 percent local income tax based on gross income. Half goes to the school district and half to Waynesboro where they live;

* real estate property taxes of $289.56, including $116. 84 to Franklin County, $147.32 to Waynesboro and $25.40 as their share of the cost to provide street lights in Waynesboro.

The Minnichs don't pay 1.5 mills in library taxes. It's included in their borough tax bill. Residents in 15 of Franklin County's 22 taxing districts do pay a library tax.

"We need to find a way to simplify the local tax system and make it more equitable for all income groups. It has to be simple enough for everyone to understand," Minnich said.

Both houses of the state legislature passed the bill that put the amendment on the ballot, said State Sen. Terry Punt, R-Franklin.

Punt said the local delegation to Harrisburg favors the amendment.

In Pennsylvania, residential and commercial real estate is assessed at the same rate. The Homestead Amendment will allow local jurisdictions to set different tax rates for residential and commercial properties.

According to literature promoting the amendment, it would allow school boards and other taxing districts to exempt a portion of property taxes paid by homeowners based on the value of the homes in their area.

The exemptions would be progressive - properties with lower assessments would have higher exemptions. It would help those on fixed incomes, proponents said.

Opponents worry how jurisdictions will make up the revenue loss the exemptions would generate.

David Sciamanna, president of the Greater Chambersburg Chamber of Commerce, said the chamber has not taken a position on the amendment, but does have concerns.

Sciamanna said the state is already perceived as being an expensive place to do business. He is worried that the amendment will shift the burden from residential to business taxpayers.

"You don't get something for nothing," he said. "It would be better if the Legislature looked at the big picture on tax reform and not tamper with pieces of it. We need a more comprehensive approach. This is only step one."

Maura Donley, spokeswoman for the Pennsylvania Chamber of Business and Industry in Harrisburg, said her organization won't oppose the amendment because of two built-in safeguards that protect commercial and business property.

"A local jurisdiction can't raise the millage rate to make up the difference and no exemption can exceed one-half of the median assessed value of property in the taxing district," she said.

Punt said that "passing the amendment will trigger local tax reforms."

They could range from a school, county or local income tax to a county sales tax, he said. Voters would decide reforms through referendums, he said.

"The whole issue of tax reform is to allow greater flexibility," Punt said. "It's for the local governments to decide what they want."

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