HARRISBURG – Gov. Edward G. Rendell issued the following statement regarding Tuesday’s primary election results involving Act 1 referenda:
“I am not surprised by the resounding defeat of the Act 1 tax shifting proposals. Unfortunately, in many cases, the full value of the property tax relief that the shift would have provided was not clear to the voters. I believe this contributed to the lackluster voter support.
“For instance, in Radnor, the ballot question indicated that by shifting to an earned income tax, property taxes could be cut by $480. In fact, homeowners in that district would have seen property taxes reduced by more than $1,200. Had the district fully informed its voters of the total value of the tax shift, residents might have voted to cut their property taxes by 25 percent. But they simply were not told the facts.
“This happened in many places across the commonwealth.
“Nevertheless, the local tax shifting proposal was an idea I accepted from the Republican leadership. They had hoped that this approach improved on Act 50 which they enacted under Governor Ridge. I expressed concerns throughout the process that voters would not embrace this sort of local tax shift. Instead, I focused on statewide funding for local property tax relief. That is why I fought so hard to enact limited gaming to fund tax relief. I am pleased that the revenues of our gaming venues seem to be high enough to ensure that property tax relief checks will go out in June, 2008.
“I expect this rejection by the voters of the local tax shifting may also give some impetus to the General Assembly to consider my proposal – which I included in my FY 2007-08 budget request — to modestly increase the sales tax and use these new revenue to lower property taxes this year. As we enter into a tough budget process, we may find that a sales tax increase is necessary and I want to be sure that if we need to increase this tax, we dedicate a substantial portion of any such increase to lower property taxes statewide.”
