Bucks Writs - Spring 2017 - 4


In addition, many studies and articles have reviewed the
proposed legislation and have concluded that its promise
of a dollar for dollar replacement of lost property tax
revenue is a false one. The proposed legislation includes the
provision to "broaden" the Sales and Use Tax ("SUT") to
"include more goods and services" (including legal services)
and increasing the SUT from 6 to 7 percent. The state's
Personal Income Tax ("PIT") would increase from 3.07 to
4.95 percent, and the Hotel Occupancy Tax would increase
from 6 to 7 percent. The legislation also relies on continuing
casino revenue to eliminate school property taxes, a source

Dear BCBA Members:
Every Spring for the last
several years, the Pennsylvania State Legislature and
Governor have wrestled with
providing sufficient revenue
to fund various initiatives and
David Truelove
projects. The Great Recession
Bucks County Bar
of 2008-2009 certainly set the
Association President
stage for crafting bare-bones
and austere budgets, with
resultant cuts to education, infrastructure, welfare, and
other departments and programs. While in the past the
Spring was a time of optimism, anticipating the verdant
blast of Spring colors, and the onset of another baseball
season, much of that eagerness has been supplanted by
the dread of another dragged-out and cumbersome (and
usually unsatisfying) state budget passage drama.

"Access to justice is a basic
constitutional right that
should not be taxed."
not necessarily the most stable in providing a reliable
funding stream. Non-lawyer professionals not subject to the
tax (for now) have also weighed in, calling SB 76 a "horrible
idea" for Pennsylvania taxpayers. (See April 12, 2016
column in "CPA Now," the publication of the Pennsylvania
Institute of Certified Public Accountants ("PICPA") entitled,
"Don't Believe the Rhetoric ! 'Property Tax Independence' Is
a Dreadful Bill" www.picpa.org/articles.)

2017 is no different from the budget years of the recent
past, except as it pertains to the legal profession. While
in the past a tax on legal services has been discussed and
contemplated (and in 2016 part of a potential budget
passage compromise), 2017 brings with it the clear
possibility that a legal services tax may be part of an overall
tax overhaul, purportedly designed to ease the burden
on taxpayers paying property taxes to support schools,
local municipalities, and county government. Key to the
proposed legislation is that the school property tax, ONLY,
will be allegedly offset by an amalgam of tax increases
and imposing taxes on new revenue sources, including
legal services.

One can see that once these new taxing sources are
introduced, the ease to increase and expand from the same
sources, and to hike the rates, will also increase.
The Pennsylvania Bar Association ("PBA") and several county
bar organizations have weighed in on the subject, arming
themselves with data and arguments which compel an
objective observer to conclude that SB 76 is just a bad idea.
As noted by the PBA, legal services are not a commodity
and, moreover, that "[A]ccess to justice is a basic constitutional right that should not be taxed." Basic legal services
would be affected: obtaining workers' compensation and
Social Security benefits; avoiding home foreclosure; gaining
court-ordered protection from an abusive spouse or parent;
obtaining fair and equal access to fundamental rights;
fighting a property assessment action by a local government;
dealing with a hostile landlord or tenant; having a simple will

The impetus behind this legislation (Senate Bill 76) is the
notion that the property tax as a method to fund Education
has become onerous and overly burdensome. No one likes
paying taxes-no one can argue that point, reasonably.
However, the truth is that the bulk of increased Education
costs are imposed as a result of mandates emanating from
the state, not local, level. School tax increases are limited
by Act 1 of 2006, as amended and modified by Act 25 of
2011, and all of those increases are consumed by pension
costs, unfunded/underfunded mandates (special education,
for example), and charter school payments. Local school
districts have no control or say in how these costs are
imposed. Simply stated, the legislature is attempting to
make up for its own inability to right the fiscal ship of state.

We Welcome Your Feedback!
Thanks for your interest in theWRITS.
Please send all comments, questions,
submissions to: WritsEditor@BucksBar.org.



Table of Contents for the Digital Edition of Bucks Writs - Spring 2017

Bucks Writs - Spring 2017 - 1
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