Does our state constitution matter in the course of politics? Why of course not! Well, at least that is what many of our State Legislators think. In 1993, the Pennsylvania State General Assembly voted on House Bill 659, which empowered the Allegheny County Commissioners to enact a 1% county sales tax. This local sales tax known as the Allegheny Regional Asset District (RAD) tax is "piggy-backed" onto the state 6% sales. Its application follows the same parameters as the state sales tax and is levied on purchases of tangible goods and services. In 1994, the Pennsylvania Department of Revenue, which acts as the collecting agent for this tax issued an eleven page document which serves as the Department’s "Statement of Policy" when questions arise regarding the levy of the tax. One important ingredient to this publication is a little known law called the "Use Tax". This law boiled down means citizens from Allegheny County must pay the RAD tax on any taxable purchases made outside the county. Now one would think that if this law applies to one, it applies to all. This would also include the state legislators that voted for the RAD Tax. Recently, I reviewed campaign reports from members from the Allegheny County delegation of the General Assembly that voted for this tax. What I discovered was a double standard dating back to the inception of the tax on July 1, 1994. Routinely, these Legislators through their political committees make a variety of purchases outside of Allegheny County, avoiding the 1% sales tax, and in some cases the state sales tax. These taxable purchases include computers, campaign signs, gifts, catering, printing & much more.Is there proof positive that the tax liability had not been paid? The answer becomes clear when one realizes that all political transactions must be reported. If the tax liabilities had been paid, expenditures issued to the PA Department Of Revenue would be listed on the campaign report. What a surprise, this transaction is absent! It also raises a question as to why these legislators make purchases outside our county, rather than supporting local businesses in this region? One can only surmise that our Legislator’s excuses would include; "I did not know that the law applies to me!" or "Isn’t this a voluntary tax?" It just so happens that our local legislators did not volunteer to pay the |
tax
and would defer comments to their legal staff. This is not just a faux pas.
The concept of RAD In the infinite wisdom of the General Assembly, the Declaration of Policy of this legislation was to provide a supplemental support to our regional assets. By creating this new revenue stream it would preserve, improve & develop the regional civic facilities, parks, libraries, cultural facilities, professional sports facilities, and other organizations and properties vital to the quality of life of the region. The stark reality is that many examples could be cited on regional assets that have not improved. The most vivid example is the condition of our parks in Allegheny County that have deteriorated in recent years. The RAD tax delivers over $12 million annually to the county park system. Why then would the injection of RAD funds equate to a decline in the quality of our parks? The answer is simple, county government is using RAD revenues as replacement rather than the legislative intent of supplementing them. In the first year of RAD funding, the County reduced its park appropriations by an amount equivalent to the RAD funding. This also holds true to other "Statutory Assets" that receive RAD funding. Another aspect of this legislation that deserves scrutiny is the program of "tax relief". I have still not figured out the logic when the framers of the bill sold us on tax relief, when creating another new tax. One such measure was the reduction of the amusement tax. Once the sales tax was levied, city government reduced the amusement tax from 10% to 5%. This tax was levied on baseball, football and hockey tickets. While the tax was reduced, consumers did not realize the savings in reduced ticket prices. This reduction became a direct windfall, netting $1 to $1.5 million to each of the Pittsburgh sports franchises. If you refer back to the definition of "regional assets" you will notice the inclusion of professional sports facilities. This does raise an interesting question to creation of a Regional Renaissance Initiative. Why did citizens vote on yet another tax to fund stadiums last year? Constitutionally speaking It should never be forgotten that the laws of the Commonwealth must stay within the parameters of the state constitution. Therefore, are local sales taxes constitutional? The Pennsylvania Constitution under |
Article VIII, Section I states: "All taxes shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax and shall be collected under general laws.’ The framers of the Constitution meant all taxes shall be uniform, not just one or two. The classification of subjects is based on the population of a particular county. The "County Code" enabled the Legislature to target legislation to specific areas of the Commonwealth. In the 67 that make up the Commonwealth, Allegheny County is the only Second Class County, the target of the RAD tax. The "authority" levying the tax is the Allegheny Regional Asset District. The territorial limits of this authority ends at the county line. One should conclude that purchases made outside of Allegheny County would be exempt from the 1% sales tax. However, Allegheny County citizens are subject to the "use tax" which requires us to pay the 1% difference. Clearly, this "use tax" goes beyond the territorial limits, collecting the local sales tax for the RAD authority. Additionally, neighbors from adjoining counties would be subject to the tax on all purchases made in Allegheny County, regardless of their county classification. The wrinkle in uniformity also provides a tax exemption on automobile purchases, as the primary use of the vehicle (registration) would determine the purchaser's tax liability, not county of purchase. The crux of this constitutional issue is that local sales taxes can not co-exist with the "use tax" law, as it sets double standards in taxation violating the uniformity clause of the constitution. It is obvious that the Legislators fell asleep on the job when creating this constitutional breach. While legislators contemplate raising the state’s debt ceiling for stadium development, businesses and population continue its silent migration outward. Lowering taxes not perpetuating sports welfare will reverse this trend. The time to act on repealing this tax is now before elected and appointed officials ignore the will of the voters, and lock in 30 years of RAD funding, mortgaging our children’s future. For more information regarding this issue, you can visit the author’s web site at: http://voicepac.org/radpage.htm Contributors to Voice PAC will receive the following high quality bumper sticker that aids in repealing this tax and assures that our work continues.
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