March 18, 2026 · FINANCE · 3,130 words · 13 speakers · 67 segments
Good morning. I want to call this meeting of the Senate Finance Committee to order. Please call the roll.
Coleman.
Here.
Fontana.
Here.
Haywood.
Here.
Kiefer.
Proxy.
Here. Oh, hey.
Wonderful, thank you.
Loughlin.
Proxy.
Muth.
Proxy.
Pennycook.
Here.
Piscatana.
Proxy.
Rothman.
Here.
Ward.
Proxy Hutchinson here.
Quorum having been established, we will now move on to consideration of our legislative agenda. First item on the agenda is Senate Bill 100 sponsored by Senator Michelle Brooks. This legislation would exempt the first $100,000 of property inherited by family members from the inheritance tax. Senator Brooks is here with us today, and I'd like to recognize her to discuss her bill and answer any questions from committee members. Senator Brooks, the floor is yours.
Thank you, Mr. Chairman, and thank you to the committee and also the minority chair. I appreciate the committee in taking up this legislation and considering Senate Bill 100 today, which would exempt the first $100,000 from being subject to the inheritance tax, or as many call it, the death tax, for family members. As of October, only five states imposed the death tax. Kentucky, Maryland, Nebraska, New Jersey, and unfortunately, Pennsylvania. Lineal heirs or direct descendants, which would mean parents to child, or grandparents to grandchild, they're taxed at 4.5%. Sibling to sibling is taxed at 12%. And the last time we talked about this in this committee, I actually served on the committee, and I referenced a family in my legislative district that owned a small family business, and the mother had passed away, And so then the daughter and the son paid the inheritance tax. Within two years, the brother passed away. So the daughter or the sister was left paying inheritance taxes twice within two years. It almost closed that family business. This just should not happen. So the death tax describes this perfectly. We actually tax people because someone in their family dies. You just can't make something like that up. So this legislation was reported from committee last session with a vote of 10 to 1, and I appreciate your consideration today with an affirmative vote. Thank you, Mr. Chairman.
Thank you, Senator Brooks. I'd now like to recognize members for questions or comments. Senator Rothman?
Yes, let's be clear. It's the death tax. And I want to thank you. I want to thank a colleague from Mercer County for doing this. I don't think it's enough. I'm going to certainly vote for it today. But the federal government exempts the first $15 million. And nowadays, $100,000 isn't what it used to be because it's generally not a pile of cash. right, or money sitting in a savings account or money at a bank, it's in actual tangible real estate. It's a home. And this affects the working poor more than anybody. I mean, I've experienced it. I've seen it in real estate. A family, grandparents save and they buy a home and they pay off the mortgage. They're still paying real estate taxes. But they die and they're leaving it to their grandchildren, not their children, and they pay with the grandchildren, is that also 4.5% or even more? 4.5%, that's 50% more than people paying income tax in Pennsylvania. So I don't think $100,000 is enough, but let's be clear where this comes from. I mean, this is the Communist Manifesto. One of the principles is 100% inheritance tax, and that's what Pennsylvania has. I mean, it's why we're one of the few states. So this is a great first step. I heard someone say way smarter than me, you tax it when you earn it. We tax it when they save it. We tax it when we spend it. And then they tax it when you die. Why? I mean, I just I just think this is why does government have to take money from people who are mourning the death of their loved one? I mean, I have friends who have moved out of the state of Pennsylvania because they don't have children. They want to leave their what's left over when they die. They want to leave it to their neighbor or to their godchild or to their niece or nephew. And I think the rate even higher if you leave it to someone who not a direct descendant 15 percent Why I mean it just makes no sense at all that you know that they're paying a higher tax rate than big corporations. Walmart doesn't pay nine and a half percent, or doesn't pay 15 percent. So I congratulate you. I thank you for doing this. It was something we've made some steps to protect family farms. I think there was a bill when I was in the House that if a child became an orphan because both parents were killed, like a tragic situation where they both died in a car accident, we would waive the inheritance tax or the death tax in that case. But thank you for doing this. I think we could add a zero or two to this. Oh, and by the way, to be clear, people who have $15 million in assets go hire lawyers and accountants and trusts and set up trusts that they don't ever pay any inheritance tax anyway. So this isn't about helping the rich. The rich are able to afford to get professionals to help them so they don't end up paying the tax, too. So thank you very much, Senator.
I appreciate you doing this. Thank you, Senator Rothman.
For years, I offered legislation that eliminated the inheritance tax. And unfortunately, that didn't gain any traction because of the impact. So I thought, where could we land that impacted those families that needed it most? And so we started at $100,000. And hopefully this allows those families to perhaps keep their family home. And that's where we came up with the $100,000. So thank you very much for your comments.
Thank you, Senator Rothman. I'd like to recognize Senator Kiefer.
Thank you, Mr. Chairman. And Senator Rothman did cover some of my points, but I think we saw a huge impact of this during COVID with family estates, right? And it was crippling families. And as the Senator said, this isn't impacting the wealthy, right? They have teams of attorneys and accountants to figure out how to navigate the system. This is middle class, lower income that are trying. They've built this wealth over generations, whether it's a family estate. or a family business, and they can't afford to keep it, right? This is, I agree, 100,000 will barely scratch the surface, especially with inflation. Property values right now are through the roof. But I commend you. Thank you for we've got to start somewhere, and we have to move this needle. We need to abolish this tax. It is one of the most regressive taxes we have, and it feeds into the climate that we have, why we're losing our young families, why they're not staying. One more reason is why they're not staying in Pennsylvania or coming to Pennsylvania. So thank you.
Thank you. Other members wish to be recognized. Yes. Senator Haywood.
Yeah. Thanks so much. So the rate changes that have been suggested here in this conversation for siblings, grandchildren, many of the rate changes that have been suggested, I think is a clear direction for the General Assembly, because the rates that we have are probably amongst the highest in the nation for some of these transactions. So it does seem to me that these rate changes are critical. the General Assembly has spent quite a bit of probably two decades or more on reducing revenue into the Commonwealth. And as a result of spending a couple of decades reducing revenue into the Commonwealth, then we had these significant gaps in terms of funding, public education, public health, roads and bridges. And so the revenue reduction agenda has a corresponding impact of government service reduction agenda, which is devastating the communities, which is why we have the second highest student loan debt in the nation. So while I agree with my colleagues that we want to decrease the impact, make our tax system less regressive, we're in the terrible ten, ten worst states in the nation in terms of regressive taxation. So all that we can do to reduce that, I think, is certainly a direction in which we want to head without cutting the services that actually attract people to the Commonwealth, public education, higher education. I haven't talked to anyone who said they weren't coming to the Commonwealth because of this tax. But at the same time, the rate issue that has been raised, I think, is very important that we get rates that are more appropriate. It's clear to me that the rates that we have are too high in many of these respects. but the revenue cutting agenda leads us to what some people have called the structural deficit Thank you Thank you Senator Haywood I agree with student loan debt and that why I been very very vocal especially with the federal government who within their policies eliminated competition that actually makes student loan interest rates much higher than they should be. So that needs to be addressed. And with revenue, we're also spending more. And Pennsylvania has one of the highest gas taxes. I live on the border of Ohio. There are times where Ohio is 60 cents cheaper in their gasoline than we are. So I'm not sure it's a revenue problem as much as maybe we shouldn't be spending as much on certain things.
most certainly I support everything that you had said I support education I support those valuable programs but only five states in the country have the inheritance tax and I'm actually in the process of looking into what those other states you know what their structure is that they've eliminated their inheritance tax so thank you very much
thank you uh senator coleman thank you mr chairman i just want to thank you uh senator brooks for for bringing up uh bill i think that's it's fantastic i hear from lots of constituents who are very disturbed by the fact that the state is you know taxing them when then when they die and so i think this is a great step forward really who could be against uh who could be against this again you know we need to make government smaller and make people less reliant on government and this is just one of the ways to get government out of people's lives especially when it's been so encumbering their life then to get them again when they die so thank you again for your time and thank you for your bill thank you Mr. Chairman
anyone else wish to be recognized see no one do we have a motion and second to report Senate Bill 100 from the Senate Finance Committee Senator Rothman, Senator Coleman. Any further discussion? Justin please call the roll. Aye.
MR. Coleman?
Aye.
Fontana?
Aye.
Haywood?
Aye.
Kiefer?
Aye.
Loughlin?
Proxy, aye.
Muth?
Proxy, aye.
Pennecook?
Aye.
Piscotano?
Proxy, aye.
Rothman?
Aye.
Wharton?
Proxy, aye.
Hutchinson?
Aye.
Having received a majority vote from the committee, Senate Bill 100 is reported to the full Senate. Thank you Mr. Chairman and thank you to the committee members. Next on the agenda, Senate Bill 124 introduced by Senator Culver. This legislation would establish a deduction from income of up to $10,000 for certain unreimbursed expenses incurred in connection with a living organ donation. I now would like to recognize Senator Culver and co-prime sponsor Senator Williams to describe this legislation. You're welcome to go when you're ready.
Thank you, Chairman Hutchinson and the members of the committee, and thank you for considering Senate Bill 124 this morning. I'm proud to co-prime this bill with Senator Williams. We may have different experiences with organ donation, but we'll share our stories today. But our goal and focus is to save lives. This legislation is a simple concept. It will have a significant impact on many lives. Currently, 23 other states have tax credits, direct reimbursement, or tax deductions for donor expenses. If a Pennsylvanian makes the extraordinarily selfless decision to become a living organ donor, we should not allow out-of-pocket costs to become a barrier for this generous act. Senate Bill 124 would allow a living organ donor to deduct up to $10,000 in unreimbursed expenses related to the donation. That includes things like travel, lodging, lost wages, and medical expenses. With the forthcoming amendment, the deduction can be claimed in the year in which the taxpayer incurs any expenses. it can be claimed only once in a lifetime, and it cannot reduce taxable income below zero. It recognizes that if a living donor steps forward to help someone else, they shouldn't be left to shoulder unavoidable costs for their act of selflessness. Right now, Pennsylvania offers a tax credit to employers who provide paid leave for employees who donate an organ or bone marrow. I'm grateful for this policy, but I still think there's more we can do. Studies show that living donors incur an average of $5,000 of expenses associated with their donation. This bill can be the difference between someone being able to donate or having to step back even when they want to help. Living donation matters. It needs to be timely, and it provides the best possible outcomes. It can shorten wait times provide better matches and eliminate the need for dialysis for those who get transplanted It reduces costs and a need for hospitalizations It can also mean the difference between continued suffering and a new start Thousands of Pennsylvanians on the transplant wait list, and nationally more than 108,000 people are waiting. We also know that approximately 13 to 17 people die every day while waiting for an organ. And someone is added to the list every 8 to 10 minutes. As many of you know, I'm an organ transplant recipient. I received a kidney from my sister in March of 2021. I will celebrate five years with my kidney in two weeks. The road to needing an organ transplant is not an easy one. And how do you ask someone to give you an organ? It's a conversation stopper. And I can tell you, I was on the transplant list for about three years and received one call for a kidney in that entire time. and I was fourth on the list to receive that kidney. I didn't get that kidney. I can tell you being an organ donor is one of the most heroic things someone can do. I have seen firsthand the gift of donation and what it means, not only for the patient but for their families and for their communities. It has allowed me and so many others the opportunity to have a full life, and that includes being productive and contributing within society. I can still work. I can still pay my taxes. That is why this bill matters so much to me and why I'm asking the committee to advance this bill. I am thankful to Senator Lindsay Williams, serving as a co-prime, and for the colleagues who have joined on as co-sponsors. It reflects a shared belief that we should support and encourage acts that save lives and remove barriers where we can. Chairman and members of the committee, Senate Bill 124 supports donors without creating an open-ended program, and it provides a practical way to reduce a barrier that we know exists. I want to thank you for your consideration.
Senator Williams.
Thank you, Chair, and thank you to the members of the committee. I'm grateful to be here today with my colleague and co-sponsor, Senator Culver, in support of Senate Bill 124. Like Senator Culver and so many across Pennsylvania, my family and friends have been touched by the need for organ donation. One of my friends is a living donor. Her donation went to a child of another friend, and my uncle suffered from kidney disease for years. Unfortunately, he was unable to receive a transplant and was on dialysis for years before his passing. Kidney disease and its treatment can be extremely isolating, expensive, time-consuming, and exhausting for individuals and their families. But living donors can make a real difference. This legislation is a spark of hope for nearly 6,000 Pennsylvanians on the transplant waiting list. because if only a tiny percent of adults find it a little easier to become a living donor, we could eliminate our transplant waiting list entirely. Thank you all for your consideration of Senate Bill 124, and hopefully we can see this on the Senate floor in time for Donate Life Month in April. Thank you.
Thank you both. Before we open it to discussion, as was mentioned by Senator Culver, I do have an amendment to offer, Amendment A-02648. This amendment clarifies how to handle situations where the timing of organ donation-related expenses does not align with the tax year of the donation itself. It ensures that the Department of Revenue has clear guidance for these overlapping circumstances, and it allows taxpayers greater flexibility in choosing which tax year to claim the deduction. Additionally, this amendment will update the bill so it applies to tax years beginning after December 31, 2025, essentially aligning it with the current tax year. So I will move that amendment. Do we have a second to the amendment? Senator Fontana, any negative votes on Amendment A-02648? Seeing no negatives, the amendment is adopted. Now we will move on to discussion of the bill as amended. Senator Rothman wishes to be recognized.
Senator, I just want to thank your sister. So if she's listening, we're just so grateful for her and for you. So thank you.
Other questions or comments on the bill as amended? Senator Haywood.
That was an amazing story that you shared with us. And it was part of the testimony that I paid the most attention to, not that I shouldn't have for others. But I really want to thank you for sharing that with us. Thank you.
Anyone else? is there a motion and second to report Senate bill 124 as amended Senator Penny Cook Senator Kiefer do we have any negative votes on reporting Senate bill 124 as amended from committee seeing no negatives we the bill passes by a unanimous vote from the committee and Senate bill 124 is reported to the full senate as amended That concludes our business today. Thank you. I now recess this meeting to the call of the chair. Thank you all.