Last week, the Tyrone Area School Board approved members for a mandated tax study commission ahead of a deadline to have the panel in place by Sept. 14.
The board named Ray Detwiler to serve as a its representative on the tax study commission. State rules allow for one member of the school board to be on the commission with the rest being residents or taxpayers in the district that reflect the socioeconomic, age and occupational diversity of the district. No school employees, officials or relatives of the district can be on the commission.
Also named were Julie Brenneman, Pam Collins, Charles R. Diehl, Jr., William Fink, Bill Hoover, Terry Miller, James Morrissey and Paula Wheland. The district had the option to name a nine-member, seven-member or five-member study commission. The school board preferred a nine-member panel and they also decided they wanted members to be from all three counties that comprise the Tyrone Area School District. The members named to the panel are from Blair, Huntingdon and Centre Counties.
The tax study commission is part of the mandated implementation of a new tax law enacted in Pennsylvania and the district sought volunteers by advertising for members in the newspaper. It is just the first step in developing a referendum question to allow voters to decide if they want to further reduce property taxes by switching a portion of the local property tax to a local income tax. The move is a result of the Act 1 law passed by the state legislature and signed by the governor earlier this year.
Property taxes are already earmarked to be reduced for homeowners in the state through money expected to be generated by slot machine gambling.
Information on a state web site about the issue (www.papropertytaxrelief.com) noted school boards can choose to not to accept state-funded tax relief for homeowners. Under a previous law, Act 72, only about 20 percent of the state’s school districts agreed to accept the property tax relief.
The information explained under the new law, the decision can be made to accept the money just before the distribution of funds. However, if a district opts out of accepting the slots-generated money, the issue will have to be placed on the ballot in that district to allow voters to either accept or reject the board’s decision.
The tax study commission will have until Dec. 13 to present nonbinding recommendations to the school board for consideration.
By Feb. 26, 2007, districts will have to begin advertising its intent to adopt a resolution regarding allowing voters the option of approving further property tax relief through a referendum. Schools are required to adopt a resolution authorizing a referendum question by March 13, 2007.
The referendum question is expected to be on the ballot in next spring’s primary election. Voters will be given an option to increase the Earned Income Tax (EIT) or convert to a Personal Income Tax (PIT) to generate revenue to cut property taxes. The additional amount of property tax relief will be between half of the maximum homestead exclusion (the formula in place for slots-based property tax relief) and the full maximum exclusion allowed, but it does not have to be more than a one percent EIT increase. The state’s tax relief web site noted “this provision does not apply to Pittsburgh, Philadelphia and Scranton because their wage tax rates are already so high, increasing them even more will further deteriorate the economies of those communities.”
The additional relief could take effect as early as July of next year.
If voters reject an EIT increase or a conversion to a PIT then there would be no additional property tax relief at the point. However, according to the state’s tax relief web site, school boards can also give voters (with the exception of Philadelphia) the choice of further reducing property taxes in the 2009 municipal election or any municipal election after that.
