School districts throughout the state are facing a deadline next Thursday to appoint a tax study commission as part of the mandated implementation of a new tax law enacted in Pennsylvania.
Last month, the Tyrone Area School Board approved the seeking of volunteers and the district placed advertising in the newspaper seeking members for the commission.
The panel is to be comprised of five, seven or nine members and is to include residents or taxpayers in the district that reflect the socioeconomic, age and occupational diversity of the district. Only one school board member can serve on the board and no school employees, officials or relatives of the district can be on the commission.
Business Administrator Cathy Peachey said the district received eight applications. However, one person had to be disqualified since they have a relative working in the district. Peachey said they are still looking for an eighth member from the general public. Peachey said board member Ray Detwiler is expected to serve as the school board representative on the commission. Although it has options on the size of the commission, Tyrone Area wants to appoint a nine-member panel.
The Tyrone Area School District serves students who live in three different counties. Peachey said those who have applied are from Blair and Huntingdon Counties, but the district is still looking for someone from Centre County to serve on the panel.
Peachey said the school board is expected to take action on the appointment of commission members at its next meeting on Tuesday.
Bellwood-Antis business manager Ken Swanson was unavailable this morning for comment about his district’s plans regarding the appointment of members to a tax study commission for that district.
The appointment of a commission is part of a series of steps to develop 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 just one of several steps districts must work through as 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.
Following the appointment of members, 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.
