Scam or Slam or Both

Yes, ACT I is a disaster. The tax shift to EIT or PIT, if approved by voters, is going to cost the average homeowner even more in property tax than they already pay. This piece of legislation is an embarrassment and a total failure.

People must realize that even if they vote down an EIT or PIT, our illustrious govenment officials in Harrisburg have left an "open door" for school districts to continue to increase taxes.

Districts can raise taxes in accordance with whatever their "inflation index" is for the year (for 2007/2008 the index ranges between 3.4% and 5.5%). That is an automatic tax increase!

According to Act 1 Backend Referendum the school disrict can then go to the Department of Education for exceptions. Last year our district not only got their exceptions approved by PDE, they actually got more than they requested. So you see, the districts are not real concerned about whether or not the voters accept an increase in EIT or PIT. They already know they will get whatever they need through backend referendum.

ACT I expands the backend referendums orginially set forth in Act 72 (hailed by all as a total disaster) for special education, health care costs and pension obligations. These items alone cause some of the biggest tax hikes that we have seen. Furthermore, the backend referendum for school construction is modified to provide an exception for school construction indebtedness incurred before the effective date of ACT I. Explains why so many of our school districts scrambled to get new school construction approved last year. No surprise there!

When given the opportunity to tighten the "back-end" referendum provisions that existed under Act 72 of 2004 (the previous law that was to distribute the gambling tax revenues), the legislature instead broadened the exemptions and enabled school districts with the power to circumvent voter referendum and continue to increase spending without hindrance.
Ed Rendell, along with all legislators in Harrisburg, should be ashamed.

This is one of the biggest scams/slams that has come down the road in quite a while.

nopropertytaxes@yahoo.com

ACT I Disaster

Groups try blocking tax shift

By ALISON HAWKESBucks County Courier Times

HARRISBURG — Upset with Harrisburg's solution to property tax relief, taxpayer groups are springing into action in an effort to defeat a proposed swap to income taxes to feed school district budgets.

A coalition of 22 groups is getting ready to send out the word to voters that the tax shifts they will vote on in May will do little to ease their tax bleed and might actually hurt them worse in the long run under the current plan.

“Vote no and make them go back to work in Harrisburg,” said Joe Gable, chairman of the Central Bucks Taxpayer Association. “That's our message.”
Gable said he and others are planning media outreach, talk show appearances and even a new blog at bucksdailybuzz.com.

The response from taxpayer groups is an early sign that Act 1, passed in June as the Taxpayer Relief Act, might not go over well in its first test with the public this spring, and if not could become the latest in a series of blundered property tax plans out of Harrisburg.
Since its inception, the tax plan was roundly criticized as being too modest and passing the buck on difficult tax issues to the locals.

As the process unfolds at the school district level, the fissures in the plan are becoming more apparent to those on the front lines of the local tax relief issue. More than a dozen citizen tax study commissions, charged with the task of coming up with the type and level of income tax shift best suited to their districts' taxpayers, are throwing up their hands and saying doing nothing is better.

No recommendation means their school boards must decide what to propose for their May ballots.

Dee John, chairwoman of Uniontown Area School District's local tax study commission, said her commission refused to make a recommendation because no option seemed palatable. A 0.4 percent increase in earned income taxes seemed too high for workers in her district to bear and any household earning more than $46,500 would be paying higher taxes overall, she said. A hike in sales taxes would be fairer, she said.

“The Legislature let us down,” said John, a Realtor. “Why are they asking the school districts to do this? Why do we vote these people in office? I don't get it, do your job.”

Neshaminy School District's tax study commission had a similar response. The break-even point there would be $55,000, below the district's median household income.

“It's a tax increase and this has been sold by the Rendell administration as a tax shifting,” said Richard Sypek, a Neshaminy commission member and retiree. “I think this Act 1 is a very bad piece of legislation.”

The property tax plan, passed after six months of grueling debate, was essentially an expansion of the earlier Act 72. It drives out $1 billion in gambling proceeds to taxpayers in the form of “free” tax relief, puts some controls on school district budget increases and expands senior tax relief by enlarging the Property Tax and Rent Rebate program.

For property tax relief beyond that, voters must decide district by district whether to switch over to higher income taxes, in some districts by as much as an additional 1 percent of their salaries. Existing income taxes at the local level would remain.

Some lawmakers are picking up on the public's roasting of the new tax plan.
Rep. Dave Steil, R-31, whose Pennsbury School District tax commission made a recommendation but unhappily so, said he senses the disapproval and even expected it. But giving voters the chance to have a say is one step in the longer process of finding a solution to the property tax debate, he said.

“I think our responsibility is to ask the voters; ask the people who pay the taxes,” he said. “The next step is we have to move to a statewide tax. That's more onerous to people in my district because we will still have to raise a tax and we will have to send it somewhere else.”

But taxpayer groups believe Harrisburg missed an opportunity to pass deeper relief when there was momentum last year to do so. Many are throwing their weight behind a plan called “Plan for Pennsylvania's Future” to eliminate property taxes altogether through a combination of a broader, lowered sales tax, an income tax hike and an increase in realty transfer taxes. The idea is to spread the tax pain as evenly as possible across all age and demographic groups.

“We're trying to send a message to the Legislature that this is not adequate. This is not what we want,” said David Baldinger of Reading, who leads the Pennsylvania Taxpayers Cyber Coalition. “They seem to have trouble understanding the word "elimination.' ”

With taxpayer groups sounding a loud “no” against the May referenda and school districts taking a publicly neutral stance, there might be few standing to defend the measure to voters.
Rep. Chris Sainato, a Lawrence County Democrat, said he won't sound a bugle for it, even though he voted for the plan.

“Every school district is different. I'm not going to say you should do it or not,” said Sainato. “It's going to be up to local groups, if there are any local groups who support it.”

In reacting to public disappointment last year, Gov. Ed Rendell and lawmakers promised to revisit the issue with a second, deeper layer of property tax relief. But it's difficult to say when that might occur.

Steve Miskin, spokesman for House Republican Leader Sam Smith, said the Democrats' agenda is pretty full right now with a new healthcare initiative and transportation funding.
“It's going to be about priorities,” he said.

Steil's district includes Lower Makefield, Newtown, Newtown Township, Yardley and District 2 of Upper Makefield.

nopropertytaxes@yahoo.com