A message to the SCASD community,
You may be aware of possible changes to our property taxes. Currently, the Pennsylvania legislature is discussing property tax reform for school districts. A proposal has not been presented during the 2017 legislative session. However, since there may be a very real chance of a bill being presented, the Board of School Directors felt it necessary to inform community members of the possible situation so you may make your own decisions regarding what is best for you and your family. We encourage you to contact your local legislators and share your thoughts and your personal circumstances. To help you, a tax calculator has been provided to aid in estimating the effect of the potential changes. Contact information for your local state legislators is included.
Relevant items for consideration include:
1) Property taxes are a primary source of funding for Pennsylvania school districts.
2) The use of local property taxes by school districts is conducted in a transparent manner through advertised public meetings and online documentation with ample opportunities for public comment.
3) The proposal, although called property tax elimination, is really a property tax reduction. County and municipal taxes will be assessed as well as school property tax, at a reduced rate, until the district has recouped funds for debt. Current estimates show the average taxpayer in the State College Area School District would continue to pay approximately $323 in school property taxes.
4) Not only does the proposal call for a higher rate of sales tax (from 6% to 7%), but it also taxes food and clothing items not previously taxed as well as increase the (state) Personal Income Tax rate (from 3.07% to 4.95%).
5) The proposal also shifts $34 million in school district property taxes from commercial property owners to individuals through the increased sales and personal income taxes.
Concerns from our school district’s perspective relate to:
- The distribution process of the newly collected funds from sales and income taxes
- The instability of sales and income taxes as revenue streams
- The inability to be reimbursed for 100% of our taxes assessed as the state distribution does not account for delinquent taxpayers (approximately $1.2 million)
- The ability to maintain desired levels of programming as well as provide resources for state mandates such as special education costs, pension costs, and charter school costs
- The ability to borrow funds if needed
We anticipate that most working families will pay more overall taxes with the proposed changes. The elimination or reduction in your property taxes will not offset the increase you will pay in the other taxes. For example, a family with both spouses making a combined income of $100,000 with a weekly grocery bill of $300 and approximate yearly clothing costs (and other taxed items) of $2,400 and a current property tax bill of $2,500 will pay $1,015.00 more in total taxes per year. (Please click on the property tax elimination calculator below to see what your savings or additional tax owed might be).
STATE COLLEGE AREA SCHOOL DISTRICT
February 6, 2017
Board of Directors Resolution 2017-01
WHEREAS, the General Assembly has previously considered legislation that would eliminate locally managed and administered school property taxes (SB 76) and is currently considering similar legislation; and
WHEREAS, the locally controlled property taxes are the primary source of funding for Pennsylvania school districts; and
WHEREAS, the use of local property taxes by school districts is conducted in a transparent manner through advertised public meetings and online documentation, with ample opportunities for public comment; and
WHEREAS, the proposal does not completely eliminate property taxes and still allows for counties and municipalities, as well as school districts, to levy property taxes for previously incurred debt; and
WHEREAS, such legislation will effectively result in a tax shift from non-local commercial property owners to individuals and local businesses; and
WHEREAS, by making school districts dependent on the Commonwealth for a far greater share of their revenue, this will result in dire consequences for school districts in the event that the legislature is unable to pass a budget on time; and
WHEREAS, revenue from increased personal income and sales taxes will leave local communities and be placed into an education funding account for the Commonwealth to determine how it will be distributed, thereby removing the ability of local boards to be responsive and accountable to their community; and
WHEREAS, school districts need the flexibility to adapt to changing educational needs and requirements; this will stifle innovation and lock school districts into the status quo, unable to respond to the needs of our students and community; and
WHEREAS, property taxes are a stable revenue source which enable local school boards to exercise prudent financial planning for long-term stability; and
WHEREAS, income and sales tax revenue fluctuate year-to-year with economic cycles; and
WHEREAS, relying on income and sales tax revenue will destabilize funding for education; and
WHEREAS, the amount of revenue collected under the tax shift is not projected to be sufficient to replace the lost revenue, especially after the first year; and
WHEREAS, such legislation is clearly regressive, singling out lower-wage workers and renters, who would carry a greater financial burden from the resulting tax shifts; and
WHEREAS, eliminating property taxes without addressing the primary factors driving school districts’ budgets does not help contain the rising cost of mandates such as pension contributions, charter school tuition payments, special education instruction and services; and
WHEREAS, property tax revenue comprises 64% of the State College Area School District budget and the school board will no longer have the ability to raise revenue to pay for mandated expenditures, or to respond to emerging needs of the district, including building repair and construction; and could cause a significant negative impact to educational programs, services, and staff; and
WHEREAS, the elimination of school property tax would undo the Commonwealth’s recently enacted basic education funding formula before it has the chance to remedy the inequities it was designed to address.
NOW, THEREFORE, BE IT RESOLVED that the Board of School Directors for the State College Area School District opposes legislation that eliminates school property taxes and believes that the tax shift created under this plan does not address the needs of taxpayers, schools and communities.
BE IT FURTHER RESOLVED that the Board of School Directors for the State College Area School District calls upon the General Assembly to oppose any legislation that would restrict or marginalize local control over education funding.
BE IT FURTHER RESOLVED that a copy of this resolution be submitted to Governor Wolf and the members of the General Assembly representing the constituents of the
State College Area School District.
Sen. Jake Corman, R-Benner Township
(34th District: all of Centre County except Philipsburg and Rush Township)
281 Main Capitol Building 236 Match Factory Place
Senate Box 203034 Bellefonte, PA 16823
Harrisburg, PA 17120-3034 814-355-0477
Rep. Kerry Benninghoff, R-Bellefonte
(171st District: Bellefonte, Centre Hall, Millheim and part of State College, and College, Gregg, Harris, Penn, Potter, Spring and Walker townships)
41B East Wing 140 W. High St.
P.O. Box 202171 Bellefonte, PA 16823
Harrisburg, PA 17120-2171 814-355-1300
717-783-1918 Fax: 814-355-3523
Rep. Scott Conklin, D-Rush Township
(77th District: Philipsburg, Port Matilda and part of State College and Ferguson, Halfmoon, Huston, Patton, Rush, Taylor and Worth townships)
325 Irvis Office Building 301 S. Allen St.
P.O. Box 202077 Suite 102
Harrisburg, PA 17120-2077 State college, PA 16801
209 E. Presqueisle St.
Philipsburg, PA 16866
Rep. Rich Irvin, R-Huntingdon
(81st District: Port Matilda and Halfmoon, Taylor, and Worth townships, and part of Ferguson, and Patton townships)
612 Pennsylvania Avenue 102 E. Plank Road
Huntingdon, PA 16652 Port Matilda, PA 16870
Fax: 644-2999 Fax: 614-692-4587
Click this link http://www.legis.state.pa.us/cfdocs/legis/home/findyourlegislator/ to access your local legislators’ contact information and this link https://www.usa.gov/elected-officials for your federally elected officials.