Notes

Outline

Overview of the Tax Study Commission Report

True or False Act 1 is Tax Reform? False, it is on a shift in the type of tax collected.  Less real estate and more wage tax Act 1 Contains Limits on School District Budgets. True, Millage increases over the Act 1 index must be approved by the community via referendum. Act 1 Provides Additional Revenue for School Districts? False The District Care how the Community Vote on the Act 1 Referendum Question? False

Act 1Requirements for Tax Commissions and School Boards Act 1 Requires: 498 School Boards to Form Tax Study Commissions Tax Commissions Must Recommend a New Tax Structure Increase EIT or PIT to Reduce Residential Real Estate 25% up to 50% Real Estate Tax Reduction Tax Commissions Must Develop a Report in 90 Days School Board Must Develop a Referendum Question by March 13th 2007 The Community Votes on the Referendum Question at the Primary Election in May 15, 2007

Commission Recommendation Increase the Earned Income Tax (EIT) by 1% to provide approximately $972 in School District Real Estate Tax Discounts for Eligible Homes. What about Slot Machine Proceeds Slot machine proceeds are an additional reduction beyond the projected $972 Slot machine proceeds are estimated to range from $106 to $273 for eligible CB residences

Commission Recommendation Continued The Recommended Increase in the EIT Means a Total Local Tax on Wage Earners of 2%

What This Means To Households (see page 7 of the report)

Referendum Question Per the Recommendation of the Tax Study Commission, the Act 1 Referendum Question Would Be:

What Else Was Considered? The Commission Could Have Recommended a Real Estate Tax Discount of up to $1,847 and an Additional EIT Tax of up to 1.9%. Why Not Recommend the Maximum Discount? Concerns About the Tax Burden on: Wage Earners Especially Renter Who are Wage Earners Slots Proceeds May Eventually Supplement Discounts “Toe in the Water”   First Recommendations can be Adjusted in 2009, 2011, etc.

Other Potential Recommendations The Commission Could Have Recommended a Personal Income Tax. Why Didn’t The Commission Recommend PIT? The PIT is a Totally New Local Tax The PA Dept of Revenue- No Final Collection Rules PIT Collected by School District- EIT by Municipal. This adds to Tax Return Confusion & Preparation Costs Can be Analyzed Again in 2009, 2011, 2013, etc.

Have You Applied? Do You Own a Home or Farm? Have you Filled Out the Homestead or Farmstead Exemption Form? Not Sure? Call the County Assessors Office at (215) 348-6219

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