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Act 72 Information Meeting

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This law provides school districts the opportunity to offer lower property taxes ... fund must first be accumulated in Harrisburg, before any funds from the slot ... – PowerPoint PPT presentation

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Title: Act 72 Information Meeting


1
Act 72 Information Meeting
  • Manheim Township School District
  • Board of School Directors
  • October 7, 2004

2
Agenda for the Evening
  • Introduction to Act 72 Mr. Adams
  • Act 72 Issues Mr. Brubaker
  • Questions from members of the Board of School
    Directors
  • Questions from the audience
  • Closing Remarks Dr. Singer

3
Act 72 What is it?
  • Governor Rendell signed Act 72 of 2004, The
    Homeowner Tax Relief Act, on July 5, 2004. 
  • This law provides school districts the
    opportunity to offer lower property taxes to home
    owners by implementing an additional earned
    income and net profits tax or a personal income
    tax. 
  • Participating school districts will qualify for a
    state allocation funded by slot machine revenue. 

4
Offsetting Tax Provisions
  • A decrease in property taxes through a Homestead
    and Farmstead Exclusion
  • An equal increase from a combination of the
    following two sources of money
  • Profits from the slot machines
  • Increase in the rate of the Earned Income Tax
    (EIT)

5
Offsetting Tax Provisions
  • The Homestead and Farmstead Exclusion
  • The reduction of property tax would be a flat
    rate for all affected homesteads and farmsteads.
  • No property tax relief would be provided to any
    businesses, including apartment buildings and
    retirement homes.

6
Offsetting Tax Provisions
  • Earned Income Tax
  • An initial increase of 0.1 to the EIT is
    required of any district that chooses to accept
    Act 72 -- effective the first year that slots
    revenue would be available to the district.
  • A further increase of the EIT would be expected
    within two years.

7
Offsetting Tax Provisions example
8
Administrative Impact
  • Additional costs and processes for both local
    districts and state government
  • Required mailings (approximately 30,000)
  • Changes in budgeting process
  • Changes in budget parameters and authority (voter
    referendum)
  • Time deadlines
  • Staff to collect data, calculate rates, indices,
    etc.

9
It Is All Contingent
  • The district must choose to participate by vote
    of the School Board.
  • A reserve fund must first be accumulated in
    Harrisburg, before any funds from the slot
    machines are made available for distribution to
    the school districts.
  • There may be additional legislative changes
    needed.
  • Possible Business Receipts Tax

10
Act 72 What It Is Not
  • No new money is being provided for education.
  • The slot machine money primarily will go to
    school districts which presently receive larger
    portions of state funding for their budgets.
  • The Act will limit the ability of school
    districts which opt in to the program to increase
    taxes as needed in the future to meet educational
    needs.
  • This does not eliminate property taxes.

11
Act 72 Issues
  • Mr. George Brubaker
  • Solicitor for Manheim Township School District
  • Co-Author of Homeowner Tax Relief Act, Act 72 of
    2004, A Comprehensive Outline and Timetable,
    August 2004
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