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Act 72 Information Meeting


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

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

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

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
  • Participating school districts will qualify for a
    state allocation funded by slot machine revenue. 

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

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.

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.

Offsetting Tax Provisions example
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
  • Time deadlines
  • Staff to collect data, calculate rates, indices,

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
  • Possible Business Receipts Tax

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
  • This does not eliminate property taxes.

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