Act 1Taxpayer Relief Act

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Act 1-Taxpayer Relief Act

• August 17, 2006

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Major Provisions

• Voters decide whether to shift from property to
  income tax (EIT or PIT)
• Tax Study Commission recommends ballot language
• School Board approves final language
• Future property tax rate increases above
  inflationary index require voter approval
• To prepare ballots requires earlier adoption of
  preliminary budget
• Installment payments for property tax

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Tax Study Commission

• School Board appoints 5, 7, or 9 members
• 1 Board Member
• No relatives of employee
• Appointed by September 14
• 90 days to make recommendation on referendum
  language
• Budget and staff provided by CRSD
• Budget of 20,000-(consultant study, court
  reporter for public hearing, legal, etc.)

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Establishing the LTSC

• Board should adopt a resolution establishing the
  LTSC, its functions, operational procedures, a
  budget and resources of the commission.
• Among the procedures
• How the commission will vote
• When meetings will take place
• Public participation/public comment
• Access to the superintendent, business manager
  and solicitor
• Budget and expenditures

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What is the LTSC required to do?

• LTSC must study 4 items
• Historic and present rates of district revenue
  from current taxes.
• The percentage of total district revenues
  provided by current taxes.

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What is the LTSC required to do?
3. The age, income, employment and property use
characteristics of the existing tax base. 4.
Projected district revenue from current taxes,
including possible new taxes authorized under Act
1 (new EIT or PIT).
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Local Tax Study Commission

• Commission must make a nonbinding recommendation
  to school board whether to levy an EIT or PIT for
  the next fiscal year.
• Must hold one public hearing
• Recommendation must be presented at a public
  school board meeting.
• School board votes to accept or reject
  recommendation.

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LTSC - Areas to Examine Preexisting EIT

• Choices if the district already has an EIT
• A district may impose a supplemental EIT to fund
  property tax relief. The taxpayer will simply
  see an increase in the tax rate of the EIT.
• A district may impose a PIT to fund the
  exclusion, but will also have to convert the
  existing EIT (in a revenue neutral manner) to a
  PIT.

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Commissions recommendation should include the
following

• EIT vs. PIT
• Income tax rate to be presented to the voters

• Specific referendum question to be presented to
  the voters
• Reason for the recommendation

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Board Decision-Accept or Reject?

• If the decision of the Board is to
• Accept - Board must pass a resolution and submit
  the referendum question to county election
  officials.
• Reject (2007 only) - Board must make its own
  referendum question to present to county election
  officials.
• Reject (in 2009 and beyond), Board is free to
  either present a referendum question or do
  nothing.

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Budgeting Changes

• Changes to District Procedures
• Accelerated budget process (except with
  certification to remain within Index).
• School districts must not raise any single tax
  more than the Index without voter approval in a
  back-end referendum.
• District may not
• Impose any tax (including an EIT) that was not
  in-place in 2005-2006 without voter approval.
• Raise an existing EIT without voter approval.

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If Within the Index

• Submitting a certification
• A school board that determines that its budget
  will not require a tax increase greater than the
  Index may adopt a resolution and avoid the
  accelerated budget timeline.
• If PDE agrees, the traditional budget timelines
  apply under 24 P.S. 6-687.
• A school board that adopts the resolution is not
  eligible to seek referendum exceptions or to go
  to referendum to exceed the Index.

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Information on www.CRSD.org

• Training presentations-PASBO
• Act 1 Overview
• Tax Study Commissions
• Calendar-PSBA
• Presentation-Fox Rothschild
• Proposed bylaws
• Proposed agenda for first meeting