Morning Call – April 6, 2006

Act 72 Proposition Tax, Gambling Slots

Dear Friends,

Good morning. Four area school superintendents are plenty worried about the impact of Act 72, the law which allegedly provides property tax relief if the 501 Pennsylvania school districts agree to raise their earned income tax rate by 1 percent…and gambling revenue reaches the billions needed annually to fund the relief. Governor Rendell and legislators, who favored gambling, dangled possible property tax relief in front of reluctant legislators. Fearing recriminations at election time, they finally caved in.

“I don’t think the promised tax relief will happen,” Quakertown School Superintendent James Scanlon began. “There are so many questions. For example, will there be sufficient gambling money? The 11,836 Quakertown area property owners could see between $187 and $334 in tax relief if there’s $9.4 billion in gambling receipts…and if a profit of $900 million [divided among participating school districts] occurs.”

School boards face a May 30 deadline to decide whether to join in or not. Scanlon’s not sure how the Quakertown School Board will act. He frets about Act 72 being too restrictive because of requirements to limit increases in annual budgets. Act 72 makes school districts put budgets to a voter referendum if expenses exceed the rate of inflation.

Robert Kish, the superintendent of Pennridge schools agrees. “There’s no guarantee that the [tax] benefits will happen,” he said. “Will gambling profits bring the results?” Like Quakertown, Pennridge is skeptical. “It’s a work in progress,” Kish observed about the decision expected May 30.

“Why should a school board be the only one facing a referendum,” he asked? “The state, county, and municipal governments don’t have referendums. In fact, the governor spoke against state referendums.”

Dr. Marilyn Miller, the acting superintendent of the Palisades school district, had similar thoughts. Speaking of the school board and her staff, she said, “We’re reading as much as we can. But we haven’t reached a decision yet.”

“The board has gradually grown more skeptical,” Timothy Kirby, the superintendent of the Upper Perkiomen School District began. “We’ve attended work shops…had public meetings. We’ll wait until May to get as much information as we can.

“I never solicit votes so I really don’t know where the [school] board is,” Kirby continued. “If the vote were held today, it would be close. Will the May 30 deadline be extended? The governor and the legislature are divided. They can’t agree how the money will be split between districts which sign up and those who don’t.”

“What happens to growing school districts like Pennridge, Souderton and us,” Scanlon asked? “In just five years, property values have increased by 50 percent in the Quakertown area alone.” He knows that Bucks has not had a reassessment in 30 years, so property taxes aren’t keeping up with rising costs brought about by a rising school population.

In the meantime, Scanlon says that the Pennsylvania Constitution orders the legislature to provide a thorough and efficient public education system, but won’t provide the money to accomplish the task. “Quakertown only receives 26 percent funding for our kids,” he added. So local property tax increases have to close the gap.

Legislators with whom I’ve talked readily admit that the property tax is regressive and unfair. They know that seniors living on fixed incomes are obviously vulnerable. But those same legislators are loath to allow school districts to choose a better, more equitable system on their own.

In my opinion, Act 72 won’t provide much tax relief. And all that Pennsylvania received in the process was more gambling. Stay tuned.

Sincerely,

Charles Meredith