A Penn State professor will be featured during a meeting scheduled Thursday in Altoona to inform the public about the ramifications of the state’s new property tax relief act.
The Act 72 legislation will be funded, in part, by revenues generated from legalized slot machines in Pennsylvania which were approved by the legislature last summer.
Dr. William T. Hartman has been hired by various school districts to help them and the public sort through the complexities of the new law.
Previously, Hartman addressed school officials from Blair and other counties at a meeting that was not open to the public.
In follow up to that session, eight school districts including Tyrone Area and Bellwood-Antis, organized the public session set for Thursday.
According to a release from the Altoona Area School District’s public relations department, Hartman is well-versed on school finance laws. His presentation will be followed by a question and answer session.
The release stated, “School boards have until May 30 to decide whether or not they want to be eligible to dip into the pool of yet-to-be-realized slots revenues in exchange for limiting their abilities to raise property taxes in the years ahead.”
The release stated, “If they don’t opt in by the end of May, they will be forever blocked from dipping into the coffers of the Commonwealth’s gambling profits.”
Last week, The Daily Herald sat down with Tyrone Area Superintendent Dr. William N. Miller and the district’s business administrator, Cathy Peachey to discuss the administration’s current position.
A top concern for the district is that it is comprised of parts of three counties: Blair, Huntingdon and Centre. That means there are multiple tax rates based on where a district taxpayer resides.
Peachey and Miller both expressed concern that the law, as it’s structured, does not address the issue. They are wondering how taxes would be equalized in districts which make up more than one county.
Tyrone is not the only district facing such as prospect. Peachey and Miller noted more than 80 districts in Pennsylvania fall into that category of the state’s 501 school districts.
Districts which opt into the tax relief program can only raise taxes on properties based on a yearly inflation index. Peachey explained the district has to equalize the mills in the counties by law and that could exceed the index without raising taxes.
Tyrone is concerned it could be left with breaking one law in an attempt to uphold another, if it opts into the program.
“Just equalizing our mills would put us in the situation where we would exceed that yearly rate increase and have to have a referendum, not to have additional revenues, but just to equalize the mills,” said Miller. “The voters could turn it down.”
He said that would then put the district in the position of breaking one law versus the other.
Peachey explained the whole concept of equalization is based on changes in the market value of properties among the three counties.
Miller said the administration would be opposed to “opting in” if the issue of equalization is not addressed. He said the inflation index should not be applied before equalization. He said if the equalization issue is not resolved it would be “untenable.”
Miller said the administration wasn’t sure how the school board members would vote at this point. He said the members have studied the tax relief act. Some of the school directors have attended several meetings about the issue.
Miller also said there is also a “moral compass” issue regarding the use of gambling revenues to help support public education.
“It’s a serious question,” said Miller. “The moral issue is out there, the philosophical issue is out there and I think there are some very strong feelings of opposition.”
It was noted 54 percent of the Tyrone Area School District’s property owners submitted the Application For Homestead and Farmstead Exclusions form which districts sent out last year to allow taxpayers to declare they wanted the property tax reduction when it becomes available. The forms were due back to tax offices by March 1. Those who didn’t submit the form will get another opportunity to do so again.
Miller indicated he couldn’t say whether or not the response rate was directly related to the moral issues on gambling, but it might play a role in rural areas of the state.
He also said the actual gaming revenues wouldn’t be applied for the purpose of property tax reduction until 2007 or 2008. The first slots, barring any legislative or judicial delays, aren’t expected to spin until at least 2006. Even then, certain amounts of revenues would need to be generated before taxpayers would see any reduction.
The Tyrone Area School District and others have also sent letters to area legislators seeking a law which would extend the deadline for districts to “opt in” or “opt out” until May 30 of next year, thus allowing them more time to analyze the ramifications of the law.
However, Dr. Miller said he doesn’t expect the legislators to act in time to allow for the extension. He also said there were some “constitutional questions” regarding the legality of the Act 72 legislation. However, he didn’t expect the legal issues to be resolved prior to the May 30 deadline. He even went as far as to indicate, districts could be left in the position of making a decision about whether to participate or not, only to have the legislation overturned after the deadline.
Bellwood-Antis Superintendent Brian Toth was asked Monday about where his district stands on the property tax reduction issue.
“The school board is very much split on the issue,” said Toth. “Part of the school board is morally against using funding generated from gambling while other members believe that how ever we could deliver a tax reduction we should, regardless of the funding source.
“Whatever their views, I can tell you they will not be voting along political lines, but for what is best for the students of the district,” said Toth.
The public meeting on the issue will be held Thursday, April 7 in the Roosevelt Junior High auditorium in Altoona starting at 7 p.m.
