LINK. A PUBLICATION OF THE SALISBURY TOWNSHIP SCHOOL DISTRICT Vol. 17 No.2 Winter 2007

Transcription

1 LINK A PUBLICATION OF THE SALISBURY TOWNSHIP SCHOOL DISTRICT Vol. 7 No.2 Winter 2007 Spring-Ford Area School District SPECIAL EDITION Act, also known as the Pennsylvania Taxpayer Relief Act, was passed in Jne 2006 by the state legislatre. This new law is designed to help school districts redce property taxes by shifting the tax brden and tilizing gaming revene. It is also designed to give voters a say in the school district bdget process. Act replaced an earlier law called Act 72, which was optional for school districts. Act, however, ACT What is Act? is not optional. All districts are reqired to abide by its reglations, even if they choose not to accept gaming revene provided throgh the act. Throgh the legislation, Spring- Ford Area School District was reqired to form a Local Tax Stdy Commission last year. This collection of commnity representatives stdied the district s existing tax strctre and demographics to determine whether or not it wold CONTINUED ON PAGE 2 How Will Act Affect Spring-Ford? Act will have a direct impact on the way in which Spring-Ford plans its bdgets. Here s a look at some of the changes: Bdget Timeline is Moved Up Instead of presenting the district s preliminary bdget in the spring, this year, the School Board got its first look at the bdget in Janary. Under Act, the bdget planning process is moved p several months so that it coincides with local elections. Final bdget adoption will still take place by Jne 30 as it has in the past. District Held to State Index Under Act, school districts are reqired to limit tax increases to an annal index, nless they agree to go to a back-end referendm or seek exceptions to the index. In , the index for Spring-Ford is 3.4 percent. The administration and School Board are committed to fiscal responsibility and make every effort to keep tax increases as low as possible while still delivering a qality academic program. However, some bdgetary costs sch as special edcation, employee healthcare and retirement benefits, and those associated with a growing stdent poplation cannot easily be controlled at the local level. That is why the district will be seeking exceptions in these areas. Special edcation costs have been increasing on average abot $500,000 or 0 percent a year. Spring-Ford is reqired by the state to provide special edcation programming, yet receives little fnding to implement the mandates. The district is also reqired by the state to contribte annally to the state employee CONTINUED ON PAGE 2 Dear Spring-Ford Area School District Resident, In previos newsletters, we have shared information with yo abot legislation called Act, the Pennsylvania Taxpayer Relief Act. If yo know anything abot Act, yo know that it is a complex law that will have a dramatic effect not only on school districts, bt on individal taxpayers as well. That is why we are dedicating an entire newsletter to this isse. We are hoping that this pblication will help yo to better nderstand the impact that Act will have on Spring- Ford and its ftre, and how it will affect yo as a resident and taxpayer. This pblication is jst the beginning of or psh to keep yo informed. We will also be posting information reglarly on or website, devoting an edition of PCTV s Spe s On to the isse, and organizing a town hall meeting in the spring. We invite residents with qestions to attend or School Board meetings, which are held on the third and forth Mondays of the month starting at 7:30 p.m. in the cafeteria of Spring-Ford Area High School s 0-2 Center. Sincerely, The Spring-Ford Area School Board Spring-Ford Area School District 99 Bechtel Road Collegeville, PA

2 How Will Act Affect Spring-Ford? CONTINUED FROM PAGE retirement system, and in recent years, that contribtion rate has risen from.5 percent in to 6.46 in Next year, Spring-Ford will have to contribte 7.3 percent. And like many private employers, Spring-Ford has seen premims increase at a rapid rate over the last seven years, health insrance premims have gone p annally, on average, by 0.3 percent and prescription premims have gone p by 5 percent. These are costs that the district has little or no control over and have exceeded the 3.4 index. year. As always, the district remains committed to balancing the needs of children with the needs of the commnity, and promises to contine thoroghly reviewing district spending to limit the impact on yo, the taxpayer. Ftre Bdget Planning Mst Be Part of Today s Bdget Planning As a feasibility stdy recently revealed, Spring-Ford will likely be planning some major bilding projects to accommodate an estimated 3,000 additional stdents who will arrive within the next 0 years. Bt paying for these bilding projects along with the escalating costs for items sch as employee health care and retirement benefits is going to become challenging as the district also tries to limit tax increases to the state index. Adding to the district s bdgetary challenges is the fact that Spring-Ford s stdent poplation contines to grow as more families move into the area. Becase the district has seen sch a large inflx of stdents over the last three years, it plans to seek an exception from the state in this area as well. That is why it will be increasingly important for the district to tilize exceptions when necessary. Being able to raise taxes above the index in certain years will help ensre that the district can raise enogh money to fnd projects in the ftre. If we are to contine or sperior level of academic programming, maintain class sizes and provide or stdents with adeqate facilities, we will need or commnity s spport. We encorage yo to get involved by attending School Board meetings, visiting or website and learning more abot or schools so that yo nderstand how yor tax dollars are being spent. If the exceptions are approved by the Pennsylvania Department of Edcation, Spring-Ford cold raise taxes by 5.5 percent instead of the 3.4 percent cap set by the state. However, in Febrary the School Board agreed it wold not raise taxes by the maximm amont and approved a preliminary bdget calling for a 4.39percent increase. Withot sing some of the exceptions, the district wold have to ct more than $ million to balance the bdget, meaning it wold become challenging to meet or goals for stdents in the coming What is Act? CONTINUED FROM PAGE be better to increase the earned income tax (EIT) or implement a personal income tax (PIT) as a way to shift the tax brden from property owners to wage earners. The LTSC recommended increasing the EIT and the School Board accepted this recommendation. It will be p to voters to decide throgh a front-end referendm on May 5th whether or not this recommendation will be implemented. (For more information on the referendm, see page 5.) proceeds to be sed for additional property tax relief. Along with tax relief, Act was also designed to limit school district spending by reqiring districts to keep bdgetary increases at or below an annal index. If a district needs to raise taxes above that index, it is reqired to ask voters to approve the increase throgh a back-end referendm. Recognizing that in some years, school districts may face expenses that are beyond their control or are nforeseen, Act allows school districts to seek exceptions for bdgetary increases over the index in certain circmstances. If these exceptions are approved, districts are allowed to increase their bdgets over the index withot going to referendm. If this measre is approved, Spring-Ford will se these additional fnds to redce property taxes. In ftre years, when the state s gambling indstry prodces enogh revene, Spring-Ford will receive a share of the gambling 2

3 LINK ION ACT T I D E SPECIAL Freqently Asked Qestions Regarding Act Q. What is the difference between a front-end referendm and a back-end referendm? Q. What happens if the referendm qestion being proposed on May 5th is voted down? Will I not receive property tax relief? A. A front-end referendm is held in the spring and is designed to allow voters to decide on the type and the rate of the tax that will be sed to redce property taxes. A. If the referendm qestion is voted down, most likely yo will not see any property tax redction next year. In ftre years yo cold see property tax relief when the district begins receiving gambling proceeds from the state, or if another front-end referendm is held and approved by a majority of voters. A back-end referendm is designed to allow voters a say in whether or not a school district shold raise its taxes above an index and is held in the election preceding the start of the school district s fiscal year, which wold mean the primary election here in Spring-Ford. Q. How mch money will the district be getting throgh Act? Q. School districts mst limit tax increase to an index nder Act. How is that index determined? A. Contrary to what yo might think, Spring-Ford Area A. The index is calclated by the state averaging two School District is not receiving any new money throgh Act. Any additional revene that the district receives from a higher earned income tax or from gambling proceeds will be sed to redce property taxes. figres, the Statewide Average Weekly Wage (SAWW) and the federal Employment Cost Index for elementary/secondary schools. For Spring-Ford, the index for the school year is 3.4 percent. Q. Will I receive a rebate check when my property taxes are redced? Q. I am a senior citizen who doesn t own property. Will I receive any benefit from Act? A. No. If measres to implement property tax redctions are approved, yo wold not receive a check. Instead, yor property assessment will be redced and the amont of taxes yo pay will be based on this new assessment. A. If yo don t own property, yo wold not benefit from Act if property taxes are redced. However, Act does expand the Senior Citizen Property Tax and Rent Rebate Program, so it is possible that if yo rent yo cold receive a rebate. To learn more, visit or call yor state legislator. 3

4 How Will Act Affect Yo as a Resident? Sometimes when a piece of legislation is passed, it has little or no direct impact on yor daily life. Bt this is not the case with Act. The law will affect anyone who votes, earns income or owns property in Spring-Ford bt it will not affect everyone the same way. So we ve broken or poplation down into several categories to explain how Act s impact might be felt. If Yo Own Property and Earn $90,000 in Combined Income: Yo will break even. Yo will receive a property tax redction, bt will also have to pay approximately the same amont back de to the higher EIT. If Yo Own Property and Earn Less than $90,000: Yo will save money becase the increase yo wold pay in EIT wold not be higher than the amont yo save throgh yor property tax redction. Before skipping over to the section that pertains to yo, it s important to note that if yo vote, yo will play a critical role in determining whether or not a tax shift will actally occr. At the May 5th primary, voters will be asked if they favor raising the school district s earned income tax (EIT) by.9 percent to.4 percent (or.9 percent when combined with the.5 percent EIT that all SpringFord mnicipalities collect). If Yo are a Renter Who Works: Yo will pay more in taxes, becase yo will pay a higher EIT bt not be eligible to receive a property tax redction. If Yo Own Property and Work in Philadelphia: Yo will save money becase yo will see a redction in yor property taxes and not be affected by the higher EIT rate, since yo already pay the city wage tax. If this measre is approved, it s estimated that qalified residential properties in or district cold receive a tax redction of approximately $600. If the measre is not approved, Spring-Ford will have to wait to provide property tax relief ntil the state begins distribting gaming revenes to school districts. In addition, yo shold also know that yo are only eligible for a property tax redction if yor property is deemed a qalified, owner-occpied residential property. The Montgomery Conty Assessor s office determines this by reviewing the homestead/farmstead exclsion form that yo shold have filled ot and retrned to the conty. If the May 5th ballot qestion is approved by voters, here is how Act might affect yo: If Yo Own Property and Earn More than $90,000 in Combined Income: Yo will pay more in taxes, becase any redction yo see in yor property taxes will be offset by the higher EIT. 4

5 Stay Informed What Can Yo Do? Learn as mch as yo can abot Act and how it will impact yo. Read or local newspaper to learn abot new developments, or visit the Pennsylvania State Department of Edcation website at the Pennsylvania School Boards Association, or the Pennsylvania Association of School Bsiness Officials, for information. Yo can also visit or website, for pdates. Review and Make Sre Yo Understand the Proposed Referendm Qestion As part of Act, Spring-Ford formed a Local Tax Stdy Commission to determine whether or not the district shold increase its earned income tax or impose a personal income tax. The Commission recommended that the district increase its earned income tax so that a majority of residents wold see a property tax redction. The Commission presented its recommendation to the School Board, and now that recommendation will go to the voters. On May 5th, when yo vote in the primary election, yo will also see this qestion at the polls: Do yo favor redcing taxes on qalified owner occpied residential properties by imposing an additional 0.9% earned income tax? The revene generated from the increased tax rate will be sed to redce taxes on qalified residential properties by approximately CONTINUED ON PAGE 6 ACT TIMELINE March 3 March 6 March 2 April 6 April 20 May 5 May 6-3 Jne Jne 20 Jne 30 Deadline for school boards to adopt a resoltion athorizing a referendm qestion asking voters if they want to increase or implement an EIT to generate revenes for the prpose of redcing property taxes Deadline for school boards to sbmit referendm qestion on EIT to conty election offices Deadline for cort/pennsylvania Department of Edcation (PDE) to rle and inform districts if exceptions have been granted or denied Secretary of Bdget certifies amont of fnds available in the property tax relief fnd Secretary of Bdget notifies PDE if allocations will be distribted to the district Primary election day, voters to determine otcome of referendm qestion School Districts shold frnish information on changes to EIT rate to the Department of Commnity and Economic Development Deadline for school boards to print and display annal bdget Deadline for school boards to give pblic notice of intent to adopt final bdget Bdget deadline for fiscal year. Deadline for boards to adopt resoltion allowing for installment payment of property taxes 5

6 LINK ACT SPECIAL EDITION What Can Yo Do? CONTINUED FROM PAGE 5 $ The crrent earned income tax rate is 0.5% and the crrent combined mnicipal/school district rate is.0%. The new combined mnicipal/school district rate wold be.9%. Vote on May 5th To make sre yo have a say in property tax relief, remember to vote on May 5th and encorage anyone yo know to do so as well. Only yo have the power to determine whether or not there will be a tax shift in Spring-Ford Area School District from property owners to wage earners. Attend Ftre School Board Meetings To flly nderstand the school bdget process and the isses facing yor school district, take some time ot to attend Spring-Ford Area School Board meetings. Coming to the meetings and expressing yor opinion, asking qestions and jst observing the School Board in action will help yo to become and stay an informed voter who will be able to make edcated decisions in ftre elections. Spring-Ford Area School Board Meetings When and Where: Third and Forth Mondays of each month at 7:30 p.m. in the cafeteria of Spring-Ford Area High School, 350 S. Lewis Road in Royersford Entrance to Board meetings is throgh Door 8. Spring-Ford Area School District 99 Bechtel Road Collegeville, PA 9426 Non-Profit U.S. Postage PAID Royersford, PA Permit No. 72 IMPORTANT Information abot Property Taxes Inside Spring-Ford Area School District Board of School Directors Donna L. Williams, President (60) John S. Grispon, Vice President (60) Joseph P. Ciresi (60) Michael V. Masciandaro (267) Ammon G. Morgan, Jr. (60) Joseph M. Petrowski (60) or (60) Bernard F. Pettit (25) Raymond J. Rocchio, Jr. (60) Robert A. Weber (60) or (60)