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Shift in school tax loses
Moving burden from property to income levy fails to persuade taxpayers that different is better
Wednesday, May 16, 2007

Western Pennsylvania residents voted a strong "no" against shifting some of their property taxes to larger local income taxes to pay for public schools, a pattern that appeared to be mirrored throughout the state.

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Allegheny County

Armstrong County

Beaver

Butler

Fayette

Greene

Washington

Westmoreland

Pennsylvania Department of State -- Primary 2007 Returns

Where at least partial results were available, they often were voting 2-1 or 3-1 against the specific proposals in their school districts.

In more than 100 school districts in seven area counties, votes were running against the measure. The counties are Allegheny, Beaver, Butler, Fayette, Greene, Washington and Westmoreland. That accounts for about one-fifth of the state's districts.

In addition, rejections were reported elsewhere by the Patriot-News in Harrisburg, the Reading Eagle, Scranton Times-Tribune, Morning Call in Allentown, Erie Times & News and York Record. One or two districts in Berks County appeared to be headed toward acceptance.

Gov. Ed Rendell had pushed hard for the referenda. His spokesman, Chuck Erdo, said, "The governor doesn't believe that the defeat of the local tax shifting question is an indication of anything other than confusion."

He added, "Many voters didn't have the information they needed to make a good choice."

The referenda were the result of a new state law -- known as Special Session Act 1 of 2006 -- which required each school board to adopt a referendum that would lower the property tax by raising an income tax. Pittsburgh, Philadelphia and Scranton were the only districts exempt under the law.

David Baldinger of Governor Mifflin School District in Berks County and administrator of the Pennsylvania Taxpayers Cyber Coalition, made up of more than 20 taxpayer groups, said he thinks the vote confirms that Act 1 is "just unacceptable to Pennsylvania taxpayers because it's not school property tax reform."

He said he talked to about 100 voters at three polling places in Berks County. He said some didn't even know the question was on the ballot, and some were confused.

Mr. Baldinger said, however, "Of people who understood what Act 1 was, almost to a person, they said they were going to vote 'no' on it."

In most communities, voters were choosing whether to raise the existing earned income tax. In others, they were deciding whether to replace the earned income tax with a personal property tax that would tax not only earned income but also interest, dividends and some other income. Neither would tax Social Security or retirement pensions.

The first step was a recommendation by a local tax study commission to the local school board; members then voted on the referendum that went on the ballot.

That resulted in a variety of proposals. In Allegheny County alone, the referendum varied from a 2.95 percent personal income tax in Allegheny Valley to a 1 percent earned income tax in East Allegheny, an increase from the current 0.5 percent earned income tax.

The estimated property tax savings also varied widely by school district, although within a district, the savings was the same whether the taxpayer has an expensive or an inexpensive house.

In Allegheny County alone, the property tax reductions ranged from $115 in Duquesne to $1,014 in Upper St. Clair, both by raising their earned income taxes. Both districts were among those whose partial results indicated defeat.

To get the property tax savings, the homeowner must have applied for a homestead or farmstead exemption.

Act 1 has other provisions as well, including requiring a referendum if a school board wants to increase property taxes beyond a certain amount under certain circumstances.

Voters in the Ambridge School District, Beaver County, considered both the tax-shifting referendum as well as a referendum on raising property taxes. In partial returns, both were losing.

First published on May 16, 2007 at 12:37 am
Education writer Eleanor Chute can be reached at echute@post-gazette.com or 412-263-1955.