Morning Call – May 25, 2005

Act 72 Opt In or Out

Dear Friends,

Good morning. How will Act 72, the so-called property tax relief law, turn out? Governor Rendell is counting on Pennsylvania’s 501 school districts to say “yes” to the law’s stipulations. But if the reactions from local school boards are typical, I predict that the governor will be disappointed.

In “opting out” of Act 72 last week, Upper Perkioman joined 83 school districts in opposition. As of may 20, only 35 districts had “opted in” to the legislation. Pennridge Superintendent Robert Kish told me that his district will “opt out” as well. Last week, the Quakertown school board passed a resolution asking the state legislature to repeal Act 72.

Quakertown will formerly “opt out” of Act 72 this week.

Why are school boards so reluctant to sign up…especially when property owners are promised tax relief? Judging by the comments from 17 residents at the Quakertown school public hearing on May 11, the arguments to “opt out” of Act 72 were driven by two fears. First, few school officials believe that slot machine revenue will reach the volume needed to reduce property taxes any time soon. And second, school districts are loath to participate in a program where voters have the opportunity to reject an annual budget.

One of Act 72’s provisions stipulates that school districts have to submit annual budgets to a local referendum if the budget exceeds the inflation rate. “A referendum on an annual budget equates to program cuts,” Kish told me. He believes that voters would reject a budget, which exceeds the rate of inflation. Presumably, the only way to reduce expenses would be to cut programs, eliminate teachers, or both.

Jim Scanlon is Quakertown’s superintendent. In the last 30 years, the annual budget increased by less than three percent only six times. The larger hikes were caused by state-mandated programs, reduced state revenue, and building or enlarging schools, he told me. “Our results would have been similar,” Kish agreed.

I listened to the residents’ opinions at Quakertown’s hearing [May 11]. Most opposed Act 72 because they feared possible program cuts and they didn’t believe the legislature’s rosy picture predicting slot machine revenue.

One of them had a different take. Richard Yost from Haycock Township asked the school board to support the bill, which State Representative Samuel Rohrer (R-128^th) has sponsored. Rohrer’s plan would abandon school property taxes in Pennsylvania. I wrote about it last year.

Rohrer would lower the state sales tax from six to four percent but eliminate all exemptions except prescription drugs, hospital health care, public transportation, gasoline, agricultural and manufactured products, food stamps and tax exempt organizations. His bill remains buried in committee.

Kish has invited Representative Paul Clymer (R-145^th) to the Pennridge School Board meeting in June. Kish hopes to have Clymer strategize how the legislature could address property tax relief for senior citizens living on fixed incomes.

On a lighter subject, while speaking with Scanlon, I asked him how many chicken wings he’d consumed at the Upper Bucks Chamber of Commerce Wing Bowl competition? It was a big hit at the Chamber’s Expo last week. “My wing days are done,” he chuckled, “But one of our math teachers was the winner.” Scanlon was referring to Alan Hunsicker who took first place. “He doesn’t know any better,” Scanlon laughed. “He’s a first year teacher.”

But I stray. Seriously, how will Act 72 turn out? We’ll just have to stay tuned.

Sincerely,

Charles Meredith