WHAT ARE THE ISSUES THAT THE SCHOOL PROPERTY TAX ELIMINATION ACT OF 2007 SOLVES? 

Education 

 

Dozens of districts are near or in financial distress

Education spending is exceeding the rate of inflation by over 2 to 1

Inequitable distribution of funding is occurring statewide

Current system is discriminating against fast-growing districts

Urban school districts are suffering from a continually shrinking tax base

 

 

Seniors are being forced from their homes because they cannot afford the escalating property taxes

Family farms are being sold due to unaffordable property tax assessments

Young families cannot afford to purchase a home because the per month property tax escrow is simply too much

High property taxes negatively effect the business climate of the state making it difficult for Pennsylvania to be economically competitive

The school property tax is antiquated and regressive

 

BOTTOMLINE: Our current system of school funding is crumbling. This decay has been occurring for many years and continues to escalate. Home foreclosures are occurring at an incredible rate and the new home market is at a standstill. This will have major implications for districts statewide. It can no longer be ignored or diminished. 

 

 

 

The School Property Tax Elimination Act of 2007 addresses every one of the concerns above and many more. It has been carefully crafted, taking into account all the factors necessary to have a healthy school funding system. It is unique because it is comprehensive, addressing all school funding issues. It is truly the first ever plan to actually completely solve our school funding crisis rather than simply delaying it. 

 

 

 

The School Property Tax Elimination Act of 2007 will ABOLISH the school property tax on all homestead/farmsteads as well as eliminate all local nuisance taxes and other ACT 511 taxes imposed by school districts   

  

The .5% local earned income tax for schools will be eliminated and replaced with an .85% education personal income tax, of  which the replacement of .55% local earned income tax and  other nuisance taxes is included.                                

 

This will be accomplished via a four year phase out of school property taxes

 

The plan utilizes our current sales tax mechanism to fund schools, restoring the original intent of the tax. The School Property Tax Elimination Act of 2007 does not increase the rate but maintains the current rate of six percent. 

 

The sales tax provides a predictable and stable funding source that is tied to economic growth. This is in clear contrast to the school property tax which was not based on economic growth and was subject to much variation.

 

The plan expands the tax base to include most services. 

DISTRIBUTION SYSTEM

 

All schools will be held harmless with the state assuming all debt.

 

The legislation establishes an exclusively dedicated Education Operating Fund (EOF) separate from the General Fund into which all sales tax revenue would be deposited and from which schools would be funded.

 

Equity in schools is assured under this legislation. Gaming revenues will be reserved for the purpose of providing equity for our public schools. Each school will receive the resources it needs regardless of the local ability to pay. This solves the funding problems faced by rural, urban and fast-growing districts.

 

Eliminates unfunded mandates.           

 

 

 

                                  

It is not about simply providing the schools with more money. A need for more cash is not the primary problem.

 

Under the first phase of the Plan (Years 1-4), all districts will begin held harmless in that they will initially receive 100% funding sufficient to meet all financial obligations and will be established at a per student expenditure level per district. Initial funding will receive quarterly adjustments for changes in enrollment as well as yearly base increases indexed to a cost of living.

 

Under the second phase of the Plan, all districts will integrate locally-driven, state of the art performance and evaluation methods to improve spending efficiency and academic performance. The savings that accrue as a result of this data-driven decision making (D3M) technology belong to the school district to use as desired. This is first time that Pennsylvania schools will be given the tools to conduct regular, ongoing performance analyses.

 

If a district desires additional revenue, they can present a ballot referendum to the voters of their district to raise additional revenue by either an earned income tax or a personal income tax. However, property taxes will not be able to be re-instituted to raise revenue.

     

 

 

 

Companion legislation to the School Property Tax Act of 2007 provides for a constitutional amendment which GUARANTEES that, once eliminated, school property taxes would be gone forever and that a future legislature could never re-institute the taxing of our properties.

 

Benefits of the
School Property Tax Elimination Act of 2007 

 

 

By abolishing all school property taxes and nuisance taxes, homeowners benefit tremendously under the School Property Tax Elimination Act of 2007.

 

 

 

The School Property Tax Elimination Act of 2007 is comprehensive school finance reform that abolishes school property taxes and primarily utilizes the sales tax to fund education

 

 

The plan goes to the core of the issue and fixes it. This is not another “band-aid” patch.

 

 

The School Property Tax Elimination Act of 2007 is simply GOOD tax policy meaning that the economics of Pennsylvania will benefit greatly.

 

- The plan provides tremendous tax simplification.  
- The plan creates over 100,000 new jobs.