How To Lower School Tax Rates Without Opting Into Act 72

April 4th, 2005

Practically everyone wants good schools. Not only do they educate our children they raise our property values. The question is, how to pay for them.

Act 72 is not the answer. As the act's authors themselves proclaimed, the act does not provide one nickle for education. Most school districts will be unable to meet their obligations to educate their students if they opt in to Act 72. The constant revenue demand due to increasing school population, labor costs, health costs, bond costs, unfunded mandates and you name it, make that near impossible. Moreover, there is no showing that the gambling revenue predicted to be greater than that realized in Nevada, will provide actual tax reduction to any taxpayers. And if it does, many taxpayers will actually see their out of pocket taxes raised. All that will have happened is a tax shift.

 

Here are eight suggestions that might meet the school districts' revenue needs without their imposing new taxes, or at least, only minimal increases. Some of them also result in a tax shift, but those that do result in a shift which would provide real relief to property holders in need and provide for a more equitable method of school support than is now the case.

 

1. The state could meet its constitutional obligation to provide fifty percent of the funding for the schools. At present it supplies only 34 percent (not 45% as state by Senator Boscola). The failure to fund the districts as the constitution requires is due entirely to our legislators shirking of their duty and attempting to shift the blame for raising taxes from themselves to school districts. A raise in state income taxes or a new sales tax or both might be needed.

 

2. County wide reassessment could be instituted throughout the state. Considering the fact the home values have been rising continually since most counties have reassessed, the same school millage would bring in large amounts of revenue. While some people would moan and groan about having to pay higher taxes such an assessment would be fairer than the current situation and no doubt help those taxpayers most in need, those in lower valued homes.

 

3. Short of a county wide reassessment, the assessors could at least bring the assessments up to date. In Northampton County, for example, the current assessment rolls are as of 2002. This means that homes improved or built since that time are not actually on the rolls or the improvements not reflected. Northampton explains this is due to the failure of the boroughs and townships to timely notify the county of building permits. In many cases that is simply untrue. Both Lower Saucon and Hellertown report, for example, that they file such certificates monthly. Failure to keep the rolls up to date loses millions of dollars in revenue for the districts. Again, the tax burden would be more equitably distributed than now.

 

4. The districts themselves might make a better effort to collect revenues due them. Many districts are inefficient in following up delinquencies. They may eventually collect the revenue due them, but delays cost money. No change in the burden but people should pay their fair share of the costs.

 

5. The districts could sue the county assessor to require him to raise the assessment on any property which the district knows has been sold for, say, more than 15% higher than the county established fair market value. Interestingly, the county assessor can't do that on his own as that would be a spot assessment prohibited by law. However, under a recent Commonwealth Court decision, a district is not bound by the same rules and can force the assessor, and through him the property owner, to pay taxes based on an assessed value established by taking the fair market value as shown by the last time it was purchased. Had this been done in the Saucon Valley School District beginning this fiscal year revenues would have increased by approximately $850,000 from July 1 through the end of February. Of course, such revenues and more would continue in the future if the district adopted that policy. Wealthy taxpayers who have their assessments raised will not be happy.

 

6. Municipalities throughout the state could engage in joint zoning which might have the effect of limiting new development in many areas. Hellertown and Lower Saucon Township are now exploring just such an idea. Using Hellertown's high density would permit the preservation of more open space in Lower Saucon without in any way damaging Hellertown. The benefit in saved school taxes to both communities is obvious. Each time a new home is erected in Lower Saucon, the cost to the school district to educate the new students is roughly twice as much as the tax revenue brought in by taxes on the home. That excess cost must be spread among all taxpayers in the district. This suggestion will save all taxpayers money.

 

7. Representative Rich Grucela has proposed a bill what would give school districts proper and timely notification of any financial impact a proposed development could have on their education budget. Developers would be required to provide an impact statement and the districts would have 30 days to make comments to the agency considering the proposed developments. Often planners don't consider this kind of financial impact. Perhaps if they did, the results might be different. While Grucela's plan might not be a solution, it is certainly a step forward.

 

8. An even better version of Grucela's plan would be to allow districts to insist on the payment of a fee to be paid by the developer for each new home constructed which would reimburse the districts for the new costs they will have to bear. Presently, municipalities are able to charge developers similar fees to offset the cost of infrastructure their developments create. Why should not the school districts be in a similar position? No cost to the taypayer, although the price of new homes might rise.

 

School board directors are no more happy to raise taxes then the taxpayers are anxious to pay them. Take it from this 77 year old school director. Those taxes hurt! Good schools are not free but they do have the effect of raising property values in the communities where they exist. Adopting one or more of these suggestions would surely ease the pain.