Bellefonte Area School District
Tax Study Commission 

ACT 1 required each public school district to appoint a Tax Study Commission (TSC) by no later than September 14, 2006.  The Act states the Commission shall be comprised of either 5, 7, or 9 members that is reflective of the socioeconomic, age and occupational diversity of the district to the extent possible.  The board appointed the following individuals at its September 12, 2006 meeting:

      1.     Adele Benson
2.     Melvin Brown
3.     Todd Clouser
4.     Randall Holderman
5.     Patricia Lose
6.     Jill Patterson
7.     Justin Patterson

Dr. Masullo and Mr. Bean, the Superintendent and Director of Fiscal Affairs respectively served as board liaisons with the TSC.  Misty Rider an employee of the district served as recording secretary.  Mrs. Jill Patterson was elected Chairwoman and Mr. Todd Clouser was elected Vice Chairman of the Commission by their fellow members.

The stated legislative purpose of this commission is to make a non-binding recommendation to the school board to levy additional earned income tax (EIT) or personal income tax (PIT).  The revenue generated from the increased tax rate will be used to reduce taxes on qualified residential properties. 

ACT 1 requires each TSC to consider the following:

·   Historic and present rates of and revenue from taxes currently levied, assessed and collected.

·    The percentage of total revenues provided by taxes currently levied, assessed and collected.

·    The age, income, employment and property use characteristics of the existing tax base.

·     Projected revenues of taxes currently levied, assessed and collected. 

Proposed finding of facts:

 We, the Bellefonte Area School District Tax Study Commission comprising of seven members find as follows:

1. that ACT 1 as enacted is a tax-shifting statute that requires this Commission and also the Bellefonte Area School District to adopt a tax increase by either establishing a PIT or raising the EIT.  As such, there will be relative levels of inequity that results as the Board under this process must adopt a tax increase and possibly a severe one at the detriment of one group and the benefit to another group.

2.  that neither the implementation of a PIT nor an increase in EIT will establish a taxing rate on Social Security income or other pension income.

3.  that PIT appears to be the most equitable form of taxation in that PIT spreads the tax burden over a broader spectrum.

4.  that high millage rates most affect homeowners who have a fixed income such as senior citizens.

5.  that high EIT rates most affect the non-homeowners with low or modest incomes and families of the highest income levels.

6.  that, as current conditions stand, collecting a PIT would be problematic.  Municipalities do not have legal authority to collect a PIT as well as the fragmented collection process as it now exists would override any positives from changing to the PIT.  The Pennsylvania Department of Revenue has not as of this date finalized the regulations for PIT implementation.

7.  ACT 1 as it is currently written does not provide any real meaningful tax relief to homeowners as well as any additional funding of our school district.  It is simply a tax shift that in the long run will not provide any sustained relief and in fact may lead to increased burdens in some instances.

Non-Binding Recommendation to the
School Board

Whereas that this Commission must recommend an increase in either EIT or an establishment of PIT;

Whereas the Personal Income Tax is not a viable option at the present time;

The Commission recommends that the EIT be increased by 0.85% to a new rate of 1.90% for the school district and a total rate of 2.40% including the local municipalities (Bellefonte Borough would be 2.50%).

The Commission further recommends that the School Board continue to encourage local and state legislators to change the local tax collection laws to allow the collection of a PIT by municipalities and the collection of either a PIT or EIT at the state or county level.

The Commission also recommends that the state legislators enact real and meaningful tax reform to adequately fund our schools as well as provide real and sustaining tax relief.

Based on the above mentioned deficiencies in ACT 1 and the inadequacies of the current tax collection process this Commission would strongly encourage the citizens to reject the referendum question thus keeping the current property and EIT rates unchanged.

These finding of facts, non-binding recommendation and rationale were so recommended by a vote of five (5) in favor and none (0) opposed with two (2) absent.