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2006 Special Session Act 1-Taxpayer Relief Act

2006 Special Session Act 1-Taxpayer Relief Act. Major Provisions. Voters decide whether to shift from property to income tax (EIT or PIT) Tax Study Commission recommends ballot language School Board approves final language

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2006 Special Session Act 1-Taxpayer Relief Act

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  1. 2006 Special Session Act 1-Taxpayer Relief Act

  2. Major Provisions • Voters decide whether to shift from property to income tax (EIT or PIT) • Tax Study Commission recommends ballot language • School Board approves final language • Future property tax rate increases above inflationary index require voter approval • To prepare ballots requires earlier adoption of preliminary budget • Installment payments for property tax

  3. Tax Study Commission • School Board appoints 5, 7, or 9 members • 1 Board Member • No relatives of employee • Appointed by September 14 • 90 days to make recommendation on referendum language • Budget and staff provided by CRSD • Budget of $20,000-(consultant study, court reporter for public hearing, legal, etc.)

  4. Establishing the TSC • Board should adopt a resolution establishing the TSC, its functions, operational procedures, a budget and resources of the commission. • Among the procedures: • How the commission will vote • When meetings will take place • Public participation/public comment • Access to the superintendent, business manager and solicitor • Budget and expenditures

  5. What is the TSC required to do? TSC must study 4 items: • Historic and present rates of district revenue from current taxes. • The percentage of total district revenues provided by current taxes.

  6. What is the TSC required to do? 3. The age, income, employment and property use characteristics of the existing tax base. 4. Projected district revenue from current taxes, including possible new taxes authorized under Act 1 (new EIT or PIT).

  7. Tax Study Commission • Commission must make a nonbinding recommendation to school board whether to levy an Earned Income Tax (EIT) or Personal Income Tax (PIT) for the next fiscal year. • Must hold one public hearing • Recommendation must be presented at a public school board meeting. • School board votes to accept or reject recommendation.

  8. Commission’s recommendation should include the following: • EIT vs. PIT • Income tax rate to be presented to the voters • Specific referendum question to be presented to the voters • Reason for the recommendation

  9. Board Decision-Accept or Reject? If the decision of the Board is to: • Accept - Board must pass a resolution and submit the referendum question to county election officials. • Reject (2007 only) - Board must make its own referendum question to present to county election officials. • Reject (in 2009 and beyond), Board is free to either present a referendum question or do nothing.

  10. Budgeting Changes Changes to District Procedures • Accelerated budget process (except with certification to remain within Index). • School districts must not raise any single tax more than the Index without voter approval in a back-end referendum. • District may not: • Impose any tax (including an EIT) that was not in-place in 2005-2006 without voter approval. • Raise an existing EIT without voter approval.

  11. If Within the Index Submitting a certification • A school board that determines that its budget will not require a tax increase greater than the Index may adopt a resolution and avoid the accelerated budget timeline. • If PDE agrees, the traditional budget timelines apply under 24 P.S. §6-687. • A school board that adopts the resolution is not eligible to seek referendum exceptions or to go to referendum to exceed the Index.

  12. Information on www.rtmsd.org • Training presentations-PASBO • Act 1 Overview • Tax Study Commissions • Timeline • Bylaws • First meeting agenda

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