Bensalem Considers An Earned-income Tax The School Board Heard The Pros And Cons Of Levying Such A Tax.

Posted: March 06, 1998

BENSALEM — Few residents were on hand to hear earned-income tax uttered - however cautiously - by Bensalem Township school board members in their first 1998-1999 budget meeting.

That will change, predicted Mike Braun, the district business manager.

On Wednesday, Braun presented board members with a list of pros and cons of an earned-income tax as a source of funding - a tax Bensalem residents have seen proposed and dropped before.

``It's an unpopular tax,'' Braun said as he ticked off a list of negatives. ``When it hits the paper,'' he continued, ``you'll know that.''

Still, the business manager said his job was to give the board options. ``I'm not promoting it or demoting it,'' he said.

Board members remained largely silent as Braun made his presentation.

In an interview yesterday, school board member Joseph Harris Sr. said he felt the board was mixed on the issue. A two-year board member, Harris was one of the members who asked Braun for the information.

``I'm getting to the point where I think [the earned-income tax] is the only alternative,'' said Harris. Nothing frustrated him more, he said, than having to cut the budget last year and raise taxes 28.7 mills.

School board member Mike Lombardo worries that a young family with two wage-earners would bear the brunt of an earned-income tax. ``It's inequitable,'' he said yesterday.

School board President Ruth Bell said yesterday that she needed more information.

Bensalem homeowners pay on average $1,780 in school taxes under a 329.6-mill tax rate.

Bensalem's property-tax base has declined steadily as businesses and homes win reassessment appeals. And little room remains for new development.

Braun said a 1-percent tax on the gross income of Bensalem workers and residents should ease the burden for senior citizens. Unlike the property-tax base, he said, a wage-tax base likely would continue to grow.

Roughly $3 million could be generated for the district in the first year of the tax, he estimated. But he emphasized that the income of Bensalem workers and residents had not been studied.

The school district would be entitled to all revenue from the tax the first year, but would have to split the revenue with the township in future years if the Township Council decided to stake its claim. Board members voiced concern that they would need to raise property taxes significantly in the second year of the earned-income tax to make up for revenue diverted to the township.

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